UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 17, 2013 (June 12, 2013)

 

Summit Midstream Partners, LP

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-35666

 

45-5200503

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

2100 McKinney Avenue

Suite 1250

Dallas, Texas 75201

(Address of principal executive offices) (Zip Code)

 

Registrants’ telephone number, including area code: (214) 242-1955

 

Not applicable.

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 1.01 Entry into a Material Definitive Agreement.

 

Purchase Agreement

 

On June 12, 2013, Summit Midstream Holdings, LLC (“Summit Holdings”), Summit Midstream Finance Corp. (“Finance Corp.” and, together with Summit Holdings, the “Issuers”), Summit Midstream GP, LLC (the “General Partner”), and Summit Midstream Partners, LP (“SMLP”) and certain subsidiary guarantors (collectively, the “Subsidiary Guarantors” and, together with SMLP, the “Guarantors”) entered into a purchase agreement (the “Purchase Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., RBC Capital Markets, LLC and RBS Securities Inc., as representatives of the initial purchasers named therein (collectively, the “Initial Purchasers”), to sell $300 million aggregate principal amount of the Issuers’ 7½% Senior Notes due 2021 (the “Notes”) in accordance with a private placement (the “Offering”) conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

 

The Purchase Agreement contains customary representations, warranties and agreements of the Issuers, the General Partner and the Guarantors (collectively, the “Partnership Parties”), and customary indemnification rights and obligations of the parties.

 

The Offering closed on June 17, 2013 and Summit Holdings used the net proceeds to repay a portion of the indebtedness outstanding under its revolving credit facility.

 

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Indenture

 

The Issuers issued the Notes pursuant to an indenture, dated as of June 17, 2013 (the “Indenture”), among the Issuers, the Guarantors and U.S. Bank National Association, as trustee (the “Trustee”). The Notes will mature on July 1, 2021. Interest on the Notes is payable semi-annually in arrears on January 1 and July 1 of each year, beginning on January 1, 2014. The Notes will be unconditionally guaranteed on a senior unsecured basis by SMLP and all existing and certain future subsidiaries of SMLP (other than the Issuers).

 

At any time prior to July 1, 2016, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of the Notes issued under the Indenture at a redemption price of 107.500% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of certain equity offerings. On and after July 1, 2016, the Issuers may redeem all or a part of the Notes at redemption prices (expressed as percentages of principal amount) equal to (i) 105.625% for the twelve-month period beginning on July 1, 2016; (ii) 103.750% for the twelve-month period beginning on July 1, 2017; (iii) 101.875% for the twelve month-period beginning on July 1, 2018; and (iv) 100.000% for the twelve-month period beginning on July 1, 2019 and at any time thereafter, plus accrued and unpaid interest.

 

The Indenture restricts SMLP’s and the Issuers’ ability and the ability of certain of their subsidiaries to: (i) incur additional debt or issue preferred stock; (ii) make distributions, repurchase equity or redeem subordinated debt; (iii) make payments on subordinated indebtedness; (iv) create liens or other encumbrances; (v) make investments, loans or other guarantees; (vi) sell or otherwise dispose of a portion of their assets; (vii) engage in transactions with affiliates; and (viii) make acquisitions or merge or consolidate with another entity. These covenants are subject to a number of important exceptions and qualifications. At any time when the Notes are rated investment grade by either of Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services and no Default or Event of Default (each as defined in the Indenture) has occurred and is continuing, many of these covenants will terminate.

 

The Indenture provides that each of the following is an Event of Default: (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of the principal of, or premium, if any, on the Notes; (iii) failure by the Issuers or SMLP to comply with certain covenants relating to merger, consolidation, sale of assets, change of control or asset sales; (iv) failure by SMLP for 180 days after notice to comply with certain covenants relating to the filing of annual, quarterly and current reports with the Securities and Exchange Commission (the “SEC”); (v) failure by the Issuers or SMLP for 30 days after notice to comply with any of the other agreements 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 SMLP or any of its restricted subsidiaries (or the payment of which is guaranteed by SMLP or any of its restricted subsidiaries) if that 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 (a “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

 

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Payment Default or the maturity of which has been so accelerated, aggregates $20.0 million or more; (vii) failure by SMLP or any of its restricted subsidiaries to pay final judgments aggregating in excess of $20.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; (viii) except as permitted by the Indenture, any guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its guarantee of the Notes; and (ix) certain events of bankruptcy, insolvency or reorganization described in the Indenture with respect to the Issuers, SMLP or any of SMLP’s restricted subsidiaries that is a significant subsidiary or any group of SMLP’s restricted subsidiaries that, taken as a whole, would constitute a significant subsidiary of SMLP.

 

In the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to either Issuer, SMLP, any of SMLP’s restricted subsidiaries that is a significant subsidiary or any group of SMLP’s restricted subsidiaries that, taken as a whole, would constitute a significant subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

 

The foregoing description of the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, a copy of which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Registration Rights Agreement

 

On June 17, 2013, the Issuers entered into a Registration Rights Agreement (the “Registration Rights Agreement”), with the Guarantors and the Initial Purchasers in connection with the Offering.

 

Under the Registration Rights Agreement, the Issuers and the Guarantors shall cause to be filed with the SEC a registration statement with respect to an offer to exchange the Notes for substantially identical notes that are registered under the Securities Act. The Issuers and the Guarantors will use their commercially reasonable efforts to cause such exchange offer registration statement to become effective under the Securities Act. In addition, the Issuers and the Guarantors will use their commercially reasonable efforts to cause the exchange offer to be consummated not later than 365 days after the issuance of the Notes. Under certain circumstances, in lieu of, or in addition to, a registered exchange offer, the Issuers and the Guarantors have agreed to file a shelf registration statement with respect to the Notes. The Issuers and the Guarantors are required to pay additional interest on the Notes if they fail to comply with their obligations to register the Notes within the specified time periods.

 

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Relationships

 

The Initial Purchasers and their affiliates have in the past, and may in the future, perform investment banking, commercial banking, advisory and other services for the Partnership Parties and their respective affiliates from time to time for which they have received, and may in the future receive, customary fees and expenses. Affiliates of each of the Initial Purchasers are lenders under Summit Holdings’ revolving credit facility and, therefore, received a portion of the net proceeds from the Offering. Amegy Bank National Association, MidFirst Bank and Comerica Bank acted as financial advisors to the Issuers in connection with the Offering but they did not serve as Initial Purchasers; each received fees in connection with such services.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K under the sub-heading “Indenture” is incorporated into this Item 2.03 by reference.

 

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Item 9.01 Financial Statements and Exhibits.

 

(d)  Exhibits.

 

Exhibit
Number

 

Description

1.1

 

Purchase Agreement, dated as of June 12, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., Summit Midstream GP, LLC, the Guarantors named therein and the Initial Purchasers named therein

 

 

 

4.1

 

Indenture, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., the Guarantors party thereto and U.S. Bank National Association (including form of the 7½% senior notes due 2021)

 

 

 

4.2

 

Registration Rights Agreement, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., the Guarantors named therein and the Initial Purchasers named therein

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Summit Midstream Partners, LP

 

(Registrant)

 

 

 

 

 

By: Summit Midstream GP, LLC (its general partner)

 

 

 

 

Date: June 17, 2013

/s/ Matthew S. Harrison

 

Matthew S. Harrison, Senior Vice President and Chief Financial Officer

 

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Exhibit Index

 

Exhibit
Number

 

Description

1.1

 

Purchase Agreement, dated as of June 12, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., Summit Midstream GP, LLC, the Guarantors named therein and the Initial Purchasers named therein

 

 

 

4.1

 

Indenture, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., the Guarantors party thereto and U.S. Bank National Association (including form of the 7½% senior notes due 2021)

 

 

 

4.2

 

Registration Rights Agreement, dated as of June 17, 2013, by and among Summit Midstream Holdings, LLC, Summit Midstream Finance Corp., the Guarantors named therein and the Initial Purchasers named therein

 


Exhibit 1.1

 

EXECUTION VERSION

 

PURCHASE AGREEMENT

 

June 12, 2013

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEUTSCHE BANK SECURITIES INC.

RBC CAPITAL MARKETS, LLC

RBS SECURITIES INC.
     As Representatives of the Initial Purchasers
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
One Bryant Park
New York, New York 10036

 

Ladies and Gentlemen:

 

Introductory .  Summit Midstream Holdings, LLC, a Delaware limited liability company (“ Summit Midstream ”) and Summit Midstream Finance Corp. ( “ Finance Corp. ” and, together with Summit Midstream, the “ Issuers ”) propose to issue and sell to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ Merrill Lynch ”) and the other several Initial Purchasers named in Schedule A (the “ Initial Purchasers ”), acting severally and not jointly, the respective amounts set forth in such Schedule A of $300,000,000 aggregate principal amount of the Issuers’ 7 ½% Senior Notes due 2021 (the “ Notes ”).  Merrill Lynch has and Deutsche Bank Securities Inc., RBC Capital Markets, LLC and RBS Securities Inc. have agreed to act as the representatives of the several Initial Purchasers (the “ Representatives ” in connection with the offering and sale of the Notes.

 

The Securities (as defined below) will be issued pursuant to an indenture, to be dated as of June 17, 2013 (the “ Indenture ”), among the Issuers, Summit Midstream Partners, LP, a Delaware limited partnership (the “ Parent Guarantor ”), the subsidiary guarantors listed on Schedule B hereto (together with the Parent Guarantor, the “ Guarantors ”) and U.S. Bank National Association, as trustee (the “ Trustee ”).  The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “ Depositary ”) pursuant to a letter of representations, to be dated on or before the Closing Date (as defined in Section 2 hereof) (the “ DTC Agreement ”), among the Issuers, the Trustee and the Depositary.

 

The holders of the Notes will be entitled to the benefits of a registration rights agreement, to be dated as of the Closing Date (the “ Registration Rights Agreement ”), among the Issuers, the Guarantors and the Representatives, pursuant to which the Issuers  and the Guarantors may be required to file with the Securities and Exchange Commission (the “ Commission ”), under the circumstances set forth therein, (i) a registration statement under the Securities Act (as defined below) relating to another series of debt securities of the Issuers with terms substantially identical to the Notes (the “ Exchange Notes ”) to be offered in exchange for the Notes (the “ Exchange Offer ”) and (ii) a shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by certain holders of the Notes, and in each case, to use their best efforts to cause such registration statements to be declared effective.  All references herein to the Exchange Notes and the Exchange Offer are only applicable if the Issuers and the Guarantors are

 



 

in fact required to consummate the Exchange Offer pursuant to the terms of the Registration Rights Agreement.

 

The payment of principal, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally by the Guarantors and any subsidiary of Summit Midstream formed or acquired after the Closing Date that executes an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns, pursuant to their guarantees (the “ Guarantees ”).  The Notes and the Guarantees attached thereto are herein collectively referred to as the “ Securities ”; and the Exchange Notes and the Guarantees attached thereto are herein collectively referred to as the “ Exchange Securities .”

 

The Parent Guarantor has entered into that certain Contribution Agreement (the “ Contribution Agreement ”), dated as of June 4, 2013, with Summit Midstream Partners Holdings, LLC, a Delaware limited liability company (“ Summit Holdings ”), and Bison Midstream, LLC, a Delaware limited liability company (“ Bison ”), pursuant to which Summit Holdings contributed all of the membership interests in Bison to the Parent Guarantor, and the Parent Guarantor then further contributed such interests to Summit Midstream.

 

The Parent Guarantor has entered into that certain Purchase and Sale Agreement (the “ Mountaineer Agreement ”), dated as of June 4, 2013, with MarkWest Liberty Midstream & Resources, L.L.C., a Delaware limited liability company and a subsidiary of MarkWest Energy Partners, L.P., a Delaware limited partnership (“ MarkWest ”), pursuant to which MarkWest agreed to sell, and the Parent Guarantor agreed to acquire, certain natural gas gathering assets in Doddridge County, West Virginia.

 

The Contribution Agreement, the Mountaineer Agreement, this Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities and the Indenture are referred to herein as the “ Transaction Documents .”

 

The Issuers understand that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and in the Pricing Disclosure Package (as defined below) and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (the “ Subsequent Purchasers ”) on the terms set forth in the Pricing Disclosure Package (the first time when sales of the Securities are made is referred to as the “ Time of Sale ”).  The Securities are to be offered and sold to or through the Initial Purchasers without being registered with the Commission under the Securities Act of 1933 (as amended, the “ Securities Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder), in reliance upon exemptions therefrom.  Pursuant to the terms of the Securities and the Indenture, investors who acquire Securities shall be deemed to have agreed that Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions afforded by Rule 144A under the Securities Act (“ Rule 144A ”) or Regulation S under the Securities Act (“ Regulation S ”)).

 

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The Issuers have prepared and delivered to each Initial Purchaser copies of a Preliminary Offering Memorandum, dated June 5, 2013 (the “ Preliminary Offering Memorandum ”), and have prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated June 12, 2013 in the form attached hereto as Exhibit A (the “ Pricing Supplement ”), describing the terms of the Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase the Securities.  The Preliminary Offering Memorandum and the Pricing Supplement are herein referred to as the “ Pricing Disclosure Package .”  Promptly after this Agreement is executed and delivered, the Issuers will prepare and deliver to each Initial Purchaser a final offering memorandum dated the date hereof (the “ Final Offering Memorandum ”).

 

All references herein to the terms “ Pricing Disclosure Package ” and “ Final Offering Memorandum ” shall be deemed to mean and include all information filed under the Securities Exchange Act of 1934 (as amended, the “ Exchange Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) prior to the Time of Sale and incorporated by reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the Final Offering Memorandum (as the case may be), and all references herein to the terms “ amend ,” “ amendment ” or “ supplement ” with respect to the Final Offering Memorandum shall be deemed to mean and include all information filed under the Exchange Act after the Time of Sale and incorporated by reference in the Final Offering Memorandum.

 

Summit Midstream GP, LLC is a Delaware limited liability company and the sole general partner of the Parent Guarantor (the “ General Partner ”).  The General Partner, the Guarantors and the Issuers are collectively referred to herein as the “ Partnership Parties .”

 

Each Partnership Party hereby confirms its agreements with the Initial Purchasers as follows:

 

SECTION 1.                             Representations and Warranties .  Each of the Partnership Parties, jointly and severally, hereby represents, warrants and covenants to each Initial Purchaser that, as of the date hereof and as of the Closing Date (references in this Section 1 to the “ Offering Memorandum ” are to (x) the Pricing Disclosure Package in the case of representations and warranties made as of the date hereof and (y) the Final Offering Memorandum in the case of representations and warranties made as of the Closing Date):

 

(a)                                  No Registration Required.   Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2(d) hereof and with the procedures set forth in Section 7 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or, until such time as the Exchange Securities are issued pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture Act of 1939 (the “ Trust Indenture Act ,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

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(b)                                  No Integration of Offerings or General Solicitation.   None of the Partnership Parties, their affiliates (as such term is defined in Rule 501 under the Securities Act) (each, an “ Affiliate ”), or any person acting on their behalf (other than the Initial Purchasers, as to whom the Partnership Parties make no representation or warranty) has, directly or indirectly, solicited any offer to buy or offered to sell, or will, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any U.S. citizen or resident, any security that is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act.  None of the Partnership Parties, their Affiliates, or any person acting on their behalf (other than the Initial Purchasers, as to whom the Partnership Parties make no representation or warranty) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.  With respect to those Securities sold in reliance upon Regulation S, (i) none of the Partnership Parties, their Affiliates or any person acting on their behalf (other than the Initial Purchasers, as to whom the Partnership Parties make no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of the Partnership Parties and their Affiliates and any person acting on their behalf (other than the Initial Purchasers, as to whom the Partnership Parties make no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.

 

(c)                                   Eligibility for Resale under Rule 144A.   The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated interdealer quotation system.

 

(d)                                  The Pricing Disclosure Package and Final Offering Memorandum.  Neither the Pricing Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum, as of its date or (as amended or supplemented in accordance with Section 3(a), as applicable) as of the Closing Date, contains or represents an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Pricing Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representatives expressly for use in the Pricing Disclosure Package, the Final Offering Memorandum or amendment or supplement thereto, as the case may be.  The Pricing Disclosure Package contains, and the Final Offering Memorandum will contain, all the information specified in, and meeting the requirements of, Rule 144A.  The Partnership Parties have not distributed and will not distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’ distribution of the Securities, any offering material in connection with the offering and sale of the Securities other than the Pricing Disclosure Package and the Final Offering Memorandum.

 

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(e)                                   Additional Written Communications.   The Partnership Parties have not prepared, made, used, authorized, approved or distributed and will not prepare, make, use, authorize, approve or distribute any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities other than (i) the Pricing Disclosure Package, (ii) the Final Offering Memorandum and (iii) any electronic road show or other written communications, in each case used in accordance with Section 3(a).  Each such communication by the Partnership Parties or their agents and representatives pursuant to clause (iii) of the preceding sentence (each, an “ Additional Written Communication ”), when taken together with the Pricing Disclosure Package, did not as of the Time of Sale, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from each such Additional Written Communication made in reliance upon and in conformity with information furnished to the Issuers in writing by any Initial Purchaser through the Representatives expressly for use in any Additional Written Communication.

 

(f)                                    Incorporated Documents.   The documents incorporated or deemed to be incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “ Incorporated Documents ”) complied and will comply in all material respects with the requirements of the Exchange Act.  Each such Incorporated Document, when taken together with the Pricing Disclosure Package, did not as of the Time of Sale, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(g)                                   The Purchase Agreement.   This Agreement has been duly authorized, executed and delivered by each of the Partnership Parties.

 

(h)                                  The Registration Rights Agreement and DTC Agreement.   The Registration Rights Agreement has been duly authorized and, on the Closing Date, will have been duly executed and delivered by, and will constitute a valid and binding agreement of, each of the Partnership Parties, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification may be limited by applicable law.  The DTC Agreement has been duly authorized and, on the Closing Date, will have been duly executed and delivered by, and will constitute a valid and binding agreement of, the Issuers, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(i)                                      The Contribution Agreement and the Mountaineer Agreement.   Each of the Contribution Agreement and the Mountaineer Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of,

 

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the Partnership Parties party thereto, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification may be limited by applicable law.

 

(j)                                     Authorization of the Notes, the Guarantees and the Exchange Notes.   The Notes to be purchased by the Initial Purchasers from the Issuers will on the Closing Date be in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by the Issuers and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Issuers, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture.  The Exchange Notes have been duly and validly authorized for issuance by the Issuers, and when issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general principles of equity and will be entitled to the benefits of the Indenture.  The Guarantees of the Notes on the Closing Date and the Guarantees of the Exchange Notes when issued will be in the respective forms contemplated by the Indenture and have been duly authorized for issuance pursuant to this Agreement and the Indenture; the Guarantees of the Notes, at the Closing Date, will have been duly executed by each of the Guarantors and, when the Notes have been authenticated in the manner provided for in the Indenture and issued and delivered against payment of the purchase price therefor, the Guarantees of the Notes will constitute valid and binding agreements of the Guarantors; and, when the Exchange Notes have been authenticated in the manner provided for in the Indenture and issued and delivered in accordance with the Registration Rights Agreement, the Guarantees of the Exchange Notes will constitute valid and binding agreements of the Guarantors, in each case, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture.

 

(k)                                  Authorization of the Indenture.   The Indenture has been duly authorized by the Issuers and the Guarantors and, at the Closing Date, will have been duly executed and delivered by the Issuers and the Guarantors and will constitute a valid and binding agreement of the Issuers and the Guarantors enforceable against Issuers and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws

 

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relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(l)                                      Description of the Transaction Documents and Conformity of the Notes.   The Transaction Documents will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum and the Notes to be purchased by the Initial Purchasers from the Issuers will on the Closing Date be in the substantially the form contemplated by the Indenture.

 

(m)                              No Material Change.   Except as otherwise disclosed in the Offering Memorandum (exclusive of any amendment or supplement thereto), subsequent to the respective dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto):  (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of any of the Partnership Parties, considered as one entity (any such change is called a “ Material Adverse Change ”); and (ii) the Partnership Parties considered as one entity, have not incurred any material liability or obligation, direct or contingent, not in the ordinary course of business nor entered into any material transaction not in the ordinary course of business.

 

(n)                                  Independent Registered Public Accounting Firm .  Deloitte & Touche LLP, who has certified certain financial statements of the Parent Guarantor and its consolidated subsidiaries (including the related notes thereto), whose reports are filed with the Commission and appear in the Offering Memorandum, is and was during the periods covered by such financial statements an independent registered public accounting firm with respect to each of the Parent Guarantor and Bison as required by the Securities Act and the Public Company Accounting Oversight Board, and any non-audit services provided by Deloitte & Touche LLP to any of the Partnership Parties have been approved by the Audit Committee of the Board of Directors of the General Partner. Anton Collins Mitchell LLP, who has certified certain financial statements of Bison (including the related notes thereto), whose reports are filed with the Commission and appear in the Offering Memorandum, is and was during the periods covered by such financial statements an independent registered public accounting firm with respect to Bison as required by the Securities Act and the Public Company Accounting Oversight Board, and any non-audit services provided by Anton Collins Mitchell LLP to any of the Partnership Parties have been approved by the Audit Committee of the Board of Directors of the General Partner.

 

(o)                                  Financial Statements.   The financial statements (including the related notes and supporting schedules) and other financial information included or incorporated by reference in the Offering Memorandum present fairly in all material respects the financial condition, results of operations and cash flows of the entities purported to be shown thereby, at the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity with accounting principles generally accepted in the United States (“ GAAP ”)

 

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applied on a consistent basis throughout the periods indicated, except to the extent disclosed therein. The summary historical financial and operating data included under the caption “Summary Historical and Pro Forma Financial and Operating Data” in the Offering Memorandum is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements from which they have been derived, except as described therein.  The other financial information of the Parent Guarantor (or its predecessor for accounting purposes), including non-GAAP financial measures contained in the Offering Memorandum has been derived from the accounting records of the Partnership Parties or their predecessors for accounting purposes, fairly presents in all material respects the information purported to be shown thereby and complies with Regulation G of the Exchange Act, to the extent applicable.  The pro forma financial information and the related notes included or incorporated by reference in the Offering Memorandum present fairly in all material respects the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial information and have been compiled on the bases described therein, and the assumptions included therein provide a reasonable basis for presenting the significant effects directly attributable to the transaction and events disclosed therein, the related pro forma adjustments give appropriate effect to those assumptions and have been properly applied to the historical financial statement amounts in the pro forma financial statements included or incorporated by reference in the Offering Memorandum. The Partnership Parties do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Offering Memorandum.  The statistical and market-related data and forward-looking statements included in the Offering Memorandum are based on or derived from sources that the Issuers and the Parent Guarantor believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Offering Memorandum and the Pricing Disclosure Package fairly present the information called for in all material respects and have been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

(p)                                  Formation and Qualification of the Partnership Parties .  Each of the Partnership Parties has been duly formed, is validly existing and in good standing as a limited partnership, limited liability company or corporation, as the case may be, under the laws of the State of Delaware and is duly qualified to do business and in good standing as a foreign limited partnership, limited liability company or corporation, as the case may be, in each jurisdiction (as set forth on Schedule B ) in which its ownership or lease of property or the conduct of its businesses requires such qualification, except where the failure to be so qualified or in good standing could not, in the aggregate, reasonably be expected to result in a Material Adverse Change.  Each of the Partnership Parties has all limited partnership, limited liability company or corporate power and authority, as the case may be, necessary to own or hold its properties and to conduct the businesses in which it is engaged and to enter into and perform its obligations under each of the Transaction Documents to which it is a party.

 

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(q)                                  Power and Authority of General Partner .  The General Partner has, and at the Closing Date will have, full limited liability company power and authority to serve as general partner of the Parent Guarantor in all material respects as disclosed in the Offering Memorandum.

 

(r)                                     Ownership of the General Partner .  Summit Holdings owns a 100% membership interest in the General Partner; such membership interest has been duly authorized and validly issued in accordance with the Amended and Restated Limited Liability Company Agreement of the General Partner dated October 3, 2012 (the “ General Partner LLC Agreement ”) and is fully paid (to the extent required under the General Partner LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware Limited Liability Company Act (the “ Delaware LLC Act ”)); and Summit Holdings owns such membership interest free and clear of all liens, encumbrances, security interests, equities, charges or claims (“ Liens ”), except for restrictions on transferability contained in the General Partner LLC Agreement or as described in the Offering Memorandum, if any.

 

(s)                                    Ownership of the General Partner Interest in the Parent Guarantor .  The General Partner is the sole general partner of the Parent Guarantor, with a 2.0% general partner interest in the Parent Guarantor, such interest being represented by 1,028,031 general partner units (the “ General Partner Units ”); such general partner interest has been duly authorized and validly issued in accordance with the First Amended and Restated Agreement of Limited Partnership of the Parent Guarantor dated October 3, 2012 (the “ Partnership Agreement ”); and the General Partner owns such general partner interest free and clear of all Liens, except for restrictions on transferability contained in the Partnership Agreement or as described in the Offering Memorandum, if any.

 

(t)                                     Ownership of Summit Midstream .  The Parent Guarantor owns a 100% membership interest in Summit Midstream; such membership interest has been duly authorized and validly issued in accordance with the Limited Liability Company Agreement of Summit Midstream dated March 30, 2011 (the “ Midstream LLC Agreement ”) and is fully paid (to the extent required under the Midstream LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and the Parent Guarantor owns such membership interest free and clear of all Liens, except for (i) restrictions on transferability contained in the Midstream LLC Agreement or as described in the Offering Memorandum, if any, and (ii) Liens arising under or in connection with the Amended and Restated Credit Agreement dated as of May 7, 2012, between Summit Midstream and the lenders party thereto (as amended or restated, the “ Revolving Credit Agreement ”).

 

(u)                                  Ownership of Finance Corp .  Summit Midstream owns 100% of the issued and outstanding shares of capital stock of Finance Corp.; such issued and outstanding capital stock has been duly authorized and validly issued in accordance with the Certificate of Incorporation and Bylaws of Finance Corp., each dated May 29, 2013 (the “ Finance Corp. Certificate and Bylaws ”) and is fully paid and nonassessable and

 

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none of the outstanding shares of capital stock of Finance Corp. were issued in violation of any preemptive rights or similar rights; and Summit Midstream owns such capital stock interest free and clear of all Liens, except for Liens arising under or in connection with the Revolving Credit Agreement.

 

(v)                                  Ownership of DFW .  Summit Midstream owns 100% of the outstanding membership interests of DFW Midstream Services, LLC, a Delaware limited liability company (“ DFW ”); such membership interests have been duly authorized and validly issued in accordance with the Second Amended and Restated Limited Liability Company Agreement of DFW dated April 1, 2011 (the “ DFW LLC Agreement ”) and are fully paid (to the extent required under the DFW LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and such membership interests are owned free and clear of all Liens, except for (i) restrictions on transferability contained in the DFW LLC Agreement or as described in the Offering Memorandum, if any, and (ii) Liens arising under or in connection with the Revolving Credit Agreement.

 

(w)                                Ownership of Grand River .  Summit Midstream owns a 100% membership interest in Grand River, such membership interest has been duly authorized and validly issued in accordance with the Amended and Restated Limited Liability Company Operating Agreement of Grand River dated May 7, 2012 (the “ Grand River LLC Agreement ”) and is fully paid (to the extent required under the Grand River LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and such membership interest is owned free and clear of all Liens, except for (i) restrictions on transferability contained in the Grand River LLC Agreement or as described in the Offering Memorandum, if any, and (ii) Liens arising under or in connection with the Revolving Credit Agreement.

 

(x)                                  Ownership of Bison .  Summit Midstream owns a 100% membership interest in Bison, such membership interest has been duly authorized and validly issued in accordance with the Limited Liability Company Agreement of Bison dated May 23, 2013 (the “ Bison LLC Agreement ”) and is fully paid (to the extent required under the Bison LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and such membership interest is owned free and clear of all Liens, except for (i) restrictions on transferability contained in the Bison LLC Agreement or as described in the Offering Memorandum, if any, and (ii) Liens arising under or in connection with the Revolving Credit Agreement.

 

(y)                                  Ownership of Mountaineer .  Summit Midstream owns a 100% membership interest in Mountaineer Midstream Company, LLC, a Delaware limited liability company (“ Mountaineer ”), such membership interest has been duly authorized and validly issued in accordance with the Limited Liability Company Agreement of Mountaineer dated May 30, 2013 (the “ Mountaineer LLC Agreement ”) and is fully paid (to the extent required under the Mountaineer LLC Agreement) and nonassessable (except as such nonassessability may be affected by Sections 18-303, 18-607 and 18-804 of the Delaware LLC Act); and such membership interest is owned free and clear of all

 

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Liens, except for (i) restrictions on transferability contained in the Mountaineer LLC Agreement or as described in the Offering Memorandum, if any, and (ii) Liens arising under or in connection with the Revolving Credit Agreement.

 

(z)                                   Capitalization . As of the date hereof and as of the Closing Date, the Parent Guarantor will have no limited partner interests issued and outstanding other than 25,966,276 common units representing limited partner interests in the Parent Guarantor (the “ Common Units ”) and 24,409,850 subordinated units representing limited partner interests in the Parent Guarantor (collectively with the Common Units, the “ Units ”) and all of such Units and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the “ Delaware LP Act ”));

 

(aa)                           No Other Subsidiaries .  Other than the General Partner Units, the Incentive Distribution Rights (as such term is defined in the Partnership Agreement) and the membership interests or capital stock, as applicable, in each of Summit Midstream, Finance Corp., DFW, Grand River, Bison and Mountaineer, the General Partner does not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.  Other than the Parent Guarantor’s 100% direct or indirect ownership of each of Summit Midstream, Finance Corp., DFW, Grand River, Bison and Mountaineer, the Parent Guarantor does not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.

 

(bb)                           No Conflicts .  None of (i) the issuance and delivery of the Securities and the Exchange Securities as described in the Offering Memorandum, (ii) the execution, delivery and performance of the Transaction Documents by the Partnership Parties party hereto or thereto, (iii) the consummation of any of the transactions contemplated by the Transaction Documents or (iv) the application of the proceeds from the sale of the Securities as described under “Use of Proceeds” in the Offering Memorandum (A) conflicts with or will conflict with or constitutes or will constitute a violation of the agreement of limited partnership, limited liability company agreement, certificate of limited partnership, certificate of formation, charter, bylaws or other governing document, as applicable (the “ Organizational Documents ”) of any of the Partnership Parties, (B) conflicts with or will conflict with or constitutes or will constitute a breach or violation of, or a change of control or default (or an event that, with notice or lapse of time or both, would constitute such an event) under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Partnership Parties is a party or by which any of them or any of their respective properties may be bound, (C) violates or will violate any statute, law, regulation, ruling or any order, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over any of the Partnership Parties or any of their properties in a proceeding to which any of them or their property is a party or is bound or (D) results or will result in the creation or imposition of any Lien (other than Liens arising under or in

 

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connection with the Revolving Credit Agreement) upon any property or assets of any of the Partnership Parties, except with respect to clauses (B), (C) and (D) for any such conflicts, violations, breaches, defaults or Liens that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

(cc)                             No Consents No consent, approval, authorization, order, registration, filing or qualification (“ consent ”) of or with any court, governmental agency or body having jurisdiction over any of the Partnership Parties or any of their properties or assets is required in connection with (i) the issuance and delivery of the Securities and the Exchange Securities as described in the Offering Memorandum, (ii) the execution, delivery and performance of the Contribution Agreement, the Mountaineer Agreement, this Agreement, the Registration Rights Agreement, the DTC Agreement and the Indenture by the Partnership Parties party hereto and thereto, (iii) the consummation of the transactions contemplated by the Transaction Documents or (iv) the application of the proceeds from the sale of the Securities as described under “Use of Proceeds” in the Offering Memorandum, except (i) for such consents as have been obtained or made by the Partnership Parties, (ii) as may be required by the securities laws of the several states of the United States with respect to the Partnership Parties’ obligations under the Registration Rights Agreement, (iii) for such consents that, if not obtained, would not, individually or in the aggregate, materially adversely affect the consummation of the transactions contemplated by this Agreement and (iv) as described in the Offering Memorandum.

 

(dd)                           No Defaults .  None of the Partnership Parties is in (i) violation of its Organizational Documents, (ii) violation of any law, statute, ordinance, administrative or governmental rule or regulation applicable to it or of any order, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over it or any of its properties or (iii) breach, default (or an event that, with notice or lapse of time or both, would constitute such an event) or violation in the performance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which it is a party or by which it or any of its properties may be bound, which breach, default or violation in the cases of clause (ii) or (iii), would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

(ee)                             Legal Proceedings .  Except as disclosed in the Offering Memorandum, there are no legal or governmental proceedings pending to which any of the Partnership Parties is a party or of which any property or assets of any of the Partnership Parties is the subject that could, in the aggregate, reasonably be expected to result in a Material Adverse Change or could, in the aggregate, reasonably be expected to have a material adverse effect on the performance by any Partnership Party of the Transaction Documents or the consummation of the transactions contemplated thereby; and to the Partnership Parties’ knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.

 

(ff)                               Intellectual Property Each of the Partnership Parties owns, licenses or possesses adequate rights to use all material patents, patent applications, trademarks,

 

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service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, know-how, software, systems and technology (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of its business and has no reason to believe that the conduct of its business conflicts with, and has not received any notice of any claim of conflict with, any such rights of others.

 

(gg)                             Permits Each of the Partnership Parties has such permits, licenses, patents, franchises, certificates of need and other approvals or authorizations of governmental or regulatory authorities (“ Permits ”) as are necessary under applicable law to own its properties and conduct its business in the manner described in the Offering Memorandum, except for any of the foregoing that could not, in the aggregate, reasonably be expected to result in a Material Adverse Change.  Each of the Partnership Parties has fulfilled and performed all of its obligations with respect to the Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights of the holder or any such Permits, except for any of the foregoing that could not reasonably be expected to result in a Material Adverse Change.

 

(hh)                           Title to Properties Each of the Partnership Parties has good and indefeasible title to all real property owned in fee by such Partnership Party (excluding easements or rights-of-way) and good title to all personal property owned by it, in each case free and clear of all Liens except (i) as described in the Offering Memorandum, (ii) such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by any of the Partnership Parties or (iii) that arise under or are expressly permitted by the Revolving Credit Agreement.  All assets held under lease by each of the Partnership Parties are held by it under valid, subsisting and enforceable leases, with such exceptions as do not materially interfere with the use made or proposed to be made of such assets by any of the Partnership Parties as described in the Offering Memorandum.

 

(ii)                                   Tax Returns The Partnership Parties have filed all federal, state, local and foreign tax returns required to be filed through the date hereof (which returns are complete and correct in all material respects), subject to permitted extensions, and have timely paid all taxes due, and no tax deficiency has been determined adversely to the Partnership Parties, nor do any of the Partnership Parties have any knowledge of any tax deficiencies that have been, or could reasonably be expected to be, asserted against the Partnership Parties that could, in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

(jj)                                 Investment Company None of the Partnership Parties is, and as of the Closing Date, after giving effect to the issuance and delivery of the Securities and the application of the proceeds therefrom as described under “Use of Proceeds” in the Offering Memorandum, none of them will be, (i) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “ Investment Company Act ”), and the rules and

 

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regulations of the Commission thereunder, or (ii) a “business development company” (as defined in Section 2(a)(48) of the Investment Company Act).

 

(kk)                           Insurance Each of the Partnership Parties carries, or is covered by, insurance from reputable insurers in such amounts and covering such risks as is reasonably adequate for the conduct of its businesses and the value of its properties and as is customary for companies engaged in similar businesses in similar industries.  All policies of insurance of any of the Partnership Parties are in full force and effect; each of the Partnership Parties is in compliance with the terms of such policies in all material respects; and none of the Partnership Parties has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance.  There are no claims by any of the Partnership Parties under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause and none of the Partnership Parties has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that could not reasonably be expected to result in a Material Adverse Change.

 

(ll)                                   Stabilization The Parent Guarantor and its Affiliates have not taken, directly or indirectly, any action designed to or that has constituted or that could reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Parent Guarantor or the Issuers in connection with the sale of the Securities.

 

(mm)                   Solvency.   Each of the Partnership Parties is, and immediately after the Closing Date will be, Solvent.  As used herein, the term “ Solvent ” means, with respect to any person on a particular date, that on such date (i) the fair market value of the assets of such person is greater than the total amount of liabilities (including contingent liabilities) of such person, (ii) the present fair salable value of the assets of such person is greater than the amount that will be required to pay the probable liabilities of such person on its debts as they become absolute and matured, (iii) such person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such person does not have unreasonably small capital.

 

(nn)                           Compliance with Sarbanes-Oxley.   The Parent Guarantor and, to the knowledge of the Partnership Parties, the officers and directors of the General Partner are in compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act, ” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

(oo)                           Accounting System.   The Partnership Parties maintain a system of accounting controls that is sufficient to provide reasonable assurances that:  (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to the Partnership Parties’ assets is permitted only in accordance with

 

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management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(pp)                           Disclosure Controls and Procedures.   (i) The Parent Guarantor has established and maintains disclosure controls and procedures (to the extent required by and as such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure controls and procedures are designed to ensure that the information required to be disclosed by the Parent Guarantor in the reports it files or will file or submit under the Exchange Act, as applicable, is accumulated and communicated to management of the General Partner and each other Partnership Party, including their respective principal executive officers and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure to be made and (iii) such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established to the extent required by Rule 13a-15 of the Exchange Act.

 

(qq)                           Regulations T, U, X.  None of the Partnership Parties, nor any agent thereof acting on their behalf has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

 

(rr)                                 Environmental Compliance (i) Each of the Partnership Parties is, and at all times prior hereto has been, in compliance with all laws, regulations, ordinances, rules, orders, judgments, decrees, permits or other legal requirements of any governmental authority, including without limitation any international, foreign, national, state, provincial, regional or local authority, relating to pollution, the protection of human health or safety, the environment, natural resources, or the use, handling, storage, manufacturing, transportation, treatment, discharge, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”) applicable to such entity, which compliance includes, without limitation, obtaining, maintaining and complying with all permits and authorizations and approvals required by Environmental Laws to conduct their respective businesses, and (ii) no Partnership Party has received notice or otherwise has knowledge of any actual or alleged violation of Environmental Laws, or of any actual or potential liability for or other obligation concerning the presence, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals or liability would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change.  Except as described in the Offering Memorandum, (x) there are no proceedings that are pending, or known to be contemplated, against any of the Partnership Parties under Environmental Laws in which a governmental authority is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) none of the Partnership Parties is aware of any issues regarding compliance with Environmental Laws, including any pending or proposed Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a material effect on the capital

 

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expenditures, earnings or competitive position of any of the Partnership Parties, and (z) none of the Partnership Parties anticipates material capital expenditures relating to Environmental Laws.

 

(ss)                               ERISA  (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Security Act of 1974, as amended (“ ERISA ”)) for which the Parent Guarantor or any member of its “ Controlled Group ” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “ Code ”)) would have any liability (each a “ Plan ”) has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules and regulations including ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) with respect to each Plan subject to Title IV of ERISA (A) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, (B) no “accumulated funding deficiency” (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred or is reasonably expected to occur, (C) the fair market value of the assets under each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan), and (D) neither the Parent Guarantor nor any member of its Controlled Group has incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan,” within the meaning of Section 4001(c)(3) of ERISA); and (iv) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

 

(tt)                                 No Labor Dispute No labor disturbance by or dispute with the employees of any of the Partnership Parties exists or, to the knowledge of the Partnership Parties, is imminent or threatened that could reasonably be expected to result in a Material Adverse Change.

 

(uu)                           Certain Relationships and Related Party Transactions No relationship, direct or indirect, exists between or among any of the Partnership Parties, on the one hand, and any Affiliate, equity holder, director, manager, officer, customer or supplier of any of the Partnership Parties, on the other hand, which is required by the Securities Act to be disclosed in a registration statement on Form S-1 that is not disclosed in the Offering Memorandum.  There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by any Partnership Party to or for the benefit of any of the officers, directors or managers of any Partnership Party or their respective family members.

 

(vv)                           Anti-Corruption None of the Partnership Parties nor, to the knowledge of the Partnership Parties, any director, officer, agent, employee or other person associated with or acting on behalf of any of the Partnership Parties, Summit Holdings or

 

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Summit Investments, has (i) used any of its funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from its funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

(ww)                       Money Laundering The operations of the Partnership Parties are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any Partnership Party with respect to the Money Laundering Laws is pending or, to the knowledge of any of the Partnership Parties, threatened.

 

(xx)                           OFAC None of the Partnership Parties nor, to the knowledge of the Partnership Parties, any director, officer, agent, employee or Affiliate of the Partnership Parties is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”); and the Issuers will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(yy)                           Regulation S.   The Issuers and the Guarantors and their respective Affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom the Issuers and the Guarantors make no representation) have complied with and will comply with the offering restrictions requirements of Regulation S in connection with the offering of the Securities outside the United States and, in connection therewith, the Offering Memorandum will contain the disclosure required by Rule 902.  Each of the Issuers and the Guarantors is a “reporting issuer” as defined in Rule 902 under the Securities Act.

 

Any certificate signed by an officer of the Partnership Parties and delivered to the Initial Purchasers or to counsel for the Initial Purchasers shall be deemed to be a representation and warranty by the Partnership Parties to each Initial Purchaser as to the matters set forth therein.

 

SECTION 2.                             Purchase, Sale and Delivery of the Securities.

 

(a)                                  The Securities.   Each of the Issuers and the Guarantors agrees to issue and sell to the Initial Purchasers, severally and not jointly, all of the Securities, and, subject to the conditions set forth herein, the Initial Purchasers agree, severally and not jointly, to purchase from the Issuers and the Guarantors the aggregate principal amount of Securities set forth opposite their names on Schedule A , at a purchase price of 98.06% of the principal amount

 

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thereof payable on the Closing Date, in each case, on the basis of the representations, warranties and agreements herein contained, and upon the terms herein set forth.

 

(b)                                  The Closing Date.   The closing of the transactions contemplated hereby (the “ Closing ”) shall occur at the offices of Latham & Watkins LLP, 811 Main Street, Suite 3700, Houston, Texas 77002 (or such other place as may be agreed to by the Issuers and the Parent Guarantor and Merrill Lynch) at 9:00 a.m. Houston time, on June 17, 2013, or such other time and date as Merrill Lynch shall designate by notice to the Issuers and the Parent Guarantor (the time and date of such Closing are called the “ Closing Date ”).  The Issuers and the Parent Guarantor hereby acknowledge that circumstances under which Merrill Lynch may provide notice to postpone the Closing Date as originally scheduled include, but are in no way limited to, any determination by the Issuers, the Parent Guarantor or the Initial Purchasers to recirculate to investors copies of an amended or supplemented Offering Memorandum or a delay as contemplated by the provisions of Section 18 hereof.

 

(c)                                   Delivery of the Securities.  The Issuers shall deliver, or cause to be delivered, to Merrill Lynch for the accounts of the several Initial Purchasers certificates for the Notes at the Closing Date against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor.  The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Agreement, and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City as Merrill Lynch may designate.  Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.

 

(d)                                  Initial Purchasers as Qualified Institutional Buyers.   Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Issuers that:

 

(i)                   it will offer and sell Securities only to (a) persons who it reasonably believes are “qualified institutional buyers” within the meaning of Rule 144A (“ Qualified Institutional Buyers ”) in transactions meeting the requirements of Rule 144A or (b) upon the terms and conditions set forth in Annex I to this Agreement;

 

(ii)                it is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act; and

 

(iii)             it will not offer or sell Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Securities Act.

 

SECTION 3.                             Additional Covenants.   Each of the Partnership Parties further covenants and agrees with each Initial Purchaser as follows:

 

(a)                                  Preparation of Final Offering Memorandum; Initial Purchasers’ Review of Proposed Amendments and Supplements and Additional Written Communications.   As promptly as practicable following the Time of Sale and in any event not later than the second business day following the date hereof, the Issuers will prepare and deliver to the Initial Purchasers the Final Offering Memorandum, which shall

 

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consist of the Preliminary Offering Memorandum as modified only by the information contained in the Pricing Supplement.  The Issuers will not amend or supplement the Preliminary Offering Memorandum or the Pricing Supplement.  The Issuers will not amend or supplement the Final Offering Memorandum prior to the Closing Date unless the Representatives shall previously have been furnished a copy of the proposed amendment or supplement at least two business days prior to the proposed use or filing, and shall not have objected to such amendment or supplement.  Before making, preparing, using, authorizing, approving or distributing any Additional Written Communication, the Issuers will furnish to the Representatives a copy of such written communication for review and will not make, prepare, use, authorize, approve or distribute any such written communication to which the Representatives reasonably objects.

 

Amendments and Supplements to the Final Offering Memorandum and Other Securities Act Matters.   If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Pricing Disclosure Package to comply with law, the Partnership Parties will immediately notify the Initial Purchasers thereof and forthwith prepare and (subject to Section 3(a) hereof) furnish to the Initial Purchasers such amendments or supplements to any of the Pricing Disclosure Package as may be necessary so that the statements in any of the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or so that any of the Pricing Disclosure Package will comply with all applicable law.  If, prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Final Offering Memorandum, as then amended or supplemented, in order to make the statements therein, in the light of the circumstances when the Final Offering Memorandum is delivered to a Subsequent Purchaser, not misleading, or if in the judgment of the Representatives or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Final Offering Memorandum to comply with law, the Partnership Parties agree to promptly prepare (subject to Section 3 hereof), file with the Commission and furnish at its own expense to the Initial Purchasers, amendments or supplements to the Final Offering Memorandum so that the statements in the Final Offering Memorandum as so amended or supplemented will not, in the light of the circumstances at the Closing Date and at the time of sale of Securities, be misleading or so that the Final Offering Memorandum, as amended or supplemented, will comply with all applicable law.  The Parent Guarantor hereby expressly acknowledges that the indemnification and contribution provisions of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum, amendment or supplement referred to in this Section 3.

 

(b)                                  Copies of the Offering Memorandum.   The Parent Guarantor agrees to furnish the Initial Purchasers, without charge, as many copies of the Pricing Disclosure

 

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Package and the Final Offering Memorandum and any amendments and supplements thereto as they shall reasonably request.

 

(c)                                   Blue Sky Compliance.   Each of the Partnership Parties shall cooperate with the Representatives and counsel for the Initial Purchasers to qualify or register (or to obtain exemptions from qualifying or registering) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States or any other jurisdictions designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities.  None of the Partnership Parties shall be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation.

 

(d)                                  Use of Proceeds.   The Issuers shall apply the net proceeds from the sale of the Securities sold by them in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure Package.

 

(e)                                   The Depositary .  The Issuers will cooperate with the Initial Purchasers and use their reasonable best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depositary.

 

(f)                                    Additional Issuer Information.   Prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, the Issuers and the Parent Guarantor shall file, on a timely basis, with the Commission all reports and documents required to be filed under Section 13 or 15 of the Exchange Act.  Additionally, at any time when the Parent Guarantor is not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial owners from time to time of the Securities, the Issuers shall furnish, at their expense, upon request, to holders and beneficial owners of Securities and prospective purchasers of Securities information (“ Additional Issuer Information ”) satisfying the requirements of Rule 144A(d).

 

(g)                                   Agreement Not To Offer or Sell Additional Securities.   During the period of 90 days following the date hereof, none of the Parent Guarantor or the Issuers will, without the prior written consent of Merrill Lynch (which consent may be withheld at the sole discretion of Merrill Lynch), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of the Parent Guarantor or the Issuers or securities exchangeable for or convertible into debt securities of the Parent Guarantor or the Issuers (other than as contemplated by this Agreement and to register the Exchange Securities).

 

(h)                                  Future Reports to the Initial Purchasers.   At any time when the Parent Guarantor is not subject to Section 13 or 15 of the Exchange Act and any Securities or Exchange Securities remain outstanding, the Parent Guarantor will furnish to the Representatives and, upon request, to each of the other Initial Purchasers:  (i) as soon as

 

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practicable after the end of each fiscal year, copies of the Annual Report of the Parent Guarantor containing the balance sheet of the Parent Guarantor as of the close of such fiscal year and statements of income, partners’ equity and cash flows for the year then ended and the opinion thereon of the Parent Guarantor’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Parent Guarantor with the Commission, the Financial Industry Regulatory Authority (the “ FINRA ”) or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Parent Guarantor mailed generally to holders of its or the Issuers’ equity or debt securities (including the holders of the Securities), if, in each case, such documents are not filed with the Commission within the time periods specified by the Commission’s rules and regulations under Section 13 or 15 of the Exchange Act.

 

(i)                                      No Integration.   The Parent Guarantor agrees that it will not and will cause its Affiliates not to make any offer or sale of securities of the Parent Guarantor or the Issuers of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Issuers to the Initial Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise.

 

(j)                                     No General Solicitation or Directed Selling Efforts .  The Parent Guarantor agrees that it will not and will not permit any of its Affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no covenant is given) to (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling efforts with respect to the Securities within the meaning of Regulation S, and the Parent Guarantor will and will cause all such persons to comply with the offering restrictions requirement of Regulation S with respect to the Securities.

 

(k)                                  No Restricted Resales.   Until the earlier of (i) the date on which all registration statements required to be filed pursuant to the Registration Rights Agreement shall become effective and (ii) one year following the Closing Date, the Parent Guarantor will not, and will not permit any of its Affiliates to resell any of the Notes that have been reacquired by any of them.

 

(l)                                      Legended Securities.   Each certificate for a Note will bear the legend contained under the caption “Transfer Restrictions” in the Preliminary Offering Memorandum for the time period and upon the other terms stated in the Preliminary Offering Memorandum.

 

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The Representatives on behalf of the several Initial Purchasers, may, in their sole discretion, waive in writing the performance by the Partnership Parties of any one or more of the foregoing covenants or extend the time for their performance.

 

SECTION 4.                             Payment of Expenses.   Each of the Partnership Parties agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation, (i) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iii) all fees and expenses of counsel to the Partnership Parties, independent public or certified public accountants and other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Pricing Disclosure Package and the Final Offering Memorandum (including financial statements and exhibits), and all amendments and supplements thereto, and the Transaction Documents, (v) all filing fees, attorneys’ fees and expenses incurred by the Partnership Parties or the Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or other jurisdictions designated by the Initial Purchasers (including, without limitation, the cost of preparing, printing and mailing preliminary and final blue sky or legal investment memoranda and any related supplements to the Pricing Disclosure Package or the Final Offering Memorandum), (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities and the Exchange Securities, (vii) any fees payable in connection with the rating of the Securities or the Exchange Securities with the ratings agencies, (viii) any filing fees incident to, and any reasonable fees and disbursements of counsel to the Initial Purchasers in connection with the review by FINRA, if any, of the terms of the sale of the Securities or the Exchange Securities (not to exceed $20,000 in the aggregate), (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Partnership Parties in connection with approval of the Securities by the Depositary for “book-entry” transfer, and the performance by the Partnership Parties of their respective other obligations under this Agreement and (x) all expenses incident to the “road show” for the offering of the Securities, provided that the Initial Purchasers agree to pay 50% of the cost of any chartered airplane or other transportation.  Except as provided in this Section 4 and Sections 6, 8 and 9 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.

 

SECTION 5.                             Conditions of the Obligations of the Initial Purchasers.   The obligations of the several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties on the part of the Partnership Parties set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and to the timely performance by the Partnership Parties of its covenants and other obligations hereunder, and to each of the following additional conditions:

 

(a)                                  Accountants’ Comfort Letter.  On the date hereof, the Initial Purchasers shall have received from each of Deloitte & Touche, LLP and Anton Collins Mitchell LLP, the independent registered public accounting firms for the Parent Guarantor and

 

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Bison, respectively, a “comfort letter” dated the date hereof addressed to the Initial Purchasers, in form and substance satisfactory to the Representatives, covering the financial information in the Pricing Disclosure Package and other customary matters.  In addition, on the Closing Date, the Initial Purchasers shall have received from such accountants a “bring-down comfort letter” dated the Closing Date addressed to the Initial Purchasers, in form and substance satisfactory to the Representatives, in the form of the “comfort letter” delivered on the date hereof, except that (i) it shall cover the financial information in the Final Offering Memorandum and any amendment or supplement thereto and (ii) procedures shall be brought down to a date no more than three days prior to the Closing Date.

 

(b)                                  No Material Adverse Change or Ratings Agency Change.   For the period from and after the date of this Agreement and prior to the Closing Date:

 

(i)                                      in the judgment of the Representatives there shall not have occurred any Material Adverse Change; and

 

(ii)                                   there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Partnership Parties or any of their securities or indebtedness by any “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) of the Exchange Act.

 

(c)                                   Opinion of Counsel for the Partnership Parties.   On the Closing Date, the Initial Purchasers shall have received the favorable opinion, negative assurance letter and opinion regarding certain tax matters of Latham & Watkins LLP, counsel for the Partnership Parties, dated as of such Closing Date, the form of which is attached as Exhibit B-1 , B-2 and B-3 , respectively.

 

(d)                                  General Counsel Opinion . On the Closing Date, the Initial Purchasers shall have received the favorable opinion of Brock M. Degeyter, as general counsel to the General Partner, dated as of such Closing Date, the form of which is attached as Exhibit C .

 

(e)                                   Opinion of Counsel for the Initial Purchasers.   On the Closing Date, the Initial Purchasers shall have received the favorable opinion of Vinson & Elkins L.L.P., counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers.

 

(f)                                    Officers’ Certificate.   On the Closing Date the Initial Purchasers shall have received a written certificate executed by the Chief Executive Officer or President of the Issuers and each Guarantor and the Chief Financial Officer or Chief Accounting Officer of the Issuers and each Guarantor, dated as of the Closing Date, to the effect set forth in Section 5(b)(ii) hereof, and further to the effect that:

 

(i)                                      for the period from and after the date of this Agreement and prior to the Closing Date there has not occurred any Material Adverse Change;

 

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(ii)                                   the representations, warranties and covenants of the Partnership Parties set forth in Section 1 hereof were true and correct as of the date hereof and are true and correct as of the Closing Date with the same force and effect as though expressly made on and as of the Closing Date; and

 

(iii)                                each of the Partnership Parties has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

 

(g)                                   Indenture; Registration Rights Agreement .   The Issuers and the Guarantors shall have executed and delivered the Indenture, in form and substance reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers shall have received executed copies thereof.  The Partnership Parties shall have executed and delivered the Registration Rights Agreement, in form and substance reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers shall have received such executed counterparts.

 

(h)                                  Additional Documents.   On or before the Closing Date, the Initial Purchasers and counsel for the Initial Purchasers shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representatives by notice to the Issuers and the Parent Guarantor at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Sections 4, 6, 8 and 9 hereof shall at all times be effective and shall survive such termination.

 

SECTION 6.                             Reimbursement of Initial Purchasers’ Expenses.   If this Agreement is terminated by the Representatives pursuant to Section 5 or clauses (i), (v) and (vi) of Section 10 hereof, including if the sale to the Initial Purchasers of the Securities on the Closing Date is not consummated because of any refusal, inability or failure on the part of the Partnership Parties to perform any agreement herein or to comply with any provision hereof, the Parent Guarantor agrees to reimburse the Initial Purchasers, severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the proposed purchase and the offering and sale of the Securities, including, without limitation, fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.

 

SECTION 7.                             Offer, Sale and Resale Procedures .  Each of the Initial Purchasers, on the one hand, and the Issuers and each of the Guarantors, on the other hand, hereby agree to observe the following procedures in connection with the offer and sale of the Securities:

 

(a)                                  Offers and sales of the Securities will be made only by the Initial Purchasers or Affiliates thereof qualified to do so in the jurisdictions in which such offers

 

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or sales are made.  Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be Qualified Institutional Buyers or non-U.S. persons outside the United States to whom the offeror or seller reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S upon the terms and conditions set forth in Annex I hereto, which Annex I is hereby expressly made a part hereof.

 

(b)                                  The Securities will be offered by approaching prospective Subsequent Purchasers on an individual basis.  No general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the offering of the Securities.

 

(c)                                   Upon original issuance by the Issuers, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Notes (and all securities issued in exchange therefor or in substitution thereof, other than the Exchange Notes) shall bear the following legend:

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, OR (C) IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D PROMULGATED UNDER THE SECURITIES ACT AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT ONLY (A) TO THE ISSUERS, THE PARENT GUARANTOR OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN

 

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ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION D THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, 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, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUERS’ AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144.”

 

Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the Issuers for any losses, damages or liabilities suffered or incurred by the Issuers, including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Security.

 

SECTION 8.                             Indemnification.

 

(a)                                  Indemnification of the Initial Purchasers.   Each of the Partnership Parties, jointly and severally, agrees to indemnify and hold harmless each Initial Purchaser, the directors, officers and employees of each Initial Purchaser, each Affiliate of any Initial Purchaser who participated or is alleged to have participated in the distribution of the Securities, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which

 

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such Initial Purchaser, Affiliate, director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Parent Guarantor), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Pricing Supplement, any Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Initial Purchaser and each such Affiliate, director, officer, employee or controlling person for any and all expenses (including the fees and disbursements of counsel chosen by Merrill Lynch) as such expenses are reasonably incurred by such Initial Purchaser or such Affiliate, director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply, with respect to an Initial Purchaser, to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Issuers and the Parent Guarantor by such Initial Purchaser through the Representatives expressly for use in the Preliminary Offering Memorandum, the Pricing Supplement, any Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto).  The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Partnership Parties may otherwise have.

 

(b)                                  Indemnification of the Issuers and the Guarantors.   Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Partnership Parties, each of their respective directors, officers and employees and each person, if any, who controls the Partnership Parties within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Partnership Parties or any such director, officer, employee or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Pricing Supplement, any Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Preliminary Offering Memorandum, the Pricing Supplement, any Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Issuers or the Parent Guarantor by such Initial Purchaser through the Representatives expressly for use therein; and to reimburse the Partnership Parties and each such director, officer, employee or controlling person for any and all expenses (including the fees and

 

27



 

disbursements of counsel) as such expenses are reasonably incurred by the Partnership Parties or such director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action.  Each of the Partnership Parties hereby acknowledges that the only information that the Initial Purchasers through the Representatives have furnished to the Issuers or the Parent Guarantor expressly for use in the Preliminary Offering Memorandum, the Pricing Supplement, any Additional Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in the third and fourth sentences under the caption “Plan of Distribution—New Issue of Notes” in the Preliminary Offering Memorandum and the Final Offering Memorandum.  The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Initial Purchaser may otherwise have.

 

(c)                                   Notifications and Other Indemnification Procedures .  Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; provided that the failure to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 8 except to the extent that it has been materially prejudiced by such failure (through the forfeiture of substantive rights and defenses) and shall not relieve the indemnifying party from any liability that the indemnifying party may have to an indemnified party other than under this Section 8.  In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties.  Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel (in each jurisdiction)), which shall be selected by Merrill Lynch (in the case of counsel representing the Initial Purchasers or their related persons), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party.

 

28



 

(d)                                  Settlements.   The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, which will not be unreasonably withheld, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this Section 8, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request or disputed in good faith the indemnified party’s entitlement to such reimbursement prior to the date of such settlement.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.

 

SECTION 9.                             Contribution.   If the indemnification provided for in Section 8 hereof is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Partnership Parties, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Partnership Parties, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative benefits received by the Partnership Parties, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Issuers, and the total discount received by the Initial Purchasers bear to the aggregate initial offering price of the Securities.  The relative fault of the Partnership Parties, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Partnership Parties, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

29



 

The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8 hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.  The provisions set forth in Section 8 hereof with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8 hereof for purposes of indemnification.

 

The Partnership Parties and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9.

 

Notwithstanding the provisions of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Initial Purchasers’ obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective commitments as set forth opposite their names in Schedule A .  For purposes of this Section 9, each Affiliate, director, officer and employee of an Initial Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Partnership Parties, and each person, if any, who controls the Partnership Parties with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Partnership Parties.

 

SECTION 10.                      Termination of this Agreement.   Prior to the Closing Date, this Agreement may be terminated by the Representatives by notice given to the Parent Guarantor if at any time:  (i) trading or quotation in any of the Parent Guarantor’s securities shall have been suspended or limited by the Commission or by the New York Stock Exchange (the “ NYSE ”); (ii) trading in securities generally on either the Nasdaq Stock Market or the NYSE shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such quotation system or stock exchange by the Commission or FINRA; (iii) a general banking moratorium shall have been declared by any federal, New York or Delaware authorities; (iv) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Representatives is material and adverse and makes it impracticable or inadvisable to proceed with the offering sale or delivery of the Securities in the manner and on the terms described in the Pricing Disclosure Package or to enforce contracts for the sale of securities; (v) in the judgment of the Representatives there shall have occurred any event or development that would result in a Material Adverse Change; or (vi) the Partnership Parties shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such

 

30



 

character as in the judgment of the Representatives may interfere materially with the conduct of the business and operations of the Partnership Parties regardless of whether or not such loss shall have been insured.  Any termination pursuant to this Section 10 shall be without liability on the part of (i) the Partnership Parties to any Initial Purchaser, except that the Partnership Parties shall be obligated to reimburse the expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial Purchaser to the Partnership Parties, or (iii) any party hereto to any other party except that the provisions of Sections 8 and 9 hereof shall at all times be effective and shall survive such termination.

 

SECTION 11.       Representations and Indemnities to Survive Delivery.   The respective indemnities, agreements, representations, warranties and other statements of the Partnership Parties, their respective officers and the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser, the Partnership Parties or any of their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.

 

SECTION 12.       Notices.   All communications hereunder shall be in writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:

 

If to the Partnership Parties:

 

Summit Midstream Partners, LP
2100 McKinney Avenue, Suite 1250
Dallas, TX 75201

Facsimile: (214) 462-7716
Attention: Brock M. Degeyter

 

with a copy to:

 

Latham & Watkins LLP
811 Main Street, 37
th  Floor
Houston, Texas 77002
Facsimile: (713) 546-5401
Attention: Brett E. Braden

 

If to the Initial Purchasers:

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated
50 Rockefeller Plaza
New York, New York  10020
Facsimile: (212) 901-7897
Attention: High Yield Legal Department

 

31



 

with a copy to:

 

Vinson & Elkins L.L.P.
1001 Fannin, Suite 2500
Houston, Texas 77002
Facsimile: (713) 615-5725
Attention: Doug McWilliams

 

Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the others.

 

SECTION 13.          Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Partnership Parties, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.

 

SECTION 14.       Successors.   This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the indemnified parties referred to in Sections 8 and 9 hereof, and in each case their respective successors, and no other person will have any right or obligation hereunder.  The term “successors” shall not include any Subsequent Purchaser or other purchaser of the Securities as such from any of the Initial Purchasers merely by reason of such purchase.

 

SECTION 15.       Authority of the Representatives.   Any action by the Initial Purchasers hereunder may be taken by Merrill Lynch on behalf of the Initial Purchasers, and any such action taken by Merrill Lynch shall be binding upon the Initial Purchasers.

 

SECTION 16.       Partial Unenforceability.   The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof.  If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

SECTION 17.       Governing Law Provisions.   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.  Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“ Related Proceedings ”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the “ Specified Courts ”), and each party irrevocably submits to the exclusive jurisdiction (except for suits, actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding a related judgment, as to which such

 

32



 

jurisdiction is non-exclusive) of the Specified Courts in any Related Proceeding.  Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum.

 

SECTION 18.       Default of One or More of the Several Initial Purchasers.   If any one or more of the several Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Schedule A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on the Closing Date.  If any one or more of the Initial Purchasers shall fail or refuse to purchase Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial Purchasers and the Parent Guarantor for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Sections 4, 6, 8 and 9 hereof shall at all times be effective and shall survive such termination.  In any such case either the Initial Purchasers or the Parent Guarantor shall have the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Final Offering Memorandum or any other documents or arrangements may be effected.

 

As used in this Agreement, the term “ Initial Purchaser ” shall be deemed to include any person substituted for a defaulting Initial Purchaser under this Section 18.  Any action taken under this Section 18 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement.

 

SECTION 19.       No Advisory or Fiduciary Responsibility.   Each of the Partnership Parties acknowledges and agrees that:  (i) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Partnership Parties, on the one hand, and the several Initial Purchasers, on the other hand, and the Partnership Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Initial Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the Partnership Parties or their respective Affiliates, members, limited partners, stockholders, creditors or employees or any other party; (iii) no Initial Purchaser has assumed or will assume an advisory or fiduciary responsibility in favor of the Partnership Parties with respect to any of

 

33



 

the transactions contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the Partnership Parties on other matters) or any other obligation to the Partnership Parties except the obligations expressly set forth in this Agreement; (iv) the several Initial Purchasers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Partnership Parties, and the several Initial Purchasers have no obligation to disclose any of such interests by virtue of any fiduciary or advisory relationship; and (v) the Initial Purchasers have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby, and the Partnership Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.

 

This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Partnership Parties and the several Initial Purchasers, or any of them, with respect to the subject matter hereof.  The Partnership Parties hereby waive and release, to the fullest extent permitted by law, any claims that the Partnership Parties may have against the several Initial Purchasers with respect to any breach or alleged breach of fiduciary duty.

 

SECTION 20.       General Provisions.  This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.  This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.  This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.  The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

34



 

If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Parent Guarantor the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

 

Very truly yours,

 

 

SUMMIT MIDSTREAM PARTNERS, LP

 

 

 

By:

Summit Midstream GP, LLC,

 

 

its General Partner

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

SUMMIT MIDSTREAM GP, LLC

 

 

 

 

 

By:

 /s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

SUMMIT MIDSTREAM HOLDINGS, LLC

 

 

 

 

 

By:

 /s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

SUMMIT MIDSTREAM FINANCE CORP.

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

DFW MIDSTREAM SERVICES LLC

 

 

 

 

By:

Summit Midstream Holdings, LLC,

 

 

its Managing Member

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

GRAND RIVER GATHERING, LLC

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

35



 

 

BISON MIDSTREAM, LLC

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

 

 

 

MOUNTAINEER MIDSTREAM COMPANY, LLC

 

 

 

 

 

By:

/s/ Steve Newby

 

 

 

Name: Steve Newby

 

 

 

Title: President & CEO

 

36



 

The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of the date first above written.

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEUTSCHE BANK SECURITIES INC.

RBC CAPITAL MARKETS, LLC

RBS SECURITIES INC.

Acting on behalf of itself
and as the Representatives of
the several Initial Purchasers

 

By:

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

 

 

 

 

 

 

 

 

By:

/s/ J. Lex Maultsby

 

 

 

Name:

J. Lex Maultsby

 

 

 

Title:

Managing Director

 

 

 

 

 

 

By:

 

Deutsche Bank Securities Inc.

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Stephen Cunningham

 

 

 

Name:

Stephen Cunningham

 

 

 

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Edwin Roland

 

 

 

Name:

Edwin Roland

 

 

 

Title:

Managing Director

 

 

 

 

 

 

By:

 

RBC Capital Markets, LLC

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ J. Scott Schlossel

 

 

 

Name:

J. Scott Schlossel

 

 

 

Title:

Managing Director

 

 

 

 

Head of Global Energy Leveraged Finance

 

 

 

 

 

 

By:

 

RBS Securities Inc.

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Ade Adedeji

 

 

 

Name:

Ade Adedeji

 

 

 

Title:

Vice President

 

 



 

SCHEDULE A

 

Initial Purchasers

 

Aggregate Principal
Amount of
Securities to be
Purchased

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated

 

$

105,156,000

 

Deutsche Bank Securities Inc.

 

40,206,000

 

RBC Capital Markets, LLC

 

40,206,000

 

RBS Securities Inc.

 

40,206,000

 

BBVA Securities Inc.

 

15,464,000

 

ING Financial Markets LLC

 

15,464,000

 

Regions Securities LLC

 

15,464,000

 

Barclays Capital Inc.

 

4,639,000

 

BMO Capital Markets Corp.

 

4,639,000

 

Capital One Southcoast, Inc.

 

4,639,000

 

Goldman, Sachs & Co.

 

4,639,000

 

Morgan Stanley & Co. LLC

 

4,639,000

 

SMBC Nikko Capital Markets Limited

 

4,639,000

 

 

 

 

 

Total

 

$

300,000,000

 

 



 

SCHEDULE B

 

LIST OF JURISDICTIONS OF FOREIGN QUALIFICATION

 

Entity

 

Jurisdiction of Formation

 

Foreign Qualifications

Summit Midstream Partners, LP

 

Delaware

 

Texas; Georgia

Summit Midstream GP, LLC

 

Delaware

 

Texas; Georgia

Summit Midstream Finance Corp.

 

Delaware

 

None

Summit Midstream Holdings, LLC

 

Delaware

 

Colorado; Georgia; Texas

 

Subsidiary Guarantor

 

Jurisdiction of Formation

 

Foreign Qualifications

Grand River Gathering, LLC

 

Delaware

 

Colorado

DFW Midstream Services LLC

 

Delaware

 

Texas

Bison Midstream, LLC

 

Delaware

 

North Dakota

Mountaineer Midstream Company, LLC

 

Delaware

 

West Virginia

 



 

EXHIBIT A

 

FORM OF PRICING SUPPLEMENT

 

PRICING SUPPLEMENT

STRICTLY CONFIDENTIAL

 

$300,000,000

 

 

Summit Midstream Holdings, LLC
Summit Midstream Finance Corp.

 

7 ½% Senior Notes due 2021

 

June 12, 2013

 

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum dated June 5, 2013. The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. Capitalized terms used but not defined in this Pricing Supplement have the respective meanings ascribed to them in the Preliminary Offering Memorandum.

 

The notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act. The notes are not transferable except in accordance with the restrictions described under “Transfer Restrictions” in the Preliminary Offering Memorandum.

 

Terms Applicable to the 7 ½% Senior Notes due 2021

 

 

 

 

 

 

 

 

Issuers:

 

Summit Midstream Holdings, LLC
Summit Midstream Finance Corp.

 

 

 

Principal Amount:

 

$300,000,000

 

 

 

Gross Proceeds:

 

$300,000,000

 

 

 

Title of Securities:

 

7 ½% Senior Notes due 2021

 

 

 

Final Maturity Date:

 

July 1, 2021

 

 

 

Issue Price:

 

100.000%, plus accrued interest from June 17, 2013

 

 

 

Coupon:

 

7.500%

 

 

 

Yield to Maturity:

 

7.500%

 

 

 

Interest Payment Dates:

 

January 1 and July 1, beginning on January 1, 2014

 

 

 

Record Dates:

 

December 15 and June 15

 



 

Optional Redemption:

 

On and after July 1, 2016, the Issuers may redeem all or part of the notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the notes redeemed to the applicable redemption date, if redeemed during the twelve-month period beginning on July 1 of the years indicated below:

 

 

 

 

 

Year

 

Price

 

 

 

 

2016

 

105.625

%

 

 

 

2017

 

103.750

%

 

 

 

2018

 

101.875

%

 

 

 

2019 and thereafter

 

100.000

%

 

 

 

 

 

 

Prior to July 1, 2016, the Issuers may redeem all or part of the notes at a redemption price equal to the sum of the principal amount thereof, plus the Make Whole Premium at the redemption date, plus accrued and unpaid interest, if any, to the redemption date.

 

 

 

Optional Redemption with Equity Proceeds:

 

Prior to July 1, 2016, up to 35% at 107.500%, plus accrued and unpaid interest on the notes, if any, to the applicable redemption date

 

 

 

Initial Purchasers:

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Deutsche Bank Securities Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
BBVA Securities Inc.

ING Financial Markets LLC
Regions Securities LLC
Barclays Capital Inc.
BMO Capital Markets Corp
Capital One Southcoast, Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. LLC
SMBC Nikko Capital Markets Limited

 

 

 

Trade Date:

 

June 12, 2013

 

 

 

Settlement Date:

 

June 17, 2013 (T+3)

 

 

 

Denominations:

 

$2,000 and integral multiples of $1,000 in excess thereof

 

 

 

Distribution:

 

144A and Regulation S with registration rights as set forth in the Preliminary Offering Memorandum

 

 

 

CUSIP and ISIN Numbers:

 

144A Notes:

Reg S Notes:

 

 

CUSIP: 86614W AA4

CUSIP: U8604T AA4

 

 

ISIN: US86614WAA45

ISIN: USU8604TAA44

 



 

Changes to the Preliminary Offering Memorandum:

 

The information included in the line item entitled “Ratio of earnings to fixed charges” on page 15 of the Preliminary Offering Memorandum is replaced in its entirety as follows:

 

 

 

Summit Midstream Partners, LP

 

Pro Forma

 

 

 

Three months ended
March 31,

 

Year ended
December 31,

 

Three
months
ended
March 31,

 

Year ended
December 31,

 

 

 

2013

 

2012

 

2012

 

2011

 

2010

 

2013

 

2012

 

Ratio of earnings to fixed charges

 

5.99

 

2.16

 

3.51

 

6.36

 

119.51

 

1.98

 

1.61

 

 

Other information (including financial information) presented in the Preliminary Offering Memorandum is deemed to have changed to the extent affected by the changes described herein.

 

This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of these notes or the offering. Please refer to the Preliminary Offering Memorandum for a complete description.

 

Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.

 



 

EXHIBIT B-1

 

FORM OF OPINION OF LATHAM & WATKINS LLP

 

1.                                       The Parent Guarantor is a limited partnership duly formed under the Delaware LP Act with limited partnership power and authority to own its properties and to conduct its business as described in the Offering Memorandum.  With your consent, based solely on certificates from public officials, we confirm that the Parent Guarantor is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business and in good standing in the states set forth opposite its name on Exhibit B hereto.

 

2.                                       The General Partner is a limited liability company duly formed under the Delaware LLC Act with limited liability company power and authority to own its properties, conduct its business and act as the general partner of the Parent Guarantor as described in the Offering Memorandum. With your consent, based solely on certificates from public officials, we confirm that the General Partner is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business and in good standing in the states set forth opposite its name on Exhibit B hereto.

 

3.                                       Summit Midstream is a limited liability company under the Delaware LLC Act with limited liability company power and authority to own its properties and to conduct its business as described in the Offering Memorandum.  With your consent, based solely on certificates from public officials, we confirm that Summit Midstream is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business and in good standing in the states set forth opposite its name on Exhibit B hereto.

 

4.                                       Finance Corp. is a corporation duly formed under the Delaware General Corporation Law (“DGCL”) with corporate power and authority to own its properties and to conduct its business as described in the Offering Memorandum. With your consent, based solely on certificates from public officials, we confirm that Finance Corp. is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business as a foreign entity and is in good standing under the laws of such jurisdiction set forth opposite each of their names on Annex B hereto.

 

5.                                       Each of the Guarantors (other than the Parent Guarantor) is a limited liability company under the Delaware LLC Act with limited liability company power and authority to own its properties and to conduct its business as described in the Offering Memorandum.  With your consent, based solely on certificates from public officials, we confirm that each of the Guarantors (other than the Parent Guarantor) is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business and in good standing in the states set forth opposite its name on Exhibit B hereto.

 

6.                                       The execution, delivery and performance of the Purchase Agreement have

 



 

been duly authorized by all necessary corporate, limited partnership or limited liability company action, as applicable, of the Partnership Parties and the Purchase Agreement has been duly executed and delivered by the Partnership Parties.

 

7.                                       The execution, delivery and performance of the Indenture have been duly authorized by all necessary limited liability company or corporate action, as applicable, of the Issuers, and the Indenture has been duly executed and delivered by the Issuers and is the legally valid and binding agreement of the Issuers, enforceable against each of the Issuers in accordance with its terms.

 

8.                                       The execution, delivery and performance of the Indenture have been duly authorized by all necessary limited liability company or limited partnership action, as applicable, of each of the Guarantors, and the Indenture has been duly executed and delivered by each of the Guarantors.  The Indenture is the legally valid and binding agreement of each of the Guarantors, enforceable against each of them in accordance with its terms.

 

9.                                       The Indenture meets the requirements for qualification under the Trust Indenture Act of 1939, as amended (the “ TIA ”), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

 

10.                                The execution, delivery and performance of the Notes have been duly authorized by all necessary limited liability company or corporate action, as applicable, of the Issuers and, when executed, issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by you in accordance with the terms of the Purchase Agreement and the Notes, will be the legally valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms.

 

11.                                The Issuers’ new 7 ½% Senior Notes due 2021 (the “ Exchange Notes ”) to the extent issued in exchange for the Notes pursuant to the registered exchange offer contemplated by the Registration Rights Agreement have been duly authorized by all necessary limited liability company or corporate action, as applicable, of the Issuers and when executed, issued and authenticated in accordance with the terms of the Indenture, will be the legally valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms.

 

12.                                The execution, delivery and performance of each of the Guarantees (including the respective guarantees of the Exchange Notes) have been duly authorized by all necessary limited liability company or limited partnership action, as applicable, of the Guarantors and, when executed, issued and authenticated in accordance with the terms of the Indenture and delivered to and paid for by you in accordance with the terms of the Purchase Agreement and the Guarantees, will be the legally valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms.

 

13.                                The execution, delivery and performance of the Registration Rights Agreement has been duly authorized by all necessary corporate, limited liability company

 



 

or limited partnership action of the Partnership Parties, as applicable, the Registration Rights Agreement has been duly executed and delivered by the Partnership Parties and the Registration Rights Agreement is the legally valid and binding agreement of the Partnership Parties, enforceable against each of them in accordance with its terms.

 

14.                                (a) The execution and delivery of the Notes, the Guarantees, the Purchase Agreement, the Indenture and the Registration Rights Agreement by the Partnership Parties, as applicable, (b) the issuance and sale of the Notes and the Guarantees by the Issuers and the Guarantors to you and the other Initial Purchasers pursuant to the Purchase Agreement and (c) assuming the issuance and sale of the Exchange Notes and the guarantees of the Exchange Notes occurred on the date hereof in accordance with the terms of the Indenture, such issuance and sale of the Exchange Notes and the guarantees of the Exchange Notes, do not on the date hereof:

 

(i)                                      violate the Organizational Documents;

 

(ii)                                   result in a breach of or a default under any of the Specified Agreements;

 

(iii)                                violate (a) any federal or New York statute, rule or regulation applicable to the Partnership Parties or (b) the Delaware LP Act, the DGCL or the Delaware LLC Act, as applicable; or

 

(iv)                               require any consents, approvals, or authorizations to be obtained by the Partnership Parties from, or any registrations, declarations or filings to be made by the Partnership Parties with, any governmental authority under (a) any federal or New York statute, rule or regulation applicable to the Partnership Parties or (b) the Delaware LP Act, the DGCL or the Delaware LLC Act, in each case, that have not been obtained or made.

 

15.                                With your consent, based solely upon a review on the date hereof of the General Partner LLC Agreement, all of the issued and outstanding limited liability company interests of the General Partner (the “ GP Membership Interests ”) are owned of record by Summit Midstream Partners Holdings, LLC, a Delaware limited liability company (“ SMPH ”).  The issuance and sale of the GP Membership Interests has been duly authorized by all necessary limited liability company action of the General Partner, and such GP Membership Interests have been validly issued in accordance with the General Partner LLC Agreement.  Under the Delaware LLC Act, SMPH has no obligation to make further payments for its ownership of the GP Membership Interests or contributions to the General Partner solely by reason of its ownership of the GP Membership Interests or its status as the sole member of the General Partner and no personal liability for the debts, obligations and liabilities of the General Partner, whether arising in contract, tort or otherwise, solely by reason of being the sole member of the General Partner.  With your consent, based solely upon a review of the lien searches dated June [  ·  ], 2013 attached hereto as Exhibit C (the “ Lien Search ”), we confirm that the GP Membership Interests are free and clear of liens, claims, charges and encumbrances (“ Liens ”) other than those (i) created by or arising under the Delaware LLC Act or the General Partner LLC Agreement, (ii) set forth or described on Exhibit C

 



 

or (iii) restrictions on transferability or other Liens described in the Offering Memorandum.

 

16.                                With your consent, based solely upon a review on the date hereof of the Parent Guarantor Governing Documents and certain resolutions of the Board of Directors of the General Partner, the General Partner is the sole general partner of the Parent Guarantor, and the 2.0% general partner interest in the Parent Guarantor (the “ General Partner Interest ”) and all of the outstanding incentive distribution rights of the Parent Guarantor (“ IDRs ” and, together with the General Partner Interest, the “ GP Ownership Interests ”) are owned of record by the General Partner. The issuance and sale of the GP Ownership Interests have been duly authorized by all necessary limited partnership action of the Parent Guarantor, and such GP Ownership Interests have been validly issued in accordance with the Partnership Agreement.  Under the Delaware LP Act, the General Partner has no obligation to make further payments for its ownership of the IDRs or contributions to the Parent Guarantor solely by reason of its ownership of the IDRs.  With your consent, based solely upon a review of the Lien Search, we confirm that the GP Ownership Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LP Act or the Partnership Agreement, (ii) set forth or described on Exhibit C or (iii) restrictions on transferability or other Liens described in the Offering Memorandum.

 

17.                                With your consent, based solely upon a review on the date hereof of the Midstream LLC Agreement, all of the issued and outstanding limited liability company interests of Summit Midstream (the “ Holdings Membership Interests ”) are owned of record by the Parent Guarantor.  The issuance and sale of the Holdings Membership Interests have been duly authorized by all necessary limited liability company action of Summit Midstream, and such Holdings Membership Interests have been validly issued in accordance with the Midstream LLC Agreement.  Under the Delaware LLC Act, the Parent Guarantor will have no obligation to make further payments for its ownership of the Holdings Membership Interests or contributions to Summit Midstream solely by reason of its ownership of the Holdings Membership Interests or its status as the sole member of Summit Midstream and no personal liability for the debts, obligations and liabilities of Summit Midstream, whether arising in contract, tort or otherwise, solely by reason of being the sole member of Summit Midstream.  With your consent, based solely upon a review of the Lien Search, we confirm that the Holdings Membership Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LLC Act or the Midstream Agreement, (ii) set forth or described on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

18.                                With your consent, based solely upon a review on the date hereof of certificates representing outstanding capital stock of, and stock transfer records for, Finance Corp., all of the outstanding shares of capital stock of Finance Corp. were owned of record on that date by Summit Midstream (the “ Finance Corp. Capital Stock ”). With your consent, based solely upon a review of the Lien Search, we confirm that the Finance Corp. Capital Stock is free and clear of Liens other than those (i) created by or arising under the DGCL or the Finance Corp. Governing Documents, (ii) set forth or described

 



 

on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

19.                                With your consent, based solely upon a review on the date hereof of the DFW LLC Agreement, all of the issued and outstanding limited liability company interests in DFW (the “ DFW Interests ”) are owned of record by Summit Midstream. The issuance and sale of the DFW Interests has been duly authorized by all necessary limited liability company action of DFW, and the DFW Interests have been validly issued in accordance with the DFW LLC Agreement.  Under the Delaware LLC Act, Summit Midstream will not have any obligation to make further payments for its ownership of the DFW Interests or contributions to DFW solely by reason of its ownership of the DFW Interests, or its status as a member of DFW and no personal liability for the debts, obligations and liabilities of DFW, whether arising in contract, tort or otherwise, solely by reason of being a member of DFW.  With your consent, based solely upon a review of the Lien Search, we confirm that the DFW Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LLC Act or the DFW LLC Agreement, (ii) set forth or described on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

20.                                With your consent, based solely upon a review on the date hereof of the Grand River LLC Agreement, all of the issued and outstanding limited liability company interests of Grand River (the “ Grand River Interests ”) are owned of record by Summit Midstream. The issuance and sale of the Grand River Interests have been duly authorized by all necessary limited liability company action of Grand River, and such Grand River Interests have been validly issued in accordance with the Grand River LLC Agreement.  Under the Delaware LLC Act, Summit Midstream will have no obligation to make further payments for its ownership of the Grand River Interests or contributions to Grand River solely by reason of its ownership of the Grand River Interests or its status as the sole member of Grand River and no personal liability for the debts, obligations and liabilities of Grand River, whether arising in contract, tort or otherwise, solely by reason of being the sole member of Grand River.  With your consent, based solely upon a review of the Lien Search, we confirm that the Grand River Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LLC Act or the Grand River LLC Agreement, (ii) set forth or described on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

21.                                With your consent, based solely upon a review on the date hereof of the Bison LLC Agreement, all of the issued and outstanding limited liability company interests of Bison (the “ Bison Interests ”) are owned of record by Summit Midstream. The issuance and sale of the Bison Interests have been duly authorized by all necessary limited liability company action of Bison, and such Bison Interests have been validly issued in accordance with the limited Bison LLC Agreement.  Under the Delaware LLC Act, Summit Midstream will have no obligation to make further payments for its ownership of the Bison Interests or contributions to Bison solely by reason of its ownership of the Bison Interests or its status as the sole member of Bison and no personal

 



 

liability for the debts, obligations and liabilities of Bison, whether arising in contract, tort or otherwise, solely by reason of being the sole member of Bison.  With your consent, based solely upon a review of the Lien Search, we confirm that the Bison Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LLC Act or the Bison LLC Agreement, (ii) set forth or described on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

22.          With your consent, based solely upon a review on the date hereof of the Mountaineer LLC Agreement, all of the issued and outstanding limited liability company interests of Mountaineer (the “ Mountaineer Interests ”) are owned of record by Summit Midstream. The issuance and sale of the Mountaineer Interests have been duly authorized by all necessary limited liability company action of Mountaineer, and such Mountaineer Interests have been validly issued in accordance with the Mountaineer LLC Agreement.  Under the Delaware LLC Act, Summit Midstream will have no obligation to make further payments for its ownership of the Mountaineer Interests or contributions to Mountaineer solely by reason of its ownership of the Mountaineer Interests or its status as the sole member of Mountaineer and no personal liability for the debts, obligations and liabilities of Mountaineer, whether arising in contract, tort or otherwise, solely by reason of being the sole member of Mountaineer.  With your consent, based solely upon a review of the Lien Search, we confirm that the Mountaineer Interests are free and clear of Liens other than those (i) created by or arising under the Delaware LLC Act or the Mountaineer LLC Act, (ii) set forth or described on Exhibit C , (iii) arising under the Revolving Credit Agreement or (iv) restrictions on transferability or other Liens described in the Offering Memorandum.

 

23.          The statements set forth in the Offering Memorandum under the caption “Description of Notes,” insofar as they purport to constitute a summary of the terms of the Indenture, the Notes, the Guarantees and the Registration Rights Agreement are accurate in all material respects.

 

24.          The statements in the Offering Memorandum under the captions “Description of Other Indebtedness,” “Certain Relationships and Related Party Transactions,” and “Certain ERISA Considerations” and incorporated by reference into the Offering Memorandum from the Parent Guarantor’s Annual Report on Form 10-K for the year ended December 31, 2012 under the caption “Business—Regulation of the Oil and Natural Gas Industries” insofar as such statements purport to describe or summarize certain provisions of documents or U.S. federal laws referred to therein, are accurate descriptions or summaries in all material respects.

 

25.          No registration of the Notes or the Guarantees under the Securities Act and no qualification of the Indenture under the TIA is required for the purchase of the Notes and the Guarantees by you or the initial resale of the Notes and the Guarantees by you, in each case, in the manner contemplated by the Purchase Agreement and the Offering Memorandum other than any registration or qualification that may be required in connection with the exchange offer with respect to the Notes and Guarantees contemplated by the Offering Memorandum or in connection with the Registration Rights

 



 

Agreement. We express no opinion, however, as to when or under what circumstances any Notes initially sold by you may be reoffered or resold.

 

26.          None of the Partnership Parties is, nor immediately after giving effect to the sale of the Notes in accordance with the Purchase Agreement and the application of the proceeds as described in the Offering Memorandum under the caption “Use of Proceeds,” will be required to be, registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

 



 

EXHIBIT B-2

 

FORM OF 10B-5 LETTER OF LATHAM & WATKINS LLP

 

The primary purpose of our professional engagement was not to establish or confirm factual matters or financial or quantitative information.  Therefore, we are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference in the Preliminary Offering Memorandum, the Pricing Supplement or the Offering Memorandum or the Incorporated Documents (except to the extent expressly set forth in numbered paragraphs 23 and 24 of our letter to you of even date or in our letter to you of even date with respect to certain tax matters), and have not made an independent check or verification thereof (except as aforesaid).  However, in the course of acting as special counsel to the Issuers and the Guarantors in connection with the preparation by the Issuers and the Guarantors of the Preliminary Offering Memorandum, the Pricing Supplement and the Offering Memorandum, we reviewed the Preliminary Offering Memorandum, the Pricing Supplement, the Offering Memorandum and the Incorporated Documents, and participated in conferences and telephone conversations with officers and other representatives of the Issuers and the Guarantors, the independent public accountants for the Issuers and the Partnership, and your counsel, during which conferences and conversations the contents of the Preliminary Offering Memorandum, the Pricing Supplement, the Offering Memorandum and portions of certain of the Incorporated Documents and related matters were discussed.  We also reviewed and relied upon certain corporate records and documents, letters from counsel and accountants, and oral and written statements of officers and other representatives of the Issuers, the Guarantors, the General Partner and others as to the existence and consequence of certain factual and other matters.

 

Based on our participation, review and reliance as described above, we advise you that no facts came to our attention that caused us to believe that:

 

·                                           the Preliminary Offering Memorandum,  as of [  ·  ]:00 [a.m.] [p.m.], New York City time, on June [  ·  ], 2013 (together with the Incorporated Documents at that date), when taken together with the Pricing Supplement, contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or

 

·                                           the Offering Memorandum, as of its date and as of the date hereof (together with the Incorporated Documents at those dates), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

it being understood that we express no belief with respect to the financial statements, financial statement schedules, or other financial data included in or incorporated by reference in, or omitted from, the Preliminary Offering Memorandum, the Pricing Supplement, the Offering Memorandum or the Incorporated Documents.

 



 

EXHIBIT B-3

 

FORM OF TAX OPINION OF LATHAM & WATKINS LLP

 

Based on such facts and subject to the qualifications, assumptions and limitations set forth herein and in the Preliminary Offering Memorandum and Offering Memorandum, we hereby confirm that the statements in the Preliminary Offering Memorandum and Offering Memorandum under the caption “Certain Material United States Federal Income Tax Consequences,” insofar as such statements purport to constitute summaries of United States federal income tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.

 



 

EXHIBIT C

 

FORM OF OPINION OF BROCK M. DEGEYTER

 

Opinion of Brock M. Degeyter, general counsel of the General Partner, to be delivered pursuant to Section 5 of the Purchase Agreement.

 

(i)           None of (i) the issuance and delivery of the Securities and the Exchange Securities as described in the Pricing Disclosure Package and the Final Offering Memorandum, (ii) the execution, delivery and performance of the Transaction Documents by the Partnership Parties party hereto or thereto, (iii) the consummation of the any transactions contemplated by the Transaction Documents or (iv) the application of the proceeds from the sale of the Securities as described under “Use of Proceeds” in the Pricing Disclosure Package and the Final Offering Memorandum (A) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a change of control or default (or an event that, with notice or lapse of time or both, would constitute such an event) under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Partnership Parties is a party or by which any of them or any of their respective properties may be bound, (B) violates or will violate any statute, law, regulation, ruling or any order, judgment, decree or injunction of any court or governmental agency or body having jurisdiction over any of the Partnership Parties or any of their properties in a proceeding to which any of them or their property is a party or is bound or (C) results or will result in the creation or imposition of any Lien (other than Liens arising under or in connection with the Revolving Credit Agreement) upon any property or assets of any of the Partnership Parties, except with respect to clauses (A), (B) and (C) for any such conflicts, violations, breaches, defaults or Liens that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

 

(ii)           There are no legal or governmental proceedings pending to which any of the Partnership Parties is a party or of which any property or assets of any of the Partnership Parties is the subject that could, in the aggregate, reasonably be expected to result in a Material Adverse Change or could, in the aggregate, reasonably be expected to have a material adverse effect on the performance by any Partnership Party of the Transaction Documents or the consummation of the transactions contemplated thereby; and to such counsel’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.

 



 

ANNEX I

 

Resale Pursuant to Regulation S or Rule 144A.   Each Initial Purchaser understands that:

 

Such Initial Purchaser agrees that it has not offered or sold and will not offer or sell the Securities in the United States or to, or for the benefit or account of, a U.S. person (other than a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities pursuant hereto and the Closing Date, other than in accordance with Regulation S or another exemption from the registration requirements of the Securities Act.  Such Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any advertisement with respect to the Securities (including any “tombstone” advertisement) to be published in any newspaper or periodical or posted in any public place and will not issue any circular relating to the Securities, except such advertisements as are permitted by and include the statements required by Regulation S.

 

Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such distributor, dealer or person receiving a selling concession, fee or other remuneration a confirmation or notice to substantially the following effect:

 

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of your distribution at any time or (ii) otherwise until 40 days after the later of the date the Securities were first offered to persons other than distributors in reliance upon Regulation S and the Closing Date, except in either case in accordance with Regulation S under the Securities Act (or in accordance with Rule 144A under the Securities Act or to accredited investors in transactions that are exempt from the registration requirements of the Securities Act), and in connection with any subsequent sale by you of the Securities covered hereby in reliance on Regulation S under the Securities Act during the period referred to above to any distributor, dealer or person receiving a selling concession, fee or other remuneration, you must deliver a notice to substantially the foregoing effect.  Terms used above have the meanings assigned to them in Regulation S under the Securities Act.”

 


Exhibit 4.1

 

Execution Version

 

 

SUMMIT MIDSTREAM HOLDINGS, LLC

 

SUMMIT MIDSTREAM FINANCE CORP.

 

As Issuers,

 

SUMMIT MIDSTREAM PARTNERS, LP,

 

As Parent Guarantor

 

AND

 

THE SUBSIDIARY GUARANTORS NAMED ON THE SIGNATURE PAGES HEREOF

 


 

7½% SENIOR NOTES DUE 2021

 


 

INDENTURE

 

Dated as of June 17, 2013

 


 

U.S. BANK NATIONAL ASSOCIATION,

 

As Trustee

 

 



 

CROSS-REFERENCE TABLE*

 

Trust Indenture
Act Section

 

Indenture
Section

310(a)(1)

 

7.10

(a)(2)

 

7.10

(a)(3)

 

N/A

(a)(4)

 

N/A

(a)(5)

 

7.10

(b)

 

7.10

(c)

 

N/A

311(a)

 

7.11

(b)

 

7.11

(c)

 

N/A

312(a)

 

2.05

(b)

 

11.03

(c)

 

11.03

313(a)

 

7.06

(b)(1)

 

7.06

(b)(2)

 

7.06, 7.07

(c)

 

7.06, 11.02

(d)

 

7.06

314(a)

 

4.03, 4.04, 11.02

(b)

 

N/A

(c)(1)

 

11.04

(c)(2)

 

11.04

(c)(3)

 

N/A

(d)

 

N/A

(e)

 

11.05

(f)

 

N/A

315(a)

 

7.01

(b)

 

7.05, 11.02

(c)

 

7.01

(d)

 

7.01

(e)

 

6.11

316(a)(last sentence)

 

2.08

(a)(1)(A)

 

6.05

(a)(1)(B)

 

6.04

(a)(2)

 

N/A

(b)

 

6.07

(c)

 

9.04

317(a)(1)

 

6.08

(a)(2)

 

6.09

(b)

 

2.04

318(a)

 

11.01

(b)

 

N/A

(c)

 

11.01

 


N/A means not applicable.

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

 

i



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION

 

BY REFERENCE

1

Section 1.01.

Definitions

1

Section 1.02.

Other Definitions

26

Section 1.03.

Incorporation by Reference of Trust Indenture Act

26

Section 1.04.

Rules of Construction

26

 

 

 

ARTICLE 2

 

THE NOTES

27

Section 2.01.

Form and Dating

27

Section 2.02.

Execution and Authentication

27

Section 2.03.

Registrar and Paying Agent

28

Section 2.04.

Paying Agent to Hold Money in Trust

28

Section 2.05.

Holder Lists

29

Section 2.06.

Transfer and Exchange

29

Section 2.07.

Replacement Notes

29

Section 2.08.

Outstanding Notes

29

Section 2.09.

Temporary Notes

30

Section 2.10.

Cancellation

30

Section 2.11.

Defaulted Interest

30

Section 2.12.

CUSIP Numbers

30

Section 2.13.

Issuance of Additional Notes

31

 

 

 

ARTICLE 3

 

REDEMPTION AND PREPAYMENT

31

Section 3.01.

Notices to Trustee

31

Section 3.02.

Selection of Notes to be Redeemed

31

Section 3.03.

Notice of Redemption

32

Section 3.04.

Effect of Notice of Redemption

33

Section 3.05.

Deposit of Redemption Price

33

Section 3.06.

Notes Redeemed in Part

34

Section 3.07.

Optional Redemption

34

Section 3.08.

Mandatory Redemption

35

Section 3.09.

Offer to Purchase by Application of Excess Proceeds

35

Section 3.10.

Purchase of Notes

37

 

 

 

ARTICLE 4

 

COVENANTS

37

Section 4.01.

Payment of Notes

37

Section 4.02.

Maintenance of Office or Agency

37

Section 4.03.

Reports

38

Section 4.04.

Compliance Certificate

39

Section 4.05.

Taxes

39

 

ii



 

Section 4.06.

Stay, Extension and Usury Laws

39

Section 4.07.

Limitation on Restricted Payments

39

Section 4.08.

Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries

43

Section 4.09.

Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock

45

Section 4.10.

Limitation on Asset Sales

48

Section 4.11.

Limitation on Transactions with Affiliates

50

Section 4.12.

Limitation on Liens

51

Section 4.13.

Additional Subsidiary Guarantees

51

Section 4.14.

Organizational Existence

52

Section 4.15.

Offer to Repurchase Upon Change of Control

52

Section 4.16.

No Inducements

55

Section 4.17.

Permitted Business Activities

55

Section 4.18.

Sale and Leaseback Transactions

55

Section 4.19.

Covenant Termination

56

Section 4.20.

Designation of Restricted and Unrestricted Subsidiaries

56

 

 

 

ARTICLE 5

 

SUCCESSORS

56

Section 5.01.

Merger, Consolidation, or Sale of Assets

56

Section 5.02.

Successor Substituted

58

 

 

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

59

Section 6.01.

Events of Default

59

Section 6.02.

Acceleration

61

Section 6.03.

Other Remedies

61

Section 6.04.

Waiver of Past Defaults

61

Section 6.05.

Control by Majority

62

Section 6.06.

Limitation on Suits

62

Section 6.07.

Rights of Holders of Notes to Receive Payment

62

Section 6.08.

Collection Suit by Trustee

63

Section 6.09.

Trustee May File Proofs of Claim

63

Section 6.10.

Priorities

63

Section 6.11.

Undertaking for Costs

64

 

 

 

ARTICLE 7

 

TRUSTEE

64

Section 7.01.

Duties of Trustee

64

Section 7.02.

Rights of Trustee

65

Section 7.03.

Individual Rights of Trustee

66

Section 7.04.

Trustee’s Disclaimer

66

Section 7.05.

Notice of Defaults

66

Section 7.06.

Reports by Trustee to Holders of the Notes

67

Section 7.07.

Compensation and Indemnity

67

Section 7.08.

Replacement of Trustee

68

Section 7.09.

Successor Trustee by Merger, etc.

69

 

iii



 

Section 7.10.

Eligibility; Disqualification

69

Section 7.11.

Preferential Collection of Claims Against Issuers

69

 

 

 

ARTICLE 8

 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

69

Section 8.01.

Option to Effect Legal Defeasance or Covenant Defeasance

69

Section 8.02.

Legal Defeasance and Discharge

70

Section 8.03.

Covenant Defeasance

70

Section 8.04.

Conditions to Legal or Covenant Defeasance

71

Section 8.05.

Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions

72

Section 8.06.

Repayment to Issuers

73

Section 8.07.

Reinstatement

73

Section 8.08.

Discharge

73

 

 

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND WAIVER

75

Section 9.01.

Without Consent of Holders of Notes

75

Section 9.02.

With Consent of Holders of Notes

76

Section 9.03.

Compliance with Trust Indenture Act

77

Section 9.04.

Effect of Consents

77

Section 9.05.

Notation on or Exchange of Notes

77

Section 9.06.

Trustee to Sign Amendments, etc.

77

 

 

 

ARTICLE 10

 

GUARANTEES OF NOTES

78

Section 10.01.

Guarantees

78

Section 10.02.

Subsidiary Guarantors May Consolidate, etc., on Certain Terms

79

Section 10.03.

Releases of Subsidiary Guarantees

79

Section 10.04.

Limitation on Subsidiary Guarantor Liability

80

 

 

 

ARTICLE 11

 

MISCELLANEOUS

80

Section 11.01.

Trust Indenture Act Controls

80

Section 11.02.

Notices

80

Section 11.03.

Communication by Holders of Notes with Other Holders of Notes

81

Section 11.04.

Certificate and Opinion as to Conditions Precedent

82

Section 11.05.

Statements Required in Certificate or Opinion

82

Section 11.06.

Rules by Trustee and Agents

82

Section 11.07.

No Personal Liability of Directors, Officers, Employees and Unitholders

82

Section 11.08.

Business Days

83

Section 11.09.

Governing Law

83

Section 11.10.

No Adverse Interpretation of Other Agreements

83

Section 11.11.

Successors

83

Section 11.12.

Severability

83

Section 11.13.

Table of Contents, Headings, etc.

83

Section 11.14.

Counterparts

83

Section 11.15.

Acts of Holders

84

 

iv



 

Section 11.16.

Patriot Act

85

 

v



 

APPENDIX AND ANNEX

 

RULE 144A/REGULATION S APPENDIX

App. - 1

 

 

EXHIBIT 1      Form of Initial Note

 

 

 

ANNEX A Form of Supplemental Indenture

Annex A-1

 

vi



 

This Indenture, dated as June 17, 2013, is among Summit Midstream Holdings, LLC, a Delaware limited liability company (the “Company”), Summit Midstream Finance Corp., a Delaware corporation (“Finance Corp.” and, together with the Company, the “Issuers”), Summit Midstream Partners, LP, a Delaware limited partnership (the “Parent”), the subsidiary guarantors listed on the signature pages hereof (each, a “Subsidiary Guarantor,” collectively, the “Subsidiary Guarantors” and together with the Parent, the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”).

 

The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Issuers’ Initial Notes, Exchange Notes and Additional Notes:

 

ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE

 

Section 1.01.                           Definitions.

 

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

 

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

 

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

 

Additional Interest ” means all Additional Interest then owing pursuant to Section 5 of the Registration Rights Agreement referred to in clause (1) of the definition of “Registration Rights Agreement” in the Appendix.  Unless the context indicates otherwise, all references to “interest” in this Indenture or the Notes shall be deemed to include any Additional Interest.

 

Additional Notes ” means, subject to the Company’s compliance with Section 4.09, 7½% Senior Notes due 2021 issued from time to time after the Initial Issuance Date under the terms of this Indenture (other than pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Notes issued pursuant to an exchange offer for other Notes outstanding under this Indenture).

 

Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided, however, that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control by the other Person.  For purposes of this definition, the

 

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terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

Agent ” means any Registrar or Paying Agent.

 

Agent Members ” has the meaning provided in the Appendix.

 

Applicable Law ,” except as the context may otherwise require, means all applicable laws, rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or governmental or congressional agency or authority and rules, regulations, orders, licenses and permits of any United States federal, state, municipal, regional, or other governmental body, instrumentality, agency or authority.

 

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

 

Asset Sale ” means:

 

(1)                                  the sale, lease, conveyance or other disposition of any properties or assets (including by way of a sale and leaseback transaction); provided, however, that the disposition of all or substantially all of the properties or assets of the Parent and its Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 4.15 and/or the provisions of Section 5.01 and not by the provisions of Section 4.10; and

 

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

 

Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:

 

(1)                                  any single transaction or series of related transactions that involves properties or assets having a fair market value of less than $10.0 million;

 

(2)                                  a transfer of properties or assets between or among any of the Parent and its Restricted Subsidiaries,

 

(3)                                  an issuance or sale of Equity Interests by a Restricted Subsidiary of the Parent to the Parent or to another of its Restricted Subsidiaries;

 

(4)                                  the sale, lease or other disposition of equipment, inventory, accounts receivable or other properties or assets in the ordinary course of business;

 

(5)                                  the sale or other disposition of cash or Cash Equivalents, Hedging Contracts or other financial instruments in the ordinary course of business;

 

(6)                                  a Restricted Payment that is permitted by Section 4.07 or a Permitted Investment;

 

2



 

(7)                                  the creation or perfection of a Lien that is not prohibited by Section 4.12;

 

(8)                                  dispositions in connection with Permitted Liens;

 

(9)                                  surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;

 

(10)                           the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property;

 

(11)                           the sale or other disposition of Capital Stock of an Unrestricted Subsidiary of the Parent; and

 

(12)                           an Asset Swap.

 

Asset Swap ” means any substantially contemporaneous (and in any event occurring within 180 days of each other) purchase and sale or exchange of any assets or properties (other than Capital Stock) used or useful in a Permitted Business between the Parent or any of its Restricted Subsidiaries and another Person; provided that any cash received must be applied in accordance with Section 4.10 as if the Asset Swap were an Asset Sale.

 

Attributable Debt ” in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.  As used in the preceding sentence, the “net rental payments” under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges.  In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.

 

Available Cash ” has the meaning assigned to such term in the Partnership Agreement, as in effect on the date of this Indenture.

 

Bankruptcy Law ” means Title 11, United States Code, as may be amended from time to time, or any similar federal or state law for the relief of debtors.

 

Beneficial Owner ” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition.  The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings.

 

3



 

Board of Directors ” means:

 

(1)                                  with respect to Finance Corp., its board of directors;

 

(2)                                  with respect to the Company or the Parent, the Board of Directors of the General Partner or any authorized committee thereof; and

 

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

 

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

 

Business Day ” means each day that is not a Saturday, Sunday or other day on which banking institutions in Dallas, Texas or in New York, New York or another place of payment are authorized or required by law to close.

 

Capital Lease Obligation ” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

 

Capital Stock ” means:

 

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

 

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

 

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

 

(4)                                  any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person (excluding debt securities convertible into or exchangeable for Capital Stock).

 

Cash Equivalents ” means:

 

(1)                                  United States dollars;

 

(2)                                  securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than six months from the date of acquisition;

 

4



 

(3)                                  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 thereof and, at the time of acquisition thereof, having a credit rating of “A” or better from either S&P or Moody’s;

 

(4)                                  certificates of deposit, demand deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any lender party to the Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better;

 

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

 

(6)                                  commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and in each case maturing within six months after the date of acquisition; and

 

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

 

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

 

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

 

(2)                                  the adoption of a plan relating to the liquidation or dissolution of the Parent or the Company or removal of the General Partner by the limited partners of the Parent;

 

(3)                                  the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), excluding the Qualifying Owners, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Parent or the General Partner, measured by voting power rather than number of shares, units or the like;

 

(4)                                  the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), excluding the Qualifying Owners, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of Summit LLC, measured by voting power rather than number of shares, units or the like,

 

5



 

at a time when Summit LLC Beneficially Owns a majority of the Voting Stock of the General Partner;

 

(5)                                  the consummation of any transaction whereby the Parent ceases to own directly or indirectly 100% of the Capital Stock of the Company; or

 

(6)                                  the first day on which a majority of the members of the Board of Directors of the General Partner are not Continuing Directors.

 

Notwithstanding the preceding, a conversion of the Parent or any of its Restricted Subsidiaries from a limited partnership, corporation, limited liability company 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 Equity Interests in one form of entity for Equity Interests in 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 Parent 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 or its general partner, as applicable, and, in either case no “person” Beneficially Owns more than 50% of the Voting Stock of such entity or its general partner, as applicable.

 

In addition, a Change of Control shall not occur as a result of (i) a merger between the Parent and the General Partner or (ii) any transaction in which the Company remains a Subsidiary of the Parent but one or more intermediate holding companies between the Company and the Parent are added, liquidated, merged or consolidated out of existence.

 

Clearstream ” means Clearstream Banking, société anonyme, or any successor securities clearing agency.

 

Code ” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.

 

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

 

Company ” means the party named as such in the preamble to this Indenture or any successor or assign pursuant to the provisions of this Indenture.

 

Consolidated Cash Flow ” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus:

 

(1)                                  an amount equal to any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated Net Income; plus

 

(2)                                  provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

 

6



 

(3)                                  consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings), and net of the effect of all payments made or received pursuant to interest rate Hedging Contracts, to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

 

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

 

(5)                                  unrealized non-cash losses resulting from foreign currency balance sheet adjustments required by GAAP to the extent such losses were deducted in computing such Consolidated Net Income; plus

 

(6)                                  all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense and, without duplication, Transaction Costs; minus

 

(7)                                  non-cash items increasing such Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business;

 

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

 

Consolidated Net Income ” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP, provided that:

 

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

 

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

 

7



 

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

 

(4)                                  any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of such Person or its consolidated Restricted Subsidiaries (including pursuant to any sale and 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 or any Person will be excluded;

 

(5)                                  unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including, without limitation those resulting from the application of the Financial Accounting Standards Board Accounting Standards Codification 815 will be excluded;

 

(6)                                  any nonrecurring charges relating to any premium or penalty paid, write off of deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity will be excluded; and

 

(7)                                  any increase or decrease in the amount of deferred revenue recorded on the Parent’s balance sheet for such period (as compared with the preceding period) will be included.

 

Consolidated Net Tangible Assets ” means, with respect to any Person at any date of determination, the aggregate amount of total assets included in such Person’s most recent quarterly or annual consolidated balance sheet prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after deducting the following amounts:  (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet.

 

Continuing Directors ” means, as of any date of determination, any member of the Board of Directors of the General Partner who:

 

(1)                                  was a member of such Board of Directors on the date of this Indenture; or

 

(2)                                  was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.

 

Corporate Trust Office of the Trustee ” means the office of the Trustee in the City of New York at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 100 Wall Street, 16 th  Floor, New York, New York 10005, or such other address in the City of New York as the Trustee may designate from time to time by notice to the Holders and the Issuers, or the principal corporate trust office in the City of New York of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Issuers).

 

8



 

Credit Agreement ” means that certain Amendment and Restatement Agreement, dated as of May 7, 2012, among the Company and the other loan parties party thereto, The Royal Bank of Scotland PLC, as Administrative Agent, and the other lenders party thereto, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, restated, modified, renewed, refunded, replaced or refinanced from time to time.

 

Credit Facilities ” means one or more debt facilities (including, without limitation, the Credit Agreement), indentures or commercial paper facilities, in each case, with banks or other institutional lenders or institutional investors providing for revolving credit loans, term loans, capital market financings, receivables financing (including, without limitation, 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 in any manner (whether upon or after termination nor otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

 

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

 

Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

Depositary ” has the meaning provided in the Appendix.

 

Designated Non-cash Consideration ” means the fair market value (as determined in good faith by the Parent) of non-cash consideration received by the Parent or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

 

Disqualified Stock ” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature.  Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Parent to repurchase or redeem such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Parent may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07.

 

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).

 

9



 

Equity Offering ” means any public or private sale of Capital Stock (other than Disqualified Stock) made for cash on a primary basis by the Parent after the date of this Indenture, provided that at any time on or after a Change of Control, any sale of Capital Stock to an Affiliate of the Parent shall not be deemed an Equity Offering.

 

Euroclear ” means the Euroclear System or any successor securities clearing agency.

 

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

 

Exchange Notes ” has the meaning specified in the Appendix.

 

Existing Indebtedness ” means the aggregate principal amount of Indebtedness of the Parent and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement which is considered incurred under the first paragraph of Section 4.09 and other than intercompany indebtedness) in existence on the date of this Indenture, until such amounts are repaid.

 

The term “ fair market value ” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Parent in the case of amounts of $20.0 million or more and otherwise by an Officer of the General Partner.

 

FERC Subsidiary ” means a Restricted Subsidiary of the Parent that is subject to the regulatory jurisdiction of the Federal Energy Regulatory Commission (or any successor thereof).

 

Fixed Charge Coverage Ratio ” means with respect to any specified Person for any four-quarter reference period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period.  In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the applicable four-quarter reference period and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, guarantee, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of such period.

 

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

 

(1)                                  acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, consolidations or otherwise (including acquisitions of assets used in a Permitted Business), and including in each case any related financing transactions (including repayment of Indebtedness) during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date, will be given pro forma effect as if they had occurred on the first day of the four-quarter reference period, including any Consolidated Cash Flow and any pro forma expense and cost reductions or operating improvements and synergies that have

 

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occurred or are reasonably expected to occur within the next 12 months, in the reasonable judgment of the chief financial or accounting officer of such Person or of its general partner, if applicable (regardless of whether those cost savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the Commission related thereto);

 

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

 

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

 

(4)                                  interest income reasonably anticipated by such Person to be received during the applicable four-quarter period from cash or Cash Equivalents held by such Person or any Restricted Subsidiary of such Person, which cash or Cash Equivalents exist on the Calculation Date or will exist as a result of the transaction giving rise to the need to calculate the Fixed Charge Coverage Ratio, will be included.

 

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

 

(1)                                  the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings), and net of the effect of all payments made or received pursuant to interest rate Hedging Contracts; plus

 

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

 

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

 

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

 

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

 

GAAP ” means generally accepted accounting principles in the United States, which are in effect on the date of this Indenture.

 

General Partner ” means Summit Midstream GP, LLC, a Delaware limited liability company, and its successors and permitted assigns as general partner of the Parent or as the business entity with the ultimate authority to manage the business and operations of the Parent.

 

Global Note ” has the meaning provided in the Appendix.

 

Government Securities ” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.

 

Guarantee ” means the guarantees of the Notes by the Guarantors.

 

The term “ guarantee ” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets, acting as co-obligor or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.  When used as a verb, “guarantee” has a correlative meaning.

 

Guarantors ” means the Parent and the Subsidiary Guarantors.

 

Hedging Contracts ” means, with respect to any specified Person:

 

(1)                                  interest rate swap agreements, interest rate cap agreements and interest rate collar agreements entered into with one or more financial institutions and designed to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred;

 

(2)                                  foreign exchange contracts and currency protection agreements entered into with one or more financial institutions and designed to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in currency exchanges rates with respect to Indebtedness incurred;

 

(3)                                  any commodity futures contract, commodity option or other similar agreement or arrangement designed to protect against fluctuations in the price of Hydrocarbons used, produced, processed or sold by that Person or any of its Restricted Subsidiaries at the time; and

 

(4)                                  other agreements or arrangements designed to protect such Person or any of its Restricted Subsidiaries against fluctuations in interest rates, commodity prices or currency exchange rates.

 

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

 

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

 

Indebtedness ” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

 

(1)                                  in respect of borrowed money;

 

(2)                                  evidenced by bonds, notes, debentures or similar instruments;

 

(3)                                  in respect of all outstanding letters of credit issued for the account of such Person that support obligations that constitute Indebtedness (provided that the amount of such letters of credit included in Indebtedness shall not exceed the amount of the Indebtedness being supported) and, without duplication, the unreimbursed amount of all drafts drawn under letters of credit issued for the account of such Person;

 

(4)                                  in respect of bankers’ acceptances;

 

(5)                                  representing Capital Lease Obligations;

 

(6)                                  representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or

 

(7)                                  representing any obligations under Hedging Contracts,

 

if and to the extent any of the preceding items (other than letters of credit and obligations under Hedging Contracts) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP.  In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person.  For the avoidance of doubt, the term “Indebtedness” excludes any obligation arising from any agreement providing for indemnities, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than guarantees of Indebtedness) incurred by the specified Person in connection with the acquisition or disposition of assets.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1)                                  the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2)                                  in the case of obligations under any Hedging Contracts, the termination value of the agreement or arrangement giving rise to such obligations that would be payable by such Person at such date; and

 

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(3)                                  the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

 

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

 

Initial Issuance Date ” means June 17, 2013.

 

Initial Notes ” has the meaning provided in the Appendix.

 

Initial Purchasers ” has the meaning provided in the Appendix.

 

Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

 

Investments ” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other obligations), advances or capital contributions (excluding (1) commission, travel and similar advances to officers and employees made in the ordinary course of business and (2) advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.  If the Parent or any Restricted Subsidiary of the Parent sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Parent such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Parent, the Parent will be deemed to have made an Investment on the date of any such sale or disposition in an amount equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07.  The acquisition by the Parent or any Subsidiary of the Parent of a Person that holds an Investment in a third Person will be deemed to be an Investment made by the Parent or such Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person on the date of any such acquisition in an amount determined as provided in the final paragraph of Section 4.07.

 

Joint Venture ” means any Person that is not a direct or indirect Subsidiary of the Parent in which the Parent or any of its Restricted Subsidiaries makes any Investment.

 

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

 

Make Whole Premium ” means, with respect to a Note at any time, the excess, if any, of (a) the present value at such time of (i) the redemption price of such Note at July 1, 2016 set forth in the table in Section 3.07(a) plus (ii) any required interest payments due on such Note

 

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through July 1, 2016 (except for currently accrued and unpaid interest), computed using a discount rate equal to the Treasury Rate plus 50 basis points, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), over (b) the principal amount of such Note.

 

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

 

Net Income ” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

 

(1)                                  any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or the extinguishment of any Indebtedness of such Person; and

 

(2)                                  any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss).

 

Net Proceeds ” means the aggregate cash proceeds received by the Parent or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:

 

(1)                                  the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, severance costs and any relocation expenses incurred as a result of the Asset Sale,

 

(2)                                  taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,

 

(3)                                  amounts required to be applied to the repayment of Indebtedness secured by a Lien on the properties or assets that were the subject of such Asset Sale, and

 

(4)                                  any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by the Parent or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to the Parent or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

 

Non-Recourse Debt ” means Indebtedness:

 

(1)                                  as to which neither the Parent nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument

 

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that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) is the lender;

 

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

 

(3)                                  as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Parent or any of its Restricted Subsidiaries except as contemplated by clause (9) of the definition of Permitted Liens.

 

For purposes of determining compliance with Section 4.09, in the event that any Non-Recourse Debt of any of the Parent’s Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Parent.

 

Notes ” has the meaning specified in the Appendix.

 

Notes Custodian ” has the meaning specified in the Appendix.

 

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

 

Offering Memorandum ” means the offering memorandum of the Issuers dated June 12, 2013 relating to the offering of the Initial Notes.

 

Officer ” means, with respect to any Person, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Chief Accounting Officer, the General Counsel, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice President of such Person or, with respect to the Company, the General Partner, or, with respect to any other partnership, its general partner.

 

Officers’ Certificate ” means a certificate signed on behalf of each of the Company and Finance Corp. by two of its Officers, one of whom, in the case of any Officers’ Certificate delivered pursuant to Section 4.04, must be the principal executive officer, the principal financial officer, or the principal accounting officer of the Company or Finance Corp., as the case may be, that, in each case, meets the requirements of Section 11.05 hereof.

 

Operating Surplus ” has the meaning assigned to such term in the Partnership Agreement, as in effect on the date of this Indenture.

 

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Opinion of Counsel ” means a written opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.  The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

 

Parent ” means the party named as such in the preamble to this Indenture or any successor or assign pursuant to the provisions of this Indenture.

 

Pari Passu Indebtedness ” means, with respect to any Excess Proceeds from Asset Sales, Indebtedness of an Issuer or any Guarantor that ranks equally in right of payment with the Notes or the Guarantees, as the case may be, and the terms of which require the Parent or any of its Restricted Subsidiaries to apply such Excess Proceeds to offer to repurchase such Indebtedness.

 

Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of the Parent dated as of October 3, 2012 as in effect on the date of the indenture and as such may be further amended, modified or supplemented from time to time.

 

Permitted Business ” means either (1) gathering, transporting, compressing, treating, processing, marketing, distributing, storing or otherwise handling Hydrocarbons, or activities or services reasonably related or ancillary thereto including entering into Hedging Contracts in the ordinary course of business and not for speculative purposes to support these businesses and the development, manufacture and sale of equipment or technology related to these activities, or (2) any other business that generates gross income that constitutes “qualifying income” under Section 7704(d) of the Code.

 

Permitted Business Investments ” means Investments by the Parent or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of the Parent or in any Joint Venture, provided that:

 

(1)                                  either (a) at the time of such Investment and immediately thereafter, the Parent could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 or (b) such Investment does not exceed the aggregate amount of Incremental Funds (as defined in Section 4.07) not previously expended at the time of making such Investment;

 

(2)                                  if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at the time of such Investment, either (a) all such Indebtedness is Non-Recourse Debt or (b) any such Indebtedness of such Unrestricted Subsidiary or Joint Venture that is recourse to the Parent or any of its Restricted Subsidiaries (which shall include, without limitation, all Indebtedness of such Unrestricted Subsidiary or Joint Venture for which the Parent or any of its Restricted Subsidiaries may be directly or indirectly, contingently or otherwise, obligated to pay, whether pursuant to the terms of such Indebtedness, by law or pursuant to any guarantee, including, without limitation, any “claw-back,” “make-well” or “keep-well” arrangement) could, at the time such Investment is made, be incurred at that time by the Parent and its Restricted Subsidiaries under the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and

 

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(3)                                  such Unrestricted Subsidiary’s or Joint Venture’s activities are not outside the scope of the Permitted Business.

 

Permitted Investments ” means:

 

(1)                                  any Investment in the Parent (including, without limitation, through purchases of Notes) or in a Restricted Subsidiary of the Parent;

 

(2)                                  any Investment in Cash Equivalents;

 

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

 

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

 

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

 

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

 

(5)                                  any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Parent; provided such Investment is not included in clause (b) of the definition of Incremental Funds in Section 4.07;

 

(6)                                  any Investments received in compromise of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure by the Parent or any of its Restricted Subsidiaries with respect to any secured Investment in default;

 

(7)                                  Hedging Contracts entered into in the ordinary course of business and not for speculative purposes;

 

(8)                                  Permitted Business Investments; and

 

(9)                                  other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (9) that are at the time outstanding, do not exceed the greater of $50.0 million or 7.5% of the Parent’s Consolidated Net Tangible Assets.

 

Permitted Liens ” means:

 

(1)                                  any Lien with respect to the Credit Agreement or any other Credit Facilities permitted to be incurred under this Indenture;

 

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(2)                                  Liens in favor of the Company or the Guarantors;

 

(3)                                  Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Parent or any Restricted Subsidiary of the Parent, provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets (other than improvements thereon, accessions thereto and proceeds thereof) other than those of the Person merged into or consolidated with the Parent or the Restricted Subsidiary;

 

(4)                                  Liens on property existing at the time of acquisition of the property by the Parent or any Restricted Subsidiary of the Parent, provided that such Liens were in existence prior to the contemplation of such acquisition;

 

(5)                                  any interest or title of a lessor to the property subject to a Capital Lease Obligation that was incurred pursuant to clause (4) of the definition of Permitted Debt;

 

(6)                                  Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capital 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 180 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 Parent or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto;

 

(7)                                  Liens existing on the date of this Indenture;

 

(8)                                  Liens to secure the performance of tenders, bids, statutory obligations, surety or appeal bonds, trade contracts, government contracts, operating leases, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

 

(9)                                  Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by the Parent or any Restricted Subsidiary of the Parent to the extent securing Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;

 

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

 

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(11)                           Liens arising under operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farmout agreements, division orders, contracts for sale, transportation or exchange of crude oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements and other agreements arising in the ordinary course of business of the Parent and its Restricted Subsidiaries that are customary in the Permitted Business;

 

(12)                           Liens upon specific items of inventory, receivables or other goods or proceeds of the Parent or any of its Restricted Subsidiaries securing such Person’s obligations in respect of bankers’ acceptances or receivables securitizations issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory, receivables or other goods or proceeds and permitted by Section 4.09;

 

(13)                           Liens securing Obligations of the Issuers or any Guarantor under the Notes or the Guarantees, as the case may be;

 

(14)                           Liens securing any Indebtedness equally and ratably with all Obligations due under the Notes or any Guarantee pursuant to a contractual covenant that limits Liens in a manner substantially similar to Section 4.12;

 

(15)                           Liens to secure performance of Hedging Contracts of the Parent or any of its Restricted Subsidiaries entered into in the ordinary course of business and not for speculative purposes;

 

(16)                           Liens securing any insurance premium financing under customary terms and conditions, provided that no such Lien may extend to or cover any assets or property other than the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded insurance premiums related thereto;

 

(17)                           other Liens incurred by the Parent or any Restricted Subsidiary of the Parent, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness then outstanding and secured by any Liens incurred pursuant to this clause (17) does not exceed the greater of $40.0 million or 5.0% of the Parent’s Consolidated Net Tangible Assets; and

 

(18)                           any Lien renewing, extending, refinancing or refunding a Lien permitted by clauses (3) and (4) above, provided that (a) the principal amount of the Indebtedness secured by such Lien is not increased except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection therewith and by an amount equal to any existing commitments unutilized thereunder and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby (other than improvements thereon, accessions thereto and proceeds thereof).

 

Permitted Refinancing Indebtedness ” means any Indebtedness of the Parent or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend,

 

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refinance, renew, replace, defease or refund other Indebtedness of the Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1)                                  the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

 

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

 

(4)                                  such Indebtedness is not incurred by a Restricted Subsidiary of the Parent (other than the Company, Finance Corp. or a Subsidiary Guarantor) if the Parent, the Company or a Subsidiary Guarantor is the issuer or other primary obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

 

Notwithstanding the preceding, any Indebtedness incurred under the Credit Agreement pursuant to Section 4.09 shall be subject only to the refinancing provision in the definition of Credit Facilities and not pursuant to the requirements set forth in the definition of Permitted Refinancing Indebtedness.

 

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

 

Purchase Agreement ” has the meaning provided in the Appendix.

 

QIB ” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

 

Qualifying Owners ” means the collective reference to (i) Energy Capital Partners II, LP, Energy Capital Partners II-A, L.P., Energy Capital Partners II-B IP, LP, Energy Capital Partners II-C (Summit IP), LP, Energy Capital Partners II (Summit Co-Invest), LP, GE EFS-S LLC and each of their Affiliated funds and investment vehicles and any fund manager, general partner, managing member or principal of any of the foregoing; (ii) the officers, directors and management employees of Parent, the Company and the subsidiaries of Parent; and (iii) any Person controlled by any of the Persons described in any of the clauses (i) or (ii).

 

Registered Exchange Offer ” has the meaning provided in the Appendix.

 

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Registration Rights Agreement ” has the meaning provided in the Appendix.

 

Regulation S ” has the meaning provided in the Appendix.

 

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

 

Responsible Officer ,” when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee  having direct responsibility for the administration of this Indenture.

 

Restricted Global Note ” has the meaning provided in the Appendix.

 

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

 

Restricted Subsidiary ” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.  Notwithstanding anything in this Indenture to the contrary, the Company and Finance Corp. shall at all times be Restricted Subsidiaries of the Parent.  Unless specified otherwise, references herein to a Restricted Subsidiary refer to a Restricted Subsidiary of the Parent.

 

Rule 144A ” has the meaning provided in the Appendix.

 

S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

 

Sale and Leaseback Transaction ” means an arrangement relating to property owned by the Parent or a Restricted Subsidiary on the Initial Issuance Date or thereafter acquired by the Parent or a Restricted Subsidiary whereby the Parent or a Restricted Subsidiary transfers such property to a Person and the Parent or a Restricted Subsidiary leases it from such Person.

 

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

 

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

 

Senior Debt ” means:

 

(1)                                  all Indebtedness of the Parent or any of its Restricted Subsidiaries outstanding under the Credit Agreement and all obligations under Hedging Contracts with respect thereto;

 

(2)                                  any other Indebtedness of the Parent or any of its Restricted Subsidiaries permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is subordinated in right of payment to the Notes or any Guarantee; and

 

(3)                                  all Obligations with respect to the items listed in the preceding clauses (1) and (2).

 

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Notwithstanding anything to the contrary in the preceding sentence, Senior Debt will not include:

 

(a)                                  any intercompany Indebtedness of the Parent or any of its Restricted Subsidiaries to the Parent or any of its Affiliates; or

 

(b)                                  any Indebtedness that is incurred in violation of this Indenture.

 

For the avoidance of doubt, “Senior Debt” will not include any trade payables or taxes owed or owing by the Parent or any of its Restricted Subsidiaries.

 

Shelf Registration Statement ” has the meaning provided in the Appendix.

 

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

 

Stated Maturity ” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

Subsidiary ” means, with respect to any specified Person:

 

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

 

(2)                                  any partnership (whether general or limited) or limited liability company (a) the sole general partner or member of which is such Person or a Subsidiary of such Person, or (b) if there is more than a single general partner or member, either (x) the only managing general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company, respectively.

 

Subsidiary Guarantees ” means the joint and several guarantees issued by all of the Subsidiary Guarantors pursuant to Article 10 hereof.

 

Subsidiary Guarantors ” means each of (a) the Subsidiaries of the Parent, other than the Company and Finance Corp., executing this Indenture as initial Subsidiary Guarantors, (b) any other Restricted Subsidiary of the Parent that executes a supplement to this Indenture in accordance with Section 4.13 or 10.02 hereof and (c) the respective successors and assigns of such Restricted Subsidiaries, as required under Article 10 hereof, in each case until such time as

 

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any such Restricted Subsidiary shall be released and relieved of its obligations pursuant to Section 8.02, 8.03 or 10.03 hereof.

 

Summit LLC ” means Summit Midstream Partners, LLC, a Delaware limited liability company.

 

TIA ” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA (except as provided in Section 9.01(i) and 9.03 hereof).

 

Transaction Costs ” means any legal, professional and advisory fees or other transaction costs and expenses paid (whether or not incurred) by the Parent or any Restricted Subsidiary in connection with (i) any acquisitions by the Parent or any Restricted Subsidiary, (ii) any incurrence of Indebtedness or Disqualified Stock by the Parent or any Restricted Subsidiary or any refinancing thereof, or any issuance of other equity securities or (iii) any reorganization or recapitalization of the capital structure of the Parent, the Company or the General Partner or Subsidiaries thereof, in each case permitted under the indenture.

 

Transfer Restricted Securities ” has the meaning provided in the Appendix.

 

Treasury Rate ” means 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 date fixed for redemption (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 July 1, 2016; provided, however, that if such period is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Company shall obtain the Treasury Rate 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 July 1, 2016 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 Company will (a) calculate the Treasury Rate on the second Business Day preceding the applicable redemption date and (b) prior to such redemption date file with the Trustee an Officers’ Certificate setting forth the Make Whole Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

 

Trustee ” means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

Uniform Commercial Code ” means the New York Uniform Commercial Code as in effect from time to time.

 

Unrestricted Subsidiary ” means any Subsidiary of the Parent (other than Finance Corp. or the Company) that is designated by the Board of Directors of the Parent as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary:

 

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(1)                                  except to the extent permitted by subclause (2)(b) of the definition of “Permitted Business Investments,” has no Indebtedness other than Non-Recourse Debt owing to any Person other than the Parent or any of its Restricted Subsidiaries;

 

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

 

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

 

(4)                                  has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Parent or any of its Restricted Subsidiaries.

 

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

 

Any designation of a Subsidiary of the Parent as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07.  If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Parent as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09, the Parent will be in default of such covenant.

 

Voting Stock ” of any Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person.

 

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

 

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

 

(2)                                  the then outstanding principal amount of such Indebtedness.

 

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Section 1.02.                           Other Definitions.

 

Term

 

Defined in Section

 

 

 

 

 

“Act”

 

11.14

 

“Affiliate Transaction”

 

4.11

 

“Appendix”

 

2.01

 

“Asset Sale Offer”

 

3.09

 

“Change of Control Offer”

 

4.15

 

“Change of Control Payment”

 

4.15

 

“Change of Control Purchase Date”

 

4.15

 

“Change of Control Settlement Date”

 

4.15

 

“Covenant Defeasance”

 

8.03

 

“Discharge”

 

8.08

 

“Event of Default”

 

6.01

 

“Excess Proceeds”

 

4.10

 

“Incremental Funds”

 

4.07

 

“incur”

 

4.09

 

“Legal Defeasance”

 

8.02

 

“Offer Amount”

 

3.09

 

“Offer Period”

 

3.09

 

“Paying Agent”

 

2.03

 

“Payment Default”

 

6.01

 

“Permitted Debt”

 

4.09

 

“Registrar”

 

2.03

 

“Restricted Payments”

 

4.07

 

“Settlement Date”

 

3.09

 

“Termination Date”

 

3.09

 

“Trailing Four Quarters”

 

4.07

 

 

Section 1.03.                           Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  Any terms incorporated in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 1.04.                           Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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(5)                                  the meanings of the words “will” and “shall” are the same when used to express an obligation;

 

(6)                                  references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

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

 

(8)                                  “herein,” “hereof” and other words of similar import refer to this Indenture as a whole (as amended or supplemented from time to time) and not to any particular Article, Section or other subdivision.

 

ARTICLE 2
THE NOTES

 

Section 2.01.                           Form and Dating.

 

Provisions relating to the Initial Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “ Appendix ”) which is hereby incorporated in and expressly made part of this Indenture. The Initial Notes, the Exchange Notes and the Trustee’s certificate of authentication therefor shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which an Issuer is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in the Appendix are part of the terms of this Indenture.

 

Section 2.02.                           Execution and Authentication.

 

An Officer of the Company shall sign the Notes on behalf of each Issuer by manual or facsimile signature.

 

If an Officer of the Company whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

 

A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note.  The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

 

On the Initial Issuance Date, the Trustee shall authenticate and deliver $300.0 million of 7½% Senior Notes due 2021 and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount specified in such order, in each case upon a written order of the Issuers.  Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be

 

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authenticated and to whom the Notes shall be registered and delivered and, in the case of an issuance of Additional Notes pursuant to Section 2.13 after the Initial Issuance Date, shall certify that such issuance is in compliance with Section 4.09.

 

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to authenticate the Notes.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

 

Section 2.03.                           Registrar and Paying Agent.

 

The Issuers shall maintain an office or agency in the United States where Notes may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency in New York, New York where Notes may be presented for payment (the “ Paying Agent ”).  The Registrar shall keep a register of the Notes and of their transfer and exchange.  The Issuers may have one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar, and the term “Paying Agent” includes any additional paying agent.

 

The Issuers 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 Issuers shall notify the Trustee of the name and address of any such agent.  If the Issuers fail to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Parent or any of its Restricted Subsidiaries may act as Paying Agent or Registrar.

 

The Issuers initially appoint The Depository Trust Company to act as Depositary with respect to the Global Notes.  The Issuers initially appoint the Trustee as Registrar and Paying Agent in connection with the Notes at the Corporate Trust Office of the Trustee.  If the Trustee is no longer the Registrar and Paying Agent, the Issuers shall provide the Trustee with access to inspect the Note register at all times and with copies of the Note register.

 

Section 2.04.                           Paying Agent to Hold Money in Trust.

 

Prior to 11:00 a.m. New York City time, on each due date of the principal, premium, if any, and interest on any Note, an Issuer shall deposit with the Paying Agent a sum sufficient to pay such principal, premium, if any, and interest when so becoming due.  The Issuers shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on the Notes and shall notify the Trustee of any default by the Issuers in making any such payment.  If the Company or a 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 Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.

 

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Section 2.05.                           Holder 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 Holders.  If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee, in writing at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders and the principal amounts and number of Notes.

 

Section 2.06.                           Transfer and Exchange.

 

The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer.  When a Note is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(a) of the Uniform Commercial Code are met.  When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.  The Issuers may require payment of a sum sufficient to cover any taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Section 3.06, 4.10, 4.15 or 9.05).

 

Section 2.07.                           Replacement Notes.

 

If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Issuers, such Holder shall furnish an indemnity bond sufficient in the judgment of the Issuers and the Trustee to protect the Issuers, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Note is replaced.  The Issuers and the Trustee may charge the Holder for their expenses in replacing a Note.  In the event any such Note shall have matured, instead of issuing a new Note, the Issuers may direct the Trustee to pay the same without surrender thereof upon the Holder furnishing the Issuers and the Trustee with indemnity satisfactory to them and complying with such other reasonable regulations as the Issuers may prescribe and paying such reasonable expenses as the Issuer and the Trustee may incur in connection therewith.

 

Every replacement Note is an additional obligation of the Issuers.

 

Section 2.08.                           Outstanding Notes.

 

Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.  Except as otherwise provided in TIA §316(a), a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

 

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If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee, any provider of an indemnity bond and the Issuers receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser.

 

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. New York time, on a redemption date or other maturity date money sufficient to pay all principal, premium, if any, and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section 2.09.                           Temporary Notes.

 

Until definitive Notes are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Notes.  Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuers consider appropriate for temporary Notes.  Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.

 

Section 2.10.                           Cancellation.

 

An Issuer at any time may deliver Notes to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange, payment or cancellation.  Upon written request, the Trustee will deliver a certificate of such cancellation to the Issuers unless the Issuers direct the Trustee to deliver canceled Notes to the Issuers instead.  The Issuers may not issue new Notes to replace Notes they have redeemed, paid or delivered to the Trustee for cancellation.

 

Section 2.11.                           Defaulted Interest.

 

If the Issuers default in a payment of interest on the Notes, the Issuers shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner.  The Issuers may pay the defaulted interest to the Persons who are Holders on a subsequent special record date.  The Issuers shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

 

Section 2.12.                           CUSIP Numbers.

 

The Issuers in issuing the Notes may use “CUSIP” numbers and corresponding “ISINs” (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers and corresponding “ISINs” in notices of redemption 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 Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.

 

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Section 2.13.                           Issuance of Additional Notes.

 

The Issuers shall be entitled, subject to their compliance with Section 4.09, to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued on the Initial Issuance Date, other than with respect to the date of issuance, issue price and the date from which interest begins to accrue.  The Initial Notes issued on the Initial Issuance Date, any Additional Notes and all Exchange Notes issued in exchange therefor shall be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, consents, directions, declarations, amendments, redemptions and offers to purchase.

 

With respect to any Additional Notes, the Issuers shall set forth in an Officers’ Certificate, which shall be delivered to the Trustee, the following information:

 

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

 

(2)                                  the issue price, the issue date and the CUSIP number and any corresponding ISIN of such Additional Notes; and

 

(3)                                  whether such Additional Notes shall be Transfer Restricted Securities.

 

ARTICLE 3
REDEMPTION AND PREPAYMENT

 

Section 3.01.                           Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee, at least five Business Days (unless a shorter period shall be agreeable to the Trustee) before the date of giving notice of the redemption pursuant to Section 3.03, an Officers’ Certificate setting forth (i) the clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price or, if the redemption price is not then determinable, the manner in which it is to be determined, and (v) whether it requests the Trustee to give notice of such redemption.  Any such notice may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereby be void and of no effect.

 

Section 3.02.                           Selection of Notes to be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes as follows:  (1) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or (2) if the Notes are not listed on any national securities exchange, on a pro rata basis (except that any Notes represented by a Global Note shall be selected by such method as the Depositary or its nominee or successor may require or, where such nominee or successor is the Trustee, a method that most nearly approximates pro rata selection as the Trustee deems fair and appropriate unless otherwise required by law).  In the event of partial redemption other than on a pro rata basis, the particular Notes to be redeemed

 

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shall be selected, not less than three (3) Business Days (unless a shorter period shall be agreeable to the Trustee) prior to the giving of notice of the redemption pursuant to Section 3.03, by the Trustee from the outstanding Notes not previously called for redemption.

 

The Trustee shall promptly notify the Issuers and the Registrar in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed.  Notes and portions of Notes selected shall be in amounts of $2,000 or integral multiples of $1,000 in excess of $2,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not $2,000 or a multiple of $1,000, shall be redeemed.  Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

The provisions of the two preceding paragraphs of this Section 3.02 shall not apply with respect to any redemption affecting only a Global Note, whether such Global Note is to be redeemed in whole or in part.  In case of any such redemption in part, the unredeemed portion of the principal amount of the Global Note shall be in an authorized denomination.

 

Section 3.03.                           Notice of Redemption.

 

At least 30 days but not more than 60 days before a redemption date, except that redemption notices may be mailed, or with respect to Global Notes, delivered in accordance with the procedures of the Depositary, more than 60 days prior to a redemption date if the notice is issued in connection with a Legal Defeasance, Covenant Defeasance or Discharge, the Issuers shall mail or deliver or cause to be mailed, by first class mail, or delivered, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address.

 

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

 

(a)                                  the redemption date;

 

(b)                                  the redemption price or, if the redemption price is not then determinable, the manner in which it is to be determined;

 

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

 

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

 

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

 

(f)                                    that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date and the only remaining right of the Holders of such Notes is to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed;

 

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

 

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

 

If any of the Notes to be redeemed is in the form of a Global Note, then the Issuers shall modify such notice to the extent necessary to accord with the procedures of the Depositary applicable to redemption.

 

At the Issuers’ request, the Trustee shall give the notice of optional redemption in the Issuers’ names and at their expense; provided, however, that the Issuers shall have delivered to the Trustee, as provided in Section 3.01, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the second preceding paragraph.

 

Section 3.04.                           Effect of Notice of Redemption.

 

Once notice of redemption is delivered in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price, subject to satisfaction of conditions permitted below.  A notice of redemption may not be conditional, except that any redemption pursuant to Section 3.07(b) may, at the Issuers’ discretion, be subject to the completion of the related Equity Offering.  If given in the manner provided for in Section 3.03, the notice of redemption shall be conclusively presumed to have been given whether or not a Holder receives such notice.  Failure to give timely notice or any defect in the notice shall not affect the validity of the redemption.

 

Section 3.05.                           Deposit of Redemption Price.

 

Prior to 11:00 a.m., Central time, on the redemption date, the Issuers shall deposit with the Paying Agent (or, if the Company or a Subsidiary thereof is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.04 hereof) money sufficient in same day funds to pay the redemption price of and accrued and unpaid interest, if any, on all Notes to be redeemed on that date.  The Paying Agent shall promptly return to the Issuers any money deposited with the Paying Agent by an Issuer in excess of the amounts necessary to pay the redemption price of and accrued and unpaid interest, if any, on all Notes to be redeemed.

 

If the Issuers comply with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed.  If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of an Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful, on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

 

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Section 3.06.                           Notes Redeemed in Part.

 

Upon surrender of a Note that is redeemed in part, the Issuers shall issue in the name of the Holder and the Trustee shall authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

 

Section 3.07.                           Optional Redemption.

 

(a)                                  On or after July 1, 2016, the Issuers may redeem all or a portion of the Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the Notes redeemed to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date), if redeemed during the twelve-month period beginning on July 1 of the years indicated below:

 

YEAR

 

PERCENTAGE

 

2016

 

105.625

%

2017

 

103.750

%

2018

 

101.875

%

2019 and thereafter

 

100.000

%

 

(b)                                  At any time prior to July 1, 2016, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture at a redemption price of 107.500% of the principal amount, plus 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 an interest payment date that is on or prior to the redemption date), in an amount not greater than the net cash proceeds of one or more Equity Offerings, provided that:

 

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

 

(2)                                  the redemption occurs within 120 days of the date of the closing of each such Equity Offering.

 

(c)                                   Prior to July 1, 2016, the Issuers may redeem all or part of the Notes at a redemption price equal to the sum of:

 

(1)                                  the principal amount thereof, plus

 

(2)                                  the Make Whole Premium at the redemption date, plus

 

(3)                                  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 an interest payment date that is on or prior to the redemption date).

 

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(d)                                  The Notes may also be redeemed, as a whole, following certain Change of Control Offers, at the redemption price and subject to the conditions set forth in Section 4.15(6).

 

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

 

Section 3.08.                           Mandatory Redemption.

 

Except as set forth under Sections 4.10 and 4.15 hereof, neither of the Issuers shall be required to make mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes at the option of the Holders.

 

Section 3.09.                           Offer to Purchase by Application of Excess Proceeds.

 

In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an “ Asset Sale Offer ”), it shall follow the procedures specified below.

 

The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by Applicable Law (the “ Offer Period ”).  No later than five Business Days after the termination of the Offer Period (the “ Settlement Date ”), the Company shall purchase and pay for the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the “ Offer Amount ”) or, if less than the Offer Amount has been validly tendered (and not validly withdrawn), all Notes validly tendered (and not validly withdrawn) in response to the Asset Sale Offer.  Payment for any Notes so purchased shall be made in the manner prescribed in the Notes.

 

Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to each of the Holders, with a copy to the Trustee.  The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer.  The Asset Sale Offer shall be made to all Holders.  The notice, which shall govern the terms of the Asset Sale Offer, shall state:

 

(a)                                  that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open, including the time and date the Asset Sale Offer will terminate (the “ Termination Date ”);

 

(b)                                  the Offer Amount and the purchase price;

 

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

 

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

 

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(e)                                   that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased;

 

(f)                                    that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Company or a Paying Agent at the address specified in the notice, before the Termination Date;

 

(g)                                   that Holders shall be entitled to withdraw their election if the Company or the Paying Agent, as the case may be, receives, prior to the Termination Date, an electronic image scan, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase, and a statement that such Holder is withdrawing his election to have such Note purchased;

 

(h)                                  that, if the aggregate principal amount of Notes surrendered by Holders, and Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis  (except that any Notes represented by a Global Note shall be selected by such method as the Depositary or its nominee or successor may require or, where such nominee or successor is the Trustee, a method that most nearly approximates pro rata selection as the Trustee deems fair and appropriate unless otherwise required by law) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Indebtedness (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess of $2,000, shall be purchased); and

 

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

 

If any of the Notes subject to an Asset Sale Offer is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depositary applicable to repurchases.

 

Promptly after the Termination Date, the Company shall, to the extent lawful, accept for payment Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate principal amount required by Section 4.10 hereof, and prior to the Settlement Date it shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09 and Section 4.10.  Prior to 11:00 a.m., Central time, on the Settlement Date, the Company or the Paying Agent, as the case may be, shall mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall issue a new Note, and the Trustee shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered by the Company to

 

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the Holder thereof.  The Company shall publicly announce the results of the Asset Sale Offer on or before the Settlement Date.

 

Section 3.10.                           Purchase of Notes.

 

The Company or any Affiliate of the Company may, subject to applicable law, at any time purchase or otherwise acquire Notes in the open market or by private agreement.  Any such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Notes.  Any Notes purchased or acquired by the Company may be delivered to the Trustee and, upon such delivery, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.10 shall apply to all Notes so delivered.

 

ARTICLE 4
COVENANTS

 

Section 4.01.                           Payment of Notes.

 

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

 

The Issuers shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the interest rate on the Notes to the extent lawful; and they shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

 

The Issuers shall notify the Trustee of the amounts and payment dates of any Additional Interest that may become payable under any Registration Rights Agreement.

 

Section 4.02.                           Maintenance of Office or Agency.

 

The Issuers shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) in New York, New York where Notes may be presented or surrendered for payment and they shall maintain an office or agency in the United States (which may be an office of the Trustee or an affiliate of the Trustee) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served; provided, however , that the Company may, at its option, pay interest on the Notes by check mailed to Holders at their addresses as they appear in the Registrar’s books.  The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Issuers 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.

 

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The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.  Further, if at any time there shall be no such office or agency in the City of New York where the Notes may be presented or surrendered for payment, the Issuers shall forthwith designate and maintain such an office or agency in the City of New York, in order that the Notes shall at all times be payable in the City of New York.  The Issuers shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.  In addition, Notes may be presented or surrendered for registration of transfer or for exchange, and notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served, at the corporate trust office of the Trustee in Houston, Texas, which on the date of this Indenture is located at 5555 San Felipe, Suite 1150, Houston, Texas 77056.

 

Section 4.03.                           Reports.

 

(a)                                  Whether or not required by the SEC, so long as any Notes are outstanding, the Parent will file with the SEC for public availability within the time periods specified in the SEC’s rules and regulations under the Exchange Act (unless the SEC will not accept such a filing) and will furnish to the Trustee and, upon its prior request, to any of the Holders or Beneficial Owners of the Notes, within five Business Days of filing, or attempting to file, the same with the SEC:

 

(1)                                  all quarterly and annual financial and other information with respect to the Parent and its Subsidiaries that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Parent were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Parent’s certified independent accountants; and

 

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

 

The availability of the foregoing information or reports on the Commission’s website will be deemed to satisfy the foregoing delivery requirements.

 

(b)                                  The Parent and the Guarantors shall furnish to the Holders and Beneficial Owners of the Notes, prospective purchasers of the Notes and securities analysts, upon their request, the information, if any, required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)                                   If the Parent has designated any of its Subsidiaries as Unrestricted Subsidiaries, then, to the extent material, the quarterly and annual financial information required by paragraph (a) of this Section 4.03 shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial

 

38



 

condition and results of operations of the Parent and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries.

 

(d)                                  Delivery of reports, information and documents to the Trustee under this Section is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein.

 

Section 4.04.                           Compliance Certificate.

 

(a)                                  The Issuers shall deliver to the Trustee, within 120 days after the end of each fiscal year ending after December 31, 2013, an Officers’ Certificate stating that a review of the activities of the Parent 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 the Parent has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Parent has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto).

 

(b)                                  The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer of the General Partner or Finance Corp. becoming aware of any Default or Event of Default, a statement specifying such Default or Event of Default.

 

Section 4.05.                           Taxes.

 

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

 

Section 4.06.                           Stay, Extension and Usury Laws.

 

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

 

Section 4.07.                           Limitation on Restricted Payments.

 

The Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

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(1)                                  declare or pay any dividend or make any other payment or distribution on account of the Parent’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Parent or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Parent’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Parent or payable to the Parent or a Restricted Subsidiary of the Parent);

 

(2)                                  purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Parent) any Equity Interests of the Parent or any direct or indirect parent of the Parent;

 

(3)                                  make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Guarantees (excluding any intercompany Indebtedness between or among the Parent and any of its Restricted Subsidiaries), except a payment of interest or principal at the Stated Maturity thereof; or

 

(4)                                  make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “ Restricted Payments ”),

 

unless, at the time of and after giving effect to such Restricted Payment, no Default (except a Reporting Default) or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment and either:

 

(1)                                  if the Fixed Charge Coverage Ratio for the Parent’s most recently ended four full fiscal quarters for which internal financial statements are available at the time of such Restricted Payment (the “ Trailing Four Quarters ”) is not less than 1.75 to 1.0, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Parent and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4), (5) and (6) of the next succeeding paragraph) with respect to the quarter for which such Restricted Payment is made, is less than the sum, without duplication, of:

 

(a)                                  Available Cash from Operating Surplus with respect to the Parent’s preceding fiscal quarter, plus

 

(b)                                  100% of the aggregate net proceeds received by the Parent (including the fair market value of property or securities other than cash (including Capital Stock of Persons, other than the Parent or a Subsidiary of the Parent, engaged primarily in a Permitted Business) or long-term assets that are used or useful in a Permitted Business to the extent acquired in consideration of Equity Interests of the Parent (other than Disqualified Stock)) after the date of the indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Parent (other than Disqualified Stock) or from the issue

 

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or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Parent that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Parent), plus

 

(c)                                   to the extent that any Restricted Investment that was made after the date of the indenture is sold for cash or otherwise cancelled, liquidated or repaid for cash, the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any), plus

 

(d)