ASSET PURCHASE AGREEMENT
by and
between
PIEDMONT NATURAL GAS COMPANY, INC.,
as Seller,
and
SPIRE INC.,
as Buyer
Dated as of July 27, 2025
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS |
1 |
Section 1.1 |
Definitions |
1 |
Section 1.2 |
Terms Generally |
21 |
ARTICLE II PURCHASE AND SALE |
22 |
Section 2.1 |
Purchased Assets |
22 |
Section 2.2 |
Excluded Assets |
24 |
Section 2.3 |
Assumed Obligations |
26 |
Section 2.4 |
Excluded Liabilities |
27 |
ARTICLE III PURCHASE PRICE |
28 |
Section 3.1 |
Purchase Price |
28 |
Section 3.2 |
Determination of Purchase Price |
29 |
Section 3.3 |
Allocation of Purchase Price |
31 |
Section 3.4 |
Prorations |
32 |
Section 3.5 |
Unbilled Revenues |
33 |
Section 3.6 |
Withholding |
33 |
ARTICLE IV THE CLOSING |
34 |
Section 4.1 |
Time and Place of Closing |
34 |
Section 4.2 |
Seller’s Closing Deliveries |
34 |
Section 4.3 |
Buyer’s Closing Deliveries |
35 |
Section 4.4 |
Records |
35 |
Section 4.5 |
Quitclaim Instruments |
35 |
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
36 |
Section 5.1 |
Organization and Good Standing |
36 |
Section 5.2 |
Authority and Enforceability |
36 |
Section 5.3 |
No Conflicts |
36 |
Section 5.4 |
Financial Information |
37 |
Section 5.5 |
No Undisclosed Liabilities |
38 |
Section 5.6 |
Absence of Certain Changes |
38 |
Section 5.7 |
Sufficiency of Purchased Assets |
38 |
Section 5.8 |
Title |
38 |
Section 5.9 |
Material Contracts |
38 |
Section 5.10 |
Support Obligations |
40 |
Section 5.11 |
Intellectual Property |
40 |
Section 5.12 |
Legal Proceedings |
41 |
Section 5.13 |
Compliance with Law; Orders; Permits |
41 |
Section 5.14 |
Anti-Corruption; Anti-Money Laundering; Sanctions |
42 |
Section 5.15 |
Environmental Matters |
42 |
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|
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Section 5.16 |
Taxes |
43 |
Section 5.17 |
Labor Matters |
45 |
Section 5.18 |
Employee Benefits |
45 |
Section 5.19 |
Information Technology and Data Security |
47 |
Section 5.20 |
Insurance |
48 |
Section 5.21 |
Real Property |
48 |
Section 5.22 |
Brokers and Finders |
49 |
Section 5.23 |
Exclusivity of Representations and Warranties |
49 |
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER |
50 |
Section 6.1 |
Organization and Good Standing |
50 |
Section 6.2 |
Authority and Enforceability |
51 |
Section 6.3 |
No Conflicts |
51 |
Section 6.4 |
Financial Capability |
52 |
Section 6.5 |
Brokers and Finders |
53 |
Section 6.6 |
Legal Proceedings |
53 |
Section 6.7 |
Regulatory Status |
53 |
Section 6.8 |
RWI Policy |
53 |
Section 6.9 |
Solvency |
54 |
Section 6.10 |
Investigation by Buyer |
54 |
ARTICLE VII COVENANTS OF THE PARTIES |
55 |
Section 7.1 |
Conduct of the Business |
55 |
Section 7.2 |
Access |
58 |
Section 7.3 |
Access to Books and Records; Cooperation |
60 |
Section 7.4 |
Confidentiality |
60 |
Section 7.5 |
Contact; Non-Disparagement |
61 |
Section 7.6 |
Interim Agreements |
62 |
Section 7.7 |
Further Assurances |
62 |
Section 7.8 |
Transition Committee; Planning |
63 |
Section 7.9 |
Governmental Approvals |
64 |
Section 7.10 |
Tax Matters |
67 |
Section 7.11 |
Employees |
69 |
Section 7.12 |
Employee Benefits |
70 |
Section 7.13 |
Insurance Policies |
73 |
Section 7.14 |
RWI Policy |
74 |
Section 7.15 |
Use of Marks |
74 |
Section 7.16 |
Notification of Customers |
75 |
Section 7.17 |
Public Statements |
76 |
Section 7.18 |
Indemnification |
76 |
Section 7.19 |
Listed Consents |
77 |
Section 7.20 |
Intercompany Accounts |
79 |
Section 7.21 |
Wrong Pockets |
79 |
Section 7.22 |
Litigation Defense |
80 |
Section 7.23 |
Financing |
81 |
Section 7.24 |
Financing Cooperation |
83 |
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|
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Section 7.25 |
Credit Support |
86 |
Section 7.26 |
Specified Site |
87 |
Section 7.27 |
Real Property Matters |
88 |
ARTICLE VIII CONDITIONS TO CLOSING |
89 |
Section 8.1 |
Conditions to Each Party’s Closing Obligations |
89 |
Section 8.2 |
Conditions to Buyer’s Closing Obligations |
89 |
Section 8.3 |
Conditions to Seller’s Closing Obligations |
90 |
ARTICLE IX SURVIVAL, TERMINATION AND OTHER REMEDIES |
90 |
Section 9.1 |
Survival |
90 |
Section 9.2 |
Termination |
91 |
Section 9.3 |
Effect of Termination |
93 |
ARTICLE X MISCELLANEOUS PROVISIONS |
95 |
Section 10.1 |
Expenses |
95 |
Section 10.2 |
Amendment |
95 |
Section 10.3 |
Notices |
95 |
Section 10.4 |
Assignment |
96 |
Section 10.5 |
Parties in Interest |
97 |
Section 10.6 |
Severability |
97 |
Section 10.7 |
Entire Agreement |
97 |
Section 10.8 |
Counterparts |
98 |
Section 10.9 |
Governing Law |
98 |
Section 10.10 |
Consent to Jurisdiction; Waiver of Jury Trial |
98 |
Section 10.11 |
Specific Performance |
99 |
Section 10.12 |
No Special Damages; Sole and Exclusive Remedy |
99 |
Section 10.13 |
Exhibits and Schedules |
100 |
Section 10.14 |
Headings |
100 |
Section 10.15 |
Construction |
100 |
Section 10.16 |
No Recourse |
100 |
Section 10.17 |
Transaction Privilege |
101 |
Section 10.18 |
Debt Financing Sources |
102 |
APPENDICES AND EXHIBITS
Exhibit A Accounting Principles
Exhibit B Sample Calculation of Adjustment Amount
Exhibit C Form of Assignment and Assumption Agreement
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Assignment of Easements
Exhibit F Form of Assignment of Leases
Exhibit G Form of Special Warranty Deed
Exhibit H Form of Quitclaim Deed
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 27, 2025 (the “Effective Date”), by and between Piedmont Natural Gas Company, Inc., a North Carolina corporation (“Seller”), and Spire Inc., a Missouri corporation (“Buyer”).
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of Seller’s right, title and interest in and to certain Purchased Assets as specified in this Agreement, upon the terms and subject to the conditions set forth herein;
WHEREAS, Seller desires to transfer to Buyer, and Buyer desires to assume from Seller, certain Assumed Obligations as specified in this Agreement, upon the terms and subject to the conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises herein made, and in consideration of the representations and warranties herein contained, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the Parties, intending to become legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms have the meanings specified in this Section 1.1:
“Accounting Principles” means the principles, policies, and procedures set out below:
(i) the accounting principles, practices, policies, judgments and methodologies set forth on Exhibit A;
(ii) solely to the extent not inconsistent with clause (i), the accounting principles, practices, policies, categorizations, classifications, procedures, assumptions, judgments, and methodologies as interpreted and used in the preparation of the balance sheet of the Business as of December 31, 2024; and
(iii) to the extent not addressed in clause (i) or (ii), GAAP as in effect on the Closing Date.
For the avoidance of doubt, in event of any conflict, clause (i) above shall take precedence over clauses (ii) and (iii), and clause (ii) shall take precedence over clause (iii).
“Adjustment Amount” means (a) the Net Working Capital Adjustment plus (b) the Capital Expenditures Adjustment plus (c) the Regulatory Assets and Liabilities Adjustment, which Adjustment Amount may be positive or negative.
“Adjustment Dispute Notice” has the meaning set forth in Section 3.2(c).
“Affiliate” has the meaning set forth in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.
“Agreement” has the meaning set forth in the Preamble.
“Allocable Amount” has the meaning set forth in Section 3.3.
“Alternative Financing” has the meaning set forth in Section 7.23(d).
“Ancillary Agreements” means the Confidentiality Agreement, each Assignment and Assumption Agreement, each Quitclaim Deed, each Special Warranty Deed, each Assignment of Easements, each Assignment of Leases, the Transition Services Agreement and each other agreement and instrument to be executed and delivered pursuant to this Agreement, including such transfer forms, notices or returns, if any, as are required to be delivered by applicable federal, state and local law in connection with the conveyance of the Real Property.
“Asset Taxes” means all ad valorem, real property Taxes, personal property Taxes, excise, sales, use, and similar Taxes based upon the operation or ownership of the Purchased Assets, Assumed Obligations and the Business, but excluding, for the avoidance of doubt, Taxes based on income or receipts and Transfer Taxes.
“Assignment and Assumption Agreement” means one or more assignment and assumption agreements, dated as of the Closing Date and substantially in the form set forth on Exhibit C.
“Assignment of Easements” means the assignments and assumptions of Seller’s right, title, and interest in the Purchased Easements to be executed and delivered by Seller and Buyer at the Closing, substantially in the form on Exhibit E (or in such other form as is required to be provided pursuant to the terms of such Purchased Easements and otherwise in form and substance mutually reasonably acceptable to each of Buyer and Seller) and subject to approval by a title company mutually reasonably acceptable to each of Buyer and Seller in the applicable counties.
“Assignment of Leases” means the assignments and assumptions of Seller’s right, title, and interest in the Leases to be executed and delivered by Seller and Buyer at the Closing, substantially in the form set forth on Exhibit F (or in such other form as is required to be provided pursuant to the terms of such Leases and otherwise in form and substance mutually reasonably acceptable to each of Buyer and Seller).
“Assumed Obligations” has the meaning set forth in Section 2.3.
“Balance Sheets” has the meaning set forth in Section 5.4.
“Base Purchase Price” has the meaning set forth in Section 3.1.
“Benefit Plan” has the meaning set forth in Section 5.18(a).
“Billed Revenues” means all outstanding bills to customers served by the Business that have not been paid as of the Effective Time less allowance for bad debt, which shall be calculated in the Ordinary Course of Business.
“Burdensome Condition” shall mean any undertakings, terms, conditions, liabilities, obligations, commitments or sanctions in connection with any Required Regulatory Approval that, individually or in the aggregate, has or would reasonably be expected to have a material adverse effect on the business, assets, properties, results of operations, or condition (financial or otherwise) of Buyer and its Affiliates taken as a whole, as contemplated to exist immediately after giving effect to the Transactions; provided, that for these purposes only, Buyer and its Affiliates, taken as a whole, shall be deemed to be a consolidated group of entities of the size and scale of a hypothetical company that is equal to the size of the Business as the Effective Date; provided, further, that any adverse effects related to the terms of any Alternative Financing shall be disregarded for purposes hereof and instead such adverse effect shall be determined as if the terms of the Debt Financing remained effective.
“Business” means the natural gas utility business conducted by Seller and its Affiliates serving customers in the Territory.
“Business Confidential Information” means confidential information, proprietary information and other Trade Secrets Exclusively Related to the Business, excluding any such information that relates to Business Employees or other current or former employees of Seller and its Affiliates.
“Business Day” means any day other than Saturday, Sunday, or any day on which banks in Charlotte, North Carolina or New York, New York are authorized by applicable Law to close.
“Business Employee” means those employees of Seller or an Affiliate who provide services to Seller and its Affiliates on behalf of the Business and are set forth on Schedule 7.11(a), as updated in accordance with Section 7.11(a).
“Business Intellectual Property” means (a) all Intellectual Property owned or purported to be owned by or exclusively licensed to Seller or its Affiliates that is Exclusively Related to the Business and (b) the Business Marks, but excluding any other Trademarks and any Excluded IP.
“Business Marks” means the business or trade names and Trademarks that include or comprise the term “Nashville Gas” or “NashvilleGas” and any derivations, adaptations, translations or abbreviations thereof.
“Buyer” has the meanings set forth in the Preamble.
“Buyer Indemnified Parties” has the meaning set forth in Section 7.18(a).
“Buyer Required Amount” has the meaning set forth in Section 6.4(a).
“Buyer Savings Plan” has the meaning set forth in Section 7.12(d).
“Buyer’s Counsel” has the meaning set forth in Section 10.17(b).
“Buyer’s Knowledge” or words to similar effect, means the actual knowledge, and the knowledge such persons would reasonably be expected to obtain if each of them had made due inquiry of their direct reports, of the Persons set forth on Schedule 1.1-A.
“Capital Expenditures” means any capital expenditures incurred by Seller or its Affiliates related to the Business of the type set forth in the Capital Expenditures Budget and calculated in accordance with the past practice of the Business applying the same cost components, classifications and capitalization policies that were used in preparing the Capital Expenditures Budget. For the avoidance of doubt, actual Capital Expenditures shall include capital expenditures amounts recorded within current liabilities as of the Effective Time.
“Capital Expenditures Adjustment” means an amount, which may be positive or negative, equal to: (a)(i) any actual Capital Expenditures made by Seller with respect to the Business for the period between January 1, 2025 and December 31, 2025 minus (ii) Target 2025 Capital Expenditures (in each case, prorated for the partial year in the case of clause (ii) to the extent the Closing Date occurs prior to December 31, 2025) plus (b) if the Closing Date is after December 31, 2025, (i) the actual Capital Expenditures made by Seller with respect to the Business between January 1, 2026 and the earlier of (x) the Closing Date and (y) March 31, 2026 minus (ii) Target 2026 First Quarter Capital Expenditures (in each case, prorated for the partial quarter in the case of clause (ii) to the extent the Closing Date occurs prior to March 31, 2026) plus (c) if the Closing Date is after March 31, 2026, any actual Capital Expenditures made by Seller with respect to the Business for the period between April 1, 2026 and the Closing Date.
“Capital Expenditures Budget” has the meaning set forth in Section 7.1(b)(ix).
“Cash and Cash Equivalents” means all cash, certificates of deposit, checks, money orders, commercial paper, treasury bills and notes, marketable securities, and other cash equivalents of the Business.
“CBA Employees” has the meaning set forth in Section 7.11(a).
“Claims” means any and all administrative, regulatory, or judicial actions or causes of action, suits, petitions, proceedings (including arbitration proceedings), investigations, inquiries, hearings, demands, demand letters, claims, or notices or other allegations of noncompliance or violation delivered by any Governmental Entity or other Person.
“Closing” has the meaning set forth in Section 4.1.
“Closing Date” has the meaning set forth in Section 4.1.
“Closing Net Working Capital” means, as of the Effective Time and without duplication, the aggregate current assets of the Business that are included in the Purchased Assets minus the aggregate current liabilities of the Business that are included in the Assumed Obligations, in each case (i) as determined in accordance with the Accounting Principles, (ii) including only the general ledger accounts set forth in the Sample Calculation of Adjustment Amount attached on Exhibit B and (iii) excluding the Excluded Assets and Excluded Liabilities.
“Closing Payment Amount” has the meaning set forth in Section 3.2(a).
“Closing Regulatory Assets” means, as of the Effective Time and without duplication, the aggregate regulatory assets of the Business that are included in the Purchased Assets, in each case (i) as determined in accordance with the Accounting Principles, (ii) including only the general ledger accounts set forth in the Sample Calculation of Adjustment Amount attached on Exhibit B and (iii) excluding the Excluded Assets and Excluded Liabilities.
“Closing Regulatory Liabilities” means, as of the Effective Time and without duplication, the aggregate regulatory Liabilities of the Business that are included in the Assumed Obligations, in each case (i) as determined in accordance with the Accounting Principles, (ii) including only the general ledger accounts set forth in the Sample Calculation of Adjustment Amount attached on Exhibit B and (iii) excluding the Excluded Assets and Excluded Liabilities.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collective Bargaining Agreements” has the meaning set forth in Section 5.9(a)(iii).
“Compliant” means, in respect of Required Information, that (i) such information does not, taken as a whole, contain any untrue statement of material fact, or, taken as a whole, omit to state any material fact necessary to make the statements in such Required Information, in light of the circumstances under which they were made, not misleading, (ii) such information (including financial information) is compliant in all material respects with all applicable requirements of Regulation S-X and Regulation S-K under the Securities Act that are applicable to offerings of securities on an automatic shelf registration statement of Buyer on Form S-3, (iii) Seller Parent’s auditor shall not have withdrawn, or advised Seller Parent in writing that they intend to withdraw, any audit opinion with respect to any financial information contained in the Required Information (as applicable), (iv) Seller Parent has not determined to undertake a restatement of any historical financial statements contained in the Required Information of Seller Parent or that any such restatement is under consideration, (v) with respect to any interim financial statements, such interim financial statements have been reviewed by the Seller’s auditors as provided in the procedures specified by the Public Company Accounting Oversight Board in AS 4105, and (vi) the combined financial statements and other financial information included in such Required Information are sufficient to permit the Financing Parties (including underwriters, placement agents or initial purchasers) to receive customary comfort letters from Seller Parent’s independent auditors, including as to customary negative assurances and change period (it being understood that monthly financial statements will not be separately prepared), in order to consummate any offering of debt, equity, equity-linked or equity-backed securities.
“Confidentiality Agreement” means that certain letter agreement regarding confidentiality by and between Seller Parent and Buyer, dated March 28, 2025.
“Continuation Period” has the meaning set forth in Section 7.12(a).
“Continuing Credit Support” has the meaning set forth in Section 7.25.
“Contract” means any legally binding contract or agreement, but excluding: (i) non-binding supplements or addenda (including those created by Seller for its internal business purposes), (ii) any Order, Franchise, Easement, or Permit and (iii) any Benefit Plan.
“Controlled Group Liabilities” means any and all Liabilities (i) under any Multiemployer Plan, (ii) under Title IV of ERISA, (iii) under Section 302 of ERISA or Section 412 and 4971 of the Code, and (iv) as a result of the failure to comply with the continuation of coverage requirements of ERISA Section 601 et seq., and Section 4980B of the Code.
“Credit Support” means, collectively, all obligations and liabilities relating to, arising out of or in connection with any guaranties, letters of credit, comfort letters, surety bonds, support agreements and other credit support of a comparable nature provided or maintained by Seller or any Affiliate thereof to the extent related to the Business.
“Customary Post-Closing Consents” means consents and approvals from Governmental Entities or other Third Parties for the assignment of the Purchased Assets to Buyer that are customarily obtained after the assignment of properties similar to the Purchased Assets at or after the Closing, including, for the avoidance of doubt, crossing agreements (including railroad, highway, and pipeline crossings and rights of way), easements on property owned by Governmental Entities, and Environmental Permits.
“Customer” means any past, present or future customer of the Business, including any industrial, commercial, governmental or residential customer of the Business.
“Data Processor” means any Person that Processes Seller Data on behalf of or at the direction of the Seller, including, but not limited to, a “service provider,” “contractor,” or “processor,” as those terms are defined by applicable privacy and data security Laws.
“Debt Financing” has the meaning set forth in Section 6.4(b).
“Debt Financing Agreements” has the meaning set forth in Section 7.23(a).
“Debt Financing Commitment Letters” has the meaning set forth in Section 6.4(b).
“Debt Financing Source Provisions” means Section 10.5 and Section 10.18.
“Debt Financing Sources” shall mean shall mean the agents, arrangers, lenders and other entities (other than Buyer or any of its Affiliates) that have committed to provide or arrange or otherwise entered into agreements in connection with all or any part of the Debt Financing or the Alternative Financing in connection with the Transactions, including the parties to any joinder agreements, indentures, note purchase agreements or credit agreements entered into in connection therewith, together with their respective Affiliates and their respective Affiliates’ officers, directors, employees, controlling persons, agents and representatives and their respective successors and assigns.
“Disputed Items” has the meaning set forth in Section 3.2(d).
“Easements” means all of Seller’s and any of its Affiliate’s right, title, and interest in and to all servitudes, easements, crossing agreements (including railroad, highway, utility and pipeline crossings and rights-of-way), service agreements, surface rights, rights-of-way, leases, licenses, orders of possession and other property right awards resulting from eminent domain, access (ingress and egress) and similar use, transmission, distribution and access rights (and all
related connections, delivery points, flanges and pipelines for the same) of, or leased, obtained, maintained or granted to, Seller or its Affiliates Located Within the Territory and Primarily Related to the Business, whether appurtenant or in gross, including as the same have been recorded in the register of deeds in the applicable counties (but excluding, for the avoidance of doubt, Permits and Franchises).
“Effect” has the meaning set forth in the definition of “Material Adverse Effect” in this Section 1.1.
“Effective Date” has the meaning set forth in the Preamble.
“Effective Time” has the meaning set forth in Section 4.1.
“Encumbrance” means any mortgage, deed of trust, security interest, pledge, lien, collateral security agreement, Uniform Commercial Code financing statement, reservation, equitable interest, charge, preference, priority, title defect, lease, sublease, conditional sale or other title retention agreement, right of first refusal, right of first offer, hypothecation, covenant, condition, servitude, right of way, encroachment, variance, option, warrant, claim, community property interest, right of others, proxy, restrictive covenant, restriction (including any restriction on use, voting, transfer, ownership, alienation, receipt of income or exercise of any other attribute of ownership), voting trust, matter of record, easement or encumbrance of any kind.
“Environment” means the indoor or outdoor environment, including all or any of the following: soil, land surface and subsurface strata, soil vapor, surface or subsurface waters, groundwater, drinking water supply, sediments, ambient or indoor air, plant and animal life, and any natural resource.
“Environmental Claims” means any and all Claims arising pursuant to any Environmental Laws or Environmental Permits, or arising from the presence, Release or threatened Release into the Environment of any Hazardous Materials, or arising from exposure to or transportation or disposal of, any Hazardous Materials, including any and all Claims for enforcement, investigation, monitoring, cleanup, remediation, removal, response, abatement, natural resource damages, bodily injury, property damage, or death, or other actions or damages, contribution, indemnification, cost recovery, compensation, or injunctive relief pursuant to any Environmental Law.
“Environmental Laws” means all Laws relating to the protection of human health or safety (as it relates to the handling of, or exposure to, Hazardous Materials), pollution or the Environment, including Laws relating to the exposure to, or Release or threatened Release of Hazardous Materials, or otherwise relating to the manufacture, processing, distribution, import, registration, labeling, use, treatment, storage, transport, disposal, or handling of Hazardous Materials.
“Environmental Permits” means all Permits issued under or with respect to applicable Environmental Laws.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“Estimated Purchase Price” has the meaning set forth in Section 3.2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Excluded Assets” has the meaning set forth in Section 2.2.
“Excluded Claims” has the meaning set forth in Section 7.18(d).
“Excluded Information” means any (i) pro forma financial statements and information, including post-Closing or pro forma cost savings, synergies, capitalization, ownership or other pro forma adjustments, (ii) any financial projections, (iii) description of all or any portion of the Debt Financing, including any “description of notes,” and other information customarily provided by Debt Financing Sources or their counsel, (iv) risk factors relating to all or any component of the Debt Financing, (v) “MD&A” section to be contained in any document prepared in connection with the Debt Financing and (vi) other information required by Rules 3-05, 3-09, 3-10, 3-16 and Article 13 of Regulation S-X, the Compensation Discussion and Analysis or other information required by Item 10, Item 402 or Item 601 of Regulation S-K, XBRL exhibits and the executive compensation and related person disclosure rules related to SEC Release Nos. 33-8732A, 34-54302A and IC-27444A.
“Excluded IP” means the Intellectual Property set forth on Schedule 1.1-B.
“Excluded IT” means the IT Assets set forth on Schedule 1.1-C.
“Excluded Liabilities” has the meaning set forth in Section 2.4.
“Exclusively Related to the Business” means exclusively related to, arising from, used in or held for use in the Business or the Purchased Assets; provided that any de minimis usage of an asset for purposes unrelated to the Business shall not, in and of itself, result in an asset (or any related Liability) being deemed not Exclusively Related to the Business.
“Fee Letters” has the meaning set forth in Section 6.4(b).
“FERC” means the Federal Energy Regulatory Commission, or any successor thereto.
“FERC Filing” means a petition for waiver of FERC regulations or policies to facilitate the permanent release or assignment to Buyer of the interstate natural gas transportation capacity and related gas supply agreements used in the Business within the Territory.
“Final Allocation” has the meaning set forth in Section 3.3.
“Final Purchase Price” has the meaning set forth in Section 3.2(e).
“Financial Statements” has the meaning set forth in Section 5.4.
“Franchise” means each franchise, agreement, ordinance, statutory right, or other grant by a municipality, town, county, parish, or other local Governmental Entity or state
Governmental Entity that provides the Business the right to operate a natural gas utility system in such jurisdiction.
“Fraud” means a knowing misrepresentation of a material fact or concealment of a material fact by a Party with respect to any representations or warranty by the Party in Article V or Article VI or in any certificate delivered by a Party pursuant to Section 8.2(c) or Section 8.3(c), as applicable (but not, for the avoidance of doubt, in any other actual or alleged representation or warranty made orally or in writing), which is made or concealed with the specific intent of inducing another Party to act or refrain from acting in reliance on it, and upon which such other Party has reasonably relied (and does not include any fraud claim based on constructive knowledge, negligent misrepresentation, recklessness or a similar theory) and suffered damage as a proximate result thereof.
“GAAP” means United States generally accepted accounting principles applied on a consistent basis.
“Gas Inventory” has the meaning set forth in Section 2.1(c).
“Good Utility Practice” means (a) the practices, methods and acts generally engaged in or approved by a significant portion of natural gas distribution utilities operating in the southeastern region of the United States during the relevant time period, or (b) the practices, methods and acts, that, in the exercise of reasonable judgment in light of the facts known at the time a decision was made, would reasonably have been expected to accomplish the desired result in a manner compliant with requirements of applicable Law, at a reasonable cost, and consistent with reliability, safety, environmental protection, economy and expedition; provided that in the case of both clause (a) and clause (b), Good Utility Practice is not intended to be limited to the optimum practices, methods or acts, to the exclusion of all others, but rather is intended to include a spectrum of practices, methods or acts generally acceptable in such region during the relevant period in light of the circumstances.
“Governing Documents” of a Party means the articles or certificate of incorporation and bylaws, or comparable governing documents, of such Party.
“Governmental Entity” means the United States of America and any other federal, state, county, parish, city, municipal, local or foreign government or political subdivision or regulatory authority, department, agency, commission, body, court, tribunal, legislature, executive, or other governmental or quasi-governmental entity, or any subdivision, department or branch of any of the foregoing, including, for the avoidance of doubt, TPUC and FERC.
“Hard Consent” means any consent to assignment with respect to which the failure to obtain such consent would (i) cause the assignment to Buyer of the Purchased Assets (or portion thereof affected thereby) to be void or voidable or otherwise result in a material loss of the benefits thereof, (ii) cause the termination of, or material breach or default under, the instrument subject to the consent under the express terms thereof or (iii) permit the holder of the consent the right to terminate such instrument; provided, however, that a “Hard Consent” will not include any Required Regulatory Approval.
“Hazardous Material” means any chemicals, materials, substances, or wastes which are defined as or included in the definition of “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic substance,” “extremely hazardous substance,” “pollutant,” “contaminant,” or words of similar import under, or for which Liability or standards of conduct may be imposed pursuant to, any applicable Environmental Laws, including any petroleum, petroleum products (including crude oil or any fraction thereof), natural gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for fuel (or mixtures of natural gas and such synthetic gas), per- and polyfluoroalkyl substances, oil and gas exploration or production waste, polychlorinated biphenyls, asbestos containing materials, mercury, and lead based paints.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“HSR Filing” means an appropriate filing of a Notification and Report Form pursuant to the HSR Act and the expiration or earlier termination of all waiting periods (and any extensions thereof) under the HSR Act applicable to the Transactions.
“Included Franchises” has the meaning set forth in Section 2.1(p).
“Income Statements” has the meaning set forth in Section 5.4.
“Indebtedness” means, with respect to a Person, and without duplication, all obligations of such Person (i) for indebtedness for borrowed money; (ii) evidenced by notes, bonds (including performance bonds and surety bonds), debentures or similar instruments; (iii) for deferred or unpaid purchase or acquisition price of property or services (including “earn-outs,” “seller-notes” and any post-closing true-up obligations with respect to the acquisition of any business, assets or securities), other than trade accounts payable arising, and accrued expenses incurred, in the Ordinary Course of Business; (iv) the guaranty or other assumption of liability for, or grant of an Encumbrance or provision of collateral to secure, the obligations of any other Person; (v) finance lease obligations; (vi) all reimbursement and other obligations (contingent or otherwise) in respect of letters of credit or similar instruments; (vii) in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging agreements; and (viii) for all interest, whether accrued for or not, prepayment premiums or penalties or breakage fees related to any of the foregoing. The term “Indebtedness” shall exclude any amounts included in the calculation of the Adjustment Amount. For the avoidance of doubt, “Indebtedness” shall not include any Taxes.
“Indemnified Parties” has the meaning set forth in Section 7.18(b).
“Independent Accounting Firm” means KPMG LLP, but if such firm refuses or is otherwise unable to accept the appointment, then any other independent accounting firm of national reputation mutually appointed by Seller and Buyer with significant experience in resolving purchase price disputes; provided, however, that if the Parties are unable to so agree, each Party shall select an accounting firm of national reputation, and such accounting firms shall mutually agree upon and appoint a third independent accounting firm of national reputation, which shall be the Independent Accounting Firm.
“Intellectual Property” means all intellectual property and proprietary rights arising under the Laws any jurisdiction, whether registered or unregistered, including all (i) patents and patent applications, (ii) Trademarks, social media accounts and domain-name registrations; (iii) copyrights, works of authorship and copyrightable subject matter (including rights in software) and registrations, applications, extensions and renewals thereof; and (iv) trade secrets under applicable Law and other intellectual property rights in confidential or proprietary information and know-how, including technologies, databases, processes, ideas, techniques, protocols, methods, models, algorithms, layouts, blueprints, specifications, strategies, customer lists, supplier lists, business plans and inventions (whether or not patentable or reduced to practice) (collectively, “Trade Secrets”).
“Interests” with respect to any Person means shares, partnership interests, limited liability company interests or any other equity interests in such Person.
“Interim Period” has the meaning set forth in Section 7.1(a).
“Inventory” has the meaning set forth in Section 2.1(d).
“IT Assets” has the meaning set forth in Section 2.1(e).
“Knowledge” means, with respect to Seller, Seller’s Knowledge, and with respect to Buyer, Buyer’s Knowledge, as the context may require.
“Large Volume Meters” has the meaning set forth in Section 3.5.
“Law” means any and all federal, state, provincial, municipal, local or similar United States or foreign laws, statutes, constitutions, rules, regulations, judgments, decrees, codes, ordinances, Orders and rulings of any Governmental Entity (including applicable common law).
“Leased Real Property” has the meaning set forth in Section 2.1(a).
“Leases” has the meaning set forth in Section 2.1(a).
“Leave Employee” has the meaning set forth in Section 7.11(a).
“Legal Restraint” has the meaning set forth in Section 8.1(b).
“Liabilities” means all liabilities, adverse claims, risks, commitments, and obligations of whatever kind and nature, primary or secondary, direct or indirect, asserted or unasserted, absolute or contingent, matured or unmatured, liquidated or unliquidated, known or unknown, whether or not accrued whenever or however arising (including whether arising out of any contract, tort, or based on negligence or strict liability and whether or not reflected or required to be reflected on the financial statements of a Person).
“Listed Consents” has the meaning set forth in Section 7.19(a).
“Located Within” means, with respect to any tangible asset or Liability, such asset or Liability is physically located within the subject geographical region.
“Losses” means all losses, Liabilities, costs, expenses (including the costs and expenses of any and all actions, suits, proceedings, assessments, judgments, settlements, and compromises relating thereto, reasonable out-of-pocket attorneys’ fees, reasonable disbursements, interest, penalties and all reasonable and out-of-pocket expenses incurred in investigating, preparing or defending against any litigation commenced or threatened or any Claim or Order in connection therewith), settlement payments, awards, judgments, fines, penalties, damages, deficiencies, interest, Taxes, or other charges of any kind.
“Material Adverse Effect” means (a) with respect to the Business, any effect, change, event, condition or development (each, an “Effect”) that, individually or in the aggregate with any other Effects, has had or would reasonably be expected to have a material adverse effect on the business, assets, properties, results of operations, or condition (financial or otherwise) of the Business, taken as a whole, but shall not include an Effect that results from or arises out of: (i) the announcement or pendency of this Agreement and the Transactions, or the performance of this Agreement or any Ancillary Agreement and the Transactions, including any adverse change in customer, supplier, governmental, landlord, employee, or similar relationships resulting therefrom or with respect thereto; (ii) factors generally affecting the international, national, or regional economy, financial markets, capital markets, including changes in interest rates and currency exchange rates, or commodities markets or tariffs; (iii) any change in regulatory or political conditions; (iv) any issuance of or change in Law or Order (other than a Law adopted or an Order issued specifically with respect to the Business, the Purchased Assets, Assumed Obligations or the Transactions); (v) any change in GAAP or in the generally applicable principles used in the preparation of the financial statements as required by the TPUC; (vi) any changes or developments in national, regional, state, or local wholesale or retail markets for natural gas or related products, including those due to actions by competitors or due to changes in commodities prices or hedging markets therefor; (vii) any changes or developments in national, regional, state, or local natural gas transmission or distribution systems; (viii) any changes or developments in national, regional, state, or local wholesale or retail natural gas prices; (ix) any actions taken or omitted to be taken by or at the written request or with the prior written consent of Buyer, or as expressly permitted or expressly prescribed under this Agreement; (x) any changes in global or national political conditions, including the outbreak or escalation of hostilities or acts of war (whether or not declared, and including the war in Ukraine and conflict in the Middle East (including involving Israel)), military conflict, sabotage, or acts of terrorism; (xi) any natural disaster, changes in weather or climate, or acts of God or any escalation or worsening thereof; (xii) any matters that are cured or no longer exist by the earlier of Closing and the termination of this Agreement; (xiii) any epidemic, pandemic, or disease outbreak (including the COVID-19 Pandemic); (xiv) any failure of the Business to meet any projections, business plans, or forecasts, including forecasted natural gas demand (provided, that this clause (xiv) shall not prevent a determination that any change or effect underlying such failure to meet projections, business plans, or forecasts has resulted in a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect)); and (xvi) seasonal fluctuations; provided, however, that the items set forth in clauses (ii), (iii), (iv), (v), (vi), (vii), (x), (xi), and (xiii) above shall be taken into account in determining whether a “Material Adverse Effect” has occurred or would reasonably be expected to occur solely to the extent such items have a substantially disproportionate effect on the Business relative to other gas utility businesses operating in the southeastern region of the United States; and (b) with respect to Seller, any event, occurrence, or circumstance that would
reasonably be expected to prevent or materially delay the performance by Seller or its Affiliates of its obligations under this Agreement, or the consummation of the Transactions.
“Material Contract” has the meaning set forth in Section 5.9(a).
“Material Gas Contract” has the meaning set forth in Section 7.8(b).
“Modified Conveyance Document” has the meaning set forth in Section 4.5.
“Multiemployer Plan” has the meaning set forth in Section 5.18(c)(iii).
“Must-Cure Item” means any mortgage or deed of trust, delinquent tax, judgment lien or mechanic’s lien that was caused by any action or omission of Seller or any of its Affiliates.
“Net Working Capital Adjustment” means (a) Closing Net Working Capital minus (b) Target Net Working Capital. The Net Working Capital Adjustment shall be reflected as (i) an increase to the Base Purchase Price if the Closing Net Working Capital is greater than the Target Net Working Capital and (ii) a decrease to the Base Purchase Price if the Closing Net Working Capital is less than the Target Net Working Capital.
“Nonassignable Asset” has the meaning set forth in Section 7.19(b)(i).
“Notifying Party” has the meaning set forth in Section 7.22(a).
“Order” means any order, decision, judgment, writ, injunction, decree, directive, or award of a court, administrative judge or other Governmental Entity, whether acting in an adjudicative, administrative, or regulatory capacity or otherwise, or of an arbitrator with applicable jurisdiction over the subject matter, whether civil, criminal or administrative, made, issued, entered or rendered.
“Ordinary Course of Business” means, with respect to the Business, the ordinary course of business of the Business consistent with past practices in all material respects, including the Pandemic Measures and any other action taken, or omitted to be taken, in response to a Pandemic.
“Owned Real Property” has the meaning set forth in Section 2.1(a).
“Pandemic” means any epidemic, pandemic, or disease outbreak, including the COVID-19 or SARS-CoV-2 virus (or any mutation or variation thereof) or related or associated epidemics, pandemics, or disease outbreaks.
“Pandemic Measures” means any reasonable actions taken or not taken to respond to any impact or probable impact on the Business due to a Pandemic or measures taken to comply with Laws, Orders, recommendations, guidelines, and directives issued by any applicable Governmental Entity or industry group relating a Pandemic, including the Coronavirus Aid, Relief and Economic Security Act (CARES Act), in each case, including reasonable changes in relationship with employees, customers, and suppliers.
“Party” means Buyer or Seller, as indicated by the context, and “Parties” means Buyer and Seller.
“Permits” means all permits, certifications, licenses, registrations, exemptions, approvals, consents, waivers, or other authorizations of Governmental Entities issued under or with respect to applicable Laws or Orders. For the avoidance of doubt, “Permits” excludes Franchises and Real Property.
“Permitted Encumbrances” means (i) those Encumbrances set forth on Schedule 1.1-D; (ii) liens for Taxes not yet overdue by more than thirty (30) days or the validity or amount of which is being contested in good faith by appropriate proceedings, in each case, for which appropriate reserves have been established in accordance with GAAP; (iii) construction, mechanics’, materialmen’s, carriers’, workers’, repairers’, landlords’, and other similar liens, including all statutory liens, arising or incurred in the Ordinary Course of Business, or pledges, deposits, or other liens securing the performance of bids, tenders, trade Contracts, leases, or other agreements, including rent security deposits, surety and appeal bonds, performance bonds or similar obligations (including workers’ compensation, unemployment insurance, or other social security legislation), in each case, not yet due and payable or the validity or amount of which is being contested in good faith by appropriate proceedings, in each case, for which appropriate reserves have been established in accordance with GAAP; (iv) Permits and all applicable variances, building codes and zoning, entitlement, restriction, and other land use or similar ordinances and environmental regulations and all other applicable Law; (v) all Encumbrances arising under Orders related to the Business or Purchased Assets which have been issued by any Governmental Entities; (vi) with respect to Real Property, any encroachments that do not, and would not reasonably be expected to individually or in the aggregate, materially interfere with the operation of the Business; (vii) with respect to Leased Real Property: (a) Encumbrances existing under or as a result of any Leases of Real Property set forth in the applicable lease (or ancillary documents) or otherwise expressly identified in the Seller Disclosure Schedules or (b) the interests and rights of the respective lessors with respect thereto and all Encumbrances to which such lessors’ interests and rights in such Leased Real Property are subject, in each case, not materially interfering with the use or occupancy of such Leased Real Property; (viii) Encumbrances created by or through Buyer as of the Closing (including pursuant to this Agreement); (ix) with respect to Real Property, any title defect or irregularity resulting from the failure to record any lease, sublease, easement or other instrument (but excluding any vesting deed of any Owned Real Property), which would not reasonably be expected to, individually or in the aggregate, materially interfere with the operation of the Business; (x) matters affecting any of the Real Property which would be disclosed on current title reports, by an accurate survey or inspection of any land, buildings, improvements, and fixtures erected thereon and all appurtenances related thereto, or that are otherwise disclosed in any real property files that have been made available to Buyer, provided such matters, individually or in the aggregate, would not materially impair the present use of such Real Property; (xi) any license to Business Intellectual Property granted by Seller or its Affiliates in the Ordinary Course of Business (excluding any license of any Business Mark); (xii) statutory or contractual liens of lessors or liens on the lessor’s interest, in each case, not materially interfering with the use or occupancy of such Leased Real Property; (xiii) any Encumbrance that is discharged by Seller at or prior to Closing; (xiv) the Listed Consents; (xv) all rights with respect to the ownership, mining, extraction and removal of oil, gas or minerals of whatever kind and character (including any rights to gravel,
hard rock aggregate or water extraction) that have expected or reserved prior to the date hereof in the public records; (xvi) Encumbrances arising out of judgments or other proceedings being contested in good faith through appropriate proceedings and expressly identified in the Seller Disclosure Schedules and for which appropriate reserves have been established in accordance with GAAP; (xvii) any restriction on transfer imposed by applicable federal and state securities Laws; (xviii) Encumbrances arising from a Uniform Commercial Code financing statement that was filed solely as a precautionary measure in connection with leases or consignment of goods or with respect to any other Permitted Encumbrances; and (xix) such other Encumbrances that do not, individually or in the aggregate, materially interfere with Buyer’s operation of the Business or use of any of the Purchased Assets in the manner currently used.
“Person” means any individual, partnership, limited liability company, joint venture, corporation, joint stock company, trust, estate, unincorporated organization, Governmental Entity, or other similar entity or association.
“Personal Data” means “personal data,” “personal information,” “protected health information,” “nonpublic personal information,” or other similar terms as defined by applicable privacy and data security Laws.
“Post-Closing Adjustment Statement” has the meaning set forth in Section 3.2(b).
“Post-Closing Tax Period” means any taxable period beginning on or after the Closing Date and the portion of any Straddle Period beginning on the Closing Date (such Taxes for a Straddle Period to be allocated in accordance with Section 3.4(b) and (c)).
“Pre-Closing Return” has the meaning set forth in Section 7.10(b).
“Pre-Closing Tax Contest” has the meaning set forth in Section 7.10(d).
“Pre-Closing Tax Period” means any taxable period ending prior to the Closing Date and the portion of any Straddle Period that ends on the day prior to the Closing Date (such Taxes for a Straddle Period to be allocated in accordance with Section 3.4(b) and (c)).
“Preliminary Adjustment Statement” has the meaning set forth in Section 3.2(a).
“Primarily Related to the Business” means primarily related to, arising from, used in or held for use in the Business or the Purchased Assets.
“Processing,” “Process,” or “Processed” means any collection, access, acquisition, storage, protection, use, recording, maintenance, operation, dissemination, re-use, disposal, disclosure, re-disclosure, deletion, destruction, sale, transfer, modification, or any other processing (as defined by applicable privacy or data security Laws) of Seller Data or IT Assets.
“Purchase Price” has the meaning set forth in Section 3.1.
“Purchased Assets” has the meaning set forth in Section 2.1.
“Purchased Documents” means books of account, ledgers, general, financial and accounting records, environmental records, files, data, databases, invoices, customer and supplier lists, other distribution lists, Tax records (other than income Tax records of the Seller or its Affiliates), and customer billing and credit records (or portions thereof), in each case, to the extent related to the Purchased Assets, the Assumed Obligations, or the Business, that Seller has retained and that are in the possession and control of Seller or its Affiliates as of the Closing Date, for the avoidance of doubt, solely in the form in which they exist as of the Closing Date; provided, that the term “Purchased Documents” excludes: (i) such portions of any of the foregoing materials to the extent related to the Excluded Assets or Excluded Liabilities; (ii) any of the foregoing materials that Seller was permitted to destroy prior to the Effective Date in accordance with its standard document retention policies; (iii) information that Seller determines with advice of counsel, which may be internal counsel, if provided to Buyer, would violate any applicable Law or Order; (iv) any valuations of or related to the sale of the Business, the Purchased Assets, or the Assumed Obligations; (v) any human resources records, except as set forth in Section 7.11(b); (vi) any of the foregoing materials to the extent related to any Benefit Plans; or (vii) any of the foregoing materials to the extent subject to the attorney client privilege, attorney work product privilege, or other applicable legal privilege of Seller or any of its Affiliates or Representatives.
“Purchased Easements” has the meaning set forth in Section 2.1(a).
“Quitclaim Deed” means the quitclaim deed or deeds to be executed and delivered by Seller at the Closing, substantially in the form set forth on Exhibit H, subject to approval by a title company reasonably acceptable to each of Buyer and Seller in the applicable counties, with respect to the Owned Real Property located in the Territory.
“Real Property” has the meaning set forth in Section 2.1(a).
“Real Property Objection” has the meaning set forth in Section 7.27(b).
“Regulatory Assets and Liabilities Adjustment” means (a) the difference between (i) the Closing Regulatory Assets minus (ii) the Target Regulatory Asset Amount minus (b) the difference between (i) the Closing Regulatory Liabilities (expressed as a positive amount) minus (ii) the Target Regulatory Liability Amount.
“Regulatory Counsel” has the meaning set forth in Section 10.17(c).
“Regulatory Matters” has the meaning set forth in Section 10.17(c).
“Regulatory Order” means (a) any Order made available to the Buyer (including if such Order is publicly available) and issued by the TPUC that affects or governs the rates, services, or other utility operations of the Business and (b) any Order issued by the TPUC in connection with the Required Regulatory Approvals.
“Related Persons” has the meaning set forth in Section 10.16.
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, abandoning, or disposing of Hazardous Materials on, into or through the Environment.
“Remedial Work” has the meaning set forth in Section 7.26.
“Remedy Exceptions” has the meaning set forth in Section 5.2.
“Representatives” means, with respect to any Person, the officers, directors, managers, employees, agents, accountants, consultants, attorneys, advisors, bankers, and other representatives of such Person and its Affiliates.
“Required Information” means (i) (a) the audited consolidated balance sheets of the Business as of December 31, 2023 and December 31, 2024 and for each fiscal year of the Business occurring after the date hereof and ended at least seventy-five (75) days prior to Closing, which may be prepared on a carve-out basis; (b) the audited consolidated statements of operations and comprehensive income for the fiscal years ended December 31, 2023 and December 31, 2024 and for each fiscal year of the Business occurring after the date hereof and ended at least seventy-five (75) days before Closing, which may be prepared on a carve-out basis; and (c) the unaudited interim condensed consolidated balance sheets of the Business and the related unaudited consolidated statements of operations, comprehensive income cash flows and changes in equity as of September 30, 2025 and for the nine-month periods ended September 30, 2025 and 2024, and for the three-month period ended December 31, 2024, and to the extent any audited financial statements are delivered pursuant to the foregoing clauses (i) (a) and (b) for the year ending December 31, 2025, as of and for each of the fiscal quarters (that is not a fiscal year-end) ending thereafter and at least forty-five (45) days prior to Closing, in each case, which may be prepared on a carve-out basis; and (ii) such other pertinent and customary information (including financial information and financial data) regarding the Business as may be reasonably requested with specificity and in writing by Buyer to the extent such information is of the type and form required in a registration statement on Form S-3 by Regulation S-X and Regulation S-K under the Securities Act for registered offerings of securities at such time, or of the type customarily included in registration statements, offering memoranda, private placement memoranda, prospectuses and similar documents for a registered securities offering, senior secured bank financing or offering of debt, equity, equity-linked or equity-backed securities pursuant to Rule 144A under the Securities Act or Section 4(a)(2) of the Securities Act, as applicable, subject to exceptions customary for such financings. Notwithstanding anything to the contrary in this definition, the Required Information shall not include any Excluded Information.
“Required Regulatory Approvals” means: (i) the filings by Seller and Buyer required by the HSR Act and the expiration or earlier termination of all waiting periods (and any extensions thereof) under the HSR Act applicable to the Transactions and (ii) approval of the TPUC Application.
“Retained Agreements” has the meaning set forth in Section 2.2(f).
“Reverse Termination Fee” has the meaning set forth in Section 9.3(b).
“RWI Policy” has the meaning set forth in Section 6.8.
“Sanctions” has the meaning set forth in Section 5.14(c).
“SEC” means the United States Securities and Exchange Commission.
“Seller” has the meaning set forth in the Preamble.
“Seller Data” means all data, information, and data compilations contained in the IT Assets or any databases owned or used in the operation of the Business by Seller, including Personal Data and confidential information, that are used by, or necessary to the operation of, the Business.
“Seller Disclosure Schedules” means, collectively, all Schedules to be provided by Seller pursuant to this Agreement.
“Seller Fundamental Representations” means the representations and warranties contained in Section 5.1 (Organization and Good Standing), Section 5.2 (Authority and Enforceability) and Section 5.22 (Brokers and Finders).
“Seller Indemnified Parties” has the meaning set forth in Section 7.18(b).
“Seller Mark Use Period” has the meaning set forth in Section 7.15(a).
“Seller Marks” means the business or trade names and Trademarks (other than the Business Marks), owned, used, or held for use, by Seller or its Affiliates, including all business or trade names and Trademarks that include or comprise the term “Duke”, “Duke Energy”, “Piedmont” or “Piedmont Natural Gas”, alone or in combination with other words or elements, and any derivations, adaptations, translations or abbreviations thereof.
“Seller Parent” means Duke Energy Corporation, a Delaware corporation.
“Seller Parties” has the meaning set forth in Section 7.14.
“Seller Savings Plan” has the meaning set forth in Section 7.12(d).
“Seller’s Counsel” has the meaning set forth in Section 10.17(a).
“Seller’s Knowledge” or words to similar effect, means the actual knowledge, and the knowledge such persons would reasonably be expected to obtain if each of them had made due inquiry of their direct reports, of the Persons set forth on Schedule 1.1-E.
“Shared Contract” means any Contract (a) between Seller or any of its Affiliates, on the one hand, and any Third Party, on the other hand, that relates, on one hand, to the Business, and, on the other hand, to: (i) any business other than the Business conducted by Seller or any of its Affiliates; (ii) any Excluded Asset; or (iii) any Excluded Liability and (b) that is not Exclusively Related to the Business.
“Shared Policies” has the meaning set forth in Section 7.13(b).
“Special Warranty Deed” means the special warranty deed or deeds to be executed and delivered by Seller at the Closing, substantially in the form set forth on Exhibit G, subject to approval by a title company mutually reasonably acceptable to each of Buyer and Seller in the applicable counties.
“Specified Site” means the real property owned by Seller located at 800 2nd Avenue North, Nashville, TN 37201.
“Specified Site Matters” means all Liabilities of Seller or any of its Affiliates arising from the Specified Site, including all Liabilities and obligations of Seller (i) under Environmental Law or otherwise relating to Hazardous Materials and (ii) under the Agreement for Purchase and Sale of Real Property by and between Seller and the Metropolitan Government of Nashville and Davidson County, Tennessee.
“Straddle Period” means any taxable period beginning before and ending on or after the Closing Date.
“Straddle Period Tax Contest” has the meaning set forth in Section 7.10(d).
“Subsidiary” means, with respect to any Person, any other Person of which fifty percent (50%) or more of the outstanding voting securities or ownership interests are owned or controlled, directly or indirectly, by such first Person, by any one or more of its Subsidiaries, or by such first Person and one or more of its Subsidiaries.
“Target 2025 Capital Expenditures” means $168,067,008.
“Target 2026 First Quarter Capital Expenditures” means the amount of Capital Expenditures forecast for the Business as set forth in the Capital Expenditures Budget for the period between (a) January 1, 2026 and (b) the earlier of (i) the Closing Date (prorated for any partial month) and (ii) March 31, 2026, which the Parties acknowledge and agree is equal to $27,133,889 for purposes of clause (b)(ii) of this definition.
“Target Net Working Capital” means $48,500,000.
“Target Regulatory Asset Amount” means $68,549,711.
“Target Regulatory Liability Amount” means $54,511,329.
“Tax” and “Taxes” means all taxes, including income, gross receipts, capital gain, ad valorem, value-added, goods and services, excise, real property, personal property, sales, use, transfer, withholding, employment, payroll, estimated, license and franchise taxes or other similar feeds, levies, charges or other assessments imposed by a Governmental Entity, including any interest, penalties, assessments or additions to tax resulting therefrom or attributable thereto.
“Tax Contest” has the meaning set forth in Section 7.10(d).
“Tax Return” means any return, report, information return, declaration, claim for refund or other document supplied or required to be supplied to any Governmental Entity with respect to Taxes, including any schedule or attachment thereto and any amendment thereof.
“Termination Date” has the meaning set forth in Section 9.2(b).
“Territory” means Seller’s service territory in the state of Tennessee.
“Third Party” means any Person other than a Party or an Affiliate of a Party.
“Third Party Claim” has the meaning set forth in Section 7.22(a).
“Third Party Claim Notice” has the meaning set forth in Section 7.22(a).
“Title Objection Period” has the meaning set forth in Section 7.27(b).
“Title Policy” has the meaning set forth in Section 7.27(c).
“TPUC” means the Tennessee Public Utility Commission.
“TPUC Application” means with respect to the TPUC, an application under Tenn. Code Ann. §65-4-113 approving the Transactions.
“Trade Secrets” has the meaning set forth in the definition of “Intellectual Property” in this Section 1.1.
“Trademarks” means trademarks, service marks, logos, trade dress, and all other indicia of source or origin, and all registrations and applications for registration of the foregoing, and any goodwill associated therewith.
“Transactions” means the transactions contemplated by this Agreement or any of the Ancillary Agreements.
“Transfer Taxes” has the meaning set forth in Section 7.10(a).
“Transferable Permits” has the meaning set forth in Section 2.1(k).
“Transferred CBA Employees” has the meaning set forth in Section 7.12(b).
“Transferred Contracts” has the meaning set forth in Section 2.1(j).
“Transferred Employees” has the meaning set forth in Section 7.12(a).
“Transferred IT Assets” has the meaning set forth in Section 2.1(e).
“Transition Committee” has the meaning set forth in Section 7.8(a).
“Transition Services Agreement” means the Transition Services Agreement in substantially the form set forth on Exhibit D.
“Treasury Regulations” means the final and temporary regulations promulgated under the Code.
“Unbilled Revenues” means receivables related to the volume of gas allocable to Seller under Section 3.5 but not yet billed to customers served by the Business.
“Vehicles” has the meaning set forth in Section 2.1(f).
“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended and any similar state and local applicable Laws related to plant closings, relocations, mass layoffs and employment losses.
Section 1.2 Terms Generally.
(a) The definitions in Section 1.1 shall apply equally to both the singular and plural forms and to correlative forms of the terms defined.
(b) Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(c) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
(d) The words “hereby,” “herewith,” “hereto,” “herein,” “hereof,” and “hereunder” and words of similar import refer to this Agreement (including the Exhibits and Schedules to this Agreement and the Seller Disclosure Schedules) in its entirety and not to any part hereof unless the context shall otherwise require.
(e) The word “or” shall be deemed to be disjunctive but not necessarily exclusive (i.e., unless the context dictates otherwise, “or” shall be interpreted to mean “and/or” rather than “either/or”).
(f) Unless the context shall otherwise require, all references herein to Articles, Sections, Exhibits, Schedules, and the Seller Disclosure Schedules shall be deemed references to Articles, Sections, and Exhibits of, and Schedules and the Seller Disclosure Schedules to, this Agreement and references to “paragraphs” or “clauses” shall be to separate paragraphs or clauses of the section or subsection in which the reference occurs.
(g) Unless the context shall otherwise require, any references to any Contract (including this Agreement) or Law shall be deemed to be references to such Contract or Law as amended, supplemented, or modified from time to time in accordance with its terms and the terms hereof, as applicable, and in effect at any given time (and, in the case of any Law, to any successor provisions).
(h) Unless the context shall otherwise require, references to any Person include references to such Person’s successors and permitted assigns, and in the case of any Governmental Entity, to any Person(s) succeeding to its functions and capacities.
(i) Any reference to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context shall otherwise require.
(j) Any reference in this Agreement to a “day” or a number of “days” (without explicit reference to “Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(k) All monetary figures shall be in United States dollars unless otherwise specified.
(l) The phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”.
(m) The phrases “delivered,” “provided to,” “made available,” and “furnished to” and phrases of similar import when used herein, unless the context otherwise requires, mean that such information, document, or material was made available for review by Buyer or any of its Affiliates or Representatives in the Datasite virtual data room set up by Seller in connection with this Agreement at least two Business Days prior to the date hereof.
ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchased Assets.
Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, and for the consideration specified in Section 3.1, at the Closing, Seller shall sell, assign, convey, transfer, and deliver (or cause to be sold, assigned, conveyed, transferred, and delivered) to Buyer, and Buyer shall purchase, acquire and receive from Seller (or an Affiliate of Seller, as the case may be), free and clear of all Encumbrances (except for Permitted Encumbrances), all of Seller’s or Seller’s Affiliates’ right, title, and interest in, to, and under all of the assets, interests, properties, rights, licenses and contracts described below, in each case, as the same exists at the Effective Time (and, as expressly permitted or expressly contemplated by this Agreement, with such additions and deletions as shall occur from the date hereof through the Effective Time), but, in each case, other than the Excluded Assets (collectively, the “Purchased Assets”):
(a) all parcels of real property and real property interests, including any buildings, structures, facilities, fixtures, systems and/or improvements located thereon or appurtenant thereto, (i) Located Within the Territory that are owned in fee by Seller or its Affiliates (together with any mineral interests owned by Seller or its Affiliates with respect to such real property, the “Owned Real Property”), (ii) Located Within the Territory that are held by, licensed, used, leased, subleased, rented or otherwise occupied by Seller or its Affiliates (the “Leased Real Property”) pursuant to any lease, sublease, license, concession, or other occupancy agreement (together with all amendments, extensions, renewals and guaranties with respect thereto, the “Leases”); and (iii) the Easement interests under the Easements (such Easement interests, the “Purchased Easements”) and (iv) and all other real property interests included in the Purchased Assets (all of the foregoing, including as listed on Schedule 2.1(a), the “Real Property”), but, in
each case, only to the extent of Seller’s or Seller’s Affiliates’ right, title, and interest in, to, and under such real property and real property interests;
(b) all natural gas distribution utility assets Located Within the Territory to the extent owned or leased by Seller or its Affiliates (together with all of Seller’s or its Affiliates’ rights in such leases), and used or held for use in the Business, including all natural gas mains, services, meters, plants and stations located within the area depicted on Schedule 2.1(b);,
(c) the inventory of natural gas and natural gas products described in the general ledger accounts listed on Schedule 2.1(c) that is Primarily Related to the Business (the “Gas Inventory”);
(d) all parts, items, equipment, material, supplies and other inventory (but excluding the Gas Inventory) that is Primarily Related to the Business (collectively, the “Inventory”);
(e) all information technology assets and computer systems (including information technology and telecommunication hardware) and related equipment (“IT Assets”) Located Within the Territory and Exclusively Related to the Business, to the extent owned or leased by or licensed to Seller or any of its Affiliates (together with all of Seller’s or its Affiliates’ rights in such leases or licenses) (the “Transferred IT Assets”);
(f) all motor vehicles, trailers, and similar rolling stock that is Primarily Related to the Business, to the extent owned or leased by Seller or its Affiliates (together with all of Seller’s or its Affiliates’ rights in such leases) including as described on Schedule 2.1(f) (the “Vehicles”);
(g) all furnishings, fixtures, machinery, equipment, materials, and other tangible personal property (other than Gas Inventory, IT Assets, and Vehicles) Located Within the Territory, or that have, in the 12-month period prior to the Effective Date, been primarily Located Within the Territory, and that is Primarily Related to the Business, to the extent owned or leased by Seller or any of its Affiliates (together with all of Seller’s or its Affiliates’ rights in such leases);
(h) all Billed Revenues and Unbilled Revenues Exclusively Related to the Business, which for the avoidance of doubt and notwithstanding any other provision of this Agreement to the contrary, shall constitute current assets for purposes of calculating the Adjustment Amount;
(i) the assets of Seller and its Affiliates with respect to over-recovered or under-recovered purchased gas cost adjustment charges, and all prepayments, deferred charges, and regulatory assets, to the extent related to the Business;
(j) all Contracts to which Seller or its Affiliate is a party Exclusively Related to the Business (excluding, (i) for the avoidance of doubt, all human resources, personnel and medical records, Benefit Plans and Shared Contracts; (ii) all Contracts between Seller or any of its Affiliates, on the one hand, and any Affiliate of Seller or any director, officer or employee of Seller or any of its Affiliates, on the other hand and (iii) as otherwise provided in Section 2.2(f)) (the “Transferred Contracts”);
(k) all Permits used or held by Seller or its Affiliates Primarily Related to the Business, or the ownership or operation of any of the Purchased Assets, including the Permits set forth on Schedule 2.1(k) (except, in all cases to the extent that, notwithstanding compliance by Seller with its obligations hereunder, any such Permits are prohibited by applicable Law or the terms of such Permits from being transferred or assigned to Buyer in connection with the Transactions) (the “Transferable Permits”);
(l) the Purchased Documents;
(m) all warranties (other than those included in Shared Contracts) against manufacturers, service providers, vendors or other Third Parties on or relating to any of the Purchased Assets, and to the extent transferable;
(n) all Business Intellectual Property and all goodwill associated with the Business Marks, together with rights to sue for all past, present, and future infringement, misappropriation, or violation thereof, and all royalties, proceeds and other amounts payable with respect to the foregoing;
(o) Claims and defenses of Seller or its Affiliates to the extent such Claims or defenses are related to the Business, Purchased Assets or Assumed Obligations; provided that such Claims and defenses (in each case, to the extent related to the Business, Purchased Assets or Assumed Obligations) will be assigned by Seller or its Affiliates to Buyer without warranty or recourse; provided, further, that if such transfer would prejudice any such Claims or defenses, the Parties shall cooperate in good faith to avoid such prejudice;
(p) the Franchises, including those set forth on Schedule 2.1(p) (collectively, the “Included Franchises”);
(q) all goodwill associated with any of the assets described in this Section 2.1;
(r) all rights to proceeds, recoveries and other monies receivable to the extent set forth under Section 7.13; and
(s) any other assets that, as of the Effective Time, are (x) Primarily Related to the Business to the extent Located Within the Territory or (y) Exclusively Related to the Business to the extent not Located Within the Territory, excluding assets of or with respect to Benefit Plans.
Section 2.2 Excluded Assets. The Purchased Assets do not include, and Seller and its Affiliates shall reserve and retain all assets and properties of Seller and its Affiliates that are not, Purchased Assets, including the following assets (all assets excluded pursuant to this Section 2.2, the “Excluded Assets”); provided, that nothing in this Section 2.2 shall limit Buyer’s rights under the Transition Services Agreement:
(a) all Cash and Cash Equivalents;
(b) certificates of deposit, shares of stock, securities, bonds, debentures, evidence of Indebtedness, and any other debt or equity interest in any Person;
(c) other than the Transferred IT Assets, all assets used by Seller in performing corporate, support, administrative, and other services, whether or not Located Within the Territory;
(d) all Benefit Plans and all assets, trusts, and contracts of or relating to the Benefit Plans and all other assets arising out of or directly or indirectly relating to employee benefits or employee benefit or compensation plans, programs, agreements or arrangements maintained or contributed to (or formerly maintained or contributed to) by the Seller or any of its Affiliates or with respect to which the Seller or any of its Affiliates has, or could reasonably be expected to have, any Liability;
(e) all IT Assets and related network resources, software, websites and integrated systems, which, for the avoidance of doubt, may also be used in connection with the Business and the operation of the Purchased Assets and may include assets to which the Transferred IT Assets connect or with which the Transferred IT Assets communicate, including all Excluded IT, in each case, other than the Transferred IT Assets;
(f) (i) all Contracts to which Seller or any of its Affiliates is a party existing as of the date hereof that are not Transferred Contracts (including all Shared Contracts), (ii) any Contract that is entered into after the date hereof that would qualify as a Transferred Contract and of which Seller provides written notice to Buyer, solely in the event Buyer has provided written notice to Seller that it does not desire to include such Contract in the Purchased Assets and (iii) any Contract that is entered into after the date hereof that would not qualify as a Transferred Contract (all of the foregoing, the “Retained Agreements”);
(g) any assets that have been disposed of by Seller or its Affiliates in compliance with this Agreement after the Effective Date and prior to the Effective Time;
(h) all books and records other than the Purchased Documents, including: (A) the corporate seal, Governing Documents, minute books, or stock books of Seller or any of its Affiliates, and the original financial and accounting books and records and Tax Returns of Seller or any of its Affiliates (including supporting work papers and other documents relating to the financial, accounting, and Tax policies of Seller, such as transfer pricing studies and other proprietary information related to the preparation and filing of Tax Returns, calculations of Tax, and similar matters but, excluding for the avoidance of doubt, any Tax records that are Purchased Documents); and (B) copies of any documents and books and records to the extent relating to the ongoing businesses (other than the Business) of Seller or any of its Affiliates;
(i) the Seller Marks and any other Intellectual Property that is not Business Intellectual Property, including all Excluded IP;
(j) any refund or credit related to Taxes paid by or on behalf of Seller, whether such refund is received as a payment or as a credit (in lieu of refund) against future Taxes payable (except to the extent such refund or credit relates to Tax payments allocated to Buyer pursuant to Section 3.4(b));
(k) except as otherwise provided in Sections 2.1(m) and 2.1(o), all Claims of Seller or its Affiliates against any Person;
(l) all insurance policies, and, subject to Buyer’s rights under Section 7.13, rights thereunder, including any such policies and rights in respect of the Purchased Assets or the Business;
(m) the rights of Seller and its Affiliates arising under or in connection with this Agreement, any certificate or other document (including the Ancillary Agreements) delivered in connection herewith, and any of the Transactions;
(n) subject to Buyer’s rights under Section 10.17, all attorney-client privilege, attorney work product privilege or other applicable legal privilege of Seller or any of its Affiliates or Representatives arising with respect to legal counsel representation of Seller or its Affiliates or the Business and all documents to the extent subject to the attorney-client privilege, attorney work product privilege or other applicable legal privilege described in this Section 2.2(n);
(o) all rights in, to, and under all Permits and other rights under any Law, other than the Transferable Permits;
(p) any investment in the Interests of (or any intercompany advances to) any Affiliate of Seller;
(q) all records relating to the Business that Seller or any Affiliate of Seller is required by applicable Law to retain in its possession to the extent so required and all human resources, medical, and personnel records (other than any Purchased Documents);
(r) all documents maintained by Seller or its Affiliates in connection with the Transactions;
(s) the assets and other rights set forth on Schedule 2.2(s);
(t) except as otherwise provided in Section 2.1(a), all real property and real property interests located in the Territory owned, held, used, or leased by Seller or its Affiliates that are not Primarily Related to the Business;
(u) except as otherwise provided in Section 2.1(b), all interstate gas transportation assets owned by Seller or its Affiliates; and
(v) any other asset, property, or right of every kind or description, wherever located, whether real, personal, or mixed, tangible or intangible of Seller or any of its Affiliates that is not a Purchased Asset.
Section 2.3 Assumed Obligations. Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, at the Closing, subject to Section 2.4, Buyer will assume and become responsible to perform, discharge, and pay when due all Liabilities of Seller and its Affiliates, known or unknown, in each case, solely to the extent arising from, based upon, related to or associated with the Business or the Purchased Assets, regardless of whether such Liabilities arose prior to, on or after the Effective Time (unless otherwise specified in this Section 2.3 or Section 2.4), including, for the avoidance of doubt, Liabilities relating in any
manner to the ownership, operation, and use thereof (the “Assumed Obligations”). Without limiting the application of the foregoing, subject to Section 2.4, the Assumed Obligations shall include all of the following Liabilities:
(a) any trade accounts payable or other accrued and unpaid current expenses;
(b) all Liabilities arising out of or relating to over-recovered or under-recovered purchased gas cost adjustment charges, and all customer deposits, customer advances for construction, deferred credits, regulatory Liabilities, and other similar items;
(c) all Liabilities (including Tax Liabilities) of any kind arising out of or relating to any Regulatory Order applicable to the Business, Customers, or the Purchased Assets, including any Liabilities or obligations imposed (whether on the Business, Seller or its Affiliates or Buyer or its Affiliates) pursuant to any Regulatory Order issued in connection with or relating to the Transactions as a condition for approval or otherwise, other than (i) payment obligations of Seller or its Affiliates arising in respect of periods prior to the Effective Time (to the extent not included in the Adjustment Amount) or (ii) Liabilities of Seller or its Affiliates to the extent related to any Excluded Assets (for the avoidance of doubt, obligations pursuant to any Regulatory Order issued in connection with or relating to the Transactions shall not be considered arising in respect of periods prior to the Effective Time);
(d) all Liabilities arising out of or relating to the Real Property, the Transferred Contracts, and the Transferable Permits;
(e) any Liabilities for Taxes imposed with respect to, arising out of or relating to the Purchased Assets, the Assumed Obligations or the Business, in each case to the extent such Liabilities are incurred in, or attributable to, any Post-Closing Tax Period;
(f) any Transfer Taxes for which Buyer is responsible under Section 7.10(a);
(g) all Liabilities, obligations, or commitments to the extent arising out of or relating to the Business or Purchased Assets and to the extent arising under, based upon, or relating to, any Environmental Law, Environmental Permit, Environmental Claims, or Hazardous Materials;
(h) all Liabilities related to the Specified Site Matters; and
(i) the Liabilities, obligations and commitments listed on Schedule 2.3(i).
Section 2.4 Excluded Liabilities. Notwithstanding anything to the contrary in Section 2.3, the Assumed Obligations do not include, and Seller and its Affiliates shall retain, all Liabilities of Seller and its Affiliates that are not Assumed Obligations, known or unknown, regardless of whether such Liabilities arose prior to, on or after the Effective Time, including the following Liabilities (all Liabilities excluded pursuant to this Section 2.4, the “Excluded Liabilities”):
(a) any trade accounts payable or other accrued and unpaid current expenses to the extent not included in the calculation of the Adjustment Amount;
(b) any Liabilities of Seller or its Affiliates to the extent related to any Excluded Assets or that are otherwise not Assumed Obligations;
(c) any Liabilities of Seller or its Affiliates in respect of Indebtedness, including any Indebtedness secured by any Purchased Assets;
(d) without duplication of any right to recovery herein, and in no event including any Taxes that are Assumed Obligations, (i) any Liabilities for Taxes imposed with respect to, arising out of or related to the Purchased Assets, the Excluded Liabilities or the Business, in each case to the extent such Liabilities are incurred in, or attributable to, any Pre-Closing Tax Period and (ii) any Liabilities for Taxes of Seller or any member of any consolidated, affiliated, combined or unitary group of which Seller is or has been a member;
(e) (i) all employment, labor, compensation, pension, employee welfare, severance, WARN Act, wage withholding Taxes, employer payroll, social security and similar Taxes, employee benefits related Liabilities and any other similar Liabilities, commitments and claims relating to each current or former employee or other service provider of Seller or its Affiliates who does not become a Transferred Employee (or any dependent or beneficiary of any such employee) in respect of all periods, whether before, at or after Closing and (ii) the workers’ compensation Liabilities for Business Employees for which Seller and its Affiliates are responsible under Section 7.12(h);
(f) all Liabilities at any time arising under, pursuant to or in connection with (i) each Benefit Plan and any other benefit or compensation plan, program, policy, contract, agreement or arrangement at any time maintained, sponsored, contributed to or required to be contributed to by Seller or any of its Affiliates, or with respect to which Seller or any of its Affiliates has, or could reasonably be expected to have, any Liability, or (ii) Section 302 or Title IV of ERISA, Section 412 of the Code, or COBRA;
(g) except as otherwise provided in this Agreement, any Liabilities of Seller or its Affiliates arising under or in connection with this Agreement, any certificate or other document delivered in connection herewith (including the Ancillary Agreements), and any of the Transactions, including fees and expenses of counsel, accountants, consultants and other advisors to Seller or any Affiliate thereof; and
(h) the Liabilities, obligations and commitments listed on Schedule 2.4(h).
ARTICLE III
PURCHASE PRICE
Section 3.1 Purchase Price. Subject to the terms and conditions of this Agreement, the aggregate purchase price (the “Base Purchase Price”) for the Purchased Assets shall be (a) an amount in cash equal to Two Billion Four Hundred Eighty Million Dollars ($2,480,000,000), increased by the Adjustment Amount if the Adjustment Amount is a positive number, or decreased by the Adjustment Amount if the Adjustment Amount is a negative number (the Base Purchase Price as adjusted, the “Purchase Price”) and (b) Buyer’s assumption of the Assumed Obligations in accordance with this Agreement. The Adjustment Amount will be determined in
accordance with this Agreement, including the Accounting Principles, and in the same format as Exhibit B.
Section 3.2 Determination of Purchase Price.
(a) No later than four (4) Business Days prior to the Closing Date, Seller will deliver to Buyer a written statement of Seller’s good faith, reasonable estimate of the Purchase Price (the “Estimated Purchase Price”), calculated in accordance with this Agreement, including the Accounting Principles, and in the same format as Exhibit B (the “Preliminary Adjustment Statement”), together with Seller’s reasonably detailed supporting calculations and reasonable supporting documentation. Prior to the Closing Date, Buyer may deliver to Seller a written report containing all changes that Buyer proposes to be made to the Preliminary Adjustment Statement and the Estimated Purchase Price, if any, together with reasonable supporting documentation showing Buyer’s calculation of the disputed amounts, in which case the Parties shall endeavor to reconcile their differences in good faith by negotiation prior to the Closing Date; provided, that in the event the Parties are unable to reconcile their differences, Seller’s estimate of the Estimated Purchase Price as set forth in the Preliminary Adjustment Statement shall prevail. The amount of the Estimated Purchase Price as set forth in the Preliminary Adjustment Statement (or the amount of the Estimated Purchase Price to which the Parties agree in accordance with this Section 3.2(a)) (the “Closing Payment Amount”) shall be paid by Buyer to Seller at the Closing.
(b) Within ninety (90) days after the Closing Date, Buyer will deliver, or cause to be prepared and delivered, to Seller a calculation of the Purchase Price, calculated in good faith in accordance with this Agreement and in the same form and format as Exhibit B (the “Post-Closing Adjustment Statement”), together with Buyer’s reasonably detailed supporting calculations and reasonable supporting documentation. Buyer agrees that, following delivery of the Post-Closing Adjustment Statement, Buyer will provide Seller with reasonable access during normal business hours (subject to execution of customary access letters) to its and its Affiliates’ books, records, information, materials and Representatives and employees as Seller may reasonably request and to the extent reasonably required by Seller in order for Seller to review the Post-Closing Adjustment Statement.
(c) The amounts determined by Buyer as set forth in the Post-Closing Adjustment Statement will, subject to Section 3.4(d), be final, binding, and conclusive for all purposes unless, and only to the extent, that within forty-five (45) days after Buyer has delivered the Post-Closing Adjustment Statement, Seller delivers to Buyer a written report containing any good faith proposed changes to each item set forth in the Post-Closing Adjustment Statement, an explanation of any such changes, and the reasons therefor, accompanied by reasonably detailed documentation showing Seller’s calculation of the disputed amounts (an “Adjustment Dispute Notice”); provided, that the disagreement may be based for purposes of this Section 3.2(c) solely only on mathematical errors or amounts reflected in the Post-Closing Adjustment Statement not being calculated in accordance with this Agreement and the Accounting Principles. Any changes not included in the Adjustment Dispute Notice shall be deemed waived, and Buyer’s determinations with respect to all such elements of the Post-Closing Adjustment Statement that are not addressed in the Adjustment Dispute Notice shall prevail. If (i) Seller fails to timely deliver an Adjustment Dispute Notice to Buyer containing changes Seller proposes to be made to
the Post-Closing Adjustment Statement in accordance with this Section 3.2(c) or (ii) the Final Purchase Price set forth in the Post-Closing Adjustment Statement is mutually agreed upon by Seller and Buyer, in each case, the Post-Closing Adjustment Statement and the Final Purchase Price set forth therein shall be final and binding on the Parties.
(d) If Seller delivers an Adjustment Dispute Notice in compliance with Section 3.2(c), and Seller and Buyer are unable to reach a resolution in good faith with respect to all disputed items set forth in the Adjustment Dispute Notice (such remaining disputed items, the “Disputed Items”) within thirty (30) days of delivery of the Adjustment Dispute Notice, Seller and Buyer shall promptly retain the Independent Accounting Firm and promptly submit the Disputed Items for determination and resolution to the Independent Accounting Firm. Any disputed items set forth in the Adjustment Dispute Notice and resolved in writing between the Parties within such thirty (30) day period shall be final and binding with respect to such items. The Independent Accounting Firm will be instructed by the Parties to, and shall, determine, and resolve any such remaining Disputed Items in accordance with this Agreement and the Accounting Principles, and report to the Parties, within twenty (20) days after such submission, of the Independent Accounting Firm’s determination and resolution. In resolving the Disputed Items, the Independent Accounting Firm: (i) shall limit its review to the Disputed Items; (ii) shall limit its review to correcting mathematical errors and determining whether the Disputed Items were determined in accordance with this Agreement and Accounting Principles and shall not make any other determination, including any determination as to whether any estimates on the Post-Closing Adjustment Statement are correct, adequate, or sufficient, and limit any adjustments to only those that are necessary to correct such errors or for the calculation of the Final Purchase Price to comply with the provisions of this Agreement; (iii) shall make its determination based solely on the documentation submitted by, and presentations made by, the Parties (and such documentation and presentations must be provided to the other Party concurrently with their submission or presentation to the Independent Accounting Firm) and (iv) may not assign a value to any Disputed Item greater than the greatest value claimed for such Disputed Item or less than the smallest value for such Disputed Item claimed by either Buyer or Seller (in the Adjustment Dispute Notice or the Post-Closing Adjustment Statement, respectively); provided, however, that to the extent the determination of the value of any Disputed Item affects any other item used in calculating the Final Purchase Price, such effect may be taken into account by the Independent Accounting Firm. The report of the Independent Accounting Firm will be final, binding, and conclusive on the Parties for all purposes absent manifest error or fraud. None of Seller, Buyer nor any of their respective Affiliates shall have any ex-parte communications or meetings with the Independent Accounting Firm regarding the subject matter hereof without the other Party’s prior written consent. In acting under this Agreement, the Independent Accounting Firm shall function solely as an expert and not as an arbitrator. The fees and disbursements of the Independent Accounting Firm will be allocated between Seller and Buyer so that Buyer’s share of such fees and disbursements will be in the same proportion that the aggregate amount of any such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully disputed by Buyer (as finally determined by the Independent Accounting Firm) bears to the total amount of such disputed amounts initially submitted to the Independent Accounting Firm. For example, if Seller disputes a total of $100 and the Independent Accounting Firm awards $60 in favor of Seller, Buyer shall pay sixty percent (60%) of the fees of the Independent Accounting Firm. The fees and disbursements of the Representatives of each Party incurred in connection with the preparation or review of the
Post-Closing Adjustment Statement and preparation or review of any Adjustment Dispute Notice, as applicable, shall be borne by such Party.
(e) Within ten (10) Business Days following the final determination of the Purchase Price pursuant to Section 3.2(c) or Section 3.2(d) (as so determined, the “Final Purchase Price”), (i) if the Final Purchase Price is greater than the Closing Payment Amount, Buyer will pay or cause to be paid the difference to Seller or (ii) if the Final Purchase Price is less than the Closing Payment Amount, Seller will pay or cause to be paid the difference to Buyer. Any amount paid under this Section 3.2(e) shall be paid in cash by wire transfer of immediately available funds to the account specified by the Party receiving payment. Neither the determination of the Final Purchase Price nor any payment thereof shall be deemed to waive or limit in any respect any representation, warranty, or rights in respect thereof under this Agreement.
(f) The Parties hereby acknowledge and agree that any payments made pursuant to this Section 3.2 shall be treated for Tax purposes as an adjustment to the Purchase Price to the maximum extent permitted by applicable Law.
Section 3.3 Allocation of Purchase Price. The payments of the Purchase Price contemplated by this Article III and any other relevant items for Tax purposes (including the Assumed Obligations, the “Allocable Amount”) shall be allocated among the Purchased Assets in accordance with (i) Section 1060 of the Code and the other applicable requirements in the Code and the Treasury Regulations and comparable provisions of state and local Tax Law and (ii) using the methodology set forth in Schedule 3.3. As soon as practicable following the determination of the Final Purchase Price in accordance with Section 3.2 (but in no event more than one hundred eighty (180) days after the Closing Date), Seller shall prepare a draft schedule reflecting the allocation of the Allocable Amount in accordance with this Section 3.3 and shall submit such allocation to Buyer for review. Buyer shall review such draft schedule and provide any comments thereon in writing to Seller within thirty (30) days after Seller’s delivery of such draft schedule; provided, that if Buyer does not provide any such written comments prior to the expiration of such thirty (30)-day period, the draft schedule as prepared by Seller shall be final, binding and conclusive on Buyer and Seller absent manifest error or fraud. If Buyer provides written comments within such thirty (30)-day period, Buyer and Seller shall use commercially reasonable efforts to agree on the amount and proper allocation of the Allocable Amount. If Buyer and Seller have not agreed on the allocation within thirty (30) days after Seller’s delivery of the draft schedule, then Buyer, on the one hand, and Seller, on the other hand, shall each have the right to deliver notice to the other party of its intent to refer the matter for resolution to the Independent Accounting Firm. Buyer and Seller shall each deliver to the other Party and to the Independent Accounting Firm a notice setting forth in reasonable detail their proposed allocations. Within thirty (30) days after receipt thereof, the Independent Accounting Firm will deliver the allocation schedule and provide a written description of the basis for its determination of the allocations therein (such allocation, whether agreed to by Buyer and Seller or determined by the Independent Accounting Firm, shall be final, binding and conclusive on Buyer and Seller absent manifest error or fraud (the “Final Allocation”)). The fees and disbursements of the Independent Accounting Firm will be allocated between Seller and Buyer so that Buyer’s share of such fees and disbursements will be in the same proportion that the aggregate amount of any disputed items in the draft schedule submitted to the Independent Accounting Firm that is unsuccessfully disputed by Buyer (as finally determined by the Independent Accounting Firm)
bears to the total amount of such disputed amounts initially submitted to the Independent Accounting Firm. Each of Buyer and Seller shall, and shall cause their respective Affiliates to, file all Tax Returns consistent with the Final Allocation and not take any position contrary thereto in any Tax proceeding except as otherwise required by a “determination” within the meaning of Section 1313(a) of the Code; provided, however, subject to Section 7.10(d), that nothing contained herein shall be construed so as to prevent any Party from settling, or require any Party to commence or participate in any Tax proceeding based upon or arising out of the Final Allocation. Each of the Parties shall promptly notify the other upon receipt by a Party or any of its Affiliates of notice of any pending or threatened Tax proceeding challenging the Final Allocation. Subsequent adjustments to the Final Purchase Price shall be allocated in accordance with the Final Allocation.
Section 3.4 Prorations. Except as otherwise provided in this Agreement:
(a) For purposes of determining the Purchase Price, fees with respect to any Transferable Permits, rents under any Leases or personal property included as part of the Purchased Assets, or other similar expenses with respect to Purchased Assets, that are not due or assessed until after the Effective Time but which are attributable in whole or in part to any period commencing prior to the Effective Time, and any other amounts that by the terms of this Agreement are to be allocated between the Parties, will be prorated as of the Effective Time, with Seller liable to the extent such items relate to any period prior to the Effective Time, and Buyer liable to the extent such items relate to any period from and after the Effective Time.
(b) Whenever it is necessary to determine the liability for Asset Taxes imposed on a periodic basis for any Straddle Period, the Taxes for the portion of the Straddle Period ending before, and for the portion of the Straddle Period beginning on, the Closing Date shall be deemed to be the amount of such Tax for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of calendar days during the Straddle Period before the Closing Date, or the number of calendar days during the Straddle Period beginning on the Closing Date, as applicable, and the denominator of which is the number of calendar days in the entire Straddle Period.
(c) Whenever it is necessary to determine the liability for all Taxes not referenced in Section 3.4(b) (such as income, employee, payroll Taxes and any Taxes imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible)), subject to Section 7.10, it shall be determined as if the Straddle Period ended at the end of the day immediately preceding the Closing Date (except that (i) solely for purposes of determining the marginal Tax rate applicable to income or receipts during such period in a jurisdiction in which such Tax rate depends upon the amount or level of income or receipts, annualized income or receipts may be taken into account if appropriate for an equitable sharing of such Taxes and (ii) exemptions, allowances and deductions that are otherwise calculated on an annual basis shall be apportioned on a daily basis).
(d) The proration of all items estimated under this Section 3.4 shall be recalculated by Buyer within a reasonable period of time following the date upon which the actual amounts become available to Buyer. Buyer shall notify Seller of such recalculated amounts and shall provide Seller with all documentation relating to such recalculations, including Tax statements
and other notices from Third Parties. The Parties shall make such payments to each other as are necessary to reconcile any estimated amounts prorated as of the Effective Time with the final amounts to be prorated. Seller and Buyer agree to furnish each other with such documents and other records as may be reasonably requested in order to confirm all proration calculations made pursuant to this Section 3.4. Buyer shall incorporate Seller’s reasonable comments to such recalculations. The Parties shall work together in good faith to resolve any disputes relating to such recalculations. Notwithstanding the other dispute resolution provisions in this Agreement, in the event that an agreement has not been reached within thirty (30) days, or such longer period as mutually agreed to by the Parties, following Buyer’s receipt of Seller’s comments to such recalculations, the unresolved disputed items shall be determined by the Independent Accounting Firm in accordance with the procedures set forth in Section 3.2(d), mutatis mutandis, and such determination shall be final, binding and conclusive on the Parties absent manifest error or fraud.
Section 3.5 Unbilled Revenues. Prior to the Closing Date, Seller shall read all customer meters in their normal cycle and in due course render the related bills to its customers served by the Business. Seller shall also read each daily read transportation customer meter (collectively, the “Large Volume Meters”) on the day immediately preceding the Closing Date. Seller shall provide Buyer with the last meter reading from each of the Large Volume Meters made on the day immediately preceding the Closing Date as soon as practicable after the Closing Date and in any event within ten (10) Business Days of the Closing Date. On and after the Closing Date, Buyer shall read the customer meters for their first time, in the normal cycle, and in due course render bills for service during the period between Seller’s last reading in the normal cycle and Buyer’s first reading in the normal cycle to the customers served by the Business. Buyer shall determine the volume of gas sold by Seller prior to the Closing Date through Large Volume Meters by Seller’s meter readings on the day immediately preceding the Closing Date. Buyer shall determine by allocation the volumes of gas sold through all meters other than Large Volume Meters, by Seller prior to the Closing Date, and by Buyer on and after the Closing Date and prior to its first meter reading, through meters without charts. Such allocation shall be consistent with Seller’s past practices for unbilled revenues.
Section 3.6 Withholding. The Parties shall be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement to any Person such amounts as are required to be deducted and withheld under the Code or any other applicable Tax Law with respect to the making of such payment. Assuming delivery of the Internal Revenue Service Form W-9 contemplated by Section 4.2(g), the Parties agree that no such deduction or withholding is required with respect to any payment due to Seller or any Affiliate thereof, unless such withholding is required by a change in Law following the Effective Date. If Buyer determines that any deduction or withholding is required with respect to any amounts payable to Seller pursuant to this Agreement, Buyer shall use commercially reasonable efforts to provide Seller at least fifteen (15) days’ advance written notice of its intent to deduct or withhold. Such notice shall include a reasonably detailed description of the legal basis for and computation of the amount of such deduction or withholding, and the Parties shall cooperate to mitigate any such requirement. Buyer shall timely pay any withheld or deducted amounts to the appropriate Governmental Entity and shall promptly furnish to Seller the original receipt issued by such Governmental Entity, if any, or otherwise such other documentation available to Buyer and reasonably satisfactory to Seller, evidencing such payment. To the extent that amounts are deducted and withheld and timely paid to the appropriate Governmental Entity in accordance
with this Section 3.6, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction or withholding was made.
ARTICLE IV
THE CLOSING
Section 4.1 Time and Place of Closing. Upon the terms and subject to the satisfaction or, when permissible, waiver in writing of the conditions set forth in Article VIII, the closing of the Transactions (the “Closing”) will take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 1440 New York Avenue, N.W., Washington, DC 20005 (or remotely via the electronic exchange of closing deliverables), commencing at 9:00 a.m. prevailing Eastern Time: (i) on the day that is five (5) Business Days after the date on which the last of the conditions set forth in Article VIII (other than any such conditions which, by their terms or nature, are not capable of being satisfied until the Closing Date but subject to the satisfaction or, when permissible, waiver in writing of such conditions at the Closing) is satisfied or, when permissible, waived in writing or (ii) on such other date or at such other time or place as the Parties may mutually agree upon in writing. The date on which the Closing occurs is referred to herein as the “Closing Date.” The Closing shall be effective for all purposes at 12:01 a.m. prevailing Eastern Time on the Closing Date (the “Effective Time”).
Section 4.2 Seller’s Closing Deliveries. At or prior to the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:
(a) the certificate contemplated by Section 8.2(c), duly executed by a duly authorized officer of Seller;
(b) a counterpart to the Assignment and Assumption Agreements, duly executed by Seller;
(c) a counterpart to the Assignment of Leases, duly executed by Seller;
(d) subject to Section 4.5, one or more Special Warranty Deeds of conveyance of the Owned Real Property, substantially in the form of the applicable Special Warranty Deed, duly executed and acknowledged by Seller, and in recordable form;
(e) one or more instruments of assignment or conveyance, substantially in the applicable form of the Assignment of Easements, as are necessary to transfer the Purchased Easements, duly executed and acknowledged by Seller and in recordable form;
(f) a counterpart to the Transition Services Agreement, duly executed by Seller;
(g) an Internal Revenue Service form W-9 properly completed and executed by Seller; and
(h) all consents, waivers or approvals that have been obtained by Seller prior to Closing from Third Parties in connection with this Agreement.
Section 4.3 Buyer’s Closing Deliveries. At or prior to the Closing, Buyer shall deliver, or cause to be delivered, to Seller the following:
(a) an amount equal to the Closing Payment Amount by wire transfer of immediately available funds to the account or accounts that have been designated by Seller to Buyer in writing prior to the Closing;
(b) the certificate contemplated by Section 8.3(c) duly executed by a duly authorized officer of Buyer;
(c) the RWI Policy, duly executed by Buyer and the insurer(s), in such form and with such terms as specified in Section 7.14 and paid in full by Buyer as of the time of delivery;
(d) a counterpart to the Assignment and Assumption Agreements, duly executed by Buyer;
(e) a counterpart to the Assignment of Leases, duly executed by Buyer;
(f) a counterpart to the Assignments of Easements duly executed (and acknowledged, as applicable) by Buyer; and
(g) a counterpart to the Transition Services Agreement, duly executed by Buyer.
Section 4.4 Records. As promptly as practical, but no later than 30 days following the Closing Date, Seller shall make available to Buyer, at Seller’s sole expense, the Purchased Documents to which Buyer is entitled pursuant to the terms of this Agreement; provided, that to the extent the Purchased Documents are Located Within the Territory or otherwise reasonably accessible to Seller, such Purchased Documents shall be delivered at Closing; and; provided, further, that to the extent Purchased Documents are accessible to Buyer pursuant to and during the term of the Transition Services Agreement, Seller shall have no further obligation to make available, provide, transfer, or deliver to Buyer such Purchased Documents after the term of the Transition Services Agreement, except as otherwise provided under Section 7.3.
Section 4.5 Quitclaim Instruments. Notwithstanding anything to the contrary in Section 4.2 or otherwise in this Agreement, in the event Seller reasonably determines prior to the Closing that Seller does not hold a fee interest, leasehold, easement or other real property interest in any portion of the Real Property, or if any Encumbrance clouds title with respect to Seller’s interest in such Real Property then (a) if such property is an Owned Real Property and Seller reasonably determines prior to the Closing that Seller does not hold a fee interest in any portion of any such Owned Real Property, in lieu of being required to deliver a Special Warranty Deed with respect to such Owned Real Property, Seller shall instead be required to deliver a Quitclaim Deed with respect to the same, (b) if such property is an Owned Real Property and Seller reasonably determines prior to the Closing that any Encumbrance clouds title with respect to Seller’s interest in such Owned Real Property, Seller shall modify the Special Warranty Deed to note that the grant of such Owned Real Property is subject to any applicable Encumbrance, and (c) if such property is a Purchased Easement or Leased Real Property, then the applicable Assignment of Easement, Assignment of Lease or other transfer document shall be modified as appropriate (as so modified, a “Modified Conveyance Document”) to clarify that Seller may not
be the record owner of interests in such property or otherwise modified to make any representations of Seller contained therein true and correct, and, in either case of (a) or (b), so long as the same would not, individually or in the aggregate, have a Material Adverse Effect, the delivery of such Quitclaim Deed or Modified Conveyance Document shall be deemed to satisfy (i) Seller’s obligation under Section 4.2 to deliver a transfer instrument with respect to such interest and (ii) the obligations of Seller under the first paragraph of Section 2.1 with respect to such property.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Seller Disclosure Schedules, Seller hereby represents and warrants to Buyer as of the Effective Date and as of the Closing Date (unless such representation and warranty is expressly made as of a specific date, in which case Seller represents and warrants to Buyer as of such date) as follows:
Section 5.1 Organization and Good Standing. Seller is a corporation duly organized, validly existing, and in good standing under the Laws of the State of North Carolina and has all requisite corporate power and authority to own, lease, and operate the Purchased Assets and to carry on the Business as presently conducted. Seller is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of the Business, or the ownership or operation of any of the Purchased Assets, by Seller makes such qualification necessary, except, in each case, for any such failures that would not, individually or in the aggregate, be material and adverse to the Business.
Section 5.2 Authority and Enforceability. Seller has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder. The execution and delivery by Seller of this Agreement and the Ancillary Agreements to which it is a party, the performance by Seller of this Agreement and the Ancillary Agreements and the consummation by Seller of the Transactions have been duly and validly authorized by all necessary corporate action on Seller’s part. This Agreement has been, and each Ancillary Agreement to which it is a party will be, duly and validly executed and delivered by Seller, and constitutes or will constitute, assuming the due authorization, execution, and delivery by the other parties thereto, a valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or affecting creditors’ rights generally and by general principles of equity (whether considered in a proceeding in equity or at law) (the “Remedy Exceptions”).
Section 5.3 No Conflicts. Except as set forth on Schedule 5.3, assuming the Required Regulatory Approvals are sought and obtained in accordance with this Agreement, none of the execution, delivery, and performance by Seller of this Agreement or any Ancillary Agreement, nor the consummation of the Transactions do or, will:
(a) violate or conflict with any of Seller’s Governing Documents in any material respect;
(b) violate any Law or Order applicable to the Business, Seller, its Affiliates or any of the Purchased Assets, except for any such violations of applicable Law or Order that would not reasonably be expected to materially and adversely affect Buyer’s operation of the Business as currently operated or use of the Purchased Assets in the manner currently used or that arise as a result of any facts or circumstances relating particularly to Buyer or any of its Affiliates;
(c) other than in connection with the Required Regulatory Approvals, require any declaration, filing, or registration by Seller or any of its Affiliates with, or notice by Seller or any of its Affiliates to, or authorization, consent, or approval of, any Governmental Entity, except for any such declarations, filings, registrations, notices, authorizations, consents, or approvals: (i) with the SEC under the Exchange Act as may be required in connection with this Agreement and the Transactions; (ii) for which the failure to make (or obtain, as applicable) in compliance with all applicable requirements would not reasonably be expected to materially and adversely affect Buyer’s operation of the Business as currently operated or use of the Purchased Assets in the manner currently used; (iii) that arise as a result of any facts or circumstances particularly relating to Buyer or any of its Affiliates; (iv) relating to Permits that will terminate in accordance with their terms prior to the Closing and are not subject to renewal in the Ordinary Course of Business; or (v) the Customary Post-Closing Consents; or
(d) except as set forth on Schedule 5.3(d), violate, conflict with, result in a breach of, require any consent or approval of, or (with or without notice or lapse of time or both) constitute a default, give rise to any right of modification, acceleration, payment, cancellation or termination, or result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) upon any of the Purchased Assets: (i) under or pursuant to any Permit or Environmental Permit; or (ii) under or pursuant to any Material Contract, except, in each case, for any such violations, conflicts, breaches, consents, approvals, defaults, or other occurrences: (A) that would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business; (B) that arise as a result of any facts or circumstances relating to Buyer or any of its Affiliates; (C) that relate to Contracts that will terminate in accordance with their terms prior to the Closing and are not subject to renewal; or (D) the Customary Post-Closing Consents.
Section 5.4 Financial Information. Schedule 5.4 sets forth accurate and complete copies of the unaudited balance sheets of the Business as of December 31, 2023 and 2024 (the “Balance Sheets”) and the income statements for the Business for the 12-month periods ended December 31, 2023 and 2024 (the “Income Statements”, and collectively the Balance Sheets and Income Statements, the “Financial Statements”). The Financial Statements are based upon and consistent with information contained in the books and records of Seller kept in the Ordinary Course of Business (which books and records are true, correct, and complete in all material respects). Each Financial Statement was prepared in accordance with GAAP and fairly presents, in all material respects, the financial condition and results of operation of the Business as of the dates thereof or for the periods covered thereby; except that (A) the Financial Statements lack footnote disclosures (none of which if presented, would materially and adversely alter the financial condition or financial results of the Business), (B) throughout the periods covered by the Financial Statements, the Business has not operated as a separate stand-alone entity of Seller, and instead the balance sheets and results of operations of the Business have been reported within the consolidated financial statements of Seller and their Affiliates, (C) stand-alone
financial statements have not historically been prepared for the Business, (D) the Financial Statements are unaudited and may not include all adjustments that an audit may require and (E) the Financial Statements include estimated allocations of certain expenses for services and other costs attributable to the Business which may not necessarily reflect amounts that the Business would incur on a standalone basis.
Section 5.5 No Undisclosed Liabilities. Except as set forth on Schedule 5.5, neither Seller nor any of its Affiliates has any Liabilities with respect to the Business other than Liabilities: (i) that are specifically reflected and adequately reserved against in the Balance Sheets; (ii) that were incurred in the Ordinary Course of Business since December 31, 2024 (none of which is a liability resulting from a breach of contract, breach of warranty, tort, infringement or misappropriation or violation of applicable Law); (iii) that are executory liabilities and obligations arising under Contracts of Seller and its Affiliates; (iv) that are Excluded Liabilities; or (v) which would not, individually or in the aggregate, reasonably be expected to be material to the Business.
Section 5.6 Absence of Certain Changes. Except as set forth on Schedule 5.6, since December 31, 2024, (a) the Business has been operated, in all material respects, in the Ordinary Course of Business (except as otherwise contemplated by this Agreement, including Section 7.1(b)), and (b) no change or event has occurred which, either individually or in the aggregate, has resulted in, or with the passage of time, would reasonably be expected to result in, a Material Adverse Effect.
Section 5.7 Sufficiency of Purchased Assets. Except for: (a) the services to be provided in the Transition Services Agreement and (b) as set forth in Schedule 5.7, and subject to the receipt of the necessary consents to transfer any Transferred Contracts, the Purchased Assets, together with any rights granted or services to be provided to Buyer under this Agreement or any Ancillary Agreement, constitute all of the material assets and Contracts, owned, used, held for use or licensed by Seller or its Affiliates required for the conduct and operation of the Business in substantially the same manner as currently conducted by Seller; provided that the foregoing is not a representation or warranty with respect to infringement, misappropriation or any other violation of Intellectual Property (which is addressed in Section 5.11(c)).
Section 5.8 Title. Seller or one or more of its Affiliates has, or as of immediately prior to the Closing will have, good, valid, and marketable title to, or a valid leasehold interest in or a valid license to use, all of the material Purchased Assets, free and clear of all Encumbrances (other than Permitted Encumbrances). Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, the Purchased Assets: (a) are in good operating condition and repair, ordinary wear and tear excepted and except for ordinary routine or planned maintenance and any other maintenance or repairs that are not material in cost and (b) are suitable and adequate for continued use in the Ordinary Course of Business.
Section 5.9 Material Contracts.
(a) Schedule 5.9(a) sets forth an accurate and complete list of all of the following Contracts to which Seller or any of its Affiliates is a party or is otherwise bound with respect to the Business or the Purchased Assets which are in effect on the Effective Date, excluding
Easements (each such Contract that is required to be listed on Schedule 5.9(a), except for those referenced in clause (xii) below, the “Material Contracts”):
(i) all Transferred Contracts that individually involved expenditures or issued purchase orders (whether by or to Seller or an Affiliate thereof) in excess of $1,500,000 in the calendar year ended December 31, 2024;
(ii) all Transferred Contracts between Seller and any of its Affiliates that will not be terminated prior to Closing that individually is expected to involve future expenditures (whether by or to Seller) in excess of $1,500,000 in any year;
(iii) all collective bargaining agreements or other agreements with any labor union, employees’ association, or other employee representative of a group of Business Employees (“Collective Bargaining Agreements”);
(iv) all Transferred Contracts providing for the extension of credit by Seller in excess of $1,500,000 in any year, other than the extension of credit to vendors in the Ordinary Course of Business;
(v) all Transferred Contracts for gas transportation or gas storage that involved payments by the Business in excess of $1,500,000 in the year ended December 31, 2024;
(vi) all Transferred Contracts restricting the right of Seller to compete with any Person or in any line of business or geographic area or containing exclusivity, fixed pricing, “most favored nations” or similar obligations, in each case, that would be binding on, or otherwise impair Buyer’s and its Affiliates’ operation of, the Business after the Closing;
(vii) all Transferred Contracts concerning the use, licensing, development or maintenance of Intellectual Property or IT Assets, other than nondisclosure or confidentiality agreements entered into in the Ordinary Course of Business or agreements with Business Employees or independent contractors entered into in the Ordinary Course of Business on the Seller’s or an Affiliate’s form agreement;
(viii) all Contracts with any Governmental Entity relating to the Business, the Purchased Assets or the Assumed Obligations (other than customer Contracts in the Ordinary Course of Business) that will involve payment after the Effective Time of any material amount or impose any other material obligation (including any conduct-related obligation) after the Effective Time;
(ix) all Leases that are material to the operation of the Business as currently conducted with an annual base rent in excess of $5,000,000;
(x) all partnership, joint venture, and joint ownership agreements, and all similar material agreements (however named) involving a sharing of assets, profits, losses, costs, or Liabilities relating to the Business, the Purchased Assets or the Assumed Obligations;
(xi) each Contract that requires any capital commitment or capital expenditure (including any series of related capital expenditures) in respect of the Business of greater than $5,000,000; and
(xii) all Shared Contracts that individually involved expenditures or issued purchase orders (whether by or to Seller or an Affiliate thereof) with respect to the Business in excess of $1,500,000 in the calendar year ended December 31, 2024.
(b) Seller has made available to Buyer copies of all Material Contracts together with all material amendments, waivers, and other changes thereto, which are correct and complete in all material respects, except as set forth on Schedule 5.9(b). Except as set forth on Schedule 5.9(b): (i) each Material Contract is a valid and binding obligation of Seller, enforceable against it in accordance with its terms, including by estoppel or waiver by the parties thereto, and, to Seller’s Knowledge, is a valid and binding obligation of each other party thereto, enforceable against it in accordance with its terms, including by estoppel or waiver by the parties thereto, in each case except as the same may be limited by the Remedy Exceptions; and (ii) neither Seller, nor, to Seller’s Knowledge, any other party thereto, is (or, upon the passage of time or the giving of notice, or both, would be) in default under or breach of any Material Contract, in each case, except for breaches, violations, or defaults as would not be material, individually or in the aggregate, to the Business.
Section 5.10 Support Obligations. Schedule 5.10 sets forth an accurate and complete list of all Credit Support in effect as of the Effective Date and maintained by Seller or its Affiliates for the benefit of the Business pursuant to applicable Law or the terms of a Material Contract or any Permit, including guarantees, letters of credit, escrows, sureties, performance bonds, security agreements and other similar arrangements.
Section 5.11 Intellectual Property.
(a) Seller and its Affiliates solely and exclusively own all right, title and interest to and in the Business Intellectual Property, free and clear of Encumbrances other than Permitted Encumbrances. Seller and each of its Affiliates take commercially reasonable measures to preserve confidentiality of all Business Confidential Information of Seller or any of its Affiliates, or of any Third Party to which Seller or any of its Affiliates has an obligation of confidentiality, in its possession. To Seller’s Knowledge, (i) no Business Confidential Information has been disclosed to any Person, except to any Person that is subject to a non-disclosure or similar agreement that contains reasonable obligations restricting the disclosure and use thereof, and (ii) there has been no default or breach of such obligations by any party to any such agreement, in each case of clause (i) and (ii) except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business.
(b) The Business Intellectual Property combined with the (i) Intellectual Property licensed pursuant to (A) the Shared Contracts and (B) the Transferred Contracts included in the Purchased Assets and (ii) the Intellectual Property (A) that will be available to Buyer or the Business under the Transition Services Agreement or (B) that will be utilized by Seller to provide “Transition Services” to Buyer under the Transition Services Agreement (assuming, in each case, all necessary third party consents are obtained), and (iii) the Seller Marks, constitute
all of the Intellectual Property necessary for or used in the operation of the Business as conducted as of the date of this Agreement; provided that the foregoing is not a representation or warranty with respect to infringement, misappropriation or any other violation of Intellectual Property (which is addressed in Section 5.11(c)).
(c) Neither the Seller nor any of its Affiliates in connection with the operation of the Business, nor the conduct of the Business is or has since January 1, 2023, infringed, diluted, misappropriated or otherwise violated the Intellectual Property rights of any Person in any material respect. No Claim is pending or threatened in writing (or to Seller’s Knowledge, threatened orally) that alleges any such infringement, misappropriation, dilution or other violation, except for such Claims that would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business. To Seller’s Knowledge, no Person is infringing, misappropriating, or otherwise violating any Business Intellectual Property in any material respect. No Claim is pending or threatened in writing (or to Seller’s Knowledge, threatened orally) by Seller or its Affiliates against another Person that alleges any such infringement, misappropriation, or other violation of the Business Intellectual Property.
(d) Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, (i) each independent contractor or any other Third Party who is or was involved in the creation or development of any Intellectual Property by or for Seller or any of its Affiliates in connection with the Business has executed an enforceable written agreement that (A) assigns to Seller or to such Affiliate, as applicable, all right, title and interest to and in all such Intellectual Property created within the scope of such Person’s employment or engagement thereby and (B) includes confidentiality provisions protecting such Intellectual Property and (ii) each employee of Seller or any of its Affiliates who is or was involved in the creation or development of any material Intellectual Property by or for Seller or any of its Affiliates in connection with the Business has acknowledged that all right, title and interest to and in all such material Intellectual Property created within the scope of such Person’s employment or engagement thereby is owned by Seller or such Affiliate.
Section 5.12 Legal Proceedings. Except as set forth on Schedule 5.12, (a) there are no, and since January 1, 2023 there have been no Claims pending or threatened in writing (or to Seller’s Knowledge, threatened orally) against Seller, its Affiliates or their respective directors or officers (in their capacity as such), with respect to the Business, the Purchased Assets or the Assumed Obligations and (b) there are no Claims pending, or threatened in writing, by Seller or its Affiliates on behalf of the Business, the Purchased Assets or the Assumed Obligations against any Third Party, which, in the case of both (a) and (b) if adversely determined against the Business would be material and adverse to the Business. There are no Orders imposed upon the Seller or any of its Affiliates with respect to the Business outstanding as of the Effective Date which have, individually or in the aggregate, a material and adverse effect on the Business.
Section 5.13 Compliance with Law; Orders; Permits.
(a) Except as set forth on Schedule 5.13(a), Seller and its Affiliates are, and at all times since January 1, 2023 have been, in compliance with all Laws, Orders, and Permits applicable to the Purchased Assets or the Business, except for violations which would not, individually or in the aggregate, have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.13(b), Seller or its Affiliates possess all Permits necessary to own and operate the Business and the Purchased Assets as currently operated, all of such Permits are in full force and effect, and no appeal or other proceeding is pending or threatened in writing (or to Seller’s Knowledge, threatened orally) to revoke any such Permits, except where the failure to have such Permit, such failure to be in effect, or such appeals or proceedings would not, individually or in the aggregate, be material and adverse to the Business.
(c) Seller has all Franchises and other rights required under applicable Law necessary or required for the lawful conduct of the Business within the Territory, except for the absence of such Franchises as would not reasonably be expected to materially and adversely affect Buyer’s operation of the Business as currently operated or use of the Purchased Assets in the manner currently used.
Section 5.14 Anti-Corruption; Anti-Money Laundering; Sanctions.
(a) Since January 1, 2023, neither Seller nor its directors or officers has, on behalf of the Business or the Purchased Assets, violated in any material respect any applicable anti-corruption Laws, including the U.S. Foreign Corrupt Practices Act.
(b) Each of Seller and any Person controlling Seller are, with respect to the Business and the Purchased Assets, in compliance in all material respects with all anti-money laundering Laws related to the prevention of money laundering and terrorist financing, including the Bank Secrecy Act and the USA PATRIOT Act in the jurisdictions in which Seller, or such Person controlling Seller, as applicable, operate.
(c) Seller is not a Person that is, or is fifty percent (50%) or more owned or controlled by a Person or Persons that are: (i) the subject of any economic or financial sanctions or trade embargoes imposed, administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control or the U.S. Department of State or other relevant sanctions authority (collectively, “Sanctions”), or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions.
(d) To Seller’s Knowledge, no sale or other transaction contemplated by this Agreement will violate Sanctions.
Section 5.15 Environmental Matters.
(a) Except as set forth on Schedule 5.15(a), or except as would not, individually or in the aggregate, be material and adverse to the Business, (i) Seller or its Affiliates hold all Environmental Permits necessary for Seller and its Affiliates to operate the Business as currently operated and (ii) Seller and its Affiliates are, and have been since January 1, 2023, in compliance with applicable Environmental Laws and all such Environmental Permits. Except as would not, individually or in the aggregate, be material and adverse to the Business, all such Environmental Permits are in full force and effect, and no appeal or other proceeding is pending or threatened in writing (or to Seller’s Knowledge, threatened orally) to revoke any such Environmental Permits. Seller or its Affiliates have timely filed any required applications for renewal of any such Environmental Permits.
(b) Except as would not, individually or in the aggregate, be material and adverse to the Business, neither Seller nor any of its Affiliates is subject to any Order, or any settlement agreement, or, since January 1, 2023, has received any written notice (or to Seller’s Knowledge oral notice) or request for information regarding any actual or alleged violation of Environmental Laws or any Liabilities or potential Liabilities, including any obligations for sampling, investigation, monitoring, corrective action, cleanup, remediation or removal, arising under Environmental Laws, or in connection with Hazardous Materials, including the presence, Release or threatened Release of, or exposure to, Hazardous Materials, except for Orders, notices, or settlement agreements with respect to matters that have been fully and completely resolved, settled, or withdrawn and for which there are no outstanding obligations, in each case relating to the ownership or operation of the Business or the Purchased Assets.
(c) Except as set forth on Schedule 5.15(c), or as would not, individually or in the aggregate, be material and adverse to the Business, there are no Environmental Claims pending or threatened in writing (or to Seller’s Knowledge, threatened orally) that relate to the Purchased Assets or the Business.
(d) There are no material Environmental Permits held by Seller or its Affiliates to operate the Business as currently operated, and there have been no material environmental audits, assessments or reports in respect of any of the Real Property, the other Purchased Assets, or the Business, which audits, assessments or reports identify undisclosed issues that would, individually or in the aggregate, be material and adverse to the Business, other than those for which copies of such Environmental Permits, and audits, assessments or reports within Seller’s or such Affiliate’s possession have been made available to Buyer.
(e) Except as set forth on Schedule 5.15(e), or as would not, individually or in the aggregate, be material and adverse to the Business, neither Seller, nor any of its Affiliates or the Business has expressly assumed or undertaken any Liability relating to Environmental Laws of another Person, nor has agreed to indemnify any other Person against Liability under Environmental Laws, except with respect to Liabilities for which the Seller, any of its Affiliates or the Business would be liable for independent of its contractual agreement with such Person.
(f) Except as would not, individually or in the aggregate, be material and adverse to the Business, in connection with the Purchased Assets and the Business, no presence, Release or threatened Release of Hazardous Materials exists or has occurred, and no exposure to Hazardous Materials has occurred, for which Seller or any of its Affiliates, with respect to the Business, is required to conduct sampling, investigation, monitoring, corrective action, cleanup, remediation or removal under Environmental Law, or which otherwise would reasonably be expected to give rise to material Liability under any Environmental Law.
Section 5.16 Taxes. Except as set forth on Schedule 5.16:
(a) All material Tax Returns required to be filed with respect to Asset Taxes have been timely filed, and all such Tax Returns are true, correct and complete in all material respects.
(b) All material Asset Taxes due and payable, whether or not shown to be due on any Tax Return, have been timely paid in full.
(c) All material amounts required to be withheld in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other Person by or with respect to the Purchased Assets, the Assumed Obligations or the Business have been duly withheld or collected, and have been paid over to the proper Governmental Entity, and each of Seller and its Affiliates has otherwise complied in all material respects with all applicable Laws relating to the withholding and collection of such Taxes.
(d) No deficiency with respect to a material amount of Asset Taxes has been claimed, proposed, asserted or assessed against or with respect to Seller which has not been fully paid or finally settled.
(e) No material Tax Return required to be filed with respect to any Asset Taxes has been audited by any Governmental Entity for any Tax year which remains open and subject to audit. There is no audit, claim or assessment asserted, pending or threatened in writing, with respect to any material Tax or material Tax Return related to Asset Taxes. No voluntary disclosure proceeding with respect to the Asset Taxes has been commenced in any U.S. state, local or non-U.S. jurisdiction.
(f) Since October 3, 2016, no claim has been made in writing by any Governmental Entity in a jurisdiction where Seller does not file Tax Returns that Seller is or may be subject to taxation by that jurisdiction with respect to Asset Taxes.
(g) No waiver of any statute of limitations regarding, or extension of any period for the assessment of, any material Asset Taxes, is currently in effect that will remain in effect following the Closing, and no request for such waiver or extension is pending.
(h) There are no Encumbrances for material Taxes on any of the Purchased Assets other than Permitted Encumbrances.
(i) Buyer will not be held liable for any material unpaid Taxes that are or have become due on or prior to the Closing Date as a successor or transferee, by statute, contract or otherwise, as a result of the transfer of the Purchased Assets, Assumed Obligations, or Business pursuant to this Agreement.
(j) None of the Seller or any of its Affiliates has applied for any private letter ruling, request for administrative relief, request for technical advice, request for a change in method of accounting of the IRS or comparable rulings of any Governmental Entity, in each case, with respect to any Asset Taxes.
(k) None of the Seller or any of its Affiliates is party to any “closing agreement” as described in Section 7121 of the Code (or any similar provision of state, local or foreign Law) or any other agreement with any Governmental Entity with respect to Asset Taxes payable by Buyer in any period after the Closing.
(l) None of the Purchased Assets or the Business is subject to any Tax partnership agreement or is otherwise treated, or required to be treated, as held in an arrangement requiring a partnership income Tax Return to be filed under Subchapter K of Chapter 1 of Subtitle A of the
Code, and no transfer of any part of the Purchased Assets or the Business will be treated as a transfer of an interest or interests in any partnership for U.S. federal income tax purposes.
(m) Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 5.16 and, to the extent relating to Taxes, Section 5.17 and Section 5.18 are Seller’s sole and exclusive representations regarding income Taxes and income Tax Returns.
Section 5.17 Labor Matters. Except as set forth on Schedule 5.17:
(a) Since January 1, 2023, Seller has not received written notice that any representation petition respecting the Business Employees has been filed with the National Labor Relations Board; and (i) there has not been any labor strike, slowdown, work stoppage, or lockout actually pending or threatened in writing (or to Seller’s Knowledge, threatened orally) involving any Business Employees.
(b) Since January 1, 2023, (i) Seller has not been, and is currently not a, party to, or bound by, any Collective Bargaining Agreement with respect to any Business Employees; (ii) no Collective Bargaining Agreement has been negotiated by Seller or any Affiliate thereof with respect to the Business Employees and no such agreement is currently being negotiated; and (iii) no Business Employees are represented by a labor union, labor organization, works council or employee representative.
(c) Since January 1, 2023, Seller has complied in all material respects with all applicable Laws which relate to employment, including all Laws which relate to wages, hours, wage payment, employment record keeping, discrimination in employment, equal employment opportunity, classification of workers as exempt and non-exempt or as employees versus independent contractors, equal pay, immigration (including applicable I-9 Requirements of Law), leaves, reasonable accommodations, occupational safety and health, confidentiality, labor relations and collective bargaining, and are not liable for any arrears of wages or any Taxes or penalties for failure to comply with any of the foregoing. Except as would not be expected to result in material Liability to the Business, there is no pending or threatened in writing, (or to Seller’s Knowledge, threatened orally) claim or investigation in respect of any such Laws (including any employment discrimination charge or employment-related multi-claimant or class actions claims).
(d) In the ninety (90) days prior to the date hereof, Seller has complied with the WARN Act with respect to any work location where any Person employed by Seller or any of its Affiliates who performs services for the Business is employed.
(e) Except as would not be expected to result in material Liability to the Business, Seller and each of its Affiliates has timely paid in full (or adequately accrued for such amounts) to all of the Business Employees, independent contractors who provide services for the Business, and former employees and independent contractors who have provided services for the Business since January 1, 2023, all compensation, including wages, salaries, commissions, bonuses, guaranteed payments, and benefits due and payable as of the date of the Agreement.
Section 5.18 Employee Benefits.
(a) Schedule 5.18(a) sets forth an accurate and complete list of each material employee benefit plan (as such term is defined in Section 3(3) of ERISA, whether or not subject to ERISA) and each other material plan, program, policy, agreement, or arrangement providing compensation or benefits to Business Employees, in each case, that is sponsored, maintained by, contributed to, or required to be contributed to by Seller or any of its Affiliates (or to which Seller or an Affiliate is a party or has, or could reasonably be expected to have, any Liability) (without reference to any materiality qualifier, each a “Benefit Plan”).
(b) With respect to each material Benefit Plan, Seller has made available to Buyer true and complete copies of each of the following documents, to the extent appliable: (i) each plan document governing such Benefit Plan (including all amendments thereto) or, in the case of any unwritten Benefit Plan, a written summary of the material terms thereof; (ii) the most recent summary plan description, together with each summary of material modifications, if required under ERISA, with respect to such Benefit Plan; (iii) the most recently filed annual report on the Internal Revenue Service Form 5500 with respect to such Benefit Plan; and (iv) the most recent Internal Revenue Service determination, opinion, or advisory letter.
(c) Except as set forth on Schedule 5.18(c):
(i) Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a determination (or is entitled to rely on an opinion or advisory letter) from the Internal Revenue Service that such Benefit Plan is so qualified and, to Seller’s Knowledge, each such Benefit Plan is so qualified. To Seller’s Knowledge, nothing has occurred that would be reasonably expected to adversely affect the qualified status of any such Benefit Plan.
(ii) Except as would not reasonably be expected to result in a material Liability to Buyer, (A) each Benefit Plan has been maintained, funded, and administered in compliance with its terms and in compliance with all applicable Laws, including ERISA and the Code; (B) there are no pending or threatened in writing (or to Seller’s Knowledge, threatened orally) Claims, audits or investigations relating to or by or on behalf of any of the Benefit Plans, by any Business Employee or any beneficiary thereof covered under any such Benefit Plan or otherwise involving any such Benefit Plan (other than routine claims for benefits); (C) all contributions and distributions required to be made with respect to any Benefit Plan on or prior to the date hereof have been timely made; (D) all reports, returns, notices and similar documents required to be filed with any Governmental Entity or distributed to any Benefit Plan participant have been timely filed or distributed; and (E) there has been no breach of fiduciary duty within the meaning of Part 4 of Subtitle B of Title I of ERISA with respect to any Benefit Plan.
(iii) Except as will not, or would not reasonably be expected to, result in any Liability to Buyer or any of its Affiliates, no Benefit Plan is, and neither Seller nor any of its Affiliates has ever sponsored, contributed to (or had an obligation to contribute to) or has, or could have, any Liability with respect to (A) a “multiemployer plan” within the meaning of Section 3(37) or Section 4001(a)(3) of ERISA (a “Multiemployer Plan”); (B) a multiple employer plan that is subject to Section 413(c) of the Code or Sections 4063 or 4064 of ERISA; (C) a “multiple employer welfare arrangement” within the meaning of
Section 3(40) of ERISA; or (D) a plan subject to Title IV of ERISA or the minimum funding standards of Section 302 of ERISA or Section 412 of the Code.
(iv) There does not now exist, nor do any circumstances exist that could reasonably be expected to result in, any Controlled Group Liability of Seller or any of its Affiliates that would be a Liability of Buyer or any of its Affiliates following the Closing.
(d) Except as set forth on Schedule 5.18(d), the consummation of the Transactions will not (i) accelerate the vesting or the time of payment, or increase the amount, of any compensation or benefits of any Business Employee, (ii) result in the payment or provision of benefits to, or cancellation of indebtedness of, any Business Employee, or (iii) result in the payment of any “excess parachute payment” (within the meaning of Section 280G(b) of the Code) to any Business Employee.
(e) Except as would not reasonably be expected to result in a material Liability to any Business Employee, each Benefit Plan that is subject to Section 409A of the Code has been established, administered, operated, and maintained in all respects according to the requirements of Section 409A of the Code.
Section 5.19 Information Technology and Data Security.
(a) To Seller’s Knowledge, the Transferred IT Assets are functioning properly (in the case of hardware, ordinary wear and tear excepted) in all material respects as necessary for the conduct of the Business as currently conducted. Seller has implemented reasonable industry standard methods to seek to minimize the possibilities of the introduction of viruses, trojan horses, backdoors or other malicious code into the Transferred IT Assets and, to Seller’s Knowledge, the Transferred IT Assets do not contain any such malicious code or defect, in each case, except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business. Except for (i) the services to be provided in the Transition Services Agreement and (ii) as set forth in Schedule 5.7, and subject to the receipt of the necessary consents to transfer any Transferred Contracts, any Seller Data included in the Purchased Assets will continue to be available for Processing by Buyer following the Closing on substantially the same terms and conditions as existed immediately before the Closing in all material respects (subject to any related services provided under the Transition Services Agreement).
(b) Since January 1, 2023, Seller and, with respect to the Processing of Seller Data, to Seller’s Knowledge, its Data Processors have, with respect to the Business, complied in all material respects with all applicable Laws and Contracts relating to privacy, data security and the processing of personal information collected, used or held for use by the Business. To Seller’s Knowledge, Seller has in place Contracts with all Data Processors to ensure that the Data Processor maintains the confidentiality and security of the Seller Data and materially complies at all times with applicable privacy and data security Laws, and such Contracts include Processing provisions as required under such Laws. Seller has, with respect to the Business, taken commercially reasonable measures designed to ensure that personal information is protected against unauthorized access, use, or disclosure.
(c) To Seller’s Knowledge, since January 1, 2023, Seller and its Data Processors have not suffered any material security breach and have not been and are not required to report any security breach to any Governmental Entity or any affected individual, in either case in connection with the Business.
Section 5.20 Insurance. Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, (a) all insurance policies of Seller providing coverage for the Purchased Assets, Assumed Obligations and the Business (other than any such policies comprising a Benefit Plan) are in full force and effect, (b) Seller is not in breach of or default under, and, to Seller’s Knowledge, no event has occurred which, with notice or the lapse of time or both, would constitute such a breach of or default under, or permit termination or modification under, any such policies, (c) all premiums due with respect to each such policy have been timely paid, (d) Seller has not received any written notice of cancellation of, premium increases with respect to, or alteration of coverage under, any such policies (other than in connection with renewals in the Ordinary Course of Business) and (e) the Seller and its Affiliates maintain insurance coverage in respect of the Business in such amounts and against such risks as are reasonable and adequate in Seller’s reasonable judgement. True, correct and complete copies of all such insurance policies that the Buyer has requested Seller to provide have been made available to Buyer.
Section 5.21 Real Property.
(a) Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, the Seller or an Affiliate has good, valid and marketable indefeasible fee simple title to each Owned Real Property free and clear of Encumbrances, except for Permitted Encumbrances. True and complete copies of all deeds and other instruments (as recorded), as applicable, by which the Seller or an Affiliate acquired such Owned Real Property in possession or control of the Seller or an Affiliate and relating to the Owned Real Property have been made available to the Buyer and/or its agents. No Owned Real Property is subject to any sales contract, purchase option, right of first refusal, right of first offer, similar agreement or other contractual obligation to sell, assign or dispose of any of the Owned Real Property or any portion thereof or interest therein to any Person. The Seller or an Affiliate is in possession of the Owned Real Property and has not leased, licensed, sublicensed or otherwise granted the right to use, operate or occupy any parcel or any portion of any parcel of any Owned Real Property to any other Person. Except as set forth on Schedule 5.21(a), neither the Seller nor any Affiliate is a party to any Contract or option to purchase any real property or interest therein that has not closed as of the Closing Date.
(b) True and correct copies of all Leases, together with all amendments, extensions, renewals and guaranties with respect thereto, have been provided or otherwise made available to Buyer and/or its agents in all material respects. Seller or an Affiliate has a valid, existing, binding and enforceable leasehold estate in, and enjoys peaceful and undisturbed possession of, all the Leased Real Property pursuant to the Leases. Each Lease is in full force and effect, legal, valid and binding on the parties thereto, and enforceable in accordance with its terms. Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, there are no subleases, licenses or similar agreements granting to any Person other than the Seller or any of its Affiliates the right to use or occupy any Leased Real Property. As of
the date hereof, neither the Seller nor any of its Affiliates has received any written or oral notice from any counterparty of any Lease of, nor does the Seller or any of its Affiliates have Knowledge of the existence of, any material default, event, condition or circumstance that, with or without notice, lapse of time, or both, would constitute a material default under any of the Leases, or would permit termination, cancelation, material modification or acceleration of rent under such Lease.
(c) Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, the Real Property constitutes all of the real property used and occupied by the Seller and its Affiliates Primarily Related to the Business as currently conducted. All Real Property is in compliance with applicable Laws in all material respects. Neither the Seller nor any Affiliate has received any written notice (or to Seller’s Knowledge, any oral notice), affecting any of the Real Property, of any pending or threatened condemnation, eminent domain, taking, transfer in lieu thereof, rezoning or other similar proceedings by any Governmental Entity, or any zoning, building code or other moratorium legal proceeding to impose any special assessment.
(d) To Seller’s Knowledge, all buildings, structures, foundations, improvements, fixtures, buildings systems and equipment, and all components thereof, located on the Real Property are in good operating condition and repair (normal wear and tear excepted) in all material respects and are fit and sufficient for use and no significant repairs thereof are required for which Seller or any of its Subsidiaries would have an obligation under applicable Law to undertake.
(e) Except as would not, individually or in the aggregate, reasonably be expected to be material and adverse to the Business, each Easement, or memorandum of such Easement (or similar document) with respect to such Easement, has been filed for record in the real property records of the applicable county or counties in which the real property subject to each Easement is situated to the extent the same is required to be filed for record in the Ordinary Course of Business and reasonably industry standard methods. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all material portions of the Seller’s pipelines and appurtenant facilities are located on land that is: (1) Real Property, or (2) an Easement. The Seller has adequate ingress and egress rights to access each Easement for all purposes related to the purposes of such Easement. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) no Easement has been relocated or terminated, (ii) there are no material defaults, and no event has occurred or circumstance exists which, with or without notice, lapse of time, or both, would constitute such a material breach or default or permit the termination, modification or relocation of such Easement, and (iii) all Easements in place permit Seller to operate its pipelines and appurtenant facilities in the manner Seller’s Business is currently conducted in all material respects.
Section 5.22 Brokers and Finders. Seller and its Affiliates have not incurred, and will not incur, any Liability for a finder’s fee, brokerage commission, or similar payment relating to the Transactions for which Buyer or any of its Affiliates will have any responsibility.
Section 5.23 Exclusivity of Representations and Warranties. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS ARTICLE V
AND THE CERTIFICATE DELIVERED BY SELLER PURSUANT TO SECTION 4.2(a) (IN EACH CASE, AS QUALIFIED BY THE SELLER DISCLOSURE SCHEDULES), NEITHER SELLER NOR ANY OF ITS AFFILIATES, NOR ANY OF ITS OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, EQUITYHOLDERS, PARTNERS, MEMBERS, OR OTHER REPRESENTATIVES HAS MADE, OR IS MAKING, ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER, ORAL OR WRITTEN, EXPRESS OR IMPLIED, RELATING TO THE PURCHASED ASSETS TO BUYER OR ANY OF ITS AFFILIATES OR ITS OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, EQUITYHOLDERS, PARTNERS, MEMBERS, OR OTHER REPRESENTATIVES, AND SELLER, ON BEHALF OF ITSELF, ITS AFFILIATES OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, EQUITYHOLDERS, PARTNERS, MEMBERS, OR OTHER REPRESENTATIVES, AND SUCH PARTIES HEREBY DISCLAIM ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES AND ALL LIABILITY AND RESPONSIBILITY FOR ALL PROJECTIONS, FORECASTS, ESTIMATES, FINANCIAL STATEMENTS, FINANCIAL INFORMATION, APPRAISALS, STATEMENTS, PROMISES, ADVICE, DATA, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING, INCLUDING ELECTRONICALLY) TO BUYER OR ANY OF BUYER’S AFFILIATES OR REPRESENTATIVES, INCLUDING OMISSIONS THEREFROM, AND NEITHER SELLER, ITS AFFILIATES, NOR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, EQUITYHOLDERS, PARTNERS, MEMBERS, OR OTHER REPRESENTATIVES SHALL BE LIABLE IN RESPECT OF THE ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED TO BUYER OR ANY OF ITS AFFILIATES OR ITS OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, EQUITYHOLDERS, PARTNERS, MEMBERS, OR OTHER REPRESENTATIVES OTHER THAN THE EXPRESS REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS ARTICLE V AND THE CERTIFICATE DELIVERED BY SELLER PURSUANT TO SECTION 4.2(a) (IN EACH CASE, AS QUALIFIED BY THE SELLER DISCLOSURE SCHEDULES).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the Effective Date and as of the Closing Date (unless such representation and warranty is expressly made as of a specific date, in which case Buyer represents and warrants to Seller as of such date) as follows:
Section 6.1 Organization and Good Standing. Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Missouri and has all requisite organizational power and authority to own, lease, and operate its assets and to carry on its business as presently conducted. As of the Closing, Buyer will be duly qualified and licensed to do business as a foreign entity in good standing in each jurisdiction in which the conduct of the Business, or the ownership or operation of any Purchased Assets, by Buyer makes such qualification and licensing necessary, except, in each case, for any such failures that would not, individually or in the aggregate, have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or consummate the Transactions on a timely basis.
Section 6.2 Authority and Enforceability. Buyer has all requisite organizational power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder. The execution and delivery by Buyer of this Agreement and the Ancillary Agreements to which it is a party, the performance by Buyer of this Agreement and the Ancillary Agreements, and the consummation by Buyer of the Transactions have been duly and validly authorized by all necessary organizational action on Buyer’s part. This Agreement has been, and each Ancillary Agreement to which it is a party will be, duly and validly executed and delivered by Buyer, and constitutes or will constitute, assuming the due authorization, execution and delivery by the other parties thereto, a valid and binding obligation of Buyer, enforceable against Buyer in accordance with their respective terms, except to the extent that enforceability may be limited by the Remedy Exceptions.
Section 6.3 No Conflicts. Except as set forth on Schedule 6.3, assuming: (i) the Required Regulatory Approvals are sought and obtained in accordance with this Agreement and (ii) the receipt of all Listed Consents, none of the execution, delivery, and performance by Buyer of this Agreement or any Ancillary Agreement, nor the consummation of the Transactions, do or will:
(a) violate or conflict with any of Buyer’s Governing Documents in any material respect;
(b) violate any Law or Order applicable to Buyer or any of its property, except for any such violations of applicable Law or Order that would not have a material and adverse effect on the ability of Buyer to perform its obligations under this Agreement or consummate the Transactions, or that arise as a result of any facts or circumstances relating to Seller or any of its Affiliates;
(c) other than in connection with the Required Regulatory Approvals, require any declaration, filing, or registration by Buyer or any of its Affiliates with, or notice by Buyer or any of its Affiliates to, or authorization, consent, or approval of, any Governmental Entity, except for any such declarations, filings, registrations, notices, authorizations, consents, or approvals, the failure of which to obtain or make would not have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or consummate the Transactions; or
(d) other than in connection with the Required Regulatory Approvals, violate, conflict with, result in a breach of, require any consent or approval of, or (with or without notice or lapse of time or both) constitute a default, give rise to any right of modification, acceleration, payment, cancellation, or termination under or pursuant to any loan agreement, note, bond, mortgage, indenture, or other material instrument or agreement to which Buyer or its Affiliates is a party or by which Buyer or any of its Affiliates or any of their assets may be bound, except for any such violations, conflicts, breaches, consents, approvals, defaults, or other occurrences that (i) would not have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or consummate the Transactions on a timely basis or (ii) arise as a result of any facts or circumstances relating to Seller or its Affiliates.
Section 6.4 Financial Capability.
(a) Assuming the conditions set forth in Section 8.1 and Section 8.2 are satisfied or waived at or prior to Closing, Buyer will have available to it at the Closing funds in connection with the Debt Financing in an aggregate amount, when added with unrestricted cash or amounts from any other available sources of funding, that will enable Buyer to pay the Purchase Price and any fees, costs, and expenses incurred by Buyer in connection with the Transactions and to perform its other obligations hereunder (the “Buyer Required Amount”). As of the Effective Date, Buyer does not know of any circumstance or condition that would or would reasonably be expected to prevent or delay the availability of such funds or otherwise impair Buyer’s ability to consummate the Transaction and pay the Buyer Required Amount at the Closing.
(b) Buyer has delivered to Seller true, correct, complete and fully executed copies of executed commitment letters, dated as of the date hereof, between Buyer and the Debt Financing Sources party thereto (including all exhibits, schedules, joinders and annexes related thereto, and the executed fee letters (the “Fee Letters”) associated therewith (provided that any Fee Letter may be redacted in a customary manner solely as to the fee amount, pricing caps, and other sensitive economic information; provided, further, that none of the redacted terms would or would reasonably be expected to (i) adversely affect or delay the availability of the Debt Financing or (ii) adversely affect the conditionality, availability, enforceability or aggregate principal amount of the Debt Financing or the ability to terminate the Debt Financing), as the same may be amended pursuant to Section 7.23, collectively, the “Debt Financing Commitment Letters”) pursuant to which the lender parties thereto have agreed, subject to the terms and conditions thereof, to provide or cause to be provided the debt financing in the amounts set forth therein (the “Debt Financing”) for the purpose of satisfying Buyer’s obligations under this Agreement, including to pay the Buyer Required Amounts.
(c) As of the Effective Date, the Debt Financing Commitment Letters and the terms of the Debt Financing have not been withdrawn (and no party thereto has indicated an intent to so withdraw), amended, restated or otherwise modified or waived, and the respective commitments contained therein have not been terminated, reduced, withdrawn, modified or rescinded in any respect, and to the Knowledge of Buyer, no such amendment, restatement, modification or waiver thereto is contemplated. As of the Effective Date, the Debt Financing Commitment Letters are in full force and effect and constitute the legal, valid and binding obligation of Buyer and, to the Knowledge of Buyer, the other parties thereto, enforceable against each party thereto in accordance with its terms (in each case, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, rehabilitation, liquidation, preferential transfer, moratorium and similar Laws now or hereafter affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at equity or law)).
(d) Buyer acknowledges and agrees that its obligation to consummate the Transactions contemplated by this Agreement are not subject to any conditions regarding Buyer’s or any other Person’s ability to obtain financing for the consummation of the Transactions.
(e) There are no side letters or other legally binding agreements, contracts, or arrangements, or understandings of any kind (written or oral) relating to the funding or investing, as applicable, of the full amount of the Debt Financing, other than as expressly set forth in the Debt Financing Commitment Letters. The Debt Financing is not subject to any conditions precedent other than those expressly set forth in each Debt Financing Commitment Letter.
(f) Buyer has fully paid all commitment fees and other fees required to be paid on or prior to the Effective Date in connection with the Debt Financing.
(g) As of the Effective Date, (i) no event has occurred which would constitute or would reasonably be expected to constitute a breach or default (or an event which with notice or lapse of time or both would constitute or would reasonably be expected to constitute a default) on the part of Buyer, or, to the Knowledge of Buyer, any other party to the Debt Financing Commitment Letters, under the Debt Financing Commitment Letters, and (ii) Buyer has no reason to believe that any of the conditions to the Debt Financing will not be satisfied on a timely basis (or that the full amount of the Debt Financing will not be available to Buyer) on or prior to the Closing Date. Buyer will fully pay when due (and has paid to the extent required to be paid prior to the Effective Date) any and all commitment and other fees, costs and expenses that are required to be paid pursuant to the Debt Financing Commitment Letters or otherwise in connection with the Debt Financing.
Section 6.5 Brokers and Finders. Buyer and its Affiliates have not incurred, and will not incur, any Liability for a finder’s fee, brokerage commission, or similar payment relating to the Transactions for which Seller or any of its Affiliates will have any responsibility.
Section 6.6 Legal Proceedings. There are no Claims pending or, to Buyer’s Knowledge, threatened in writing, which, individually or in the aggregate, would reasonably be expected to materially impair or delay the ability of Buyer to effect the consummation of the Transactions or otherwise prevent Buyer from performing in all material respects their obligations under this Agreement or any of the Ancillary Agreements. To Buyer’s Knowledge, there is no fact relating to Buyer’s or any of its Affiliates’ respective businesses, operations, assets, financial condition, or legal status, including any officer’s, director’s, or current employee’s status, that would reasonably be expected to impair or delay the ability of the Parties to promptly obtain the Required Regulatory Approvals.
Section 6.7 Regulatory Status. Except as set forth on Schedule 6.7, neither Buyer nor any of its Affiliates (a) operate natural gas pipeline or distribution facilities subject to state public utility requirements or (b) are otherwise subject to the regulatory authority of the TPUC.
Section 6.8 RWI Policy. As soon as reasonably practicable following the Effective Date, Buyer shall have conditionally bound a buyer-side representation and warranty insurance policy(ies) (the “RWI Policy”). The RWI Policy provides coverage on reasonable terms for the benefit of Buyer or its designee as the named insured for breaches of representations and warranties of Seller set forth in Article V that result in any Losses to Buyer. Prior to inception of the RWI Policy, Buyer shall have provided Seller with a reasonable opportunity to review and comment on the draft RWI Policy.
Section 6.9 Solvency. As of (a) the Effective Date and (b) as of the Closing and immediately after consummating the Transactions (including the Debt Financing), Buyer and its consolidated Subsidiaries, taken as a whole, will not: (i) be insolvent (either because their financial condition is such that the sum of their debts and Liabilities is greater than the fair value of their assets or because the present fair salable value of its assets will be less than the amount required to pay their probable Liability on their debts and Liabilities as they become absolute and matured); (ii) have unreasonably small capital with which to engage in their businesses; or (iii) have incurred, or plan to incur, debts beyond their ability to repay such debts as they become absolute and matured. No transfer of property is being made by Buyer and no obligation is being incurred by Buyer in connection with the Transactions (including the Debt Financing) with the intent to hinder, delay, or defraud either present or future creditors of Buyer or its Subsidiaries.
Section 6.10 Investigation by Buyer. Buyer has performed all due diligence that it has deemed necessary to perform concerning the Business, the Purchased Assets, and the Assumed Obligations in connection with its decision to enter into this Agreement and the Ancillary Agreements and to consummate the Transactions, and acknowledges that Buyer, its Affiliates, and its Representatives have been provided access to the personnel, properties, premises, and records of Seller for such purpose. In entering into this Agreement, Buyer has relied solely upon its own investigation and analysis and the representations and warranties of Seller set forth in Article V and any Ancillary Agreement, and Buyer:
(a) acknowledges that none of Seller or any of its Affiliates or Representatives makes or has made any representation or warranty, of any kind or nature whatsoever, either express or implied, oral or written, as to the accuracy or completeness of any of the information provided or made available to Buyer or any of its Affiliates or Representatives, except that the foregoing limitations shall not apply with respect to Seller to the specific representations and warranties set forth in Article V and in the certificate delivered by Seller pursuant to Section 4.2(a) or any Ancillary Agreement, but always subject to the limitations and restrictions contained herein;
(b) agrees, to the fullest extent permitted by applicable Law, that none of Seller or any of its Affiliates or Representatives shall have any Liability whatsoever to Buyer on any basis based upon any information provided or made available, or statements made, whether oral or written, to Buyer or any of its Affiliates or Representatives (including any documents, financial statements, estimates, budgets, forecasts, including forecasted natural gas demand, information, projected information, Third Party reports, such as the quality of earnings report or the market and regulatory vendor due diligence report, or other material), in any “data rooms,” teaser, confidential information memorandum, due diligence discussions, management presentations, or otherwise in connection with the Transactions except with respect to the representations and warranties set forth in Article V of this Agreement and in the certificate delivered by Seller pursuant to Section 4.2(a) and the Ancillary Agreements; provided, that nothing in this Section 6.10 shall in any way be deemed to limit or modify any rights of Buyer or its Affiliates under the RWI Policy or to the extent arising from or related to Fraud or inhibit Buyer from obtaining any remedies Buyer may have against any insurer under the RWI Policy or to the extent arising from or related to Fraud;
(c) acknowledges that (i) there are inherent uncertainties in any estimates, budgets, forecasts, including forecasted natural gas demand, Third Party reports, projected information
estimates, or similar information, and (ii) that Buyer takes full responsibility for making its own evaluation of the adequacy and accuracy of any such estimates, budgets, forecasts, Third Party reports, projected information estimates, or similar information (including the reasonableness of the assumptions underlying any such estimates, budgets, forecasts, projected information estimates, or similar information); and
(d) acknowledges that, except as expressly set forth in Article V and in the certificate delivered by Seller pursuant to Section 4.2(a) and the Ancillary Agreements, as qualified by the Seller Disclosure Schedules, or in the Ancillary Agreements there are no representations or warranties of any kind, express or implied, oral or written, with respect to the Business, the Purchased Assets, or the Assumed Obligations.
ARTICLE VII
COVENANTS OF THE PARTIES
Section 7.1 Conduct of the Business.
(a) From the Effective Date and prior to the earlier to occur of the Closing Date and the date that this Agreement is validly terminated in accordance with Article IX (the “Interim Period”), except: (i) as expressly required or expressly permitted by this Agreement (including as described on Schedule 7.1 and the other matters expressly contemplated by the other Schedules and Exhibits hereto) or any of the other Ancillary Agreements or as required by applicable Law (including any Pandemic Measures and any action taken, or omitted to be taken, by Seller or its Affiliates pursuant thereto); (ii) in connection with necessary repairs due to unanticipated breakdown or casualty, or other actions in accordance with Good Utility Practices in response to a business emergency or other unforeseen operational matters (in which case, Seller shall provide Buyer with written notice of such repairs or other actions reasonably in advance of taking such actions to the extent reasonably practicable under the circumstances, or otherwise reasonably promptly thereafter); or (iii) as otherwise approved in advance in writing by Buyer (which approval shall not be unreasonably withheld, conditioned or delayed), Seller shall, and shall cause its Affiliates to, use commercially reasonable efforts to operate the Purchased Assets and the Business in the Ordinary Course of Business.
(b) Without limiting the generality of the foregoing, during the Interim Period, except (x) as otherwise expressly contemplated by this Agreement (including as described on Schedule 7.1 and the other matters expressly contemplated by the other Schedules and Exhibits hereto) or any of the other Ancillary Agreements (y) as required by applicable Law (including any Pandemic Measures and any action taken, or omitted to be taken, by Seller or its Affiliates pursuant thereto) or (z) as otherwise approved in advance in writing by Buyer (which approval shall not be unreasonably withheld, conditioned, or delayed), Seller shall not (with respect to the Business, Purchased Assets and Assumed Obligations), and shall cause its Affiliates, not to, directly or indirectly:
(i) sell, lease (as lessor), sublease, license, assign, mortgage, pledge, transfer, encumber or otherwise dispose of any of the Purchased Assets (other than (x) Real Property, which is addressed in Section 7.1(b)(viii) and (y) Business Intellectual Property, which is addressed in Section 7.1(b)(xii)), other than: (A) the use, disposal or
sale of Inventory in the Ordinary Course of Business; (B) the disposal of Purchased Assets having an aggregate value of less than $5,000,000; or (C) the disposal of obsolete, defective, or surplus Purchased Assets that are no longer useful in the Business;
(ii) terminate, assign, relinquish or permit to lapse (other than in accordance with the terms of such Material Contract or Transferable Permit) any material rights under, grant any material waiver or material consent under, or amend in any material respect, any of the Material Contracts or Transferable Permits (or any contract or Permit which, if in effect as of the date hereof, would be a Material Contract or a Transferable Permit) except for: (A) the expiration of any Material Contract or Transferable Permit in accordance with its terms or extensions that become automatically effective unless a party thereto provides prior notice of an intention not to renew or extend and (B) amendments in the Ordinary Course of Business, including to extend the term of any Material Contract or Transferable Permit;
(iii) enter into any Transferred Contract that would constitute a Material Contract if in existence as of the Effective Date (other than renewals of any Material Contract in the Ordinary Course of Business without any material changes to the terms thereof) unless such Transferred Contract is entered into in the Ordinary Course of Business and may be terminated by Buyer, without penalty or cost on no more than ninety (90) days prior written notice following the Closing;
(iv) increase or decrease the number of Business Employees, or transfer employees from or to the positions of employment in which Business Employees are employed, except for any transfers, increases or decreases (in the aggregate) that do not impact more than 10% of the total number of Business Employees listed on Schedule 7.11(a) as of the date hereof and that (A) are made in the Ordinary Course of Business to fill positions due to turnover in respect of any individual whose annual base compensation does not exceed $200,000 or (B) result from a termination of a Business Employee’s employment for cause as determined by Seller in its good faith discretion;
(v) grant any increase in the compensation of, or grant any bonus or retention or severance pay to, any Business Employee, except: (A) for increases in compensation and bonuses in the Ordinary Course of Business; (B) for bonuses, including long-term incentive awards, and retention and severance pay that will be fully paid by Seller and result in no Liability to Buyer or its Affiliates; (C) for any acceleration of the vesting or payment of any cash incentive, equity or equity-based compensation that will be paid by Seller and result in no Liability to Buyer or its Affiliates; and (D) as required by a Collective Bargaining Agreement;
(vi) establish, adopt, enter into, terminate or amend in any material respect any Benefit Plan other than as required by applicable Law, unless any such amendment applies in substantially the same manner to Business Employees and all other employees similarly situated of Seller and its Affiliates;
(vii) commence, waive, release, assign, settle or compromise any pending or threatened action, suit, or proceeding or any claim or claims, that (A) would reasonably
be expected to result in injunctive or other equitable relief that would be material to and binding upon the Business or, following the Closing, the Buyer or (B) in the aggregate, would reasonably be expected to result in a monetary liability of greater than $7,500,000;
(viii) enter into any Contract for the purchase, sale or lease of real property Primarily Related to the Business or amend, terminate, or grant any waiver or consent with respect to any Real Property, except (A) for any leases, subleases, licenses (as tenant, subtenant or licensee) of real property with an annual base rent of less than $5,000,000 in aggregate or renewals or extensions of existing Leases in accordance with the terms thereof in the Ordinary Course of Business, (B) for any terminations that become automatically effective unless a party thereto provides prior notice of an intention not to renew or extend, (C) with respect to routine service, property management, asset management or similar services or equipment leasing contracts relating to the Real Property, in each case, in the Ordinary Course of Business or (D) sales, assignments, transfers, conveyances or disposals of any Real Property with a fair market value of less than $5,000,000 in the aggregate;
(ix) fail to make capital expenditures in accordance with the capital plan set forth on Schedule 7.1(b)(ix) (the “Capital Expenditures Budget”), subject to a 15% aggregate variance in any calendar year;
(x) enter into any Contract with any union or labor organization (including any Collective Bargaining Agreement if entered into by Seller with respect to any Business Employees) or amend or modify any Collective Bargaining Agreements in any material respect, in each case, except as required by a Collective Bargaining Agreement or an arbitration decision or effects bargaining in connection with the Transactions (other than, with respect to effects bargaining, any Contract that results in material Liability to the Business following the Closing without prior consultation with Buyer);
(xi) (A) make any material Tax election outside the ordinary course of business and not required by applicable Law that would result in an increased Tax Liability of Buyer or (B) settle or compromise any material Tax Liability that would constitute an Assumed Obligation; provided, however, that nothing in this Section 7.1(b)(xi) shall prevent Seller from taking any action to the extent such action (1) affects solely the assets or business of Seller other than the Purchased Assets or the Business or (2) relates to income Taxes or income Tax Returns of Seller or any of its Affiliates;
(xii) sell, assign, transfer, license, dispose of, encumber, cancel, abandon or allow to lapse any material Business Intellectual Property, other than (A) non-exclusive licenses granted in the Ordinary Course of Business, or (B) expiration of Business Intellectual Property in accordance with the applicable statutory term; or
(xiii) agree or commit to take any action which would be a violation of the restrictions set forth in this Section 7.1(b).
Nothing in the foregoing shall prevent or prohibit Seller or its Affiliates from making necessary repairs due to unanticipated breakdown or casualty, or taking other actions in accordance with
Good Utility Practice in response to a business emergency or other unforeseen operational matters so long as such action, and the basis therefor, is disclosed to Buyer in writing in advance to the extent reasonably practicable under the circumstances, and otherwise promptly thereafter. Any approval from Buyer for matters addressed in this Section 7.1 may be granted in writing (including through the minutes of a meeting of the Transition Committee) by a Buyer designee on the Transition Committee (including at a meeting of the Transition Committee or via email).
Section 7.2 Access.
(a) Subject to confidentiality obligations that may be applicable to information furnished to Seller or any of its Subsidiaries by Third Parties that may be in Seller’s or any of its Subsidiaries’ possession from time to time, during the Interim Period, to the extent permitted by applicable Law, including in accordance with the HSR Act, Seller shall, and shall cause its Affiliates to, during ordinary business hours and upon reasonable notice: (i) give Buyer and any of its Affiliates and its and their respective Representatives reasonable access to the physical sites, properties, facilities, financial materials, books and records of Seller and its Affiliates to the extent related to the Business, the Purchased Assets and the Assumed Obligations; (ii) permit Buyer, its Affiliates and its and their respective Representatives to make such reasonable inspections thereof as Buyer may reasonably request; (iii) furnish Buyer, its Affiliates and its and their respective Representatives with (or provide access to) such financial and operating data and other information with respect to the Business, Purchased Assets and Assumed Obligations (and any properties, facilities, books and records related thereto) as Buyer may from time to time reasonably request; and (iv) furnish Buyer, its Affiliates and its and their respective Representatives with (or provide access to) a copy of each material report, schedule, or other Document (and any properties, facilities, financial materials, books and records related thereto) (which may be reasonably redacted by Seller to the extent not related to the Business) filed or submitted by Seller with, or received by Seller from, any Governmental Entity, in each case: (A) to comply with reporting, disclosure, filing, or other requirements imposed on Buyer or its Affiliates (including under applicable securities Laws) or for other bona fide business reasons; (B) to satisfy audit, accounting, claims, regulatory, litigation, subpoena, or other similar requirements; (C) to comply with the obligations of Buyer under this Agreement or the Ancillary Agreements or (D) to reasonably aid Buyer and its Affiliates with respect to the transition of the Business to Buyer from and after the Closing; provided, however, that any such access will be conducted at Buyer’s risk and expense, at a reasonable time, under the supervision of Seller’s or its Affiliates’ personnel; and (w) any such investigation will be conducted in such a manner as not to interfere unreasonably with the operation of the Business or any other Person, including the business of Seller and its Affiliates; (x) none of Seller or its Affiliates shall be required to take any action which would constitute or result in a waiver of any of the foregoing to the extent subject to the attorney-client privilege, attorney work product privilege, or other applicable legal privilege of Seller or any of its Affiliates or Representatives; (y) Seller shall not be required to supply any information relating to the sale process for the Business and information and analysis (including financial analysis) relating thereto; and (z) none of Seller or its Affiliates shall be required to supply Buyer with any information which Seller or its Affiliate is under a legal obligation not to supply (provided, that, in the case of this clause (z), to the extent reasonably practicable, Seller shall provide Buyer with a reasonably detailed summary of such withheld information in a manner which would not violate such legal obligation not to supply); provided, further, that Buyer’s access to the Real Property may be limited to the extent Seller reasonably
determines that (A) any such restrictions are required pursuant to any Contracts or instruments related to or governing the Real Property or (B) any such access would jeopardize the health and safety of any of its employees or other Representatives (including in light of any Pandemic). Notwithstanding the foregoing, Seller may, upon the advice of outside counsel, which may be internal counsel, reasonably designate any competitively sensitive material provided to Buyer under this Section 7.2 as “outside counsel only.” Such materials and the information contained therein shall be given only to Buyer’s outside counsel, and Buyer shall cause such outside counsel not to disclose such materials or information to Buyer’s Affiliate or employees, officers, directors, or other Representatives of Buyer, unless express written permission is obtained in advance from the source of the materials. Notwithstanding anything herein to the contrary, no such access, disclosure, or copying shall be permitted for a purpose relating to a dispute or potential dispute between Seller and Buyer or any of its respective Affiliates. All requests for access and information pursuant to this Section 7.2 shall be made to such Representatives of Seller as Seller shall designate in writing, who shall be solely responsible for coordinating all such requests and all access permitted hereunder.
(b) Notwithstanding anything in this Section 7.2 to the contrary: (i) Buyer will not have access to human resources, personnel, and medical records if such access could, in Seller’s opinion (in its sole discretion), subject Seller to risk of Liability or otherwise violate applicable Law, including the Health Insurance Portability and Accountability Act of 1996; (ii) Buyer will not have access to any information to the extent relating to any Tax Return of Seller or any of its Affiliates that does not constitute a Document; and (iii) any investigation of environmental matters by or on behalf of Buyer will be limited to visual inspections, site visits, records reviews, and employee interviews commonly included in the scope of “Phase 1” level environmental site assessments and environmental compliance reviews, and Buyer will not have the right to perform or conduct any sampling or testing at, in, on, or underneath any of the Purchased Assets without the express written consent of Seller (which consent can be withheld, conditioned or delayed in Seller’s sole discretion). Buyer shall abide by Seller’s safety rules, regulations, and policies (including the execution and delivery of any documentation or paperwork (e.g., Liability releases)) with respect to Buyer’s access to any of the Real Property to the extent disclosed to Buyer in advance or at the time of such access. Seller shall have the right to have a Representative present at all times during any such inspections, interviews, and examinations. Buyer shall hold in confidence all such information on the terms and subject to the conditions contained in the Confidentiality Agreement. No investigation by Buyer or other information received by Buyer shall operate as a waiver or otherwise affect any representation, warranty, covenant, or agreement given or made by Seller in this Agreement.
(c) (i) BUYER, ITS AFFILIATES, AND ITS AND THEIR RESPECTIVE REPRESENTATIVES, AS APPLICABLE, WAIVE AND RELEASE ALL DAMAGES AND LOSSES AGAINST THE SELLER INDEMNIFIED PARTIES FROM AND (ii) BUYER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE SELLER INDEMNIFIED PARTIES FROM AND AGAINST ALL DAMAGES AND LOSSES RESULTING FROM OR RELATING TO THE ACTIVITIES OF BUYER, ITS AFFILIATES, AND ITS AND THEIR RESPECTIVE REPRESENTATIVES UNDER THIS SECTION 7.2, EVEN IF SUCH LOSSES ARISE OUT OF OR RESULT FROM, SOLELY OR IN PART, THE SOLE, ACTIVE, PASSIVE, CONCURRENT, OR COMPARATIVE NEGLIGENCE (INCLUDING GROSS NEGLIGENCE), WILLFUL MISCONDUCT, STRICT LIABILITY, OR OTHER FAULT OR
VIOLATION OF LAW BY THE SELLER INDEMNIFIED PARTIES. The foregoing indemnification obligation shall survive the Closing or the termination of this Agreement.
Section 7.3 Access to Books and Records; Cooperation. Each Party and its Affiliates shall retain the books, records, documents, instruments, accounts, correspondence, writings, evidences of title, and other papers relating to the Business, the Purchased Assets, including the Purchased Documents in its possession or control, and the Assumed Obligations, in each case, as of the Closing Date, for a period of six years following the Closing Date or such longer period as may be required by applicable Law or any applicable Order, and shall cause its Affiliates to provide the other Party and its Affiliates and Representatives reasonable access during regular business hours to such books and records (including the right to receive hard or electronic copies thereof) and to the employees of such Party as reasonably requested by the other Party or its Affiliates and will be conducted in such a manner as not to unreasonably interfere with the operation of the business of any Party or its respective Affiliates, including the Business after the Closing in the case of Buyer; provided, that such access for either Party or its Affiliates and Representatives will not include any records (a) to the extent prohibited by any obligation of confidentiality owed to a Third Party, (b) that involve information pertinent to any Claim in which either Party or its Affiliates, on the one hand, and the other Party and its Affiliates, on the other hand, are then currently engaged in, or (c) that are privileged under the attorney-client privilege, attorney work product privilege, or any other applicable privilege of a Party or that would otherwise result in an action that would constitute or result in a waiver of such privileges; provided, however, that in the case of clause (c), each Party shall use respective commercially reasonable efforts to disclose such applicable information in a manner that would not reasonably be expected to constitute a waiver of the applicable privilege; provided, further, that the retention obligations and access rights in this Section 7.3 shall no longer apply to such books and records of a Party that have been provided in hard or electronic copy to the other Party. The Party exercising the right of access hereunder will be solely responsible for any costs or expenses incurred by either Party in connection therewith. This Section 7.3 shall not apply with respect to Taxes, which shall be governed by Section 7.10(c).
Section 7.4 Confidentiality.
(a) Buyer acknowledges that the information being provided to it in connection with the Transactions and the consummation thereof (including the terms and conditions of this Agreement and the Ancillary Agreements) is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference. Except as provided in Section 7.4(b), Buyer, its Affiliates, and its and their respective Representatives shall hold in confidence all Confidential Information (as defined in the Confidentiality Agreement) obtained from Seller or its Affiliates or Representatives, in accordance with the provisions of the Confidentiality Agreement which, notwithstanding anything contained herein or therein, shall remain in full force and effect following the execution of this Agreement and shall survive any termination of this Agreement in accordance with its terms.
(b) Effective upon, and only upon, the Closing, the confidentiality provisions of the Confidentiality Agreement shall terminate with respect to Confidential Information relating solely to the Business, the Purchased Assets and the Assumed Obligations; provided, however, that Buyer acknowledges and agrees that, notwithstanding anything to the contrary in (including
any shorter term as provided in) the Confidentiality Agreement, (i) any and all other Confidential Information provided (or made available) to it by or on behalf of Seller or any of its Affiliates or Representatives, whether prior to or after the Closing, concerning Seller, or any of its Affiliates or Representatives or their respective businesses, services, or operations shall remain subject to the terms and conditions of the Confidentiality Agreement, in each case after the Closing Date until the later of (x) the second anniversary of the Closing and (y) the first anniversary of the termination of the Transition Services Agreement and (ii) Buyer shall remain subject to Section 13 of the Confidentiality Agreement until the second anniversary of the Closing; provided, however, that the following actions shall not be considered a breach of that section: (A) solicitations for employment of any persons whose employment with Seller and its Subsidiaries ended at least six months prior to such solicitation or (B) the employment of any person who initiates contact with Buyer or its Affiliates without violation by Buyer of its obligations under Section 13 of the Confidentiality Agreement.
(c) From and after the Closing until the later of (x) the second anniversary of the Closing and (y) the first anniversary of the termination of the Transition Services Agreement, Seller will, and will cause its Affiliates and Representatives to, hold all Business Confidential Information in strict confidence and not disclose it to any Person other than its Affiliates and Representatives who have a need to know such information and are advised as to the confidential nature thereof, except to the extent such information (i) is in the public domain through no violation of this Agreement by Seller, its Affiliates, or their respective Representatives, (ii) is lawfully acquired by Seller, any of its Affiliates or their respective Representatives from and after the Closing from sources not actually known to be prohibited from disclosing such information to such Person by an obligation of confidentiality to Buyer or (iii) is developed independently by Seller, any of its Affiliates or any of their respective Representatives without the use of Business Confidential Information. Notwithstanding the foregoing, Seller or its Affiliates or Representatives may disclose Business Confidential Information to the extent that such information is required to be disclosed by Seller or its Affiliates, or Representatives by applicable Law or in connection with any proceeding by or before a Governmental Entity, including any disclosure, financial or otherwise, required to comply with the rules of any securities commission or exchange; provided, that Seller will (A) give Buyer advance notice thereof as promptly as possible and (B) at Buyer’s expense, reasonably cooperate with Buyer in seeking any protective orders or other relief as Buyer may reasonably request and (C) disclose only that portion of the Business Confidential Information as it is legally required to disclose. Seller shall be liable for any breach of this Section 7.4(c) by any of its Affiliates and Representatives.
(d) Notwithstanding anything herein or in the Confidentiality Agreement to the contrary, the term limitations set forth in Section 7.4(b) and Section 7.4(c) are expressly agreed by the Parties to modify any applicable term limitation contained in the Confidentiality Agreement with respect to such obligations.
Section 7.5 Contact; Non-Disparagement. Except as otherwise provided in this Agreement or in the ordinary course of Buyer’s business unrelated to the Transactions, during the Interim Period, Buyer shall not, and shall instruct their respective Affiliates and Representatives not to, contact or communicate with the employees, material customers or material suppliers, any other Persons actually known by Buyer to have a material business
relationship with Seller or its Affiliates, or any Governmental Entity or Representatives thereof in connection with the Transactions whether in person or by telephone, mail, or other means of communication, without the prior written consent of Seller (which shall not be unreasonably withheld, conditioned or delayed). Notwithstanding anything to the contrary in the foregoing, until the second (2nd) anniversary of the Closing, Buyer and Seller shall not, and shall cause their respective Affiliates and Representatives not to, directly or indirectly, disparage any other Party or its Affiliates and Representatives or that has the purpose or intent of adversely affecting such other Party, its Affiliates or Representatives, in any written or oral communication with any Person; provided, that the foregoing shall not apply to true and factual statements or assertions made in the course of litigation or pursuant to any Claims, including in connection with the RWI Policy or in respect of indemnification claims in accordance with the terms of this Agreement but, for the avoidance of doubt, excluding any Claim related to any approvals or consents contemplated in Section 7.9 or Section 7.19.
Section 7.6 Interim Agreements. During the Interim Period, Seller and its Affiliates may enter into new Transferred Contracts that would constitute Material Contracts, and Schedule 5.9(a) (Material Contracts) shall be deemed automatically supplemented to include such new Transferred Contracts if: (a) Buyer consents in writing thereto (which consent shall not be unreasonably withheld, conditioned, or delayed); provided, however, that in the event Seller has requested Buyer’s consent to enter into such Transferred Contract and Buyer has not responded to such request within five (5) Business Days, Buyer shall be deemed to have consented to the entry into such Transferred Contract; or (b) such Transferred Contract does not require Buyer’s consent under the terms of Section 7.1(b)(iii).
Section 7.7 Further Assurances.
(a) Subject to the terms and conditions of this Agreement (including Section 7.9 (Governmental Approvals) and Section 7.19 (Listed Consents) which shall control with respect to matters described therein), each of the Parties shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable Law to consummate and make effective the Transactions, including using commercially reasonable efforts to satisfy the conditions precedent to each Party’s obligations hereunder or thereunder. Neither Party will, and each Party will cause its Affiliates not to, in each case, without the prior written consent of the other Party, take any action which would reasonably be expected to prevent or materially impede, interfere with, or delay the Transactions.
(b) Seller and Buyer each agree that, from time to time on or after the Closing Date, they shall execute and deliver, or cause their respective Affiliates to execute and deliver, such further documents, instruments, conveyances and assurances, and take (or cause their respective Affiliates to take) such other action as may be reasonably necessary to carry out the purpose and intent of this Agreement and the Ancillary Agreements.
(c) In the event and for so long as either Party is actively contesting or defending any Third Party Claim in connection with any transaction contemplated under this Agreement, and without limiting the Parties’ obligations under Section 7.22(b), the other Party shall use its commercially reasonable efforts to cooperate with the contesting or defending Party and its
counsel in the contest or defense, make available its personnel and Representatives, and provide access to its books and records as is reasonably necessary in connection with the contest or defense; provided that, no Party shall be required to take any action which would constitute or result in a waiver of the attorney-client privilege, work product doctrine or other legal privilege unless the party to whom the privilege belongs waives such privilege.
Section 7.8 Transition Committee; Planning.
(a) As soon as reasonably practicable after the Effective Date, Buyer and Seller will each designate two (2) individuals reasonably acceptable to each other to a working committee (the “Transition Committee”) for the purpose of, subject to the Confidentiality Agreement and compliance with applicable Law, coordinating during the Interim Period with respect to the migration and integration of the Purchased Assets, Assumed Obligations and Business to and into Buyer, including to (i) consider in good faith and negotiate the terms of Exhibit A to the Transition Services Agreement and (ii) identify and seek to obtain any required consent(s) from counterparties in respect of the provision of services contemplated under the Transition Services Agreement pursuant to Section 7.19(c). In the event that any such Transition Committee member is unable to attend a meeting of the Transition Committee or is otherwise temporarily unavailable to discharge his or her duties in connection with the Transition Committee, Buyer or Seller, as applicable, shall have the right to designate one “alternate” individual to the Transition Committee. Such “alternate” individual shall be entitled to attend meetings of the Transition Committee in place of the originally designated committee member for so long as such Transition Committee member is unable to attend meetings of the Transition Committee or is otherwise unavailable to discharge his or her duties in connection therewith. The Transition Committee will meet at least monthly during the Interim Period (and such meeting may be by telephonic or video conference in lieu of an in-person meeting). The obligations of the Parties under this Section 7.8 are in addition to any other obligations of the Parties in this Agreement.
(b) In furtherance of the transition and subject to Section 7.19, during the Interim Period, Seller shall, and shall cause its Affiliates to, work together with Buyer in good faith and the Parties shall use their commercially reasonable efforts to obtain any required consent(s) from counterparties to Seller’s asset management agreements, interstate pipeline service agreements and natural gas purchase and sales contracts that are Transferred Contracts (“Material Gas Contracts”) to (i) assign or novate such Material Gas Contracts, as appropriate, to Buyer at Closing (or for Buyer to enter into replacement agreements for such Material Gas Contracts), or (ii) in lieu of obtaining such consents, obtain from such counterparties capacity releases to preserve the capacity to which Seller is currently entitled through the transaction for the benefit of Buyer or its Affiliates. If such third party consents to assign or novate (or enter into replacements agreements for) such Material Gas Contracts have not been granted as of the Closing Date (or such counterparties have not provided the capacity releases referenced in the foregoing sentence), then Seller or its Affiliates shall continue the efforts described in this Section 7.8(b) under the terms of the Transition Services Agreement and, to the extent requested by Buyer, use commercially reasonable efforts to ensure that the capacity to which Seller is currently entitled under Material Gas Contracts is preserved through the transaction for the benefit of Buyer or its Affiliates on substantially the same economic basis. Such Material Gas Contracts may constitute a full, stand-alone Contract transferred from Seller to Buyer or a portion of a Contract where the portion of the rights and obligations under the Contract
Exclusively Related to the Business is transferred to Buyer and the remaining portion of rights and obligations under the Contract is retained by Seller.
(c) Notwithstanding anything to the contrary in this Section 7.8, Seller shall not be obligated to provide to Buyer any pricing or other information related to any Shared Contracts if provision of such information would violate the terms of the Contracts related to such Shared Contracts.
Section 7.9 Governmental Approvals.
(a) Upon the terms and subject to the conditions set forth in this Agreement, each Party shall cooperate and promptly prepare and file all necessary documentation to effect all necessary applications, notices, petitions and filings, and shall use reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things in order to, (i) obtain all approvals and authorizations of all Governmental Entities necessary or advisable to consummate and make effective, in the most expeditious manner reasonably practicable, the Transactions, including the Required Regulatory Approvals, (ii) make all registrations, filings and submissions, and thereafter, make any other required registrations, filings or submissions, and pay any fees due in connection therewith, with any Governmental Entity necessary in connection with the consummation of the Transactions, (iii) defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, (iv) seek to have lifted or rescinded any injunction or restraining order which may adversely affect the ability of the Parties to consummate the Transactions, in each case until the issuance of a final, non-appealable order with respect thereto, and (v) execute and deliver any additional agreements or instruments reasonably necessary to consummate the Transactions.
(b) In furtherance of the obligations set forth in Section 7.9(a) and otherwise subject to the terms of this Section 7.9, each of the Parties shall make or cause to be made, as promptly as reasonably practicable after the Effective Date and in any event within forty-five (45) days after the Effective Date, which may be extended by mutual agreement of the Parties, all necessary filings with Governmental Entities related to the Transactions, including (i) the Required Regulatory Approvals and (ii) the FERC Filing; provided that, to the extent required, the filings for any consents set forth on Schedule 7.9(b)(iii) shall be made at such time as mutually reasonably agreed by Buyer and Seller. Each of the Parties shall supply as promptly as reasonably practicable (and in any case within any applicable time period required by the applicable Governmental Entity) additional information and documentary material that may be requested by the Federal Trade Commission, the Department of Justice Antitrust Division, the TPUC, FERC or the applicable Governmental Entity with respect to any other approval or authorization necessary or advisable to consummate and make effective the Transactions.
(c) If the FERC approvals contemplated by the FERC Filing have not been granted as of the Closing Date, then Seller or its Affiliates shall continue the efforts to obtain such waivers pursuant to the terms of the Transition Services Agreement.
(d) In furtherance of the obligations set forth in Section 7.9(a) and Section 7.9(b) and otherwise subject to the terms of this Section 7.9, each Party will use its reasonable best efforts to take (and to cause its Subsidiaries and Affiliates to take) promptly any and all steps reasonably
necessary, proper or advisable to obtain all approvals and authorizations of all Governmental Entities necessary or advisable to consummate and make effective the Transactions, including the Required Regulatory Approvals, so as to enable the Parties to close the Transactions as promptly as reasonably practicable, including, if necessary, by proposing, negotiating, committing to and implementing, by way of settlement, stipulation, operational restriction, consent decree, hold separate order, divestiture, undertaking or otherwise, all terms, conditions, Liabilities, commitments, sanctions or undertakings required by applicable Governmental Entities in respect of each Party and any of their Affiliates; provided, that, in any case, such reasonable best efforts shall not require Seller or any of its Affiliates to pay any consideration (monetary or otherwise) or make any offer, acceptance or agreement or commitment to any undertakings, terms, conditions, liabilities, obligations, commitments or sanctions (including settlements, stipulations, operational restrictions, consent decrees, hold separate orders, divestitures or otherwise).
(e) Notwithstanding anything contained in this Agreement (including the obligations set forth in Section 7.9(a), Section 7.9(b) and Section 7.9(d)), (i) neither Party nor any of its Affiliates shall be required to, and each Party and its Affiliates shall not be permitted to without the other Party’s prior written approval, in connection with obtaining any Required Regulatory Approvals, agree or consent to or accept any undertakings, terms, conditions, liabilities, obligations, commitments or sanctions (including settlements, stipulations, operational restrictions, consent decrees, hold separate orders, divestitures or otherwise) as a condition to obtaining the Required Regulatory Approvals that would, individually or in the aggregate, have or reasonably be expected to have a Burdensome Condition. Nothing contained in this Agreement (including the obligations set forth in Section 7.9(a), Section 7.9(b) and Section 7.9(d)) shall require Buyer or Seller or any of their respective Affiliates to agree or consent to or accept any undertakings, terms, conditions, Liabilities, obligations, commitments or sanctions (including settlements, stipulations, operational restrictions, consent decrees, hold separate orders, divestitures or otherwise) in connection with obtaining the Required Regulatory Approvals to take any action or agree to any commitment that is not conditioned on the Closing.
(f) Unless prohibited by applicable Law or by the applicable Governmental Entity, (i) to the extent reasonably practicable, neither Seller nor Buyer (nor their respective Representatives on their behalf) shall participate in or attend any meeting, or engage in any substantive discussion with any Governmental Entity (including any member of any Governmental Entity’s staff) in respect of this Agreement or the Transactions (including with respect to any of the actions referred to in Section 7.9(a) and Section 7.9(b)) without providing prior notice of any such meeting or discussion to the other and allowing the other Party to attend such a meeting or discussion (subject to appropriate confidentiality restrictions), (ii) in the event a Party is prohibited by applicable Law or by the applicable Governmental Entity from participating in or attending any such meeting or engaging in any such discussion, the other Party shall keep such Party reasonably and promptly apprised with respect thereto, (iii) the Parties shall cooperate in the filing of any substantive memoranda, white papers, filings, correspondence or other written communications explaining or defending this Agreement or the Transactions, articulating any regulatory or competitive argument or responding to requests or objections made by any Governmental Entity or intervenor and allow the other Party a reasonable opportunity to comment thereon prior to submission and take account in good faith any such comments, and (iv) to the extent reasonably practicable, each Party shall promptly provide the other Party copies
of all correspondence, filings (with the exception of the Parties’ HSR Filings) and communications between it and its Affiliates and their respective Representatives, on the one hand, and any Governmental Entity (including any member of any Governmental Entity’s staff), on the other hand, with respect to this Agreement or the Transactions; provided that (x) neither Party shall be under an obligation to disclose confidential information with respect to the Party or its Affiliates to the other Party and (y) the obligations in this sentence do not extend to meetings or discussions by the Parties with applicable Governmental Entities that are not arranged or held in connection with the Transactions, notwithstanding the fact that the Transactions or the Required Regulatory Approvals may be discussed in such meetings or discussions (provided, however, that, unless otherwise agreed by Buyer and Seller in advance, in any such meetings or discussions, (A) the Party present for such meeting or discussion shall only respond to questions or comments by a Governmental Entity relating to the Business during such meeting or discussion so long as such Party is not disclosing any confidential information of the Business or the other Party and its Affiliates and (B) to the extent reasonably practicable, any responses provided by the Party present for such meeting or discussion shall be consistent in all material respects with the substance of the filings and other communications previously provided by the Parties to such Governmental Entity). Seller and Buyer shall jointly (A) control the strategy for obtaining any Required Regulatory Approvals and (B) coordinate the overall development of the positions to be taken and the regulatory actions to be requested in any filing with a Governmental Entity in connection with the Transactions and the Required Regulatory Approvals and in connection with any investigation or other inquiry or litigation by or before, or any negotiations with, a Governmental Entity relating to the Transactions and the Required Regulatory Approvals. For the avoidance of doubt, this Section 7.9(f) shall not apply to Tax matters.
(g) Seller and Buyer shall, and shall cause their respective Affiliates to, cooperate with each other and use commercially reasonable efforts to, as promptly as practicable (except in the case of Customary Post-Closing Consents or Listed Consents, which are governed by Section 7.19): (i) prepare and file all necessary applications, notices, petitions, and filings, and execute all agreements and documents, to the extent required by applicable Law, Order, or this Agreement for consummation of the Transactions (including the Required Regulatory Approvals); (ii) obtain the transfer or assignment to Buyer of all Transferable Permits; and (iii) obtain the consents, approvals, and authorizations of all Governmental Entities to the extent required by applicable Law or Order for consummation of the Transactions (including the Required Regulatory Approvals). Unless prohibited by applicable Law or by the applicable Governmental Entity, each Party shall promptly notify the other Party of any notice or other communication from any Person alleging that such Person’s approval, authorization, consent or Permit is or may be required in connection with the Transactions. For the avoidance of doubt, the provisions of this Section 7.9(g) shall not be deemed to expand the rights or obligations of either Party to the extent expressly covered by any other provision of this Section 7.9.
(h) Notwithstanding anything to the contrary in this Agreement, Buyer shall not, nor shall it agree to, directly or indirectly through one or more of its Affiliates, (i) acquire or make any investment in any Person or any division or assets thereof, or enter into any other business combination or similar transaction that would reasonably be expected to prevent, materially impair or materially delay the ability of the Parties to consummate the Transactions or (ii) take any other action with the intent to prevent, materially impair or materially delay the ability of the
Parties to consummate the Transactions. Any act by an Affiliate of Buyer that would be a violation of this Section 7.9(h) if taken by Buyer shall be a breach of this Section 7.9(h) by Buyer.
Section 7.10 Tax Matters.
(a) All transfer, documentary, sales (including bulk sales), use, value added, gross receipts, stamp, registration, recordation, occupation, privilege, conveyance, license, gains, excise, duty or other similar transfer Taxes incurred in connection with the transactions contemplated by the terms of this Agreement or the Ancillary Agreements, including all recording or filing fees, notarial fees (including penalties, interest and other charges with respect thereto) and any other similar costs of Closing (collectively, “Transfer Taxes”), that may be imposed, payable, collectible or incurred shall be paid by Buyer. Buyer shall prepare and file all necessary Tax Returns or other documents with respect to all such Transfer Taxes, and Seller shall reasonably cooperate in the preparation and filing of, and, to the extent required by applicable Law, join in the execution of, any such Tax Returns or other documents with respect to all such Transfer Taxes, and to timely sign and deliver such certificates or forms as may reasonably be necessary or appropriate to establish an exemption from or otherwise reduce, such Transfer Taxes.
(b) After the Closing Date, Buyer shall: (i) be responsible for paying any Asset Taxes relating to any Pre-Closing Tax Period (including the pre-Closing portion of any Straddle Period) that become due and payable on or after the Closing Date and shall file with the appropriate Governmental Entity any and all Tax Returns required to be filed on or after the Closing Date with respect to such Asset Taxes (each such Tax Return, a “Pre-Closing Return”); (ii) submit each Pre-Closing Return to Seller no later than ten (10) Business Days prior to the due date for filing such Tax Return for Seller’s review and comment; and (iii) timely file any such Pre-Closing Return incorporating any reasonable comments received from Seller prior to the due date therefor. The Parties agree that this Section 7.10(b) is intended to solely address the timing and manner in which certain Tax Returns are filed and the Taxes shown thereon are paid to the applicable Governmental Entity and nothing within this Section 7.10(b) shall be interpreted as altering the manner in which Taxes are allocated and economically borne by the Parties pursuant to Article III or otherwise pursuant to this Agreement. For the avoidance of doubt, Pre-Closing Returns do not include any Tax Returns relating solely to Taxes for which Seller is not responsible under applicable Law and would not have any indemnity obligation under this Agreement.
(c) The Parties shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with (i) the preparation and filing of Tax Returns with respect to the Purchased Assets, the Assumed Obligations, or the Business, (ii) determining any liability for Taxes with respect to the Purchased Assets, the Assumed Obligations, or the Business, and (iii) any audit, demand, claim, proposed adjustment, assessment, examination or other administrative or court proceeding involving Taxes payable with respect to the Purchased Assets, the Assumed Obligations, or the Business. Such cooperation shall include the retention and (upon the other Party’s written request) the provision of records and information that are reasonably relevant to any such audit, demand, claim, proposed adjustment, assessment, examination or other administrative or court proceeding and making employees reasonably available on a mutually
convenient basis to provide additional information and explanation of any material provided hereunder. Any information obtained pursuant to this Section 7.10(c) or pursuant to any other provision of this Article VII providing for the sharing of information or review of any Tax Return or other schedule relating to Taxes with respect to any Seller shall be kept, unless otherwise required by applicable Law, confidential by the Parties and their respective legal and tax advisors. Notwithstanding any provision of this Agreement to the contrary, none of Buyer or any of its Affiliates shall be entitled to any income Tax Return (or copy thereof) of Seller or any of its Affiliates.
(d) If, after the Closing Date, Buyer receives notice of an audit or administrative or judicial proceeding with respect to any Asset Tax or Tax Return with respect to such Taxes (a “Tax Contest”) related to any Pre-Closing Tax Period (a “Pre-Closing Tax Contest”), Buyer shall notify Seller within ten (10) Business Days of receipt of such notice. Seller shall have the option, at its sole cost and expense, to control any such Pre-Closing Tax Contest and may exercise such option by providing notice to Buyer within fifteen (15) days of receiving notice of such Pre-Closing Tax Contest from Buyer; provided, that if Seller exercises such option, Seller shall (i) keep Buyer reasonably informed of the progress of such Pre-Closing Tax Contest; (ii) permit Buyer (or Buyer’s counsel) to participate, at Buyer’s sole cost and expense, in such Pre-Closing Tax Contest, including in meetings with the applicable Governmental Entity; and (iii) not settle, compromise or concede any portion of such Pre-Closing Tax Contest in connection with which Buyer otherwise could be adversely affected, which consent shall not be unreasonably withheld, conditioned or delayed. If, after the Closing Date, Buyer receives notice of a Tax Contest related to a Straddle Period (a “Straddle Period Tax Contest”), Buyer shall notify Seller within ten (10) Business Days of receipt of such notice. Buyer shall control any Tax Contest other than a Pre-Closing Tax Contest for which Seller assumes control; provided, that with respect to any Pre-Closing Tax Contest that Seller does not elect to control pursuant to this Section 7.10(d) or any Straddle Period Tax Contest, Buyer shall: (A) keep Seller reasonably informed of the progress of such Straddle Period Tax Contest; (B) permit Seller (or Seller’s counsel) to participate, at Seller’s sole cost and expense, in such Straddle Period Tax Contest, including in meetings with the applicable Governmental Entity; and (C) not settle, compromise, or concede any portion of such Straddle Period Tax Contest relating to an Excluded Liability, or in connection with which Seller otherwise could be adversely affected, without the consent of Seller, which consent shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding anything herein to the contrary, Seller shall control any proceeding related to Taxes payable on any Tax Returns of Seller or any of its Affiliates and Buyer shall have no rights with respect thereto.
(e) Unless required by applicable Law, Buyer shall not, and shall not cause or permit any other Person to (i) amend, refile, revoke or otherwise modify, or consent to the amendment, refiling, revocation or modification of, any Tax Returns, or make or change any Tax elections or accounting methods with respect to the Purchased Assets or the Business relating to any Pre-Closing Tax Period or (ii) voluntarily approach any Governmental Entity regarding any Taxes or Tax Returns with respect to the Purchased Assets or the Business relating to any Pre-Closing Tax Period.
Section 7.11 Employees.
(a) Schedule 7.11(a) sets forth a true and accurate list of each Business Employee and contains the following information for each such individual: unique identifier, hire date, position or title, whether covered by a Collective Bargaining Agreement, annual salary or hourly rate, as applicable, target bonus for 2025, commission eligibility, work location, status as full- or part-time, visa status (including visa type and expiration date), leave status (including leave type and expected return to work date, if known). Each Business Employee indicated on Schedule 7.11(a) as being (i) covered by a Collective Bargaining Agreement is a “CBA Employee,” and (ii) on a leave of absence is a “Leave Employee.” Schedule 7.11(a) shall be updated by Seller prior to the Closing Date to reflect any changes to the information contained therein, subject to Seller’s obligations under Section 7.11(b) and applicable Law, and upon Buyer’s reasonable advance written request.
(b) Not later than thirty (30) Business Days prior to the reasonably anticipated Closing Date and in compliance with the terms and conditions set forth in this Agreement, Buyer will make a written offer of employment to each Business Employee or cause an Affiliate to make a written offer of employment. Each written offer of employment made to any Business Employee under this Section 7.11(b) shall provide for a work location within twenty-five (25) miles of the Business Employee’s employment location set forth on the last updated version of Schedule 7.11(a), be effective as of, and subject to, the Closing Date (except as provided below with respect to Leave Employees), provide for terms and conditions of employment that comply with the requirements of Section 7.12(a), and in Buyer’s sole discretion, be made contingent on the Business Employee satisfying Buyer’s or its Affiliate’s generally applicable background checks, drug screens, work authorization verification and similar requirements and other requirements to execute and deliver non-competition, non-solicitation, confidentiality or other similar agreements. As applicable (and in lieu of the requirement described in the preceding sentence), offers of employment to CBA Employees shall comply with the requirements of the applicable Collective Bargaining Agreement, except to the extent that Buyer’s compliance with any provision of the Collective Bargaining Agreement is impossible, in which case Buyer will comply with any agreed-upon substitute term reached during effects bargaining (subject to Seller’s prior consultation with Buyer in accordance with Section 7.1(b)(x)), and if no agreed-upon term is reached, then with Seller’s last offer in effects bargaining (provided that Buyer was consulted with prior to Seller making any such offer). Buyer shall, or shall cause an Affiliate to, provide that for each Business Employee who is or becomes a Leave Employee before the Closing Date that such employee’s offer of employment with Buyer or an Affiliate shall be effective as of the date of such employee’s return to active work, provided that such return to active work occurs on or prior to twelve (12) months following the Closing Date. Buyer shall provide to Seller, prior to making the offers described above, forms of the employment offer communications contemplated by this Section 7.11(b) and shall consider in good faith any comments of Seller with respect to such forms. All such employment offers shall contain a provision that informs the Business Employee that, by acceptance of the offer, the individual consents to the transfer of copies of all such individual employee’s personnel records as are reasonably necessary (as determined by Seller) for Buyer to carry out its obligations hereunder, but only to the extent that such records pertain to: (i) skill and development training; (ii) seniority histories; (iii) salary and benefit information; (iv) Occupational, Safety and Health
Administration reports and records; (v) active medical restriction forms; and (vi) I-9 or immigration information.
(c) With respect to CBA Employees, immediately following the Closing Date, Buyer will, or will cause an Affiliate to, assume the applicable Collective Bargaining Agreement and notwithstanding any other provision of this Agreement, to continue to abide by the terms and conditions of the applicable Collective Bargaining Agreement until its expiration, modification or termination in accordance with its terms or applicable Law, except to the extent Buyer’s compliance with any provision of the Collective Bargaining Agreement is impossible, in which case Buyer will comply with any agreed-upon substitute term reached during effects bargaining (subject to Seller’s prior consultation with Buyer in accordance with Section 7.1(b)(x)), and if no agreed-upon term is reached, then with Seller’s last offer in effects bargaining (provided that Buyer was consulted with prior to Seller making any such offer). Offers of employment to CBA Employees shall be made in accordance with the Collective Bargaining Agreement, except to the extent Buyer’s compliance with any provision of the Collective Bargaining Agreement is impossible, in which case Buyer will comply with any agreed-upon substitute term reached during effects bargaining (subject to Seller’s prior consultation with Buyer in accordance with Section 7.1(b)(x)), and if no agreed-upon term is reached, then with Seller’s last offer in effects bargaining (provided that Buyer was consulted with prior to Seller making any such offer), but shall otherwise comply with the requirements of Section 7.11(b).
Section 7.12 Employee Benefits.
(a) During the twelve (12) month period immediately following the Closing Date (the “Continuation Period”), Buyer shall, or shall cause an Affiliate to, provide Business Employees who accept an offer of employment and commence employment (and remain employed) with Buyer or an Affiliate who are not CBA Employees (“Transferred Employees”) with (i) base salary or hourly rate, as applicable, no less than those provided in respect of such Transferred Employees as of immediately before the Closing Date, (ii) cash target annual bonus opportunities no less than those provided in respect of such Transferred Employees as of immediately before the Closing Date, (iii) employee welfare and qualified retirement benefit opportunities (excluding any non-qualified deferred compensation, defined benefit pension benefits and retiree or post-termination welfare benefits) substantially comparable in the aggregate to those provided to such Transferred Employees as of the date hereof and (iv) eligibility for severance benefits no less favorable than either those available to such Transferred Employee immediately before the Closing Date in the event the Transferred Employee’s employment is involuntarily terminated without cause or the Transferred Employee voluntarily terminates employment in connection with the failure of Buyer and its Affiliates to comply with the requirements of this Section 7.12(a).
(b) Notwithstanding the foregoing, Buyer shall provide or cause to be provided to CBA Employees who accept employment with Buyer or an Affiliate (“Transferred CBA Employees”) with terms and conditions of employment following the Closing which comply with the requirements of the applicable Collective Bargaining Agreement (except to the extent Buyer’s compliance with any provision of the Collective Bargaining Agreement is impossible, in which case Buyer will comply with any agreed-upon substitute term reached during effects bargaining (subject to Seller’s prior consultation with Buyer in accordance with Section
7.1(b)(x)), and if no agreed-upon term is reached, then with Seller’s last offer in effects bargaining (provided that Buyer was consulted with prior to Seller making any such offer) until its expiration, modification or termination in accordance with its terms or applicable Law.
(c) Buyer shall, and shall cause each of its Affiliates to, recognize and grant each Transferred Employee full credit under all Buyer benefit plans, including Buyer’s retirement contribution plans (but excluding any defined benefit pension plans, retiree or post-termination welfare benefit plans and retiree life insurance plans), for all service with Seller and its Affiliates including as applicable service with predecessor employers, for purposes of eligibility, vesting, entitlements to vacation and other leave and paid time off, educational reimbursement, severance benefits and level of benefits, in each case, to the extent recognized immediately before the Closing Date for such purpose by Seller or an Affiliate. For purposes of each benefit plan of Buyer or an Affiliate providing medical, dental, pharmaceutical or vision benefits to any Transferred Employee, Buyer shall use commercially reasonable efforts to cause all pre-existing condition exclusions and actively-at-work requirements of such Benefit Plan to be waived for such employee and his or her covered dependents, except to the extent such conditions would not have been waived under the comparable Seller Benefit Plan in which such employee participated immediately prior to the respective Transfer Date, and Buyer shall use commercially reasonable efforts to cause any eligible expenses incurred by such employee and his or her covered dependents under a Seller Benefit Plan during the portion of the plan year of the Seller Benefit Plan ending on the date such employee’s participation in the corresponding Buyer benefit plan begins, to be taken into account under such Buyer Benefit Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with the Buyer Benefit Plan. Seller shall cause Buyer to be provided with the information required to comply with this Section 7.12(c), subject to applicable Law.
(d) Buyer shall, or shall cause an Affiliate to, (i) establish or designate a defined contribution plan intended to qualify under Sections 401(a) and 501(a) of the Code that includes a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code (the “Buyer Savings Plan”) in which Transferred Employees and Transferred CBA Employees shall be eligible to participate on and after the Closing Date and (ii) cause the Buyer Savings Plan to accept from Seller Parent Retirement Savings Plan (the “Seller Savings Plan”) the “direct rollover,” within the meaning of Section 401(a)(31) of the Code, of the account balance (including the in-kind rollover of promissory notes evidencing outstanding loans) of each such Transferred Employee and Transferred CBA Employee who participated in each such Seller Savings Plan prior to the Closing Date and who elects such direct rollover in accordance with the terms of the Seller Savings Plan and the Code.
(e) As soon as administratively practicable, but no later than sixty (60) days after the Closing Date, Seller shall pay or cause to be paid to each Transferred Employee who participates in an annual bonus plan of Seller or an Affiliate an amount in respect of such bonus, calculated at the target level of performance and pro-rated for the portion of the calendar year which has elapsed as of the Closing Date. Seller may condition such payment on a release of claims in respect of any other annual bonus payment. Buyer shall be responsible for any annual bonus for periods following the Closing Date, which shall be in the discretion of Buyer, subject to the other provisions hereof.
(f) On or no later than sixty (60) days after the Closing Date, Seller shall pay or cause to be paid to each Transferred Employee such employee’s accrued, unused paid time off balance if any.
(g) From and after the Closing, Seller or an Affiliate shall retain all assets of and Liabilities with respect to, the Seller Parent Retirement Cash Balance Plan and Buyer and its Affiliates shall not have any rights or obligations with respect to such plan or any assets thereof or otherwise. Nothing in this Agreement shall result in the Buyer or its Affiliates assuming any Liability or obligation under or in relation to Title IV of ERISA or on account of any violation of COBRA by Seller or any of its Affiliates or under any Benefit Plan or any other employee benefit plan of the Seller or any of its Affiliates, including all withholding and employment Taxes (including the employer portion of any payroll, social security, unemployment or other Taxes payable in connection with such amounts) and other costs related to such plans. Seller shall retain and shall satisfy as and when due, and shall hold Buyer and its Affiliates harmless from and against, any such Liabilities, regardless of when any such Liabilities arise, are incurred or are disclosed.
(h) Seller and its Affiliates shall be responsible for all workers’ compensation liabilities and obligations for Business Employees to the extent such liabilities and obligations are for any injuries that occur prior to the Closing. Buyer shall cause the applicable post-Closing employer to assume all workers’ compensation liabilities and obligations for Transferred Employees and Transferred CBA Employees to the extent such injuries occur on or after the Closing.
(i) Seller hereby waives and agrees that it will not enforce (and cause not to be enforced) with respect to Buyer and its Affiliates or any of their respective successors any restrictive covenant agreements (including any non-use or non-disclosure of confidential information) between a Transferred Employee, on the one hand, and Seller and its Affiliates, on the other hand, to the extent the restriction would prohibit or restrict such employee from performing his or her duties for Buyer or its Affiliates or any of their respective successors.
(j) Buyer shall employ those foreign nationals working in the United States in non-immigrant visa status, under terms and conditions such that Buyer qualifies as a “successor-in-interest” under applicable United States immigration laws effective as of the Closing Date. Buyer agrees to assume all immigration-related liabilities and responsibilities with respect to such employees.
(k) Prior to Closing and after Closing, Seller shall cooperate in good faith with Buyer’s and its Affiliates’ benefits and compensation integration efforts and the Seller shall and shall cause its Affiliates to timely provide, to the extent permissible under applicable Law, Buyer and its Affiliates or their designees with all information reasonably requested or necessary in order to implement such integration or to comply with any covenants set forth in this Section 7.12. Seller shall not and shall cause its Affiliates not to make any statements or announcements or otherwise communicate with any Business Employees regarding the compensation and benefits to be provided by Buyer or its Affiliates following the Closing Date without Buyer’s prior written consent, except to the extent such communications are consistent with the terms of this Agreement or prior communications approved by Buyer.
(l) Nothing in this Agreement (including this Section 7.12) shall, or is intended to, (i) amend any Benefit Plan or effect the establishment or amendment of any plan or agreement of Seller or Buyer or an Affiliate of either or affect the rights of Seller, Buyer or any Affiliate of either to amend or terminate any Benefit Plan or other plan or agreement pursuant to the terms of such plan or agreement, (ii) confer upon any employee (including any Business Employee or Transferred Employee), any collective bargaining representative, or any other Person (other than a Party) any rights, benefits, or remedies, including any right to continued employment for any period or any terms or conditions of employment, or any third-party beneficiary rights hereunder or (iii) prevent the termination of employment of any Transferred Employee or Transferred CBA Employee at any time.
Section 7.13 Insurance Policies.
(a) Except as expressly provided in this Section 7.13, from and after the Closing, (i) the Business and the Purchased Assets shall cease to be insured by Seller and its Affiliates’ current and historical insurance policies, including any self-insurance, fronted insurance, or captive insurance, and neither Buyer nor its Affiliates shall have any access, right, title or interest to or in any such insurance policies (including the right to make claims and receive proceeds thereunder) to cover the Business, the Purchased Assets or any Assumed Obligations, or any liability or loss arising from the operation of the Business at any time, whether before, at or after the Closing and (ii) Buyer shall be solely responsible, at its sole cost and expense, for providing insurance with respect to the Business, the Purchased Assets and the Assumed Obligations.
(b) From and after the Closing, Seller and its Affiliates shall use commercially reasonable efforts to cooperate with Buyer, at Buyer’s reasonable written request, to allow Buyer to pursue bona fide insurance claims under (i) Seller and its Affiliates’ occurrence-based insurance policies (other than any self-insurance, but including any fronted insurance or captive insurance) arising out of any occurrences relating to the Purchased Assets, the Assumed Obligations or the Business that took place prior to the Closing and that result or could reasonably be expected to result in Losses to Buyer or Assumed Obligations and (ii) Seller and its Affiliates’ claims-made insurance policies (other than any self-insurance, but including any fronted insurance or captive insurance) arising out of any acts or omissions that took place prior to the Closing, but only with respect to insurance claims or notices of circumstances submitted to the applicable insurer(s) and pending under such claims-made insurance policies at or prior to the Closing (such policies referred to in the foregoing clauses (i) and (ii), collectively, the “Shared Policies”), subject to the terms and conditions of such Shared Policies; provided that (i) Buyer shall exclusively bear any deductibles, retentions, claims handling fees and any other amounts incurred or payable relating to any such insurance claims (subject to Section 7.13(c)); and (ii) subject to Buyer’s compliance with its indemnification obligations under this Agreement for any Assumed Obligations relating to any insurance claim under any Shared Policies, Seller shall remit insurance proceeds actually received by Seller or any of its Affiliates for Buyer’s claim under any such Shared Policy. Prior to the Closing, Seller and its Affiliates shall use commercially reasonable efforts to provide notice to the applicable insurer(s) under the applicable Shared Policy(ies) of any known claims, circumstances, occurrences, acts or omissions, as applicable, in each case, relating to the Purchased Assets, the Assumed Obligations or the Business that took place prior to the Closing and Seller reasonably believes are covered under the applicable Shared Policy(ies).
(c) Notwithstanding anything to the contrary in this Agreement, (i) in the event that Seller or any of its Affiliates, on the one hand, and Buyer, on the other hand, have competing claims under any Shared Policy and there are insufficient limits remaining under such Shared Policy, then Seller and its Affiliates shall have first right of access to the remaining limits (provided, however, that, in any such case, the amount of any deductibles or retentions borne by Buyer pursuant to Section 7.13(b) shall be reduced proportionally); (ii) neither Seller nor its Affiliates shall be liable to Buyer for any claims, or portions thereof, not covered under a Shared Policy for any reason; (iii) Buyer shall indemnify and hold harmless Seller and its Affiliates with respect to any loss, liability, costs or expenses incurred or payable by Seller and its Affiliates relating to any insurance claims by or on behalf of Buyer under the Shared Policies; and (iv) Seller and its Affiliates shall retain all rights to control the Shared Policies, including the right to erode, exhaust, settle, release, commute, buy back or otherwise resolve disputes with respect to any of the Shared Policies, notwithstanding the rights of Buyer set forth in this Section 7.13; provided, however, that neither the Seller nor any of its Affiliates shall take any such action, or omit to take any action, with the intent of, or which would reasonably be expected to have the effect of, subverting the rights of Buyer under the Shared Policies.
Section 7.14 RWI Policy. Buyer shall use reasonable best efforts to take all actions necessary to complete the conditions in the conditional binder to the RWI Policy (other than the condition that the Closing has occurred) within the times set forth therein and shall maintain the RWI Policy in full force and effect. The RWI Policy shall explicitly provide that: (i) the RWI Policy insurer(s) irrevocably waives and agrees not to pursue, directly or indirectly, any and all rights of subrogation, contribution or any other rights that the RWI Policy insurer(s) might have against Seller, its Affiliates and any of their respective equityholders and Representatives (collectively, the “Seller Parties”) in connection with this Agreement and the Transactions, other than in the case of Fraud by any such Seller Party, and then only against such Seller Party to the extent of such Fraud by such Seller Party; (ii) the RWI Policy provisions required by this Section 7.14 may not be amended, modified or waived in a manner adverse to any of the Seller Parties without Seller’s prior written consent, which consent may be withheld in Seller’s sole discretion; and (iii) the Seller Parties are third party beneficiaries of the provisions set forth in this Section 7.14 regarding the RWI Policy. Seller and Buyer acknowledge that Buyer obtaining the RWI Policy is a material inducement to Seller entering into this Agreement and agreeing to consummate the Transactions, and Seller is relying on Buyer’s covenants and obligations set forth in this Section 7.14. Buyer shall provide a true and complete copy of the conditionally bound RWI Policy to Seller promptly following inception of the RWI Policy and shall provide a true and complete copy of the RWI Policy to Seller promptly following Closing. Buyer shall be solely responsible for all costs to procure, maintain and make claims under the RWI Policy, including all premiums, retentions, taxes, broker’s fees, expenses and costs of any nature whatsoever. Seller shall reasonably cooperate with reasonable requests from Buyer and its Representatives with respect to Buyer’s procurement of the RWI Policy.
Section 7.15 Use of Marks.
(a) Buyer acknowledges and agrees that (a) Seller and its Affiliates own the Seller Marks, and (b) following the Closing, none of Buyer and its Affiliates will have any right, title, or interest in the Seller Marks. Promptly following the Closing, Buyer shall cause the Business to cease to hold itself out as having any affiliation with Seller or any of its Affiliates. Following the
Closing and subject to this Section 7.15, Buyer shall, as soon as practicable, but in no event later than ninety (90) days following the Closing Date, cease using, and cause the Business to cease using, any Seller Marks; provided that, with respect to any uses of the Seller Marks necessary in connection with the receipt of the services under the Transition Services Agreement, until the date such applicable service is canceled or otherwise terminated pursuant to such Transition Services Agreement (“Seller Mark Use Period”). In furtherance thereof, as soon as practicable but in no event later than the end of the Seller Mark Use Period, Buyer shall remove, strike over, or otherwise eliminate or cause to be removed or otherwise eliminated all Seller Marks from the Purchased Assets and all other assets and materials owned or used by Buyer that are in Buyer’s possession or under Buyer’s control, including any vehicles, business cards, schedules, stationery, packaging materials, displays, signs, promotional materials, manuals, forms, websites, and other materials and systems (except to the extent any such materials must be retained to comply with applicable Laws or document retention notices issued by any Governmental Entity). Notwithstanding the foregoing, Buyer shall not be in breach of this Section 7.15(a) by reason of: (i) the appearance of the Seller Marks in or on written materials or other assets that are solely used for internal purposes in connection with the Purchased Assets; or (ii) the use by Buyer of the Seller Marks in a non-trademark manner for purposes of conveying to customers or the general public the historical origins of the Business. Any use by Buyer of any of the Seller Marks as permitted in this Section 7.15(a) is subject to Buyer’s compliance with the reasonable quality control requirements and guidelines provided in writing by Seller to Buyer in effect for the Seller Marks as of the Closing Date (as may be amended in writing by Seller from time to time following the Closing, and notice of such amendments shall be reasonably promptly provided to Buyer). Buyer shall not use the Seller Marks in a manner that reflects negatively or may be reasonably likely to reflect negatively on such Seller Marks or on Seller or its Affiliates. Notwithstanding the foregoing, Buyer shall not be in breach of this Section 7.15(a) by reason of the appearance of the Seller Marks in or on written materials or other assets that are solely used for internal purposes.
(b) Following the Closing, Seller and its Affiliates shall, as soon as practicable, but in no event later than thirty (30) days following the Closing Date, cease all use of the Business Marks; provided that, with respect to any uses of the Business Marks necessary in connection with the provision of the services under the Transition Services Agreement, until the date such applicable service is canceled or otherwise terminated pursuant to such Transition Services Agreement. Following the Closing, neither Seller nor any of its Affiliates shall have any ownership rights in or to any Business Marks and, subject to the preceding sentence, no other right, title or interest in the Buyer Marks. Notwithstanding the foregoing, Seller shall not be in breach of this Section 7.15(b) by reason of the appearance of the Business Marks in or on written materials or other assets that are solely used for internal purposes. All goodwill arising from the use or display of any Business Marks by the Seller or any of its Affiliates following the Closing will inure to the sole benefit of Buyer.
Section 7.16 Notification of Customers. As soon as practicable following the Closing, Seller and Buyer shall use reasonable best efforts to cause to be sent to customers of the Business written notice that such customers have been transferred from Seller to Buyer. Such notice will be delivered by Buyer and will contain such information, and otherwise be in form and substance, as is required by applicable Law and as approved by Buyer and Seller, which approval will not be unreasonably withheld, conditioned or delayed.
Section 7.17 Public Statements. The mutual announcement of this Agreement and the Transactions immediately following the execution of this Agreement shall be as agreed by Buyer and Seller. Buyer and Seller shall consult with each other before issuing (and shall provide each other reasonable opportunity to review, comment upon and concur with, any other press release) or otherwise making any public statements with respect to this Agreement or the Transactions, and shall not issue any such press release or make any such public statement prior to obtaining the other Party’s written approval (which approval shall not be unreasonably withheld, conditioned or delayed), except (a) as the Parties or their respective Affiliates may be required, at the advice of counsel (including internal counsel), to do by applicable Law or by obligations pursuant to any listing agreement with any applicable securities exchange (in which case such Party will, to the extent practicable, promptly inform the other Party in writing in advance of such compelled disclosure and provide the other Party with a copy of such disclosure), and (b) as is consistent with previous press releases, public disclosures or public statements made jointly by the Parties or otherwise in a manner consistent with this Section 7.17; provided that, in each such case, to the extent practicable, the Party intending to make such release shall use its reasonable best efforts consistent with Law to consult with the other Party in advance of such release with respect to the text thereof.
Section 7.18 Indemnification.
(a) From and after the Closing, Seller shall indemnify, reimburse, defend and hold Buyer, its Affiliates, and its and their respective directors and officers, each in their capacity as such (the “Buyer Indemnified Parties”) harmless against all Losses to the extent arising out of or relating to any Excluded Liabilities. Seller’s obligations to indemnify the Buyer Indemnified Parties for such Losses shall be net of available insurance proceeds actually received by the applicable Buyer Indemnified Parties for such Losses (net of Buyer’s and its Affiliates’ reasonable costs of recovery thereof); provided, however, for the avoidance of doubt: (i) Seller shall be responsible for paying all defense, indemnification, and settlement costs for such Losses until insurance proceeds are actually received by the applicable Buyer Indemnified Parties for such Losses; (ii) the Buyer Indemnified Parties shall not be required to advance payment for any such defense, indemnification, or settlement costs for such Losses; and (iii) any insurance proceeds paid to the applicable Buyer Indemnified Parties for any such defense, indemnification, or settlement costs for such Losses, to the extent previously paid by Seller, shall promptly be remitted to Seller.
(b) From and after the Closing, Buyer shall indemnify, reimburse, defend, and hold Seller, its Affiliates, and its and their respective directors and officers, each in their capacity as such (the “Seller Indemnified Parties” and together with the Buyer Indemnified Parties, the “Indemnified Parties”) harmless against (i) all Losses to the extent arising out of or relating to any Assumed Obligations and (ii) any Liability of Buyer and its Affiliates not related to the Business, whether arising before or after Closing. Buyer’s obligations to indemnify the Seller Indemnified Parties for such Losses shall be net of available insurance proceeds actually received by the applicable Seller Indemnified Parties for such Losses (net of Seller’s and its Affiliates’ reasonable costs of recovery thereof); provided, however, for the avoidance of doubt: (A) Buyer shall be responsible for paying all defense, indemnification, and settlement costs for such Losses until insurance proceeds are actually received by the applicable Seller Indemnified Parties for such Losses; (B) Seller Indemnified Parties shall not be required to advance payment
for any such defense, indemnification, or settlement costs for such Losses; and (C) any insurance proceeds paid to the applicable Seller Indemnified Parties for any such defense, indemnification; or settlement costs for such Losses, to the extent previously paid by Buyer, shall promptly be remitted to Buyer.
(c) Each Indemnified Party shall use its commercially reasonable efforts to mitigate any Loss indemnifiable pursuant to this Section 7.18. Each of the Parties shall have the right, but not the obligation, and shall be afforded the opportunity to the extent reasonably possible, to take all available steps to minimize Losses for which such Party is obligated to provide indemnification to an Indemnified Party pursuant to this Section 7.18 before such Losses are actually incurred by the Indemnified Party.
(d) Except with respect to (i) claims for injunctive relief, specific performance, or other similar equitable remedies pursuant to Section 10.11, (ii) claims related to any breach of or failure to perform any covenant or agreement set forth in this Agreement, which by its express terms are required to be performed after the Closing; (iii) claims under (and pursuant to the terms of) the Ancillary Agreements; (iv) claims for indemnification pursuant to Section 7.10(d); (v) defense of Third Party Claims pursuant to Section 7.22, and (vi) claims for Fraud (the foregoing, collectively, “Excluded Claims”), following the Closing, indemnification pursuant to this Section 7.18 (and in the case of Buyer, claims under the RWI Policy) will be the sole and exclusive remedy of the Parties and any Person claiming by or through any party (including the Indemnified Parties) for any Losses related to or arising from the Excluded Liabilities and the Assumed Obligations, and none of Buyer or Seller will have any other rights or remedies in connection therewith, whether based on Contract, tort, strict liability, other Laws or otherwise.
(e) Except for Excluded Claims and claims for indemnification pursuant to this Section 7.18, from and after Closing, (i) Buyer releases, remises, and forever discharges Seller and all Seller Indemnified Parties and (ii) Seller releases, remises, and forever discharges Buyer and all Buyer Indemnified Parties, in each case, from any and all Liabilities in Law or in equity, known or unknown, which any of the Buyer Indemnified Parties or the Seller Indemnified Parties, as applicable, might now or subsequently may have, based on, relating to, or arising out of this Agreement and the Transactions, including the ownership, use or operation of the Purchased Assets prior to the Closing, or the condition, quality, status, or nature of the Purchased Assets prior to the Closing.
(f) The indemnities set forth in this Section 7.18 shall survive the Closing without time limit.
(g) The Parties hereby acknowledge and agree that any indemnification payments made pursuant to this Section 7.18 shall be treated for Tax purposes as an adjustment to the Purchase Price to the maximum extent permitted by applicable Law.
Section 7.19 Listed Consents.
(a) With respect to (i) each Hard Consent applicable to Transferred Contracts for gas transportation, gas storage, gas transport, construction or engineering, or which are otherwise regulated by FERC, in each case, as set forth on Schedule 7.19(a)(i) and (ii) each Hard Consent
applicable to the Included Franchises, Leases and Purchased Easements set forth on Schedule 7.19(a)(ii), in each case other than Customary Post-Closing Consents (clauses (i) and (ii), collectively, the “Listed Consents”), prior to the Closing and, with respect to the Included Franchises, at such time as mutually reasonably agreed by Buyer and Seller, and otherwise as promptly as reasonably practicable following the Effective Date, Seller shall send or cause to be sent to the holder of each such Listed Consent a notice in compliance with the contractual provisions applicable to such Listed Consent and otherwise in form and substance reasonably acceptable to Buyer, seeking such holder’s consent to the Transactions.
(b) If Seller fails to obtain a Listed Consent prior to Closing:
(i) Seller shall not assign any Purchased Assets (or portions thereof) affected by such unobtained Listed Consent (each such Purchased Asset, a “Nonassignable Asset”), and there will be no reduction in the Purchase Price as a result thereof;
(ii) for a period of eighteen (18) months after the Closing, subject to Section 7.19(c), Seller and Buyer will use their respective commercially reasonable efforts (subject to Section 7.19(c), at the sole expense of Buyer and at no expense and without any Liability to Seller) to obtain such Listed Consents with respect to any such excluded Purchased Assets for the assignment or transfer thereof to Buyer as Buyer may reasonably request; provided that Seller will not be obligated to pay any money or incur any Liability or obligation to any Third Party from whom consent or approval is requested unless Buyer agrees to reimburse Seller therefor;
(iii) upon obtaining any Listed Consent, or if such Listed Consent is no longer required, with respect to a Nonassignable Asset, Seller shall promptly convey, transfer, assign, and deliver, or cause to be conveyed, transferred, assigned, and delivered, the Nonassignable Asset affected by such Listed Consent to Buyer at no additional cost; and
(iv) with respect to each Nonassignable Asset subject to a Listed Consent that is withheld from the Closing pursuant to Section 7.19(b)(i), during the period from and after the Closing until the earlier of (A) the date that any such Nonassignable Asset is assigned to Buyer pursuant to Section 7.19(b)(iii) and (B) eighteen (18) months from the Closing, the Parties agree that (x) Buyer shall, to the extent reasonably practicable, be provided with all benefits of ownership of such Nonassignable Asset, including all proceeds thereof, subject to the other provisions of this Agreement, as if such Nonassignable Asset had been assigned to Buyer at Closing, and Seller will use commercially reasonable efforts to enforce its and its Affiliates’ rights thereunder for the benefit of Buyer; and (y) all obligations and Losses caused by, arising out, of or resulting from such Nonassignable Asset, whether arising prior to, on, or after the Closing, subject to the other provisions of this Agreement, shall be deemed to be Assumed Obligations as if such Nonassignable Asset had been assigned to Buyer at Closing.
(c) Prior to Closing and after Closing, Seller shall use its commercially reasonable efforts to obtain the Listed Consents or any other consent or approval to be obtained in connection with this Agreement or the provision of services contemplated under the Transition Services Agreement, including the Customary Post-Closing Consents; provided, however, that
none of Seller or its Affiliates shall be required to incur any Liability, pay any money, or provide any other consideration in order to obtain any such Listed Consent or other consent unless Buyer agrees to reimburse Seller therefor. Buyer shall use its reasonable best efforts (without any obligation to incur any Liability, pay money, or provide any other consideration) to assist and cooperate with Seller in furtherance of Seller’s efforts pursuant to this Section 7.19; provided, that, if any money is paid, or consideration is provided, by Seller to a Third Party with the prior written consent of Buyer in order to obtain any such Listed Consent or other consent, Buyer shall reimburse Seller within ten (10) Business Days of Seller’s written notice to Buyer thereof. Except as otherwise provided herein, Buyer shall reimburse Seller for any money paid, or other consideration provided, by Seller to any Third Party for all fees, including application fees, administration fees, or processing fees, or any other charges applicable to obtaining any Listed Consent, Customary Post-Closing Consent, or any other consent or approval to be obtained in connection with this Agreement or the provision of services contemplated under the Transition Services Agreement, including, for the avoidance of doubt, all fees and expenses of agents, advisors, Representatives, counsel, and accountants with respect thereto, within ten (10) Business Days of Seller’s payment of money or provision of other consideration; provided, that such moneys, consideration and other fees are approved in advance in writing by Buyer (such approval to be granted or withheld in Buyer’s sole discretion).
Section 7.20 Intercompany Accounts. Prior to the Effective Time, Seller shall cause all intercompany payables, receivables, and loans between the Business, on the one hand, and Seller and its Affiliates, on the other hand, to be settled or canceled.
Section 7.21 Wrong Pockets. If at any time during the three (3) year period after the Closing:
(a) (i) Seller or any of its Affiliates receives or identifies any property, right, or other asset or amount held by Seller or its Affiliates that is a Purchased Asset or is otherwise properly due and owing to Buyer (including a Purchased Asset) or (ii) Buyer or any of its Affiliates pays any amounts in respect of any Liability of Seller or any of its Affiliates (including any Excluded Liability), then, in each case of clauses (i) and (ii), Seller promptly shall and shall cause its Affiliates to, as applicable, assign, transfer, remit, or pay, or cause to be assigned, transferred, remitted, or paid, as applicable, such property, rights or other asset or amount, net of any out-of-pocket expenses and costs (including Taxes) incurred in connection with determining, collecting, or obtaining such property, right, or other asset or amount to Buyer or any of its Affiliates for no further consideration than as set forth in this Agreement and (2) hold such Purchased Asset or other amount in trust for the use and benefit and burden of Buyer or an Affiliate of Buyer designated by Buyer until Seller or its applicable Affiliate effects such conveyance, transfer or assignment; or
(b) (i) Buyer or any of its Affiliates receives or identifies any property, right, or other asset or amount held by Buyer or its Affiliates that is an asset of Seller or any of its Affiliates (including an Excluded Asset), or is otherwise properly due and owing to Seller or any of its Affiliates or (ii) Seller or any of its Affiliates pays any amounts in respect of any Liability of the Business or Purchased Assets (including any Assumed Obligation), then, in each case of clauses (i) and (ii), Buyer shall (1) promptly assign, transfer, remit, or pay, or cause to be assigned, transferred, remitted, or paid, as applicable, such property, right, or other asset or amount, net of
any out-of-pocket expenses and costs (including Taxes) incurred in connection with determining, collecting, or obtaining such property, right, or other asset or amount, to Seller or any of its Affiliates for no further consideration than as set forth in this Agreement and (2) hold such asset or other amount in trust for the use and benefit and burden of Seller or an Affiliate of Seller designated by Seller until Buyer or its applicable Affiliate effects such conveyance, transfer or assignment.
(c) Without limiting the foregoing, if any Purchased Asset is found to have been retained by Seller or any of its Affiliates in error, either directly or indirectly (including in preparation for the separation of the Business from Seller or its Affiliates), Seller shall, or shall cause its Affiliate to, as applicable, reasonably promptly transfer at no cost to Buyer or its Affiliates such Purchased Asset to Buyer or an Affiliate designated in writing by Buyer for no further consideration than as set forth in this Agreement.
(d) Buyer and Seller shall cause its applicable Affiliates to cooperate with the other Party, including by using commercially reasonable efforts to execute, acknowledge and deliver any further conveyances, notices, assumptions, releases and other instruments, and by taking such further actions, as may be reasonably necessary or appropriate to effect the transfers contemplated by this Section 7.21.
Section 7.22 Litigation Defense.
(a) Third Party Claims. From and after the Closing, if (x) Seller or any of its Affiliates is party to, or receives notice of, any Claim by any Person who is neither a Party to this Agreement nor an Affiliate of a Party to this Agreement which relates to an Assumed Obligation or a Purchased Asset, including any claim for which indemnification may be available pursuant to Section 7.18 or (y) Buyer or any of its Affiliates is party to, or receives notice of, any Claim by any Person who is neither a Party to this Agreement nor an Affiliate of a Party to this Agreement which relates to an Excluded Liability or an Excluded Asset, including any claim for which indemnification may be available pursuant to Section 7.18 (each, a “Third Party Claim”) Seller or Buyer, as applicable (the “Notifying Party”) shall promptly provide notice (a “Third Party Claim Notice”) of such Third Party Claim to the other Party. Any such Third Party Claim Notice shall describe the nature, facts, and circumstances of the Third Party Claim in reasonable detail. The Notifying Party shall provide the other Party with such other information known to it or in its possession with respect to the Third Party Claim as the other Party may reasonably request. The other Party, at its sole cost and expense, shall have the right, upon written notice to the Notifying Party within thirty (30) days (or such earlier time as may be required by the nature of the Third Party Claim) of receiving a Third Party Claim Notice, to assume the defense of the Third Party Claim through counsel of its choice; provided that the Notifying Party shall be entitled to retain its own counsel, at the Notifying Party’s sole cost and expense, if: (i) upon the advice of the Notifying Party’s counsel, a conflict of interest exists (or would reasonably be expected to arise) that would make it inappropriate for the same counsel to represent both Parties or their respective Affiliates in connection with a Third Party Claim; or (ii) such Third Party Claim (A) seeks non-monetary relief or (B) involves criminal allegations.
(b) Defense of Third Party Claims. If a Party assumes the defense of a Third Party Claim pursuant to Section 7.22(a) (in such capacity, the “Assuming Party”), the Assuming Party
shall keep the other Party reasonably informed with respect to such defense. Such other Party shall, and shall cause its Affiliates to, cooperate with the Assuming Party and their counsel, including making available to the Assuming Party all witnesses, pertinent records, materials, and information in such Party’s possession or under its control relating thereto as is reasonably required by the Assuming Party. Such other Party will have the right to participate in such defense, including appointing separate counsel; provided, that, the costs of such participation shall be borne solely by such other Party. The Assuming Party shall, in consultation with the other Party, make all decisions and determine all actions to be taken with respect to the defense and settlement of the Third Party Claim; provided, however, the Assuming Party may not directly or indirectly enter into, or permit to be entered into, a settlement or compromise with respect to a Third Party Claim without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed) unless: (i) the sole relief provided is monetary damages that will be paid in full by the Assuming Party, (ii) such settlement or compromise includes a complete release of the other Party and its Affiliates and (iii) there is no finding or admission of any violation of applicable Law or of the rights of any Person.
(c) Failure to Assume Defense. If a Party elects not to defend a Third Party Claim or fails to promptly notify the applicable Notifying Party in writing of its election to defend, the Notifying Party may defend such Third Party Claim and seek indemnification for any and all Losses that would otherwise be Assumed Obligations or Excluded Liabilities, as applicable, pursuant to this Agreement and all other fees and expenses of agents, advisors, Representatives, counsel, and accountants with respect thereto; provided, however, that the Notifying Party shall not pay, compromise, settle, or otherwise dispose of such Third Party Claim without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed).
(d) Conflict. The Parties agree that Section 7.10(d) shall control with respect to any Tax Contest.
Section 7.23 Financing.
(a) Buyer shall use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable to obtain the Debt Financing and to consummate the Debt Financing on the Closing Date, including using reasonable best efforts to (i) negotiate, execute and deliver definitive agreements (such definitive agreements being referred to as the “Debt Financing Agreements”) with respect to the Debt Financing on the terms and conditions contained in the Debt Financing Commitment Letters (including any “market flex” provisions applicable thereto) or, if available, on other terms and conditions that are acceptable to Buyer, including under a Permanent Financing (as defined in the Debt Financing Commitment Letters) in lieu of all or a portion of the Debt Financing contemplated under the Debt Financing Commitment Letters; provided that such other terms and conditions (including any such terms and conditions under a Permanent Financing) would not and would not reasonably be expected to (A) reduce the aggregate amount of net proceeds of the Debt Financing below the amount required to satisfy the Buyer Required Amount or (B) add, expand or otherwise modify the conditions precedent or contingencies to the funding on the Closing Date if such additions, expansions or modifications are adverse to Buyer or otherwise would or would reasonably be expected to (x) make less likely the funding of the Debt Financing
(or satisfaction of the conditions precedent to the funding of the Debt Financing) on or prior to the Closing Date, (y) adversely affect the ability of Buyer to timely consummate the Transactions or (z) adversely impact the ability of Buyer to enforce its rights against any other party to any of the Debt Financing Commitment Letters or the Debt Financing Agreements, (ii) satisfy on a timely basis or obtain the waiver of all conditions applicable to Buyer in the Debt Financing Commitment Letters, (iii) maintain in full force and effect the Debt Financing Commitment Letters in accordance with the terms thereof and not cancelling any commitments thereunder (subject to Buyer’s right to replace, restate, supplement, modify, assign, substitute, waive or amend the Debt Financing Commitment Letters in accordance with this Section 7.23), (iv) in the event that all conditions of each Debt Financing Commitment Letter have been satisfied or waived or, substantially concurrently with funding would be satisfied or waived, draw down upon and consummate the Debt Financing contemplated by the Debt Financing Commitment Letters and (v) paying all commitment or other fees and other amounts that become due and payable under or with respect to the Debt Financing Commitment Letters as they become due and payable.
(b) Buyer shall, promptly following the request of Seller, keep Seller informed with respect to all activity and developments concerning the Debt Financing, including advising and updating Seller, in a reasonable level of detail, with respect to status and providing copies of substantially final drafts of the primary Debt Financing Agreements. Without limiting the generality of the foregoing, Buyer agrees to notify Seller as promptly as practical (i) if the commitments with respect to all or any portion of the Debt Financing shall expire or otherwise become unavailable or be terminated for any reason, (iii) of a breach, default, termination or repudiation (or alleged or purported breach, default, termination or repudiation) by any party to the Debt Financing Commitment Letters of which Buyer becomes aware, including any Debt Financing Source notifying Buyer in writing that such Debt Financing Source (or its applicable Affiliate) no longer intends to provide financing to Buyer on the terms set forth therein or Buyer receiving any written notice, or other communication with respect to, any actual or threatened breach, default, termination or repudiation by any party to any Debt Financing Commitment Letter or (iv) if Buyer has concluded in good faith that it will not be able to obtain, on or prior to the Closing Date, all or any portion of the Debt Financing contemplated by the Debt Financing Commitment Letters in an amount sufficient to fund the Buyer Required Amount.
(c) Buyer shall have the right from time to time to amend, replace, supplement or otherwise modify, or waive any of its rights under, any Debt Financing Commitment Letter (including replacements or reductions of any Debt Financing Commitment Letter in connection with any Permanent Financing issued or incurred in lieu of all or a portion of any facility contemplated by the Debt Financing Commitment Letter); provided, however, that Buyer shall not, without the prior written consent of Seller (which shall not be unreasonably withheld), agree to, or permit, any amendment, restatement, replacement, supplement or other modification of, or waiver or consent under, the Debt Financing Commitment Letters, any Debt Financing Agreement or any other documentation relating to the Debt Financing if such amendment, restatement, replacement, supplement or other modification of, or waiver or consent, taken as a whole, would or would reasonably be expected to (i) reduce the aggregate amount of net proceeds of the Debt Financing below the amount required to satisfy the Buyer Required Amount or (ii) add, expand or otherwise modify the conditions precedent or contingencies to the funding on the Closing Date if such additions, expansions or modifications would or would
reasonably be expected to (x) make less likely the funding of the Debt Financing (or satisfaction of the conditions precedent to the funding of the Debt Financing) on the Closing Date in an amount equal to or greater than the Buyer Required Amount or (y) adversely affect the ability of Buyer to obtain the Debt Financing in an amount equal to or greater than the Buyer Required Amount; provided, that Buyer may amend the Debt Financing Commitment Letters to add initial lenders, lead arrangers, bookrunners, syndication agents or other similar roles of comparable creditworthiness that had not executed the Debt Financing Commitment Letters as of the Effective Date to the extent doing so would not impose new, modified or additional conditions or expand any existing conditions to the amount, receipt or availability of the Debt Financing or result in any amendments to the Debt Financing Commitment Letters that would not otherwise be permitted without Seller’s consent. Upon any such replacement, amendment, supplement or other modification of, or waiver under, any Debt Financing Commitment Letter in accordance with this Section 7.23, the terms “Debt Financing” and “Debt Financing Commitment Letters” shall mean the Debt Financing contemplated by such Debt Financing Commitment Letter as so replaced, amended, supplemented, modified or waived and such Debt Financing Commitment Letter as so replaced, amended, supplemented, modified or waived, respectively.
(d) If all or any portion of the Debt Financing becomes unavailable, Buyer shall use its reasonable best efforts to arrange and obtain from the same or alternative Debt Financing Sources, alternative or additional financing on terms and in an amount sufficient to enable Buyer to pay the Buyer Required Amount (“Alternative Financing”); provided that Buyer shall use reasonable best efforts to ensure that any such Alternative Financing shall not expand upon the conditions precedent to the Debt Financing as set forth in the Debt Financing Commitment Letters on the Effective Date if such expansions would adversely affect the ability of Buyer to consummate the Transactions and to pay the Buyer Required Amount. In such event, the term “Debt Financing” as used in this Agreement shall be deemed to include any Alternative Financing, and the term “Debt Financing Commitment Letters” as used in this Agreement shall be deemed to include the commitment letter(s) with respect to such Alternative Financing. Buyer shall promptly provide Seller with a correct and complete copy of any commitment letter and any related fee letter (or similar agreements) relating to such Alternative Financing (provided that any such fee letter may be redacted in a customary manner solely as to the fee amount, pricing caps, and other sensitive economic information; provided, further, that that none of the redacted terms would or would reasonably be expected to (i) adversely affect or delay the availability of the Alternative Financing or (ii) adversely affect the conditionality, availability, enforceability or aggregate principal amount of Alternative Debt Financing).
(e) Except as otherwise permitted pursuant to this Section 7.23, neither Buyer nor any of its Affiliates shall take any action that would reasonably be expected to materially impair, delay or prevent the consummation of the Debt Financing.
Section 7.24 Financing Cooperation.
(a) In connection with any contemplated obtainment of Debt Financing, prior to the Closing, at Buyer’s expense to the extent subject to the expense reimbursement provisions in Section 7.24(b), Seller and its Affiliates shall use reasonable best efforts to provide (and shall use reasonable best efforts to cause its and their Representatives to provide) to Buyer (at Buyer’s sole expense) such cooperation and assistance as may be reasonably required by Buyer to assist
Buyer in arranging and obtaining the Debt Financing (or any Alternative Financing in accordance with Section 7.23(d)), subject to Section 7.24(b). Such cooperation shall include, but not be limited to: (i) (x) furnishing to Buyer and its Representatives and the Debt Financing Sources the Required Information, (y) reasonable cooperation to update any Required Information in order to cause such Required Information to be Compliant; provided that such assistance shall be limited to be solely with respect to information and data derived or derivable from Seller’s current, historical books and records or otherwise reasonably available to Seller without undue burden on Seller; (ii) preparation for and participation in a reasonable number (with reasonable advance notice) (at reasonable times and locations mutually agreed and it being understood that any such meeting may take place via videoconference or web conference) of meetings, conference calls, road shows, due diligence sessions, drafting sessions and presentations with prospective lenders and investors and with rating agencies, including direct contact between senior management of Seller, on the one hand, and the actual and potential Debt Financing Sources, on the other hand or other reasonable and customary financing activities, in each case, by officers of customary seniority and expertise of the Seller; (iii) providing information regarding the Business, the Purchased Assets and the Assumed Obligations as may be reasonably requested by Buyer to assist Buyer in preparing materials for rating agency presentations, offering documents, private placement memoranda, registration statements, prospectuses, bank information memoranda, a confidential information memorandum, packages (including, in each case, procuring permission for the use of industry reports and data referenced therein) and similar documents reasonably and customarily used to syndicate the Debt Financing; (iv) using commercially reasonable efforts to assist Buyer in the preparation of customary pro forma financial statements (it being agreed that the preparation of any such pro forma financial statements will be the sole responsibility of Buyer and not Seller), including assisting in the preparation of audited and unaudited, carve-out financial statements, as may be reasonably requested by Buyer to the extent that such information is of the type and form customarily included in a bank information memoranda or an offering memorandum with respect to a private placement of debt, equity or equity-linked securities pursuant to Rule 144A under the Securities Act, as applicable; provided, that neither Seller or its Representatives shall be required to provide any such assistance with respect to (A) the Excluded Information or (B) financial information or statements relating to the determination of the proposed aggregate amount of the Debt Financing, the interest rates thereunder or the fees and expenses relating thereto; provided, further, that (x) such assistance shall be limited to be solely with respect to information and data derived from Seller’s historical books and records reasonably available to Seller and without undue burden on Seller and (y) neither Seller nor its Representatives shall be required to certify or attest to any such pro forma financial statements or other forecasted information; (v) to the extent required by the Debt Financing Sources, providing customary authorization letters authorizing the distribution of information to prospective Debt Financing Sources regarding the Business, subject to customary terms and conditions, including that (x) Seller and its Affiliates shall not have any liability of any kind or nature resulting from the use of information contained in such marketing information materials or otherwise in all activity undertaken in connection with the syndication or other marketing of the Debt Financing and (y) each recipient of such authorization letters agrees that it shall be entitled to rely only on the representations and warranties contained in the Debt Commitment Letters and the Debt Financing Agreement; and (vi) in connection with any offering of securities as part of the Debt Financing, use commercially reasonable efforts to cause the independent registered public accountants of Seller to participate, consistent with
customary practice, in due diligence sessions with the Debt Financing Sources, and to issue, consistent with customary practice, a customary comfort letter (including customary “negative assurance”) as reasonably requested by the Debt Financing Sources with respect to the financial information of the Business included in the offering documentation for any Debt Financing (subject to the completion by such accounts of customary procedures relating thereto).
(b) Nothing in this Section 7.24 will require Seller to (i) pay any fee or incur any other liability or obligation in connection with the Debt Financing; (ii) waive or amend any terms of this Agreement or agree to pay or reimburse any expenses for which it has not received prior reimbursement or is not otherwise indemnified by or on behalf of Buyer; (iii) approve, execute or deliver any definitive agreement (including any Debt Financing Agreement, including any certificate (including any solvency certificate), instrument, agreement or other documentation or agree to any change or modification of any existing certificate, instrument, agreement or other documentation); (iv) give any indemnities in connection with the Debt Financing; (v) take any action that, in the good faith determination of Seller, would adversely or unreasonably interfere with the conduct of the business or operations of Seller and its Affiliates or create an unreasonable risk of damage or destruction to any property or assets of Seller or any of its Affiliates; (vi) adopt resolutions (whether by the board of directors of Seller or otherwise) approving the agreements, documents and instruments pursuant to which the Debt Financing is obtained; (vii) provide any assistance or cooperation that (A) would cause any representation or warranty in this Agreement to be breached (or to not be true and current) or (B) cause any conditions to Closing set forth in Article VIII to fail to be satisfied by the Termination Date or otherwise result in a breach of this Agreement; (viii) provide any financial (or other information), except for the Required Information, that (1) is not produced in the ordinary course of business, (2) is not required to be provided pursuant to the terms of the documentation governing the Indebtedness of Seller or (3) cannot be produced or provided without unreasonable cost or expense prior to Closing; (ix) take any action that would conflict with, violate or result in a breach of or default (with or without notice, lapse of time or both) under its organizational documents or any contract or law (including with respect to privacy of employees) to which it or its property (or its Affiliates or their respective properties) is bound; (x) provide access to or disclose information that Seller determines in good faith would jeopardize any attorney client privilege (provided that Seller shall use reasonable best efforts to provide access to or disclose such information in a manner that would not jeopardize any attorney-client privilege), (xi) cause or be reasonably expected to cause any Representative of Seller to incur any personal liability, or (xii) deliver or cause the delivery of any legal opinions or reliance letter. Nothing in this Section 7.24 will require any Representative of Seller or any of its Affiliates to deliver any document, or take any action that would reasonably be expected to result in any actual or potential personal liability to any Representative of Seller or its Affiliates. Buyer shall promptly, upon request by Seller (and in any event within ten (10) Business Days of such request), reimburse Seller for all reasonable and documented out-of-pocket fees, costs and expenses incurred by Seller or any of its Affiliates (including reasonable and documented attorneys’ fees and expenses and accountants’ fees and expenses) in connection with its cooperation contemplated by this Section 7.24.
(c) Buyer shall indemnify and hold harmless Seller and its Affiliates and their respective directors, officers, employees and other Representatives from and against any and all Losses suffered or incurred by them in connection with the arrangement and completion of any
Debt Financing, capital markets transactions or related transactions by Buyer in connection with financing the Transactions and any information utilized in connection therewith except to the extent such losses result from the gross negligence or willful misconduct of such indemnified persons or the Seller’s willful breach of its obligations under Section 7.23 or this Section 7.24. This Section 7.24(c) shall survive the consummation of the Closing and any termination of this Agreement, and is intended to benefit, and may be enforced by, the officers and directors of Seller and its Affiliates and their respective heirs, executors, estates and personal representatives who are each third party beneficiaries of this Section 7.24(c).
(d) Seller hereby consents, on behalf of itself and its Subsidiaries and its Affiliates, to the use of its and its Subsidiaries’ and Affiliates’ logos in connection with the Debt Financing; provided, that such logos are used in a manner that is not intended to or reasonably likely to harm or disparage Seller’s or its Subsidiaries’ or Affiliates’ reputation or goodwill.
(e) The Parties acknowledge and agree that the provisions contained in this Section 7.24 represent the sole obligation of Seller and its Representatives with respect to any financing (including the Debt Financing) to be obtained by Buyer with respect to the transactions contemplated by this Agreement. Notwithstanding anything to the contrary in this Agreement (but without limitation of Seller’s obligations under this Section 7.24), solely to the extent Compliant Required Information is not delivered prior to the Closing, as promptly as reasonably practicable following the Closing, Seller and its Affiliates shall use reasonable best efforts to (and shall use reasonable best efforts to cause its and their Representatives to) furnish to Buyer and its Representatives Compliant Required Information.
(f) Notwithstanding anything in this Agreement to the contrary, in no event shall the receipt by, or availability to, Buyer of any funds or financing or any other financing transaction (including the Debt Financing) be a condition to Buyer’s obligation to effect the Closing.
(g) Seller shall use reasonable best efforts to provide to Buyer any necessary Uniform Commercial Code termination statements or other appropriate releases, in each case together with authorizations to file such termination statements or releases at and following the Closing, to evidence the release of any Encumbrance (other than Permitted Encumbrances) against the Purchased Assets, in each case, at least three (3) Business Days prior to Closing.
Section 7.25 Credit Support. At or prior to the Closing, Buyer shall use its reasonable best efforts, and Seller shall reasonably cooperate therewith, to arrange for (a) substitute letters of credit, surety bonds, guarantees and other obligations to replace any Credit Support that is (i) outstanding as of the Effective Date, including the outstanding Credit Support set forth on Schedule 7.25(a), or (ii) entered into in the Ordinary Course of Business during the period beginning on the Effective Date and ending on the fifth (5th) Business Day prior to the Closing Date (with respect to which, on or prior to executing any such Credit Support, Seller shall have delivered to Buyer written notice describing such additional Credit Support in reasonable detail) or (b) Buyer or one or more of its Affiliates to assume all of Seller’s or any of its Affiliates’ obligations under each such outstanding Credit Support, including the outstanding Credit Support set forth on Schedule 7.25(a) obtaining from the creditor, beneficiary or other counterparty a full release (in a form reasonably satisfactory to Seller) of Seller or its Affiliates for reimbursement to the creditor or fulfillment of other obligations to a beneficiary or
counterparty in connection with amounts drawn under such Credit Support; provided, that Buyer may elect (but shall have no obligation) to terminate (and, if Buyer does so elect, Seller shall use its reasonable best efforts to cause such termination, at Buyer’s expense, at the Closing) any of the underlying Contracts, obligations or arrangements to which such outstanding Credit Support relate. Notwithstanding anything to the contrary in this Section 7.25, (A) in obtaining the release of Seller or its Affiliates from any Liability pursuant to any of the outstanding Credit Support, Buyer and its Affiliates shall not be required to (1) agree to any amendment of or modification to any Contract or (2) otherwise agree to enter into any Contract on terms that are materially less favorable, in the aggregate, to Buyer than the terms applicable to Seller under the outstanding Credit Support, and (B) in replacing any of the Credit Support, Buyer shall be required only to furnish, obtain or post substantially equivalent credit support to the Credit Support being replaced. To the extent that Buyer has not elected to terminate the underlying Contracts, obligations or arrangements to which any outstanding Credit Support relate or the beneficiary or counterparty under any such Credit Support does not accept or Buyer is unable (after use of its reasonable best efforts) to implement any such substitute letter of credit, guarantee or other obligation proffered by Buyer (each such Credit Support, a “Continuing Credit Support”), Buyer shall, for so long as such Continuing Credit Support Obligations remain in effect, (i) reimburse Seller and its Affiliates for, and hold each of them harmless from, all amounts paid or payable to the relevant beneficiary, (ii) reimburse Seller and its Affiliates for any Third Party expenses reasonably incurred by Seller or its Affiliates for any Continuing Credit Support issued by Third Parties on Seller’s or its Affiliate’s behalf (excluding any internal costs or administrative overhead) and (iii) pay to Seller a fee equal to three percent (3%) p.a. from and after the date that is six (6) months following the Closing Date on the aggregate nominal amount of Continuing Credit Support issued by Seller or its Affiliates and then outstanding, as applicable, excluding the Credit Support set forth on Schedule 7.25(b) (solely to the extent Buyer is prohibited by applicable Law from replacing such Credit Support), with the fee pursuant to clause (iii) due and payable by Buyer to Seller in monthly installments (pro rated for partial months) and the reimbursement pursuant to clauses (i) and (ii) shall occur within ten (10) Business Days of Seller providing Buyer with evidence and documentation thereof reasonably satisfactory to Buyer. After the Closing, Buyer shall continue to use reasonable best efforts to replace such outstanding Continuing Credit Support as contemplated by the first sentence of this Section 7.25. Notwithstanding anything in this Agreement to the contrary, (x) during the Interim Period, Buyer, on a coordinated basis with Seller, shall have the right to contact and have discussions with each beneficiary of a Credit Support in order to satisfy its obligations under this Section 7.25 and Seller shall facilitate such communications with the counterparties to the Credit Support and (y) from and after the Closing, for a period of twenty-four (24) months, for so long as Buyer is not in breach of its obligations with respect to Continuing Credit Support, Seller and its Affiliates shall keep in place any Continuing Credit Support until such Continuing Credit Support terminates or expires by its terms or by consent of the applicable beneficiary or is replaced pursuant to this Section 7.25.
Section 7.26 Specified Site. From and after the Closing, Buyer shall be solely responsible for the conduct, defense of and discharging of all Liabilities and obligations related to the Specified Site, including without limitation, conducting all required cleanup or remedial actions required to address, investigate, monitor, treat or remove Hazardous Materials at the site (“Remedial Work”) at the Specified Site. Buyer shall keep Seller reasonably informed as to the progress of the Remedial Work and allow Seller to participate, at its own cost and expense, in
activities related to the Remedial Work, including (i) attending and participating in meetings with respect to the determination of the nature or extent of any specific Remedial Work to be performed; and (ii) reviewing and providing comments on any remedial proposals, reports or other documents, which comments will be considered in good faith by Buyer. To the extent that Buyer elects to limit the extent of the Remedial Work to standards acceptable only for industrial properties, any future conveyances of the Specified Site by Buyer shall require the acquiror thereof to limit the use of the property to uses consistent with that remediation standard and will require the recordation of appropriate deed restrictions requiring compliance with any such limits.
Section 7.27 Real Property Matters.
(a) At no additional cost or other Liability to Seller, Buyer shall have the right to obtain (i) a commitment from an American Land Title Association fee owner’s policy of title insurance in relation to the Owned Real Property and (ii) a current property condition report, zoning report and survey of the Owned Real Property, such reports and surveys performed by a registered land surveyor or engineer reasonably acceptable to Buyer, and all reports and surveys in such form and content as is reasonably acceptable to Buyer. At no additional cost or other Liability to Seller, Seller shall provide reasonable access, at reasonable times upon reasonable advance notice, to Buyer and its Representatives for purposes of such surveys and reports and shall reasonably cooperate with Buyer (at the expense of Buyer) in obtaining the foregoing.
(b) Within ninety (90) days of the Effective Date (“Title Objection Period”), Buyer shall be permitted to object to defects in title with respect to such Owned Real Properties listed on Schedule 7.27 (each, a “Real Property Objection”) as disclosed by such title commitments or surveys that are not Permitted Encumbrances and that are reasonably expected to be material and adverse to the Business. If Buyer raises any Real Property Objections, Seller shall, if such defect is not a Must-Cure Item, use good faith commercially reasonable efforts to remove such title defect prior to the Closing. If such defect is a Must-Cure Item, Seller shall remove such defect prior to the Closing. If Seller is unwilling or unable to remove a monetary title defect prior to the Closing, Buyer may, in its sole discretion, pay such amounts and receive credit against the amounts due to Seller at Closing. Seller shall pay all reasonable costs of recording any instruments required to discharge and/or release the Must-Cure Items and any other costs necessary or appropriate to effect such discharge and/or release of the Must-Cure Items.
(c) On the Closing Date, if requested by Buyer, Seller shall execute and deliver customary owner’s affidavits and gap indemnities with respect to the Owned Real Property and other customary authority documentation reasonably requested by the title company, as may be in a form reasonably acceptable to Seller and the title company to (i) effect the transfer of the Owned Real Property to Buyer, and (ii) issue an ALTA extended coverage form of owner’s title insurance policy with respect to each parcel of Owned Real Property listed on Schedule 7.27 (each, a “Title Policy”). The issuance of any Title Policy and the obligations set forth in this Section 7.27 shall not be a condition to Closing. If the Closing occurs prior to the Title Objection Period or within ten (10) days of the expiration of the Title Objection Period, Seller’s obligations set forth in this Section 7.27 shall survive the Closing for a period not to exceed ninety (90) days (and any references in Section 7.27(b) and this Section 7.27(c) to the Closing or the Closing Date shall refer to such extended period).
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to Each Party’s Closing Obligations. The respective obligations of each Party to consummate the Transactions are subject to the satisfaction (or, where legally permissible, waiver in writing by such Party, in its sole and absolute discretion) at or prior to the Closing of each of the following conditions:
(a) The Required Regulatory Approvals shall have been obtained; and
(b) No Order (whether temporary, preliminary, or permanent) which prevents the consummation of the Transactions shall have been issued and remain in effect (without limiting each Party’s obligations in this Agreement), and no Law shall have been enacted which prohibits or makes unlawful the consummation of the Transactions (any such Order or Law, a “Legal Restraint”).
Section 8.2 Conditions to Buyer’s Closing Obligations. The obligation of Buyer to consummate the Transactions is subject to the satisfaction (or, where legally permissible, waiver in writing by Buyer, in its sole and absolute discretion) at or prior to the Closing of each of the following additional conditions:
(a) Seller shall have performed and complied in all material respects with all of the covenants and agreements hereunder required to be performed and complied with by Seller on or prior to the Closing;
(b) (i) The Seller Fundamental Representations shall be true and correct in all material respects, disregarding any materiality, Material Adverse Effect, material adverse effect or similar qualifications therein, as of the Effective Time as though made at and as of the Effective Time (except to the extent that any such representation or warranty which by their express provisions are made as of a particular date, in which case such representation and warranty will be true and correct only as of such date) and (ii) all other representations and warranties of Seller set forth in Article V shall be true and correct, disregarding any materiality, Material Adverse Effect, material adverse effect or similar qualifications therein, as of the Effective Time as though made at and as of the Effective Time (except to the extent that any such representation or warranty which by its express provisions are made as of a particular date, in which case such representation or warranty will be true and correct only as of such date), except for any failure or failures of such representations and warranties to be true and correct that would not, individually or in the aggregate, result in a Material Adverse Effect;
(c) Buyer shall have received a certificate from Seller, duly executed by a duly authorized officer of Seller and dated the Closing Date, to the effect that the conditions set forth in Section 8.2(a), Section 8.2(b) and Section 8.2(e) have been satisfied;
(d) Seller shall be ready, willing, and able to deliver all agreements, instruments, and documents required to be delivered by or on behalf of Seller pursuant to Section 4.2;
(e) Since the Effective Date, no fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect, shall have occurred; and
(f) No Order granting any of the Required Regulatory Approvals shall impose terms or conditions that, individually or in the aggregate (when taken together with the other Orders granting such Required Regulatory Approvals), would reasonably be expected to result in a Burdensome Condition.
Section 8.3 Conditions to Seller’s Closing Obligations. The obligation of Seller to consummate the Transactions is subject to the satisfaction (or, where legally permissible, waiver in writing by Seller, in its sole and absolute discretion) at or prior to the Closing Date of each of the following additional conditions:
(a) Buyer shall have performed and complied in all material respects with all of the covenants and agreements hereunder required to be performed and complied with by Buyer prior to the Closing;
(b) the representations and warranties of Buyer set forth in Article VI shall be true and correct, disregarding any materiality, material adverse effect or similar qualifications therein, as of the Effective Time as though made at and as of the Effective Time (except to the extent that any such representation or warranty which, by their express provisions, are made as of a particular date, in which case such representation or warranty will be true and correct only as of such date), except for any failure or failures of such representations and warranties to be true and correct that would not, individually or in the aggregate, cause such representations and warranties of Buyer to be materially inaccurate taken as a whole or have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or the Ancillary Agreements or consummate the Transactions;
(c) Seller shall have received a certificate from Buyer, duly executed by a duly authorized officer of Buyer and dated the Closing Date, to the effect that the conditions set forth in Section 8.3(a) and Section 8.3(b) have been satisfied; and
(d) Buyer shall be ready, willing, and able to deliver all agreements, instruments, and documents required to be delivered by Buyer under Section 4.3.
ARTICLE IX
SURVIVAL, TERMINATION AND OTHER REMEDIES
Section 9.1 Survival.
(a) Except in the case of Fraud, none of the representations and warranties of any Party contained in this Agreement (including any certificates to be delivered under Section 4.2(a) and Section 4.3(b)) shall survive the Closing. None of the covenants or obligations of any Party required to be performed by such Party at or before the Closing shall survive the Closing; provided, that for the avoidance of doubt, the obligations hereunder to make payments at or in connection with the Closing shall survive until performed in accordance with their terms. Unless otherwise indicated herein, the covenants and agreements set forth in this Agreement, which by
their express terms are required to be performed after the Closing, shall survive the Closing until they have been performed or satisfied.
(b) Except to the extent arising from or related to Fraud (and then only to the extent of such Fraud) and subject to Section 7.18 and claims for injunctive relief, specific performance or other similar equitable remedies pursuant to Section 10.11, the rights provided under the RWI Policy will be Buyer’s sole recourse for any breach of any representation and warranty contained in this Agreement (even in the event the RWI Policy is never issued by an insurer, the RWI Policy is revoked, canceled, or modified in any manner after issuance for any reason, a claim is denied, in whole or in part, by any insurer under the RWI Policy or coverage is unavailable under the RWI Policy for any reason, including due to exclusions from coverage thereunder), and Seller will have no Liability (other than in the event of Fraud, and then only to the extent of such Fraud) for any breach of any representation or warranty contained in this Agreement. Nothing in this Section 9.1 will in any way be deemed to limit or modify any rights of Buyer or its Affiliates under the RWI Policy or inhibit Buyer from obtaining any remedies they may have against any insurer under the RWI Policy.
Section 9.2 Termination. Without prejudice to other remedies which may be available to the Parties by applicable Law or this Agreement, this Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing:
(a) by mutual written consent of Seller and Buyer;
(b) by either Seller or Buyer by giving written notice to the other Party if the Closing shall not have occurred by the date that is nine (9) months after the Effective Date (the “Termination Date”), unless extended by written agreement of Seller and Buyer; provided, that if the only outstanding condition to Closing (other than any conditions that by their terms are to be satisfied at Closing and that remain capable of being satisfied) is one or more of the conditions set forth in Section 8.1(a) or Section 8.1(b), then the Termination Date shall automatically be extended by an additional three (3) months; provided, further, that the right to terminate this Agreement under this Section 9.2(b) shall not be available to any Party if such failure of the Closing to occur by the Termination Date was due to the material breach or violation of, or material failure to perform, any of the representations, warranties, covenants, or agreements contained in this Agreement by such Party; provided, further, that the right to terminate this Agreement pursuant to this Section 9.2(b) shall not be available to any Party (i) during the pendency of any proceeding for specific performance of this Agreement provided by Section 10.11, and in such case, the Termination Date shall automatically be extended following completion of such proceeding such that the Termination Date shall be five (5) Business Days following the completion of such proceeding, or (ii) during the time period referred to in Section 4.1, starting on the date on which the last of the conditions set forth in Article VIII (other than any such conditions which, by their terms or nature, are not capable of being satisfied until the Closing Date but subject to the satisfaction or, when permissible, waiver in writing of such conditions at the Closing) is satisfied or, when permissible, waived in writing, and in such case, the Termination Date shall automatically be extended such that the Termination Date will be one (1) Business Day after the day Closing was required to occur in accordance with Section 4.1;
(c) by either Seller or Buyer by giving written notice to the other Party if: (i) any Required Regulatory Approval or any approval or waiting period expiration or termination listed in clause (i) of the definition of Required Regulatory Approval, has been denied by the applicable Governmental Entity and such denial has become final and non-appealable; (ii) any Governmental Entity in the United States has issued an Order or enacted a Law permanently restraining, enjoining, or otherwise prohibiting or making unlawful the Closing, and such Order or Law, if applicable, has become final and non-appealable or (iii) (A) with respect to termination by Buyer under this clause (iii), a Burdensome Condition exists, and (B) the undertakings, terms, conditions, liabilities, obligations commitments or sanctions giving rise to such Burdensome Condition have become final and non-appealable; provided, however, that the right to terminate this Agreement under this Section 9.2(c) shall not be available to any Party if the denial, Order or Law described in clauses (i), (ii) or (iii) hereof is the result of the failure of such Party to perform or comply with any of its covenants, agreements, obligations or conditions contained in this Agreement to be performed or complied with by it prior to the Closing;
(d) by either Seller or Buyer by giving written notice to the other Party if such other Party has breached any of its representations, warranties, covenants, agreements, or other obligations in this Agreement in a manner that would reasonably be expected to cause any condition of such Party giving notice set forth in Article VIII not to be satisfied and, except in the case of a breach of Buyer’s obligation to pay the Purchase Price in accordance with the terms of Article III, such breach is of a character that is not capable of being cured or has not been cured by the earlier of (i) the Termination Date and (ii) thirty (30) days after written notification thereof by the Party seeking termination hereunder; provided, that the right to terminate this Agreement under this Section 9.2(d) shall not be available to a Party if such Party is then in material breach of or there is a material failure to perform any of such Party’s covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing, or if any representation or warranty contained in Article V (if such Party is Seller) or Article VI (if such Party is Buyer) is or becomes untrue or inaccurate in any material respect with respect to such Party and such breach or failure to perform or such untrue or inaccurate representation or warranty would result in the failure of any condition set forth in Section 8.1 or Section 8.2 (if such Party is Seller) or Section 8.1 or Section 8.3 (if such Party is Buyer) to be satisfied; or
(e) by Seller, upon written notice to Buyer, if (i) all the conditions to Closing set forth in Section 8.1 and Section 8.2 have been and continue to be satisfied or waived as of the date the Closing should have been consummated pursuant to the terms of this Agreement (other than those conditions that, by their terms or by their nature, are to be satisfied at the Closing, each of which shall be capable of being satisfied if the Closing were to occur), (ii) Seller has irrevocably certified in writing to Buyer, on or prior to the date on which the Closing is required to occur pursuant to Section 4.1, that all conditions to Closing set forth in Section 8.1 and Section 8.3 have been satisfied or, when permissible, waived (other than any such conditions which by their terms or nature are not capable of being satisfied until the Closing, each of which are, at the time that such written notice is delivered, capable of being satisfied if the Closing were to occur at the time that such written notice is delivered) and that Seller is ready, willing and able to, and will proceed with and immediately consummate, the Closing when required pursuant to Section 4.1, and (iii) Buyer fails to consummate the Closing within five (5) Business Days following the time the Closing is required to occur pursuant to Section 4.1 (and Seller did not, in fact, prevent Buyer from consummating the Closing on a subsequent date prior to Seller’s termination of this
Agreement pursuant to this Section 9.2(e)); provided, that the right to terminate this Agreement pursuant to this Section 9.2(e) will not be available to Seller if Seller is then in material breach of or there is a material failure to perform any of Seller’s covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing, or if any representation or warranty contained in Article V is or becomes untrue or inaccurate in any material respect and such breach or failure to perform or such untrue or inaccurate representation or warranty would result in the failure of any condition set forth in Section 8.1 or Section 8.2 to be satisfied.
Section 9.3 Effect of Termination.
(a) In the event of any termination of this Agreement pursuant to Section 9.2, all rights and obligations of the Parties hereunder shall terminate without any Liability on the part of either Party or its Affiliates or other Related Persons in respect thereof, except that (i) the provisions of, and the obligations of Buyer and Seller under Section 1.2, Section 7.2(c), Section 7.4(a), Section 7.17, this Section 9.3, Section 10.1, Section 10.2, Section 10.3, Section 10.4, Section 10.5, Section 10.6, Section 10.7, Section 10.9, Section 10.10, Section 10.11, Section 10.12, Section 10.16, Section 10.17 and Section 10.18 (and any definitions in Article I referenced in any of the foregoing), and the Confidentiality Agreement shall remain in full force and effect and (ii) subject to Section 9.3(e), such termination shall not relieve any Party of any Liability for any willful and intentional breach of this Agreement prior to such termination.
(b) Notwithstanding anything to the contrary in this Agreement, if: (i) (A) either Seller or Buyer terminates this Agreement (1) pursuant to Section 9.2(b) and, at the time of such termination, any of the conditions set forth in Section 8.2(f) or, in connection with the Required Regulatory Approvals, Section 8.1(a) or Section 8.1(b) shall have not been satisfied, or (2) in connection with the Required Regulatory Approvals, pursuant to Section 9.2(c)(i) or Section 9.2(c)(ii), (B) Buyer terminates this Agreement pursuant to Section 9.2(c)(iii) or (C) Seller terminates this Agreement pursuant to Section 9.2(d) based on a failure by Buyer to perform its covenants or agreements under Section 7.9, and (ii) in each case of the foregoing clauses (A), (B) and (C), at the time of such termination, all other conditions to the Closing set forth in Section 8.1(b) (other than Legal Restraints arising in connection with the Required Regulatory Approvals), Section 8.2(a), Section 8.2(b) and Section 8.2(e) shall have been satisfied or waived (except for (I) those conditions that by their nature are to be satisfied at the Closing but which conditions would be satisfied or would be capable of being satisfied if the Closing Date were the date of such termination or (II) those conditions that have not been satisfied as a result of a breach of this Agreement by Buyer), then Buyer shall, within two (2) Business Days following any such termination, pay to Seller or its designee in cash by wire transfer in immediately available funds to an account designated by Seller a non-refundable fee in an amount equal to six and a half percent (6.5%) of the Base Purchase Price (the “Reverse Termination Fee”).
(c) Nothing herein shall be construed to prohibit Seller from first seeking specific performance in accordance with the terms of Section 10.11 but thereafter terminating this Agreement and electing to receive the Reverse Termination Fee as liquidated damages in lieu of fully prosecuting its claim for specific performance.
(d) The Parties acknowledge that the agreements contained in Section 9.3(b) are an integral part of the Transactions, and that, without these agreements, the Parties would not enter
into this Agreement. If Buyer fails to promptly pay an amount due pursuant to Section 9.3(b) and, in order to obtain such payment, Seller commences an action against Buyer, Buyer shall pay to Seller (if Seller is the prevailing party in such action), on the one hand, or Seller shall pay to Buyer (if Buyer is the prevailing party in such action), on the other hand, such prevailing party’s reasonable and documented out-of-pocket costs and expenses (including reasonable attorneys’ fees) in connection with such action, together with interest on the amount of such payment from the date such payment was required to be made until the date of payment at the U.S. prime rate as quoted by The Wall Street Journal in effect on the date such payment was required to be made.
(e) Each of the Parties acknowledges and agrees that the Reverse Termination Fee is not intended to be a penalty, but rather is liquidated damages in a reasonable amount that will compensate Seller in the circumstances in which such Reverse Termination Fee is due and payable, for the efforts and resources expended and opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions, which amount would otherwise be impossible to calculate with precision. As such, notwithstanding anything to the contrary in this Agreement, (i) without limiting the rights of Seller under Section 10.11 and any reimbursement obligations hereunder prior to the termination of this Agreement, if this Agreement is terminated under circumstances in which Buyer is obligated to pay the Reverse Termination Fee under Section 9.3(b), upon payment of the Reverse Termination Fee, and, if applicable, the costs and expenses of Seller pursuant to Section 9.3(d) in accordance therewith, Buyer and its Related Persons and Debt Financing Sources shall have no further liability with respect to this Agreement or the Transactions to Seller or its Related Persons, and payment of the Reverse Termination Fee and such costs and expenses by Buyer shall be the sole and exclusive remedy (whether in contract or in tort or otherwise, or whether at law (including at common law or by statute) or in equity) of Seller and its Related Persons for any action, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements, suffered or incurred by Seller or any other Person in connection with this Agreement or the Transactions, including for the failure of the Closing to occur for any reason, or any matter forming the basis for such termination, and Seller shall not have, and expressly waives and relinquishes, any other right, remedy or recourse (whether in contract or in tort or otherwise, or whether at law (including at common law or by statute) or in equity). The Parties acknowledge and agree that, notwithstanding anything to the contrary set forth in this Agreement, in no event shall (A) Seller be entitled to payment of both (x) monetary damages (including in connection with Fraud or a willful and intentional breach of this Agreement or breaches under other Ancillary Agreements) and (y) the Reverse Termination Fee or (B) Seller be entitled to both (x) payment of any monetary damages (including in connection with Fraud or a willful and intentional breach of this Agreement or breaches under other Ancillary Agreements) or the Reverse Termination Fee and (y) a grant of specific performance of this Agreement or any other equitable remedy that results in the Closing occurring.
(f) Except as otherwise provided in this Agreement, in the event that a Party having the right to unilaterally terminate this Agreement desires to terminate this Agreement, such Party shall give the other Party notice of such termination, specifying the basis for such termination, and this Agreement will terminate and the Transactions will be abandoned, without further action by either Party, whereupon the Liabilities of the Parties hereunder will terminate, except as
otherwise expressly provided in this Section 9.3. Upon any termination of this Agreement: (i) all filings, applications, and other submissions made pursuant to this Agreement, to the extent applicable and practicable, will, within a commercially reasonable time thereafter, be withdrawn by the filing Party from the Governmental Entity or other Person to which they were made; and (ii) Buyer shall return or destroy, at Buyer’s sole expense, all data and information (including all copies, extracts, and other reproductions, in whole or in part) furnished by Seller or any of its Affiliates or Representatives to Buyer or any of its Affiliates or Representatives or prepared by or on behalf of Buyer in connection with its due diligence investigation of the Transactions, in each case, in accordance with the Confidentiality Agreement and the terms of this Agreement, and an officer of Buyer shall certify the same to Seller in writing.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Expenses. Buyer shall bear one hundred percent (100%) of all filing fees of either Party incurred in connection with any Required Regulatory Approvals. Further, Buyer shall bear: (a) all costs and expense related to the RWI Policy; and (b) all filing, recording, transfer, or other fees or charges of any nature in connection or otherwise payable pursuant to any provision of any Law, Order, or franchise in connection with the sale, transfer, and assignment by Seller or its Affiliates of the Purchased Assets and the Assumed Obligations to Buyer or its Affiliates. Except as provided in the foregoing, or to the extent otherwise specifically provided herein (including Section 7.10(a)), and irrespective of whether the Transactions are consummated, all other costs and expenses incurred in connection with this Agreement and the Transactions will be borne by the Party incurring such costs and expenses, including all fees and expenses of agents, advisors, Representatives, counsel (including in connection with the preparation and prosecution of any and all applications and proceedings with respect to the TPUC Application), and accountants.
Section 10.2 Amendment. Except as set forth in Section 7.6, Section 7.8 and Schedule 7.11(a), this Agreement may not be amended, supplemented, or otherwise modified except in a written instrument executed by each of the Parties. No waiver by any of the Parties of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No waiver by any of the Parties of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the Party sought to be charged with such waiver. Notwithstanding the foregoing, no amendments or modifications to Section 10.18 nor any waiver to the provisions in Section 10.18 shall be permitted in a manner adverse to any Debt Financing Source without the prior written consent of such Debt Financing Source.
Section 10.3 Notices. All notices and other communications required or permitted to be given by any provision of this Agreement shall be in writing and mailed (certified or registered mail, postage prepaid, return receipt requested) or sent by hand or overnight courier, or e-mail transmission (when demonstrably transmitted from the email server of the sender and so long as such transmission does not generate an error message or notice of non-delivery),
charges prepaid, and addressed to the intended recipient as follows, or to such other addresses or numbers as may be specified by a Party from time to time by like notice to the other Party:
(a) If to Seller, to:
Piedmont Natural Gas Company, Inc.
c/o Duke Energy Corporation
550 S. Tryon Street, DEC45A
Charlotte, NC 28202
Attn: Greer Mendelow
Email: greer.mendelow@duke-energy.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, DC 20005
Attn: Pankaj Sinha; Erik Elsea
Email: psinha@skadden.com; erik.elsea@skadden.com
(b) if to Buyer, to:
c/o Spire Inc.
700 Market Street, 6th Floor
St. Louis, MO 63101
Attn: Matt Aplington, Senior Vice President and Chief Legal Officer
Email: Matt.Aplington@spireenergy.com
with a copy (which shall not constitute notice) to:
Sidley Austin LLP
787 Seventh Avenue
New York, NY 10019
Attn: Jeffrey Kochian; Brittany Harrison
Email: jeffrey.kochian@sidley.com; brittany.harrison@sidley.com
All notices and other communications given in accordance with the provisions of this Agreement shall be deemed to have been given and received: (i) when delivered by hand or transmitted by e-mail (when demonstrably transmitted from the email server of the sender and so long as such transmission does not generate an error message or notice of non-delivery); (ii) three (3) Business Days after the same are sent by certified or registered mail, postage prepaid, return receipt requested; or (iii) one (1) Business Day after the same are sent by a reliable overnight courier service, with acknowledgment of receipt.
Section 10.4 Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign (by Contract, stock sale, operation of applicable Law, or otherwise) either this Agreement or any of its rights, interests, or obligations hereunder without the express prior written consent of the
other Party, and any attempted assignment, without such consent, shall be null and void; provided, that Buyer may, without the consent of Seller, assign or delegate all or any part of its rights under this Agreement to (a) reasonably in advance of the making of the initial filings with Governmental Entities related to the Required Regulatory Approvals as contemplated by Section 7.9(b), any of its wholly-owned Subsidiaries or (b) any of its lenders as collateral security for their obligations under any of their debt financing arrangements (including the lenders or other Persons providing Debt Financing) so long as such assignment does not result in a breach of any representation or covenant of Buyer in this Agreement and would not reasonably be expected to delay, hinder or prohibit the consummation of the Transactions; provided, however, that, in each case, no such assignment shall relieve Buyer of, or constitute a discharge of, any of Buyer’s liabilities and obligations under this Agreement.
Section 10.5 Parties in Interest. Nothing in this Agreement, whether express or implied, is intended or shall be construed to give any Person, other than the Parties, their respective successors and permitted assigns and the Indemnified Parties with respect to Section 7.18, any legal or equitable right, remedy, claim, or benefit under or in respect of this Agreement, and the Indemnified Parties may directly enforce the provisions of Section 7.18. Notwithstanding anything to the contrary herein (including in this Section 10.5), the Debt Financing Sources shall be intended third party beneficiaries of and may enforce the Debt Financing Source Provisions (and any defined term or provision of this Agreement to the extent a modification, waiver or termination of such defined term or provision would modify the substance of such Debt Financing Source Provisions) and such provisions (including this Section 10.5) may not be modified, waived or terminated in a manner that impacts or is adverse in any respect to the Debt Financing Sources without the prior written consent of such Debt Financing Sources.
Section 10.6 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be declared by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable in any respect, all other provisions of this Agreement, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid, illegal, void, or unenforceable, shall nevertheless remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. Furthermore, in lieu of such invalid, illegal, void, or unenforceable provision, there shall be added automatically as a part of this Agreement a valid, legal and enforceable provision as similar in terms to such invalid, illegal, void or unenforceable provision as may be possible so that the Transactions are fulfilled to the greatest extent possible.
Section 10.7 Entire Agreement. This Agreement (including the Schedules and the Exhibits hereto) and the Ancillary Agreements constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior understandings, negotiations, agreements, or representations among the Parties of any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof or thereof.
Section 10.8 Counterparts. This Agreement may be executed in any number of original, PDF, or facsimile counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. Documents shall include images of manually executed signatures transmitted by facsimile or other electronic format (including “pdf”, “tif” or “jpg”) and other electronic signatures (including DocuSign and AdobeSign). In the event that any signature to this Agreement or any agreement or certificate delivered pursuant hereto, or any amendment thereof, is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof. No Party will raise the use of a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver any such signature page or the fact that such signature was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense to the formation or enforceability of a Contract and each Party forever waives any such defense.
Section 10.9 Governing Law. This Agreement and all claims or causes of action based upon, arising out of or relating to this Agreement and the Transactions, shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to principles or rules of conflict, or choice of laws to the extent such principles or rules would require or permit the application of Laws of another jurisdiction.
Section 10.10 Consent to Jurisdiction; Waiver of Jury Trial.
(a) Each of the Parties irrevocably submits to the exclusive jurisdiction of the Delaware Chancery Court (or, if the Delaware Chancery Court shall be unavailable, any other court of the State of Delaware, or in the case of Claims to which the federal courts have exclusive subject matter jurisdiction, any federal court of the United States of America sitting in the State of Delaware, and, in each case, appellate courts therefrom) for the purposes of any suit, Claim, or other proceeding arising out of or relating to this Agreement or any Transactions (and irrevocably agrees not to commence any Claim, suit, or proceeding relating hereto except in such courts). Each of the Parties further irrevocably agrees that service of any process, summons, notice, or document hand delivered or sent by U.S. registered mail to such Party’s respective address set forth in Section 10.3 shall be effective service of process for any Claim, suit, or proceeding with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any Claim, suit, or proceeding arising out of or relating to this Agreement or the Transactions in (x) state courts of the State of Delaware or (y) the United States District Court for the District of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Claim, suit, or proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each Party agrees that a final judgment in any Claim, suit or proceeding so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in law or in equity.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS, THE TRANSACTIONS OR THE ANCILLARY AGREEMENTS, OR THE ACTIONS OF THE PARTIES IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF OR THEREOF.
Section 10.11 Specific Performance. Notwithstanding anything in this Agreement to the contrary: (a) each Party recognizes and acknowledges that a breach by it of any covenants or agreements contained in this Agreement shall cause the other Party to sustain irreparable harm for which it would not have an adequate remedy at law, and, therefore, in the event of any such breach the aggrieved Party shall, without the posting of bond or other security (any requirement for which the Parties hereby waive), be entitled to the remedy of specific performance of such covenants and agreements, including injunctive and other equitable relief, in addition to any other remedy to which it might be entitled; (b) a Party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement; and (c) in the event that any action is brought in equity to enforce the provisions of this Agreement, no Party shall allege, and each Party hereby waives the defense or counterclaim, that there is an adequate remedy at law. For the avoidance of doubt, notwithstanding anything to the contrary in this Agreement, under no circumstances shall Seller be entitled to receive both a grant of specific performance to require Buyer to consummate the Closing and payment of the Reverse Termination Fee. Notwithstanding anything in this Agreement to the contrary, in no event shall Seller or any of its Affiliates or Representatives (or any other Person) be entitled to, or permitted to seek, specific performance in respect of any Debt Financing Source or Buyer’s or its Affiliates’ respective rights under the Debt Commitment Letters or any other agreements with any Debt Financing Source relating to the Debt Financing.
Section 10.12 No Special Damages; Sole and Exclusive Remedy.
(a) In no event shall either Party be liable for (i) special, punitive, exemplary, incidental, consequential, or indirect damages; (ii) lost profits or lost business, loss of enterprise value, diminution in value, damage to reputation, or loss of goodwill; or (iii) damages calculated based on a multiple of profits, revenue, or any other financial metric hereunder, in each case, except to the extent payable by the Indemnified Party to a Third Party in connection with a matter for which such Indemnified Party is otherwise entitled to indemnification under Section 7.18.
(b) Furthermore, Buyer and Seller acknowledge and agree that:
(i) the Parties have voluntarily agreed to define their rights, Liabilities, and obligations respecting the Transactions exclusively in contract pursuant to the express terms and provisions of this Agreement and hereby waive any statutory and common law remedies, with respect to matters relating to the Transactions;
(ii) the sole and exclusive remedies for any breach of the terms and provisions of this Agreement, or any action otherwise arising out of or related to the Transactions, shall be those remedies available at law or in equity for breach of contract only (as such contractual remedies have been further limited or excluded pursuant to the express terms of this Agreement, including pursuant to Section 7.18 and Section 9.3(e));
(iii) the provisions of and the limited remedies provided in this Section 10.12 were specifically bargained for between the Parties and were taken into account by the Parties in arriving at the Purchase Price;
(iv) after the Closing, no Party or its Affiliates may seek the rescission of the Transactions; and
(v) the Parties each hereby acknowledge that this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length negotiations, and the Parties specifically acknowledge that no Party has any special relationship with another Party that would justify any expectation beyond that of an ordinary buyer and an ordinary seller in an arm’s-length transaction.
Section 10.13 Exhibits and Schedules.
(a) All Exhibits and Schedules and the Seller Disclosure Schedules attached hereto are hereby incorporated herein by reference and made a part hereof.
(b) Any disclosure made by Seller in the Seller Disclosure Schedules with reference to any Section or Schedule of this Agreement shall be deemed to be a disclosure with respect to all other Sections or Schedules to which the relevance of such disclosure is reasonably apparent on its face. Certain information set forth in the Seller Disclosure Schedules is included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of any information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made in this Agreement nor shall such information be deemed to establish a standard of materiality.
Section 10.14 Headings. The table of contents and Section headings contained in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement or affect in any way the meaning or interpretation of this Agreement.
Section 10.15 Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
Section 10.16 No Recourse. Notwithstanding anything to the contrary in this Agreement or in any Ancillary Agreement, this Agreement and the Ancillary Agreements may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the Ancillary Agreements, or the Transactions may only be brought against, the Persons that are expressly named as parties hereto or thereto, and then only with respect to, and to the extent of, the specific obligations set forth herein and therein with respect to such party. Except to the extent such Person is a named party to this Agreement or the Ancillary Agreements (and then only to the extent of the specific obligations undertaken by such named party in this Agreement or the Ancillary Agreements, and not otherwise), no past, present, or future equity holder, controlling person, director, officer, employee, agent, attorney, Affiliate,
member, manager, general or limited partner, stockholder, investor, or assignee of any party to this Agreement, nor any past, present or future equity holder, controlling person, director, officer, employee, agent, attorney, Affiliate, member, manager, general or limited partner, stockholder, investor, or assignee of any of the foregoing (collectively, “Related Persons”), shall have any Liability or obligation (whether in contract, tort, equity, or otherwise) for any one or more of the representations, warranties, covenants, agreements, or other obligations or Liabilities of Seller or Buyer under this Agreement or the applicable parties to the Ancillary Agreements (whether for indemnification or otherwise) of or for any claim based on, arising out of, or related to this Agreement, the Ancillary Agreements or the Transactions. For the avoidance of doubt, nothing in this Agreement shall limit the recourse of Buyer or any of its Affiliates in respect of Fraud.
Section 10.17 Transaction Privilege.
(a) Seller or certain of its Affiliates have engaged Skadden, Arps, Slate, Meagher & Flom LLP, McGuireWoods LLP and Holland & Knight LLP (each “Seller’s Counsel”) as their legal counsel in connection with the Transactions. By entering into this Agreement, Buyer and its Affiliates: (a) consent to the continued representation of Seller and certain of its Affiliates by Seller’s Counsel in connection with the Transactions; (b) waive any actual or alleged conflict of Seller’s Counsel that may arise from Seller’s Counsel’s representation of Seller and certain of its Affiliates in connection with the Transactions; and (c) agree not to seek to disqualify or otherwise prevent Seller’s Counsel from representing Seller and certain of its Affiliates in the Transactions. This consent and waiver extend to Seller’s Counsel representing Seller and certain of its Affiliates against Buyer and its Affiliates in litigation, arbitration, or mediation in connection with this Agreement or the Transactions. Nothing contained herein shall be deemed to constitute a waiver of any privilege or consent to the disclosure of any confidential information.
(b) Buyer or certain of its Affiliates have engaged Sidley Austin LLP and Bradley Arant Boult Cummings LLP (each “Buyer’s Counsel”) as their legal counsel in connection with the Transactions. By entering into this Agreement, Seller and its Affiliates: (a) consent to the continued representation of Buyer and certain of its Affiliates by Buyer’s Counsel in connection with the Transactions; (b) waive any actual or alleged conflict of Buyer’s Counsel that may arise from Buyer’s Counsel’s representation of Buyer and certain of its Affiliates in connection with the Transactions; and (c) agree not to seek to disqualify or otherwise prevent Buyer’s Counsel from representing Buyer and certain of its Affiliates in the Transactions. This consent and waiver extend to Buyer’s Counsel representing Buyer and certain of its Affiliates against Seller and its Affiliates in litigation, arbitration, or mediation in connection with this Agreement or the Transactions. Nothing contained herein shall be deemed to constitute a waiver of any privilege or consent to the disclosure of any confidential information.
(c) Seller acknowledges and agrees on behalf of itself and its Affiliates that, if Buyer wishes to engage: (i) after the date hereof and prior to the Closing and on a joint basis with Seller or its applicable Affiliate, McGuireWoods LLP in respect of the Required Regulatory Approval set forth in clause (ii) of the definition thereof or (ii) following the Closing, McGuireWoods LLP and/or Holland & Knight LLP (each of the foregoing, whether engaged in accordance with the foregoing clause (i) or (ii), as applicable, “Regulatory Counsel”) in respect of any regulatory
matters related to the Business (collectively, the “Regulatory Matters”), by entering into this Agreement, Seller and its Affiliates: (x) consent to the representation of Buyer and certain of its Affiliates by Regulatory Counsel in connection with any Regulatory Matters; and (y) waive any actual or alleged conflict of Regulatory Counsel that may arise from Regulatory Counsel’s representation of Buyer and certain of its Affiliates solely in connection with any Regulatory Matters; provided that (1) such waiver is made with the understanding that Regulatory Counsel’s advice and services to Buyer and its Affiliates are not rendered in anticipation of litigation, arbitration, regulatory proceeding, or other adversarial legal proceeding by Buyer or any of its Affiliates against Seller or any of its Affiliates, or in connection with matters reasonably likely to lead to any such proceedings, and (2) nothing contained herein shall be deemed to constitute a waiver of any privilege by Seller or its Affiliates or a consent to the disclosure of any confidential information of Seller or its Affiliates to Buyer and its Affiliates or any other Person.
Section 10.18 Debt Financing Sources. Notwithstanding anything to the contrary contained in this Agreement, each of the Parties: (a) agrees that it will not bring or support any Person in any Claim of any kind or description, whether at law or in equity, whether in contract or in tort or otherwise, against any of the Debt Financing Sources in any way relating to this Agreement or any of the Transactions, including any dispute arising out of or relating in any way to the Debt Financing Commitment Letters or the performance thereof or the financings contemplated thereby, in any forum other than the Supreme Court of the State of New York, County of New York, or, if, under applicable law, exclusive jurisdiction is vested in the Federal courts, the United States District Court for the Southern District of New York sitting in New York County (and appellate courts thereof); (b) agrees that, except as specifically set forth in the Debt Financing Commitment Letters, all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Debt Financing Sources in any way relating to the Debt Financing Commitment Letters or the performance thereof or the financings contemplated thereby, shall be exclusively governed by the State of New York, without giving effect to principles or rules of conflicts of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction; and (c) hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation (whether at law or in equity, whether in contract or in tort or otherwise) directly or indirectly arising out of or relating in any way to the Debt Financing Commitment Letters or the performance thereof or the financings contemplated thereby. Notwithstanding anything to the contrary contained in this Agreement, subject to the rights of the parties to any Debt Financing Commitment Letters, (i) the Parties hereby acknowledge and agree that no Party or any of its or their respective Affiliates, directors, officers, employees, agents, partners, managers, members or equityholders or any successors or assigns of any of the foregoing (x) shall have any rights or claims against any Debt Financing Sources in any way relating to this Agreement, the Debt Financing, the Debt Financing Commitment Letters or any of the Transactions, or in respect of any other document or any of the Transactions, or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Debt Financing Commitment Letters or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise and (y) agrees not to commence any Claim against any Debt Financing Sources in connection with this Agreement, the Debt Financing, the Debt Financing Commitment Letters or any of the Transactions, or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith,
including any dispute arising out of or relating in any way to the Debt Financing Commitment Letters or the performance thereof or the Debt Financing, and (ii) no Debt Financing Source shall have any Liability (whether in contract, in tort or otherwise) to any Party and its or their respective Affiliates, directors, officers, employees, agents, partners, managers, members, representatives or equityholders or any successors or assigns of any of the foregoing for any Liabilities of any Party under this Agreement or for any claim based on, in respect of, or by reason of, the Transactions or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Debt Financing Commitment Letters or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise. Notwithstanding anything to the contrary contained in this Agreement, the Debt Financing Sources are intended third party beneficiaries of, and shall be entitled to the protections of, this provision. Notwithstanding anything in this Agreement to the contrary, in no event shall Seller or any of its Affiliates or Representatives (or any other Person) be entitled to, or permitted to seek, specific performance in respect of any Debt Financing Source or Buyer’s or its Affiliates’ respective rights under the Debt Financing Commitment Letters or any other agreements with any Debt Financing Source relating to the Debt Financing.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.
PIEDMONT NATURAL GAS COMPANY, INC.
By: Brian D. Savoy__________________
Name: Brian D. Savoy
Title: Executive Vice President and Chief Financial Officer
SPIRE INC.
By: Scott Doyle_____________________
Name: Scott Doyle
Title: President and Chief Executive Officer
[Signature Page to Asset Purchase Agreement]
DELAYED DRAW TERM LOAN AGREEMENT
BY AND AMONG
Spire Inc.,
BANK OF MONTREAL,
AS ADMINISTRATIVE AGENT,
BMO CAPITAL MARKETS CORP.,
JPMORGAN CHASE BANK, N.A.,
MIZUHO BANK, LTD.,
U.S. BANK NATIONAL ASSOCIATION
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS LEAD ARRANGERS, LEAD BOOKRUNNERS AND SYNDICATION AGENTS,
BANK OF AMERICA, N.A.,
MORGAN STANLEY BANK, N.A.,
REGIONS BANK,
ROYAL BANK OF CANADA
and
TD SECURITIES (USA) LLC,
AS DOCUMENTATION AGENTS
AND
THE BANKS PARTY HERETO
August 22, 2025
|
|
SECTION 1. DEFINITIONS. |
1 |
1.01 Definitions |
1 |
1.02 Accounting Terms |
28 |
1.03 Other Terms; Construction |
28 |
1.04 Interest Rates |
29 |
1.05 Divisions |
29 |
SECTION 2. THE LOANS. |
29 |
2.01 Delayed Draw Term Loan Commitments. |
29 |
2.02 Method of Borrowing. |
31 |
2.03 Notes. |
32 |
2.04 Duration of Interest Periods and Selection of Interest Rates. |
33 |
2.05 Interest Rates. |
34 |
2.06 Computation of Interest |
36 |
2.07 Fees. |
36 |
2.08 Prepayments. |
37 |
2.09 General Provisions as to Payments. |
37 |
2.10 Funding Losses |
39 |
2.11 Basis for Determining Interest Rate Inadequate or Unfair. |
39 |
2.12 Illegality |
41 |
2.13 Increased Cost |
42 |
2.14 Base Rate Loans Substituted for Affected SOFR Loans |
42 |
2.15 Capital Adequacy |
42 |
2.16 Survival of Indemnities |
43 |
2.17 Discretion of Banks as to Manner of Funding |
43 |
2.18 Obligations of Banks are Several; Sharing of Payments. |
43 |
2.19 Substitution of Bank |
44 |
2.20 Taxes. |
45 |
2.21 Defaulting Banks. |
48 |
SECTION 3. [RESERVED] |
49 |
SECTION 4. CONDITIONS PRECEDENT. |
49 |
4.01 Conditions to Effective Date |
49 |
4.02 All Extensions of Credit |
51 |
SECTION 5. REPRESENTATIONS AND WARRANTIES. |
53 |
5.01 Corporate Existence and Power |
53 |
5.02 Corporate Authorization |
53 |
5.03 Binding Effect |
53 |
5.04 Governmental and Third-Party Authorization |
53 |
5.05 Litigation |
54 |
5.06 Taxes |
54 |
5.07 Subsidiaries |
54 |
5.08 No Material Adverse Effect |
54 |
TABLE OF CONTENTS
(continued)
Page
|
|
5.09 Financial Statements |
55 |
5.10 Compliance with Other Instruments; None Burdensome |
55 |
5.11 ERISA. |
55 |
5.12 Regulation U |
55 |
5.13 Investment Company Act of 1940 |
56 |
5.14 [Reserved]. |
56 |
5.15 Labor Relations |
56 |
5.16 Use of Proceeds |
56 |
5.17 Compliance with Laws |
56 |
5.18 Full Disclosure |
56 |
5.19 OFAC; Anti-Terrorism Laws; Anti-Corruption Laws. |
56 |
5.20 No Default |
57 |
5.21 Affected Financial Institutions |
57 |
5.22 Solvency |
57 |
SECTION 6. COVENANTS. |
57 |
6.01 Affirmative Covenants |
57 |
6.02 Maximum Consolidated Capitalization Ratio |
61 |
6.03 Negative Covenants |
61 |
6.04 Use of Proceeds |
63 |
SECTION 7. EVENTS OF DEFAULT. |
64 |
SECTION 8. ADMINISTRATIVE AGENT |
66 |
8.01 Appointment and Authority |
66 |
8.02 Rights as a Bank |
67 |
8.03 Exculpatory Provisions |
67 |
8.04 Reliance |
68 |
8.05 Delegation of Duties |
68 |
8.06 Resignation of Administrative Agent |
68 |
8.07 Non-Reliance on Administrative Agent and Other Banks |
69 |
8.08 No Other Duties, Etc |
70 |
8.09 Enforcement |
70 |
8.10 [Reserved] |
70 |
8.11 Erroneous Payments. |
70 |
SECTION 9. GENERAL. |
72 |
9.01 No Waiver; Remedies Cumulative |
72 |
9.02 Right of Set-Off |
73 |
9.03 Costs and Expenses; General Indemnity. |
73 |
9.04 Notices. |
75 |
9.05 Consent to Jurisdiction; Waiver of Jury Trial |
76 |
9.06 Governing Law |
77 |
9.07 Amendments and Waivers. |
77 |
TABLE OF CONTENTS
(continued)
Page
|
|
9.08 References; Headings for Convenience |
78 |
9.09 Successors and Assigns. |
78 |
9.10 Entire Agreement |
81 |
9.11 Severability |
81 |
9.12 Counterparts |
81 |
9.13 Confidentiality |
82 |
9.14 USA Patriot Act Notice |
83 |
9.15 Subsidiary Reference |
83 |
9.16 No Fiduciary Duty |
83 |
9.17 Acknowledgement and Consent to Bail-In of Affected Financial Institutions |
84 |
9.18 Certain ERISA Matters. |
84 |
9.19 Acknowledgement Regarding Any Supported QFCs |
85 |
Schedules
1.01 Delayed Draw Term Loan Commitments and Pro Rata Shares
2.02 Authorized Individuals
5.04 Authorizations
5.07 Subsidiaries
9.04 Notice Addresses
Exhibits
A-1 Form of Delayed Draw Term Loan Note
A-2 [Reserved]
B-1 Form of Notice of Borrowing
B-2 [Reserved]
B-3 Form of Notice of Election
B-4 [Reserved]
C Form of Compliance Certificate
D Form of Assignment and Assumption Agreement
E Solvency Certificate
DELAYED DRAW TERM LOAN AGREEMENT
THIS DELAYED DRAW TERM LOAN AGREEMENT (this “Agreement”) is made and entered into as of August 22, 2025, by and among SPIRE INC., a Missouri corporation (the “Borrower”), the Banks from time to time party hereto and BANK OF MONTREAL, as Administrative Agent for the Banks.
RECITALS
A. The Borrower intends to acquire, directly or through subsidiaries or affiliates, from Piedmont Natural Gas Company, Inc., a North Carolina corporation (the “Seller”), all of the Seller’s right, title and interest in and to the Purchased Assets (as defined in the Specified Acquisition Agreement and as hereinafter referred to as, the “Specified Acquired Business”).
B. The acquisition of the Specified Acquired Business (the “Specified Acquisition”) will be effected pursuant to that certain Asset Purchase Agreement, dated as of July 27, 2025, between the Borrower and the Seller (the “Asset Purchase Agreement”).
C. In connection with the Specified Acquisition, the Borrower desires to obtain $2,480,000,000 of gross proceeds from (i) a senior unsecured bridge term loan facility of up to $1,880,000,000 (the “Bridge Facility”) and (ii) as described in this Agreement, an additional delayed draw senior unsecured asset sale bridge term loan facility of up to $600,000,000 (the “Delayed Draw Term Loan Facility” and, together with the Bridge Facility, the “Facilities”) the proceeds of which, together with cash on hand, would be used by the Borrower, in lieu of or in combination with Capital Markets Proceeds (as defined herein and which aggregate amount of Capital Markets Proceeds shall reduce the commitments or loans under the Facilities on a dollar-for-dollar basis as described herein), to (i) finance the Specified Acquisition and (ii) pay fees, commissions and expenses in connection with the Transactions (as defined herein).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Banks and the Administrative Agent hereby mutually covenant and agree as follows:
SECTION 1. DEFINITIONS.
1.01 Definitions. In addition to the terms defined elsewhere in this Agreement or in any Exhibit or Schedule hereto, when used in this Agreement, the following terms shall have the following meanings (such meanings shall be equally applicable to the singular and plural forms of the terms used, as the context requires):
“Acquisition” shall mean any transaction or series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any Subsidiary of the Borrower directly or indirectly (a) acquires all or substantially all of the assets comprising one or more business units of any other Person, whether through purchase of assets, merger or otherwise or (b) acquires (in one transaction or as the most recent transaction in a series of transactions) at least (i) a majority (in number of votes) of the stock and/or other securities of a corporation having ordinary
Signature Page to Spire 2025 Delayed Draw Term Loan Agreement
#100806096v13
voting power for the election of directors (other than stock and/or other securities having such power only by reason of the happening of a contingency), (ii) a majority (by percentage of voting power) of the outstanding partnership interests of a partnership, (iii) a majority (by percentage of voting power) of the outstanding membership interests of a limited liability company or (iv) a majority of the ownership interests in any organization or entity other than a corporation, partnership or limited liability company.
“Adjusted Base Rate” shall mean the Base Rate plus the Applicable Rate for Base Rate Loans.
“Adjusted Term SOFR” shall mean, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent” shall mean BMO, in its capacity as administrative agent for the Banks under this Agreement and the other Transaction Documents and its successors in such capacity.
“Administrative Questionnaire” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Bank” shall have the meaning ascribed thereto in Section 2.19.
“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, “control” shall mean the power to direct or cause the direction of the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, neither the Administrative Agent nor any Bank shall be deemed an “Affiliate” of the Borrower.
“Agreement” shall mean this Delayed Draw Term Loan Agreement.
“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to the Borrower and its affiliated companies concerning or relating to money-laundering, bribery or corruption, including without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and regulations thereunder.
“Applicable Rate” shall mean a rate per annum equal to (a) in respect of SOFR Loans, 1.375% and (b) in respect of Base Rate Loans, 0.375%.
“Approved Fund” shall mean any Fund that is administered or managed by (i) a Bank, (ii) an Affiliate of a Bank, or (iii) a Person (or an Affiliate of a Person) that administers or manages a Bank.
“Asset Purchase Agreement” shall have the meaning ascribed thereto in the recitals.
“Assignee” shall have the meaning ascribed thereto in Section 9.09(c).
“Assignment and Assumption” shall mean an Assignment and Assumption entered into by any Bank or Assignee (with the consent of any Person whose consent is required by Section 9.09), substantially in the form of Exhibit D or any other form approved by the Administrative Agent.
“Authorized Individuals” shall have the meaning ascribed thereto in Section 2.02(i).
“Availability Period”: the period from and including the Effective Date to but excluding the earlier of the Commitment Termination Date and the date of termination of the Delayed Draw Term Loan Commitments pursuant to Section 7 or otherwise in accordance with the terms of this Agreement.
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.11(b)(iv).
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Banks” shall mean the banks or other financial institutions from time to time party to this Agreement and their successors and permitted assigns.
“Base Rate” shall mean, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, (c) Adjusted Term SOFR for a tenor of one month plus 1% and (d) 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR, provided that clause
(c) shall not be applicable during any period in which Adjusted Term SOFR is unavailable or unascertainable.
“Base Rate Loan” shall mean, at any time, any Loan that bears interest at such time at the applicable Adjusted Base Rate.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.11(b)(iii).
“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Transaction Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.
“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such
non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the FRB, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” shall mean, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” shall mean the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 2.11(b)(i) and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Transaction Document in accordance with Section 2.11(b)(i).
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 CFR § 1010.230.
“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BMO” shall mean Bank of Montreal.
“Board of Directors” means as to any Person, the board of directors, board of managers, sole member or managing member or other governing body of such Person, or if such Person is owned or managed by a single entity or has a general partner, the board of directors, board of managers, sole member or managing member or other governing body of such entity or general partner, or in each case, my duly authorized committee thereof, and the term “directors” means members of the Board of Directors.
“Borrower” shall have the meaning ascribed thereto in the introductory paragraph hereof.
“Borrower’s Obligations” shall mean any and all present and future indebtedness (including principal, interest (including interest accruing after the filing of a petition or commencement of a case by or with respect to the Borrower seeking relief under any Debtor Relief Law and any fraudulent transfer and fraudulent conveyance laws, whether or not the claim for such interest is allowed in such proceeding), fees, collection costs and expenses, attorneys’ fees and other amounts), liabilities and obligations (including, without limitation, indemnity obligations) of the Borrower to the Administrative Agent and other Bank, or any other Person entitled thereto evidenced by or arising under or in respect of this Agreement, any Note and/or any other Transaction Document.
“Bridge Facility” shall have the meaning ascribed thereto in the recitals.
“Business Day” shall mean (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in New York, New York, are open for the conduct of their commercial banking business, and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any SOFR Loan, or any Base Rate Loan as to which the interest rate is determined by reference to Adjusted Term SOFR, any day that is a Business Day described in clause (a) and that is also a U.S. Government Securities Business Day.
“Capital Markets Proceeds” means (a) all Net Cash Proceeds from the issuance of additional Capital Stock (including, without limitation, common equity, preferred equity, equity-linked securities, hybrid securities, convertible securities, forward sales of equity or other equity securities) in the Borrower or any of its subsidiaries to Persons other than the Borrower and any of its Subsidiaries and (b) all Net Cash Proceeds from the issuance or incurrence of Debt of the Borrower or any of its Subsidiaries to Persons other than the Borrower and any of its Subsidiaries, in each case that are received by the Borrower or any of its Subsidiaries (provided that, solely in the case of forward sales of equity, Net Cash Proceeds will be deemed received as of the date that the contract for such forward sale of equity is executed) or funded into escrow on behalf of the Borrower or any of its Subsidiaries pending the closing of the Specified Acquisition, in each case other than any such Net Cash Proceeds received from (i) the issuance or incurrence of Debt under (A) the Facilities, (B) the Existing Borrower Revolver, including any amendments, restatements, amendments and restatements, supplements or other modifications, and increases in commitments thereunder of up to an aggregate principal amount of $275,000,000; (ii) the issuance or incurrence of Debt by the Borrower or any of its Subsidiaries in the ordinary course of business, including from sale leaseback or other lease transactions in an aggregate principal amount not to exceed $100,000,000, (iii) the issuance of commercial paper and similar short-term Debt in the ordinary course of business; (iv) any issuance or sale of Capital Stock pursuant to any equity incentive plan, employee benefit or compensation plan of the Borrower or the Borrower’s dividend reinvestment plan; (v) any issuance or sale of Capital Stock by the Borrower’s Subsidiaries to the Borrower or its Subsidiaries; (vi) the issuance or incurrence of intercompany Debt among the Borrower and its direct or indirect parents or Subsidiaries; (vii) the issuance of any letters of credit in the ordinary course of business, swap agreements and any other commodity or currency derivatives in the ordinary course of business; (viii) the issuance or incurrence of any purchase money Debt, capital or synthetic lease obligations, industrial bonds or similar obligations (provided the proceeds of which would not be used to pay the cash consideration payable in respect of the Specified Acquisition); (ix) the issuance and incurrence of up to $35,000,000 aggregate principal amount of Debt of Spire Alabama Inc. (to the extent the use of proceeds thereof is to refinance its existing notes due September 2025 and is not related to the Specified Acquisition); (x) the issuance and incurrence of up to $350,000,000 aggregate principal amount of Debt of the Borrower (to the extent the use of proceeds thereof is to refinance its existing notes due March 2026 and is not related to the Specified Acquisition); and (xi) the issuance or incurrence of any trade, seller or customer finance-related financing.
“Capital Stock” shall mean (a) with respect to any Person that is a corporation, any and all shares, interests or equivalents in Capital Stock (whether voting or nonvoting, and whether common or preferred) of such corporation, and (b) with respect to any Person that is not a corporation, any and all partnership, membership, limited liability company or other equity interests of such Person; and in each case, any and all warrants, rights or options to purchase any of the foregoing.
“Capitalized Lease” shall mean any lease of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as finance leases on a balance sheet of such Person under GAAP.
“Capitalized Lease Obligations” of any Person shall mean, as of the date of any determination thereof, the obligations of such Person to pay rent or other amounts under any
Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Change of Control Event” shall mean:
(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Capital Stock that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than thirty-five percent (35%) of the Capital Stock of the Borrower entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Borrower or (ii) a majority of the members of the board of directors (or other equivalent governing body) of the Borrower shall not constitute Continuing Directors; or
(b) the Borrower, or any one or more direct or indirect wholly-owned Domestic Subsidiaries of the Borrower, shall fail to own legally or beneficially one hundred percent (100%) (by number of votes) of the Voting Stock of Spire Missouri or Spire Alabama.
“Code” shall mean the Internal Revenue Code of 1986.
“Commitment Letter” shall mean that certain commitment letter agreement, dated July 27, 2025, among BMO, BMO Capital Markets Corp. and the Borrower, as the same may from time to time be amended, modified, extended, renewed or restated.
“Commitment Termination Date” shall mean the earliest to occur of (a) the date on which the Specified Acquisition is consummated without any borrowing of Delayed Draw Term Loans, (b) the date of termination or express abandonment of the Specified Acquisition, (c) 5:00 pm (Eastern time) on Monday, April 27, 2026 (subject to one 3 month automatic extension pursuant to the terms of the Specified Acquisition Agreement as in effect on July 27, 2025), if the closing of the Specified Acquisition shall not have occurred by such time and (d) the date on which any Delayed Draw Term Loans are funded.
“Compliance Certificate” shall mean a fully completed and duly executed certificate substantially in the form of Exhibit C, together with a Covenant Compliance Worksheet.
“Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), the timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.10 and other technical, administrative or operational matters) that the Administrative Agent reasonably decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the
use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent reasonably decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent reasonably determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Transaction Documents).
“Consolidated Capitalization” shall mean, as of the date of any determination thereof, the sum of Consolidated Debt of the Borrower as of such day plus Consolidated Net Worth of the Borrower as of such day, all determined on a consolidated basis and in accordance with GAAP.
“Consolidated Capitalization Ratio” shall mean, as of the date of any determination thereof, the ratio (expressed as a percentage) of Consolidated Debt of the Borrower as of such day to Consolidated Capitalization of the Borrower as of such day, all determined on a consolidated basis and in accordance with GAAP.
“Consolidated Debt” shall mean, as of the date of any determination thereof, all Debt of the Borrower and its Subsidiaries as of such date, determined on a consolidated basis and in accordance with GAAP.
“Consolidated Net Worth” shall mean, as of the date of any determination thereof, the amount of the Capital Stock accounts (net of treasury stock, at cost) of the Borrower and its Subsidiaries as of such date plus (or minus in the case of a deficit) the surplus and retained earnings of the Borrower and its Subsidiaries as of such date, all determined on a consolidated basis and in accordance with GAAP.
“Continuing Directors” shall mean (a) the directors of the Borrower on the Effective Date, (b) those directors whose election or nomination to the board of directors (or equivalent governing body) of the Borrower was approved by individuals referred to in clause (a) above constituting at the time of such election or nomination at least a majority of the board or other equivalent governing body and (c) those directors whose election or nomination to the board of directors (or equivalent government body) of the Borrower was approved by individuals referred to in clauses (a) and (b) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
“Covenant Compliance Worksheet” shall mean a fully completed worksheet in the form of Attachment A to Exhibit C.
“Debt” of any Person shall mean, as of the date of determination thereof, the sum of (a) all indebtedness of such Person for borrowed money or incurred in connection with the purchase or other acquisition of property (other than trade accounts payable incurred in the ordinary course of business not more than ninety (90) days past due) including, but not limited to, obligations of such Person evidenced by notes, bonds, debentures or similar instruments, or upon which interest payments are customarily made plus (b) all Capitalized Lease Obligations of such Person plus (c) the aggregate undrawn face amount of all letters of credit and/or surety bonds issued for the account and/or upon the application of such Person together with all unreimbursed drawings with respect thereto plus (d) all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person plus (e) all Disqualified Capital Stock issued by such Person, with the amount of indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus (f) the principal balance outstanding and owing by such Person under any synthetic lease, tax retention operating lease or similar off-balance sheet financing product (but excluding, for the avoidance of doubt, any lease that constitutes an operating lease and not a Capitalized Lease under GAAP) plus (g) all Guarantees by such Person of Debt of others plus (h) for all purposes other than Section 6.02, the net obligations of such Person under any Swap Contracts plus (i) all indebtedness of the types referred to in clauses (a) through (h) above (i) of any partnership or unincorporated joint venture in which such Person is a general partner or joint venturer to the extent such Person is liable therefor or (ii) secured by any Lien (other than leases qualified as operating leases under GAAP) on any property or asset owned or held by such Person regardless of whether or not the indebtedness secured thereby shall have been incurred or assumed by such Person or is nonrecourse to the credit of such Person, the amount thereof being equal to the value of the property or assets subject to such Lien. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. For the avoidance of doubt and notwithstanding anything to the contrary set forth above, Permitted Commodity Hedging Obligations shall not constitute Debt for purposes of this Agreement.
“Debt Rating” for the Borrower shall mean, as of any date of determination, the rating as determined by any of S&P, Fitch or Moody’s of the Borrower’s senior unsecured non-credit enhanced long-term indebtedness; provided, that if the Borrower does not have such a rating available, then the Debt Rating will be determined by reference to the issuer credit rating assigned to the Borrower by S&P, the issuer rating assigned to the Borrower by Moody’s and the issuer default rating assigned to the Borrower by Fitch (which rating shall be deemed the Debt Rating for the succeeding sentences of this paragraph).
“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” shall mean any event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Defaulting Bank” shall mean, subject to Section 2.21(b), any Bank that (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans within three (3) Business Days of the date required to be funded by it hereunder, unless such Bank notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Bank’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Bank’s obligation to fund a Loan hereunder and states that such position is based on such Bank’s determination that a condition precedent to
funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Bank shall cease to be a Defaulting Bank pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company that has (i) become the subject of a proceeding under any bankruptcy, insolvency or other similar laws, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) becomes the subject of a Bail-In Action; provided that a Bank shall not be a Defaulting Bank solely by virtue of the ownership or acquisition of any equity interest in that Bank or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Bank with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Bank (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Bank. Any determination by the Administrative Agent that a Bank is a Defaulting Bank under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Bank shall be deemed to be a Defaulting Bank (subject to Section 2.21(b)) upon delivery of written notice of such determination by the Administrative Agent to the Borrower and each Bank.
“Delayed Draw Term Loan Commitment” shall mean, subject to (a) any reduction of the Delayed Draw Term Loan Commitments pursuant to Section 2.01(d) and (b) assignments of the Delayed Draw Term Loan Commitments by the Banks to the extent permitted by Section 9.09, with respect to each Bank the amount set forth opposite such Bank’s name on Schedule 1.01 attached hereto and incorporated herein by reference. The aggregate amount of Delayed Draw Term Loan Commitments as of the Effective Date is $600,000,000.00.
“Delayed Draw Term Loan Facility” shall have the meaning ascribed thereto in the recitals.
“Delayed Draw Term Loan Note” shall have the meaning ascribed thereto in Section 2.03(a).
“Delayed Draw Term Loans” shall have the meaning ascribed thereto in Section 2.01(a).
“Designated Person” shall mean (a) any Person listed on a Sanctions List, (b) any Person located, organized or resident in a Sanctioned Country or (c) any Person otherwise the subject or target of any Sanctions.
“Disqualified Capital Stock” shall mean, with respect to any Person, any Capital Stock of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event or otherwise, (a) matures or is mandatorily redeemable or subject to any mandatory repurchase requirement, pursuant to a sinking fund obligation or otherwise, (b) is redeemable or subject to any mandatory repurchase requirement at the sole option of the holder thereof, or (c) is convertible into or exchangeable for
(whether at the option of the issuer or the holder thereof) (i) debt securities or (ii) any Capital Stock referred to in (a) or (b) above, in each case under (a), (b) or (c) above at any time on or prior to the first anniversary of the Final Maturity Date; provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so redeemable at the option of the holder thereof, or is so convertible or exchangeable on or prior to such date shall be deemed to be Disqualified Capital Stock.
“Dollar” or “$” shall mean dollars of the United States of America.
“Domestic Subsidiary” shall mean any Subsidiary organized under the laws of any political subdivision of the United States.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any credit institution or investment firm established in any EEA Member Country.
“Effective Date” shall mean the first date upon which each of the conditions set forth in Section 4.01 shall have been satisfied or waived in accordance with the terms of this Agreement.
“Electronic Record” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.
“Electronic Signature” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.
“Environmental Laws” shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” shall mean, except as otherwise provided in this paragraph, any trade or business, whether or not incorporated, deemed to be under “common control” with, or a member of the same “controlled group” as the Borrower or any of its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
“ERISA Event” shall mean any of the following with respect to the Borrower: (i) a failure to meet the minimum funding standard of Section 412 of the Code by the Borrower or an ERISA Affiliate, (ii) the application by the Borrower or an ERISA Affiliate for a funding waiver pursuant to Section 412 of the Code, (iii) the incurrence by the Borrower or an ERISA Affiliate of any Withdrawal Liability, or the receipt by the Borrower or an ERISA Affiliate of notice from a Multiemployer Plan that it is insolvent pursuant to Section 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA, (iv) the distribution by the Borrower or an ERISA Affiliate under Section 4041 of ERISA of a notice of intent to terminate any Plan or the taking of any action to terminate any Plan, (v) the commencement of proceedings by the PBGC under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Borrower or an ERISA Affiliate of a notice from any Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, (vi) the institution of a proceeding by any fiduciary of any Multiemployer Plan against the Borrower or an ERISA Affiliate to enforce Section 515 of ERISA which is not dismissed within 30 days, (vii) the imposition upon the Borrower or an ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, or the imposition or threatened imposition of any Lien upon any assets of the Borrower or an ERISA Affiliate as a result of any alleged failure to comply with the Code or ERISA with respect to any Plan, or (viii) the engaging in or otherwise becoming liable for a Prohibited Transaction by the Borrower or an ERISA Affiliate.
“Erroneous Payment” shall have the meaning ascribed thereto in Section 8.11(a).
“Erroneous Payment Deficiency Assignment” shall have the meaning ascribed thereto in Section 8.11(d).
“Erroneous Payment Return Deficiency” shall have the meaning ascribed thereto in Section 8.11(d).
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” shall have the meaning ascribed thereto in Section 7.
“Exchange Act” shall mean the Securities Exchange Act of 1934.
“Excluded Taxes” shall mean, with respect to the Administrative Agent, any Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Bank, in which its applicable Lending Office is located, (b)
any branch profits taxes imposed by a jurisdiction described in clause (a), (c) in the case of a Foreign Bank (other than an assignee pursuant to a request by the Borrower under Section 2.19), any withholding tax that is imposed on amounts payable to such Foreign Bank at the time such Foreign Bank becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Bank’s failure or inability (other than as a result of a Regulatory Change) to comply with Section 2.20(e), except to the extent that such Foreign Bank (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.20(a) and (d) any U.S. Federal withholding taxes imposed by FATCA.
“Existing Borrower Revolver” shall mean that certain Second Amended and Restated Loan Agreement, dated as of October 11, 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to July 27, 2025 or as permitted under clause (i)(B) of the definition of “Capital Markets Proceeds”), among the Borrower, the other borrowers party thereto, the banks from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent, and the other financial institutions from time to time party thereto.
“Facilities” shall have the meaning ascribed thereto in the recitals.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended version that is substantively comparable), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent from three (3) federal funds brokers of recognized standing on such day on such transactions as determined in good faith by the Administrative Agent. Notwithstanding anything to the contrary, if the Federal Funds Rate shall be less than zero, then such rate shall be deemed zero for purposes of this Agreement.
“Final Maturity Date” shall mean the earlier of (a) the end of the Availability Period (other than pursuant to clause (d) of the definition of “Commitment Termination Date”) and (b) the day that is 364 days after the funding of the Delayed Draw Term Loans; provided, that, if such date under this clause (b) is not a Business Day, then the Final Maturity Date shall be the immediately preceding Business Day.
“Financial Officer” shall mean the chief financial officer, vice president - finance, controller or treasurer of the Borrower.
“Fitch” shall mean Fitch Rating Services, Inc.
“Floor” shall mean a rate of interest equal to 0%.
“Foreign Bank” shall mean any Bank that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.
“FRB” shall mean the Board of Governors of the Federal Reserve System of the United States.
“Fund” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funding Date” shall mean the date on which the Delayed Draw Term Loans are funded in accordance with this Agreement.
“GAAP” shall mean, at any time, generally accepted accounting principles at such time in the United States (subject to the provisions of Section 1.02).
“Governmental Authority” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” by any Person shall mean any obligation (other than endorsements of negotiable instruments for deposit or collection in the ordinary course of business), contingent or otherwise, of such Person guaranteeing, or in effect guaranteeing, any indebtedness or other obligation of any other Person who is not a Subsidiary of the Borrower (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such indebtedness or obligation or any property constituting security therefor, or (b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, (ii) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation, (iii) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of the primary obligor to make payment of the indebtedness or obligation or (iv) otherwise to assure the owner of the indebtedness or obligation of the primary obligor against loss in respect thereof. For the purposes of all computations made under this Agreement, a Guarantee in respect of any Debt shall be deemed to be Debt equal to the then outstanding principal amount of such Debt which has been guaranteed or such lesser amount to which the
maximum exposure of the guarantor shall have been specifically limited. “Guarantee” when used as a verb shall have a correlative meaning.
“Indemnified Liabilities” shall have the meaning ascribed thereto in Section 9.03(b).
“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Transaction Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitees” shall have the meaning ascribed thereto in Section 9.03(b).
“Interest Period” shall mean, as to any SOFR Loan, the period commencing on the date such SOFR Loan is disbursed or converted to or continued as a SOFR Loan and ending on the date one (1), three (3) or six (6) months thereafter, in each case as selected by the Borrower pursuant to Section 2.04 and subject to availability; provided that: (a) the Interest Period shall commence on the date of advance of or conversion to any SOFR Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires; (b) if any Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; (c) subject to clause (d) below, any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period; (d) no Interest Period shall extend beyond the Final Maturity Date and (e) no tenor that has been removed from this definition pursuant to Section 2.11(b)(iv) shall be available for specification in any Notice of Borrowing or Notice of Election.
“Investment” shall mean any investment (including, without limitation, any loan or advance) of the Borrower or any Subsidiary of the Borrower in or to any Person, whether payment therefor is made in cash or Capital Stock of the Borrower or any Subsidiary of the Borrower, and whether such investment is directly or indirectly by acquisition of Capital Stock or Debt, or by loan, advance, transfer of property out of the ordinary course of business, capital contribution, equity or profit sharing interest, extension of credit on terms other than those normal in the ordinary course of business or otherwise.
“Lead Arranger” shall mean each of BMO Capital Markets Corp., JPMorgan Chase Bank, N.A., Mizuo Bank, Ltd., U.S. Bank National Association and Wells Fargo Bank, National Association, in its capacity as lead arranger, lead bookrunner and syndication agent.
“Lending Office” shall mean, with respect to any Bank, the office of such Bank designated as such in such Bank’s Administrative Questionnaire or in connection with an Assignment and Assumption, or such other office as may be otherwise designated in writing from time to time by such Bank to the Borrower and the Administrative Agent. A Bank may designate separate Lending Offices as provided in the foregoing sentence for the purposes of making or maintaining different Types of Loans, and, with respect to SOFR Loans, such office may be a domestic or foreign branch or Affiliate of such Bank.
“Lien” shall mean any interest in any property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on common law, statute or contract, including, without limitation, any security interest, mortgage, deed of trust, pledge, hypothecation, judgment lien or other lien or encumbrance of any kind or nature whatsoever, any conditional sale or trust receipt, any lease, consignment or bailment for security purposes and any Capitalized Lease.
“Loan” and “Loans” shall mean any or all of the Delayed Draw Term Loans.
“Material Adverse Effect” shall mean (a) a material adverse effect on the properties, assets, liabilities, business, operations, or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the Borrower’s ability to perform any of its obligations under this Agreement, any Note, and/or any other Transaction Document or (c) a material adverse effect on the validity or enforceability against the Borrower of this Agreement or any Note.
“Material Subsidiary” shall mean any Subsidiary of the Borrower whose assets exceed 10% of the total consolidated assets of the Borrower and its Subsidiaries as of the end of the most recently completed fiscal year. For the avoidance of doubt, Spire Alabama and Spire Missouri are Material Subsidiaries of the Borrower.
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Multiemployer Plan” shall mean any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes, is making or is obligated to make contributions or has made or been obligated to make contributions.
“Net Cash Proceeds” means, with respect to any transaction or event by the Borrower or any of its Subsidiaries, an amount equal to the cash proceeds received by the Borrower or such Subsidiary from or in respect of such transaction or event less (i) any out-of-pocket fees (including attorneys’ fees) costs and expenses owing or paid to a Person that is not the Borrower or an Affiliate thereof that are reasonably incurred by the Borrower or such Subsidiary in connection therewith, (ii) in the case of an asset sale or other disposition of property the amount of any Debt secured by a Lien on the related assets and discharged from the proceeds of such sale or disposition, (iii) in the case of an asset sale or other disposition of property, any Taxes (including withholding Taxes and Tax distributions) paid or reasonably estimated by the Borrower or such Subsidiary, as applicable, to be payable by such Person in respect of or in connection with such sale or disposition (provided that if the actual amount of Taxes paid is less than the estimated amount, the difference shall immediately constitute Net Cash Proceeds) and (iv) any reserve for the adjustment in respect of (x) the sale price of assets involved in a sale or disposition of assets or purchase price adjustments established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by the Borrower or any of its Subsidiaries after a sale or disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or with respect to any indemnification obligations associated with such transaction.
“Non-Consenting Bank” shall mean any Bank that does not approve a consent, waiver or amendment to any Transaction Document requested by the Borrower or the Administrative Agent
that (i) requires the approval of all Banks (or all Banks directly affected thereby) in accordance with the terms of Section 9.07 and (ii) has been approved by the Required Banks.
“Notes” shall mean any or all of the Delayed Draw Term Loan Notes.
“Notice of Borrowing” shall have the meaning ascribed thereto in Section 2.02(a).
“Notice of Election” shall have the meaning ascribed thereto in Section 2.04(a).
“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control, and any successor thereto.
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made by the Borrower, or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Transaction Document by or with respect to the Borrower.
“Participant” shall have the meaning ascribed thereto in Section 9.09(b).
“PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) of 2001, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.
“Payment Recipient” shall have the meaning ascribed thereto in Section 8.11(a).
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA, and any successor thereto.
“Permitted Commodity Hedging Obligations” shall mean the obligations of the Borrower or any Subsidiary of the Borrower with respect to commodity agreements or other similar agreements or arrangements entered into in the ordinary course of business designed to protect against, or mitigate risks with respect to, fluctuations of commodity prices to which the Borrower or such Subsidiary is exposed in the conduct of its business so long as (a) the management of the Borrower or such Subsidiary has determined that entering into such agreements or arrangements are bona fide hedging activities which comply with the Borrower’s or such Subsidiary’s risk management policies and (b) such agreements or arrangements are not entered into for speculative purposes.
“Permitted Investment” shall mean, with respect to the Borrower or any Subsidiary of the Borrower, any Investment or Acquisition, or any expenditure or any incurrence of any liability to make any expenditure for an Investment or Acquisition, other than (a) any Investment or Acquisition the result of which would be to change substantially the nature of the business engaged in by the Borrower and its Subsidiaries, considered as a whole, as of the date of this Agreement, and reasonable extensions thereof, (b) any Investment that is in the nature of a hostile or contested Acquisition, and (c) any Investment that would result in a Default or Event of Default with respect to the Borrower or such Subsidiary; provided, that it is expressly agreed that all Investments under
the Borrower’s and its Subsidiary’s gas supply risk management program are Permitted Investments.
“Permitted Liens” shall mean, with respect to the Borrower or any Subsidiary of the Borrower, any of the following:
(a) Liens created pursuant to the Transaction Documents;
(b) Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) (i) not yet due or as to which the period of grace (not to exceed sixty (60) days), if any, related thereto has not expired or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;
(c) Liens in respect of property imposed by law such as materialmen’s, mechanics’, carriers’, warehousemen’s, processors’ or landlords’ and other nonconsensual statutory liens incurred in the ordinary course of business, which (i) are not overdue for a period of more than sixty (60) days, or if more than sixty (60) days overdue, no action has been taken to enforce such Liens or such Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP and (ii) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Borrower or any of its Subsidiaries;
(d) Liens arising from good faith performance of bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds, and other obligations of like nature arising in the ordinary course of such Person’s business, including, without limitation, deposits and pledges of funds securing Permitted Commodity Hedging Obligations;
(e) encumbrances in the nature of zoning restrictions, easements, rights of way or restrictions of record on the use of real property, which in the aggregate do not, in any material respect, impair the use thereof in the ordinary conduct of business;
(f) Liens arising from the filing of precautionary UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Borrower and its Subsidiaries;
(g) Liens securing Debt incurred in connection with Capitalized Leases; provided that (i) such Liens shall be created substantially simultaneously with the acquisition, repair, improvement or lease, as applicable, of the related property and (ii) such Liens do not at any time encumber any property other than the property financed by such Debt;
(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 7.10 or securing appeal or other surety bonds relating to such judgments;
(i) Liens on property (i) of any Person which are in existence at the time that such Person is acquired pursuant to an Acquisition that constitutes a Permitted Investment and (ii) of the Borrower or any of its Subsidiaries existing at the time such tangible property or tangible assets
are purchased or otherwise acquired by the Borrower or such Subsidiary thereof pursuant to a transaction permitted pursuant to this Agreement; provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens are not incurred in connection with, or in anticipation of, such Acquisition, purchase or other acquisition, (B) such Liens are not “blanket” or all asset Liens and (C) such Liens do not attach to any other property of the Borrower or any of its Subsidiaries;
(j) (i) Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) Liens of any depositary institution in connection with statutory, common law and contractual rights relating to liens, rights of set-off, recoupment or similar rights with respect to any deposit account or other fund of the Borrower or any Subsidiary thereof;
(k) (i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property or assets relating to such contract;
(l) any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement entered into in the ordinary course of business which do not (i) interfere in any material respect with the business of the Borrower or its Subsidiaries or materially detract from the value of the relevant assets of the Borrower or its Subsidiaries or (ii) secure any Debt;
(m) Liens incurred in connection with a Permitted Securitization by the Borrower or any of its Subsidiaries;
(n) pledges or deposits made in the ordinary course of business to secure payment of worker’s compensation insurance, unemployment insurance, pensions or social security programs;
(o) Liens arising from good faith deposits in connection with or to secure performance of statutory obligation and surety and appeal bonds;
(p) Liens on the proceeds of assets that were subject to Liens permitted hereunder or on assets acquired with such proceeds as a replacement of such former assets;
(q) any Lien on any assets securing purchase money Debt or Debt incurred or assumed for the purpose of financing all or any part of the cost of acquiring, developing, operating, constructing, altering, repairing or improving all or part of such assets (including any pipeline assets); provided, other than with respect to Liens on pipeline assets, such Lien attached to such asset concurrently with or within ninety (90) days after the acquisition thereof, completion of construction, improvement or repair, or commencement of commercial operation of such assets;
(r) Liens constituted by a right of set off or rights over a margin call account, or any form of cash collateral, or any similar arrangement, securing Permitted Commodity Hedging Obligations and/or physical trade obligations;
(s) (i) Liens under the indenture of mortgage and deed of trust, dated as of February 1, 1945, between The Laclede Gas Light Company (now known as Spire Missouri Inc.) and the trustee named therein, as supplemented or otherwise amended from time to time, that secure bonds or related Debt issued from time to time pursuant thereto, and (ii) Liens under the indenture of mortgage, dated as of December 1, 1941, between Mobile Gas Service Corporation (now known as Spire Gulf Inc.) and the trustee named therein, as supplemented or otherwise amended from time to time, that secure bonds or related Debt issued from time to time pursuant thereto;
(t) Liens not otherwise permitted hereunder securing Debt or other obligations in the aggregate principal amount not to exceed 15% of the Consolidated Net Worth of the Borrower at any time outstanding, less any amount outstanding under the Permitted Securitizations of the Borrower and its Subsidiaries; and
(u) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens referred to in the foregoing clauses (a) through (s) for amounts not exceeding the principal of the indebtedness (including undrawn commitments) secured by the Lien so extended, renewed or replaced; provided that such extension, renewal or replacement Lien is limited to all or part of the same property or assets that were covered by the Lien extended, renewed, or replaced (plus improvements on such property or assets);
provided, however, notwithstanding the foregoing, Permitted Liens shall not include (1) other than the Permitted Securitizations, Liens on the accounts receivable of the Borrower and its Subsidiaries generated from the sale of natural gas, (2) Liens on the natural gas inventory of the Borrower and its Subsidiaries and (3) Liens imposed by ERISA, the creation of which would result in an Event of Default under Section 7.12.
“Permitted Securitization” shall mean any sale, assignment, conveyance, grant or contribution, or series of related sales, assignments, conveyances, grants or contributions, by the Borrower or any of its Subsidiaries of any accounts receivable and related rights from its sale of natural gas, and any supporting obligations and other financial assets related thereto not to exceed, at any one time outstanding, in the aggregate (i) for each of the Borrower and Spire Missouri, $100,000,000 and (ii) for Spire Alabama, $75,000,000, that are transferred, or in respect of which security interests are granted in one or more transactions that are customary for asset securitizations of such receivables to a trust, corporation or other entity, where the purchase of such receivables is funded or exchanged in whole or in part by the incurrence or issuance by the purchaser, grantee or any successor entity of indebtedness or securities that are to receive payments from, or that represent interests in, the cash flow derived primarily from such receivables (provided, however, that “indebtedness” as used in this definition shall not include indebtedness incurred by any trust, partnership or other Person established by the Borrower or any of its Subsidiaries to implement a Permitted Securitization owed to the Borrower or any of its Subsidiaries, which indebtedness represents all or a portion of the purchase price or other consideration paid by such trust, partnership or other Person for such receivables or interests therein).
“Person” shall mean any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, other entity of any kind or government (whether national, federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).
“Plan” shall mean any “employee pension benefit plan” within the meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA (other than a Multiemployer Plan) which is maintained or contributed to by the Borrower or an ERISA Affiliate.
“Prime Rate” shall mean, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.
“Pro Rata Share” shall mean for the item at issue, with respect to each Bank, a fraction (expressed as a percentage), the numerator of which is the portion of such item owned or held by such Bank and the denominator of which is the total amount of such item owned or held by all of the Banks. For example, (a) if the amount of the Delayed Draw Term Loan Commitment of a Bank is $1,000,000 and the total amount of the Delayed Draw Term Loan Commitments of all of the Banks is $5,000,000, such Bank’s Pro Rata Share of the Delayed Draw Term Loan Commitments would be 20% and (b) if the original principal amount of a Loan is $5,000,000 and the portion of such Loan made by one Bank is $500,000, such Bank’s Pro Rata Share of such Loan would be 10%. As of the date of this Agreement, the Pro Rata Shares of the Banks with respect to the Delayed Draw Term Loan Commitments and the Loans are as set forth on Schedule 1.01 attached hereto and incorporated herein by reference.
“Prohibited Transaction” shall mean any transaction described in (a) Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a Department of Labor prohibited transaction individual or class exemption or (b) Section 4975(c) of the Code that is not exempt by reason of Section 4975(c)(2) or 4975(d) of the Code.
“PTE” shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Purchasing Bank” shall have the respective meanings ascribed thereto in Section 2.19.
“Register” shall have the meaning ascribed thereto in Section 9.09(h).
“Regulations D, T, U and X” shall mean Regulations D, T, U and X, respectively, of the Board of Governors of the Federal Reserve System, as amended, and any successor regulations.
“Regulatory Change” shall mean the occurrence, after the date of this Agreement, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Regulatory Change, regardless of the date enacted, adopted or issued.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, advisors and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” shall mean the FRB or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the FRB or the Federal Reserve Bank of New York, or any successor thereto.
“Required Banks” shall mean at any time Banks holding more than fifty percent (50%) of the aggregate amount of the Delayed Draw Term Loan Commitments or, if the Delayed Draw Term Loan Commitments have been terminated, more than fifty percent (50%) of the aggregate outstanding Delayed Draw Term Loans; provided that the Delayed Draw Term Loan Commitment of, and the Delayed Draw Term Loans, as applicable, held or deemed held by, any Defaulting Bank shall be excluded for purposes of making a determination of Required Banks.
“Requirement of Law” shall mean, with respect to any Person, the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person, and any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject or otherwise pertaining to any or all of the transactions contemplated by this Agreement and the other Transaction Documents.
“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“S&P” shall mean Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., and any successor thereto.
“Sanctioned Country” shall mean a country or territory which is at any time the subject of Sanctions.
“Sanctions” shall mean: economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (i) the U.S. government and administered by OFAC, the U.S. State Department, the U.S. Department of Commerce, (ii) the United Nations Security Council, (iii) the European Union or (iv) His Majesty’s Treasury of the United Kingdom.
“Sanctions List” shall mean any of the lists of specifically designated nationals or designated persons or entities (or equivalent) maintained by the U.S. government and administered by OFAC, the U.S. State Department or the U.S. Department of Commerce or any similar list maintained by the European Union, any other EU Member State, His Majesty’s Treasury of the
United Kingdom, the United Nations Security Council or any other U.S. government entity, in each case as the same may be amended, supplemented or substituted from time to time.
“Seller” shall have the meaning ascribed thereto in the recitals.
“SOFR” shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Loan” shall mean any Loan bearing interest based on Adjusted Term SOFR.
“Solvency Certificate” shall mean a certificate duly made by a Financial Officer of the Borrower substantially in the form of Exhibit E.
“Solvent” shall mean, (a) with respect to the Borrower and its Subsidiaries, on a consolidated basis, after giving effect to the Transactions, (i) the fair value and the then-present fair saleable value of any and all property of the Borrower and its Subsidiaries, on a consolidated basis, is greater than the probable liability on existing debts of the Borrower and its Subsidiaries, on a consolidated basis, as they become absolute and matured (it being understood that the amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing as of the date of determination, represents the amount that can reasonably be expected to become an actual or matured liability), (ii) the Borrower and its Subsidiaries, on a consolidated basis, are able to pay their debts (including, without limitation, contingent and subordinated liabilities) as they become absolute and mature (it being understood that the amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing as of the date of determination, represents the amount that can reasonably be expected to become an actual or matured liability), (iii) the Borrower and its Subsidiaries, on a consolidated basis, are otherwise “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances and (iv) the Borrower and its Subsidiaries are not engaged in businesses or transactions, nor about to engage in businesses or transactions, for which any property remaining would, on a consolidated basis, constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which they are engaged and (b) the Borrower and its Subsidiaries, on a consolidated basis, do not intend to, nor do they believe that they will, incur debts that would be beyond their ability to pay as such debts mature.
“Specified Acquired Business” shall have the meaning ascribed thereto in the recitals.
“Specified Acquisition” shall have the meaning ascribed thereto in the recitals.
“Specified Acquisition Agreement” shall mean the Asset Purchase Agreement, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, but without giving effect to any waiver, amendment, modification or consent thereunder that is materially adverse to the Banks or the Lead Arranger (as reasonably determined by the Lead Arranger) unless approved by the Lead Arranger (which approval shall not be unreasonably withheld, conditioned or delayed), it being understood and agreed that, without limiting the
generality of the foregoing, (i) any amendment to delay the Termination Date (as defined in the Asset Purchase Agreement as in effect on July 27, 2025) (other than any extensions explicitly permitted under the Asset Purchase Agreement as in effect on July 27, 2025) shall be deemed to be a modification which is materially adverse to the Banks and the Lead Arranger, (ii) any purchase price adjustment expressly provided in the Specified Acquisition Agreement shall not be materially adverse to the Banks or the Lead Arranger, (iii) any decrease in the purchase price shall not be materially adverse to the interests of the Banks or the Lead Arranger so long as such decrease is allocated to reduce the Facilities on a pro rata basis and (iv) any increase in the purchase price shall not be materially adverse to the Banks or the Lead Arranger so long as such increase is not funded with third party debt for borrowed money.
“Specified Acquisition Agreement Material Adverse Effect” shall mean a Material Adverse Effect (as defined in the Specified Acquisition Agreement as in effect on July 27, 2025).
“Specified Acquisition Agreement Representations” shall mean the representations made by the Seller and/or the Specified Acquired Business with respect to the Specified Acquired Business in the Specified Acquisition Agreement as are material to the interests of the Banks, but only to the extent that the Borrower or one of its Affiliates has the right (determined without regard to any notice requirement) to terminate its obligations under the Specified Acquisition Agreement, or to decline to consummate the Specified Acquisition, in each case as a result of any violation or inaccuracy of such Specified Acquisition Agreement Representations in the Specified Acquisition Agreement.
“Specified Representations” means the representations and warranties set forth in Sections 5.01(a) and (b), 5.02, 5.03, 5.10 (solely with respect to (x) conflicts with, breaches of or defaults under the Borrower’s Articles of Incorporation or Bylaws and (y) defaults under this Agreement or under indentures or other agreements evidencing, or otherwise in respect of, Debt or committed financing, in each case, in excess of $100,000,000 in principal or commitments (after giving pro forma effect to the Transactions)), 5.12, 5.13, 5.16, 5.19 and 5.22.
“Spire Alabama” shall mean Spire Alabama Inc., an Alabama corporation.
“Spire Missouri” shall mean Spire Missouri Inc., a Missouri corporation.
“Subsidiary” shall mean, with respect to any Person, any corporation or other entity of which more than fifty percent (50%) of the issued and outstanding Capital Stock entitled to vote for the election of directors or persons performing similar functions (other than by reason of default in the payment of dividends or other distributions) is at the time owned or controlled, directly or indirectly, by such Person and one or more of its other Subsidiaries or a combination thereof (irrespective of whether, at the time, securities of any other class or classes of any such corporation or other Person shall or might have voting power by reason of the happening of any contingency).
“Swap Contract” shall mean any interest rate or currency swap agreement, interest rate or currency future agreement, interest rate collar agreement, swap agreement (as defined in 11 U.S.C. § 101), interest rate or currency hedge agreement, and any put, call or other agreement or arrangement designed to protect such Person against fluctuations in interest rates or currency exchange rates.
“Swap Termination Value” shall mean, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Bank or any Affiliate of a Bank).
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean,
(a) for any calculation with respect to a SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (Eastern time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b) for any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (Eastern time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.
“Term SOFR Adjustment” shall mean a percentage equal to 0.10% per annum.
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Transaction Documents” shall mean this Agreement, the Notes and any and all other agreements, documents and instruments heretofore, now or hereafter delivered to the Administrative Agent or any Bank with respect to or in connection with or pursuant to this Agreement, any Loans made hereunder or any of the other Borrower’s Obligations, and executed by or on behalf of the Borrower, all as the same may from time to time be amended, modified, extended, renewed or restated.
“Transactions” shall mean, collectively, the Specified Acquisition, the funding of the Facilities and/or the transactions giving rise to the Capital Markets Proceeds and all related transactions and the payment of fees, commissions and expenses in connection with each of the foregoing.
“Type” shall refer to whether a Loan is a Base Rate Loan or a SOFR Loan.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Voting Stock” shall mean, with respect to any corporation or other entity, any Capital Stock of such corporation or other entity whose holders are entitled under ordinary circumstances to vote for the election of directors (or Persons performing similar functions) of such corporation or other entity (irrespective of whether at the time Capital Stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Write-Down and Conversion Powers” shall mean (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
1.02 Accounting Terms. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements of the Borrower required to be delivered hereunder shall be prepared in accordance with, GAAP, applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered to the Banks prior to the Effective Date or filed with the Securities and Exchange Commission; provided that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any financial covenant in Section 6.02 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Banks wish to amend Section 6.02 for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP as in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Banks. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Debt of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, plus or minus any associated unamortized original issue premium or discount, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.
1.03 Other Terms; Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
1.04 Interest Rates. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement), as it may or may not be adjusted pursuant to Section 2.11(b), will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its Affiliates or other related entities may engage in transactions that affect the calculation of the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or any other Benchmark, any component definition thereof or rates referred to in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Bank or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
1.05 Divisions. For all purposes under the Transaction Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Capital Stock at such time.
SECTION 2. THE LOANS.
2.01 Delayed Draw Term Loan Commitments.
(a) Subject to the terms and conditions set forth in this Agreement, during the Availability Period, each Bank severally agrees to make loans (each a “Delayed Draw Term Loan” and collectively the “Delayed Draw Term Loans”) to the Borrower in Dollars as the Borrower may request in a single borrowing pursuant to Section 2.02(a) in an amount up to its Delayed Draw Term Loan Commitment. Each Delayed Draw Term Loan under this Section 2.01(a) which is a Base Rate Loan shall be for an aggregate principal amount of at least $500,000. Each Delayed Draw Term Loan under this Section 2.01(a) which is a SOFR Loan shall be for an aggregate principal amount of at least $2,500,000. Each Delayed Draw Term Loan under this Section 2.01
shall be made from the Banks severally and ratably in proportion to their respective Pro Rata Shares with respect to the Delayed Draw Term Loan Commitments. Amounts repaid or prepaid in respect of Delayed Draw Term Loans may not be reborrowed. Unless sooner payable pursuant to the terms of this Agreement, all Delayed Draw Term Loans, together with all accrued and unpaid interest thereon and all fees and other amounts owing by the Borrower to the Administrative Agent and/or any Bank with respect thereto shall be due and payable on the Final Maturity Date. The failure of any Bank to make any Loan required under this Agreement shall not release any other Bank from its obligation to make Loans as provided herein.
(b) During the Availability Period, Delayed Draw Term Loan Commitments shall be permanently reduced, and after the making of Delayed Draw Term Loans hereunder, Delayed Draw Term Loans shall be prepaid without premium or penalty, in each case, in an amount equal to (i) 100% of the Net Cash Proceeds received by the Borrower or its Subsidiaries from all asset sales outside the ordinary course of business and other dispositions of property (including proceeds of insurance and condemnation proceeds to the extent not used or committed to be used for assets necessary, used or useful in the operation of the Borrower’s business within 180 days thereof), in each case in excess of $50,000,000, but in each case excluding any intercompany sales or intercompany dispositions of assets and any dispositions of inventory, used or surplus equipment, and cash or cash equivalents, (ii) the aggregate amount of any decrease in the cash consideration payable in respect of the Specified Acquisition, and (iii) 100% of the Capital Markets Proceeds received by the Borrower or its subsidiaries from any facility, issuance, incurrence of Debt, Capital Stock or other transactions giving rise to the Capital Markets Proceeds; provided that all mandatory prepayments of Delayed Draw Term Loans or Delayed Draw Term Loan Commitment reductions made pursuant to (A) for the avoidance of doubt, clause (i) shall be applied first to the Delayed Draw Term Loan Facility (or permanent reduction of all commitments in respect of the Delayed Draw Term Loan Facility to $0), then second, to the extent of any excess amount, to the Bridge Facility (or as otherwise agreed between the Borrower and the lenders under the Bridge Facility), (B) clause (ii) shall be applied pro rata to the Bridge Facility and the Delayed Draw Term Loan Facility and (C) clause (iii) shall be applied first to the Bridge Facility and, if such application results in the prepayment of all loans under the Bridge Facility (or permanent reduction of all commitments in respect of the Bridge Facility to $0), then second, to the extent of any excess amount, to the Delayed Draw Term Loan Facility. Any required Delayed Draw Term Loan Commitment reduction shall be automatically effective on the same day as such Net Cash Proceeds or Capital Markets Proceeds are received or such decrease in cash consideration occurs. Any mandatory prepayment of Delayed Draw Term Loans resulting from the receipt of Net Cash Proceeds or Capital Markets Proceeds shall be made within three (3) Business Days of receipt of such Net Cash Proceeds or Capital Markets Proceeds, as the case may be. Prepayments or commitment reductions pursuant to this Section 2.01(b) shall be made on a ratable basis among the Banks based on their respective Pro Rata Shares.
(c) The Delayed Draw Term Loan Commitment of each Bank shall be terminated in full on the Commitment Termination Date.
(d) The Borrower may terminate entirely at any time, or proportionately reduce, the aggregate Delayed Draw Term Loan Commitments from time to time, upon five (5) Business Days’ prior written notice to the Administrative Agent and each Bank on a ratable basis among the Banks based on their respective Pro Rata Shares by an aggregate amount of $5,000,000 or any
larger multiple of $1,000,000; provided, however, that any such termination or reduction shall be permanent and the Borrower shall have no right to thereafter reinstate or increase, as the case may be, the Delayed Draw Term Loan Commitment of any Bank.
2.02 Method of Borrowing.
(a) In order to make a borrowing of Delayed Draw Term Loans (other than borrowings involving continuations or conversions of outstanding Loans, which shall be made pursuant to Section 2.04), Borrower shall give notice (each, a “Notice of Borrowing”) substantially in the form of Exhibit B-1 to the Administrative Agent by 11:00 a.m. (Eastern time) on the Business Day of each Base Rate Loan to be made to the Borrower, and by 11:00 a.m. (Eastern time) at least one (1) Business Day before each SOFR Loan to be made to the Borrower, specifying: (i) the date of such Delayed Draw Term Loans, which shall be a Business Day during the Availability Period; (ii) the aggregate principal amount of such Delayed Draw Term Loans; (iii) the initial Type of the Loan, provided that if the Borrower shall have failed to designate the Type of such Loan, the Borrower shall be deemed to have requested a borrowing comprised of Base Rate Loans; (iv) in the case of a SOFR Loan, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, provided that if the Borrower shall have failed to select the duration of the applicable Interest Period, then the Borrower shall be deemed to have selected an Interest Period with a duration of one (1) month and (v) the account or accounts (together with appropriate wire instructions) into which the proceeds of such borrowing are requested to be disbursed (and, in the case of multiple accounts, the applicable amounts to be disbursed into the respective accounts).
(b) Not later than 2:00 p.m. (Eastern time) on the date of the Delayed Draw Term Loan, each Bank shall make available its Pro Rata Share of such Delayed Draw Term Loan, in Dollars and in funds immediately available to the Administrative Agent at its address specified in Schedule 9.04. The Administrative Agent will make the funds so received from the Banks available to the Borrower immediately thereafter at the Administrative Agent’s aforesaid address by crediting such funds to the deposit account specified by such Borrower on the Notice of Borrowing. The Administrative Agent shall not be required to make any amount available to the Borrower hereunder except to the extent the Administrative Agent shall have received such amounts from the Banks as set forth herein, provided, however, that unless the Administrative Agent shall have been notified by a Bank prior to the time a Loan is to be made hereunder that such Bank does not intend to make its Pro Rata Share of such Loan available to the Administrative Agent, the Administrative Agent may assume that such Bank has made such Pro Rata Share available to the Administrative Agent prior to such time, and the Administrative Agent may in reliance upon such assumption, but shall not be required to, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Bank and the Administrative Agent has made such amount available to the Borrower, the applicable Bank and the Borrower severally agree to pay to the Administrative Agent forthwith and on demand such corresponding amount, together with interest thereon in respect of each day during the period from and including the date such amount was made available to the Borrower to but excluding the date the Administrative Agent recovers such amount at (i) in the case of a payment to be made by such Bank, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the Adjusted Base Rate.
(c) [Reserved].
(d) [Reserved].
(e) [Reserved].
(f) [Reserved].
(g) The obligations of the Banks hereunder to make Loans are several and not joint. The failure of any Bank to make any Loan on the requested borrowing date shall not relieve any other Bank of its corresponding obligation, if any, hereunder to do so on such date, but no Bank shall be responsible for the failure of any other Bank to so make its Loan required hereunder.
(h) Each Bank may, at its option, make and maintain any Loan at, to or for the account of any of its Lending Offices, provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan to or for the account of such Bank in accordance with the terms of this Agreement.
(i) The Borrower hereby irrevocably authorizes the Administrative Agent to rely on telephonic, telegraphic, facsimile, telex or written instructions of any person identifying himself or herself as one of the individuals listed on Schedule 2.02 attached hereto (or any other individual from time to time authorized to act on behalf of the Borrower pursuant to a resolution adopted by the Board of Directors of the Borrower and certified by the Secretary of the Borrower and delivered to the Administrative Agent) (the “Authorized Individuals”) with respect to any request to make a Loan or a repayment by the Borrower hereunder, and on any signature which the Administrative Agent believes to be genuine, and the Borrower shall be bound thereby in the same manner as if such individual were actually authorized or such signature were genuine; provided that the Administrative Agent shall not be obligated under any circumstances to forward amounts to any account not listed on a Notice of Borrowing. The Borrower also hereby agrees to defend and indemnify the Administrative Agent and each Bank and hold the Administrative Agent and each Bank harmless from and against any and all claims, demands, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) relating to or arising out of or in connection with the acceptance of instructions for making Loans or repayments under this Agreement; provided that the Administrative Agent and each Bank will not have any right to indemnification for any of the foregoing to the extent resulting from the Administrative Agent’s or such Bank’s own fraud, gross negligence or willful misconduct or a material breach in bad faith by the Administrative Agent or such Bank of its obligations hereunder, in each case, as determined by a final non-appealable judgment of a court of competent jurisdiction.
2.03 Notes.
(a) If requested by any Bank, the Delayed Draw Term Loans of such Bank shall be evidenced by a Delayed Draw Term Loan Note of the Borrower in substantially the form of Exhibit A-1 attached hereto and incorporated herein by reference (with appropriate insertions) (collectively, as the same may from time to time be amended, modified, extended, renewed, restated or replaced (including, without limitation, any Delayed Draw Term Loan Note issued in
full or partial replacement of an existing Delayed Draw Term Loan Note as a result of an assignment by a Bank) the “Delayed Draw Term Loan Notes”).
(b) [Reserved].
(c) Each Bank shall record in its books and records the date, amount, Type and Interest Period (if any) of each Loan made by it to the Borrower and the date and amount of each payment of principal and/or interest made by the Borrower with respect thereto; provided, however, that the obligation of the Borrower to repay each Loan made by a Bank to the Borrower under this Agreement shall be absolute and unconditional, notwithstanding any failure of such Bank to make any such recordation or any mistake by such Bank in connection with any such recordation. The books and records of each Bank showing the account between such Bank and the Borrower shall be conclusive evidence of the items set forth therein in the absence of manifest error.
(d) The Administrative Agent shall maintain the Register pursuant to Section 9.09(h), and a subaccount for each Bank, in which Register and subaccounts (taken together) shall be recorded (i) date, amount, Type and Interest Period (if any) of each such Loan, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Bank hereunder in respect of each such Loan and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of each such Loan and each Bank’s share thereof.
(e) The entries made in the books, records and Register and subaccounts maintained pursuant to Section 2.03(c) (and, if consistent with the entries of the Administrative Agent, Section 2.03(d)) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Bank or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Bank in accordance with the terms of this Agreement.
2.04 Duration of Interest Periods and Selection of Interest Rates.
(a) The duration of the initial Interest Period for each SOFR Loan shall be as specified in the applicable Notice of Borrowing; provided, all SOFR Loans comprising a single borrowing must at all times have the same Interest Period. The Borrower may elect to continue each such SOFR Loan made to it by selecting the duration of each subsequent Interest Period applicable to such SOFR Loan and the interest rate to be applicable during such subsequent Interest Period (and such Borrower shall have the option (i) in the case of any Base Rate Loan, to elect that such Base Rate Loan be converted into a SOFR Loan and the Interest Period to be applicable thereto, and (ii) in the case of any SOFR Loan, to elect that such SOFR Loan be converted into a Base Rate Loan), in each case by giving written notice of such election to the Administrative Agent (each a “Notice of Election”) substantially the form of Exhibit B-3 by 11:00 a.m. (Eastern time) on the Business Day of the end of the immediately preceding Interest Period applicable thereto, in the case of the election of the Adjusted Base Rate, and by 11:00 a.m. (Eastern time) at least three (3) Business Days before the end of the immediately preceding Interest Period applicable thereto, in the case of the election of Adjusted Term SOFR; provided, however, that notwithstanding the foregoing, in
addition to and without limiting the rights and remedies of the Administrative Agent and the Banks under Section 7 hereof, (A) any such election that SOFR Loans be converted into Base Rate Loans shall involve an aggregate principal amount of not less than $500,000; any such election that Base Rate Loans be converted into, or any continuation of, SOFR Loans shall involve an aggregate principal amount of not less than $2,500,000; and no partial conversion of SOFR Loans made pursuant to a single borrowing shall reduce the outstanding principal amount of such SOFR Loans to less than $2,500,000, (B) except as otherwise provided in Section 2.12, SOFR Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto (and, in any event, if a SOFR Loan is converted into a Base Rate Loan on any day other than the last day of the Interest Period applicable thereto, the Borrower will pay, upon such conversion, all amounts required under Section 2.10 to be paid as a consequence thereof), (C) [reserved] and (D) so long as any Default or Event of Default under this Agreement has occurred and is continuing, the Borrower shall not be permitted to continue any SOFR Loan as a SOFR Loan or to convert any Base Rate Loan into a SOFR Loan.
(b) Each Notice of Election shall specify (i) the date of such election (which shall be a Business Day), (ii) in the case of an election that a Base Rate Loan be converted into a SOFR Loan, or a continuation of, SOFR Loans, the Interest Period to be applicable thereto, and (iii) the aggregate amount and Type of the Loans being converted or continued. Upon receipt of a Notice of Election by the Borrower to the Administrative Agent under this Section 2.04, the Administrative Agent shall notify each Bank promptly on the date of receipt of such notice (which must be a Business Day) of the contents thereof. If the Administrative Agent does not receive a Notice of Election for a Loan pursuant to this Section 2.04(b) as specified herein, with respect to any outstanding SOFR Loans, such SOFR Loans shall automatically be converted into Base Rate Loans upon the expiration of the current Interest Period applicable thereto (unless repaid pursuant to the terms hereof). In the event the Borrower shall have failed to select in a Notice of Election the duration of the Interest Period to be applicable to any conversion into, or continuation of, SOFR Loans, then such Borrower shall be deemed to have selected an Interest Period with a duration of one (1) month.
(c) The Borrower may not have outstanding and the Banks shall not be obligated to make to the Borrower more than one (1) SOFR Loan at any one time.
2.05 Interest Rates.
(a) So long as no Event of Default under this Agreement has occurred and is continuing each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Base Rate Loan is made until it becomes due, at a rate per annum equal to the Adjusted Base Rate. Interest shall be payable quarterly in arrears on the first Business Day of each calendar quarter commencing on the first such date after such Base Rate Loan is made, and on the Final Maturity Date (whether by reason of acceleration or otherwise); provided, that in the event the Loans are repaid or prepaid in full or the Delayed Draw Term Loan Commitments have been terminated, then accrued interest in respect of all Base Rate Loans shall be payable together with such repayment or prepayment on the date thereof. (i) Immediately upon the occurrence and during the continuance of an Event of Default under Section 7.01, 7.02, 7.07 or 7.08 or (ii) at the election of the Required Banks (or the Administrative Agent at the direction of the Required Banks), upon the occurrence and during the continuance of any other Event of Default, each Base
Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Base Rate Loan is made until it becomes due, at a rate per annum equal to two percent (2%) over and above the Adjusted Base Rate and such default interest shall be payable on demand. From and after the Final Maturity Date, whether by reason of acceleration or otherwise, each Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to two percent (2%) over and above the Adjusted Base Rate.
(b) So long as no Event of Default under this Agreement has occurred and is continuing, each SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period applicable thereto at a rate per annum equal to Adjusted Term SOFR plus the Applicable Rate for SOFR Loans. Interest shall be payable for each Interest Period on the last day thereof, unless the duration of such Interest Period exceeds three (3) months, in which case such interest shall be payable at the end of the first three (3) months of such Interest Period and on the last day of such Interest Period, and on the Final Maturity Date (whether by reason of acceleration or otherwise); provided, that in the event all SOFR Loans made pursuant to a single borrowing are repaid or prepaid in full, then accrued interest in respect of such SOFR Loans shall be payable together with such repayment or prepayment on the date thereof. (i) Immediately upon the occurrence and during the continuance of an Event of Default under Section 7.01, 7.02, 7.07 or 7.08 or (ii) at the election of the Required Banks (or the Administrative Agent at the direction of the Required Banks), upon the occurrence and during the continuance of any other Event of Default, each SOFR Loan shall bear interest on the outstanding principal amount thereof for each Interest Period applicable thereto at a rate per annum equal to two percent (2%) over and above the rate (including the Applicable Rate) then applicable to SOFR Loans until the end of the applicable Interest Period and thereafter at a rate per annum of two percent (2%) in excess of the Adjusted Base Rate and such default interest shall be payable on demand. From and after the Final Maturity Date, whether by reason of acceleration or otherwise, each SOFR Loan shall bear interest, payable on demand, for each day until paid, at a rate per annum equal to two percent (2%) over and above the Adjusted Base Rate.
(c) [Reserved].
(d) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and its determination thereof shall be conclusive in the absence of manifest error.
(e) (i) Immediately upon the occurrence and during the continuance of an Event of Default under Section 7.01, 7.02, 7.07 or 7.08 or (ii) at the election of the Required Banks (or the Administrative Agent at the direction of the Required Banks), upon the occurrence and during the continuance of any other Event of Default, all other overdue Borrower’s Obligations (other than Borrower’s Obligations specified in subsections (a), (b) and (c) above) shall bear interest at a rate per annum equal to two percent (2%) over and above the Adjusted Base Rate and such default interest shall be payable on demand. For the avoidance of doubt, interest shall continue to accrue on the Borrower’s Obligations after the filing by or against the Borrower of any petition seeking any relief in bankruptcy or under any Debtor Relief Law.
(f) Nothing contained in this Agreement or in any other Transaction Document shall be deemed to establish or require the payment of interest to any Bank at a rate in excess of the maximum rate permitted by applicable law. If the amount of interest payable for the account of
any Bank on any interest payment date would exceed the maximum amount permitted by applicable law to be charged by such Bank, the amount of interest payable for its account on such interest payment date shall be automatically reduced to such maximum permissible amount. In the event of any such reduction affecting any Bank, if from time to time thereafter the amount of interest payable for the account of such Bank on any interest payment date would be less than the maximum amount permitted by applicable law to be charged by such Bank, then the amount of interest payable for its account on such subsequent interest payment date shall be automatically increased to such maximum permissible amount, provided that at no time shall the aggregate amount by which interest paid for the account of any Bank has been increased pursuant to this sentence exceed the aggregate amount by which interest paid for its account has theretofore been reduced pursuant to the previous sentence.
(g) The Administrative Agent shall promptly notify the Borrower and the Banks upon determining the interest rate for each borrowing of SOFR Loans after its receipt of the relevant Notice of Borrowing or Notice of Election; provided, however, that the failure of the Administrative Agent to provide the Borrower or the Banks with any such notice shall neither affect any obligations of the Borrower or the Banks hereunder nor result in any liability on the part of the Administrative Agent to the Borrower or any Bank. Each such determination shall, absent manifest error, be conclusive and binding on all parties hereto.
(h) In connection with the use or administration of Term SOFR, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document. The Administrative Agent will promptly notify the Borrower and the Banks of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
2.06 Computation of Interest. Interest on Base Rate Loans when the Base Rate is determined by the Prime Rate shall be computed on the basis of a year of 365/366 days and paid for the actual number of days elapsed (including the first day but excluding the last day). All other computations of fees and interest provided hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).
2.07 Fees.
(a) [Reserved].
(b) [Reserved].
(c) [Reserved].
(d) [Reserved].
(e) The Borrower shall pay to the Administrative Agent for its own account and for the account of the Banks, as applicable, all fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.
2.08 Prepayments.
(a) The Borrower may, upon notice to the Administrative Agent, given not later than 11:00 a.m. (Eastern time) on the date of such prepayment, specifying that it is prepaying Base Rate Loans made to it, prepay without penalty or premium such Base Rate Loans in whole at any time or in part in amounts aggregating $500,000 from time to time, by paying the principal amount to be paid. Each such optional prepayment shall be applied to pay the Base Rate Loans of the several Banks in proportion to their respective Pro Rata Shares.
(b) The Borrower may, upon at least three (3) Business Days’ notice to the Administrative Agent, given not later than 11:00 a.m. (Eastern time), specifying that it is prepaying the SOFR Loans made to it, prepay the SOFR Loans to which a given Interest Period applies, in whole, or in part in amounts aggregating $2,500,000, by paying the principal amount to be paid together with all accrued and unpaid interest thereon to and including the date of payment and any funding losses and other amounts payable under Section 2.10; provided, however, that in no event may such Borrower make a partial prepayment of SOFR Loans which results in the total outstanding SOFR Loans with respect to which a given Interest Period applies being less than $2,500,000. Each such optional prepayment shall be applied to pay the SOFR Loans of the several Banks in proportion to their respective Pro Rata Shares.
(c) Each notice of prepayment under this Section 2.08 shall specify the proposed date of such prepayment and the aggregate principal amount and Type of the Loans to be prepaid (and, in the case of SOFR Loans, the applicable Interest Period), and shall be irrevocable and shall bind the applicable Borrower to make such prepayment on the terms specified therein. Upon receipt of a notice of prepayment pursuant to this Section, the Administrative Agent shall promptly notify each Bank of the contents thereof and of such Bank’s Pro Rata Share of such prepayment and such notice shall not thereafter be revocable by the Borrower; provided that if such notice has also been furnished to the Banks, the Administrative Agent shall have no obligation to notify the Banks with respect thereto. Loans prepaid pursuant to this Section 2.08 may not be reborrowed.
2.09 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest on, the Loans made to it and of fees and all other amounts payable by it under this Agreement, not later than 1:00 p.m. (Eastern time) on the date when due and payable, without condition or deduction for any counterclaim, defense, recoupment or setoff, in Dollars in immediately available funds to the Administrative Agent at its address specified in Schedule 9.04. All payments received by the Administrative Agent after 1:00 p.m. (Eastern time) shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day. The Administrative Agent will distribute to each Bank in immediately available funds its Pro Rata Share of each such payment received by the Administrative Agent for the account of the Banks by 3:00 p.m. (Eastern time) on the day of receipt of such payment by the Administrative Agent if such payment is received by the Administrative Agent from the Borrower by 1:00 p.m. (Eastern time) on such day or by 3:00 p.m. (Eastern time) on the next succeeding Business Day if such payment is received by the Administrative Agent from such Borrower after 1:00 p.m. (Eastern time) on such day. Any such payment owed by the Administrative Agent to any Bank which is not paid within the applicable time period shall bear interest until paid (payable by the Administrative Agent) at the Federal
Funds Rate. Whenever any payment of principal of, or interest on, the Loans or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon, at the then applicable rate, shall be payable for such extended time.
(b) Notwithstanding the foregoing or any contrary provision hereof, if any Bank shall fail to make any payment required to be made by it hereunder to the Administrative Agent, then the Administrative Agent may, in its discretion, apply any amounts thereafter received by the Administrative Agent for the account of such Bank to satisfy such Bank’s obligations to the Administrative Agent until all such unsatisfied obligations are fully paid.
(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Banks hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Banks the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Banks severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(d) Notwithstanding any other provision of this Agreement or any other Transaction Document to the contrary, all amounts collected or received by the Administrative Agent or any Bank after acceleration of the Loans pursuant to Section 7 with respect to the Borrower shall be applied by the Administrative Agent as follows:
(i) first, to the payment of all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ and consultants’ fees irrespective of whether such fees are allowed as a claim after the occurrence of an Event of Default under Sections 7.07 or 7.08) of the Administrative Agent in connection with enforcing the rights of the Banks against the Borrower under the Transaction Documents;
(ii) second, to the payment of any fees owed to the Administrative Agent hereunder or under any other Transaction Document by the Borrower;
(iii) third, to the payment of all reasonable and documented out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ and consultants’ fees irrespective of whether such fees are allowed as a claim after the occurrence of an Event of Default under Sections 7.07 or 7.08) of each of the Banks in connection with enforcing its rights against the Borrower under the Transaction Documents or otherwise with respect to the Borrower’s Obligations owing to such Bank;
(iv) fourth, to the payment of all of the Borrower’s Obligations consisting of accrued fees and interest (including, without limitation, fees incurred and interest accruing
at the then applicable rate after the occurrence of an Event of Default under Sections 7.07 or 7.08 irrespective of whether a claim for such fees incurred and interest accruing is allowed in such proceeding);
(v) fifth, to the payment of the outstanding principal amount of the Borrower’s Obligations;
(vi) sixth, to the payment of all other Borrower’s Obligations and other obligations that shall have become due and payable under the Transaction Documents or otherwise by the Borrower and not repaid; and
(vii) seventh, to the payment of the surplus (if any) to whomever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (A) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category and (B) all amounts shall be apportioned ratably among the Banks in proportion to the amounts of such principal, interest, fees or other Borrower’s Obligations owed to them respectively pursuant to clauses (iii) through (vi) above.
(e) The Borrower shall not fund all or part of any repayment of any of the Borrower’s Obligations out of proceeds derived from transactions which would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions.
2.10 Funding Losses. Notwithstanding any provision contained in this Agreement to the contrary, (a) if for any reason there occurs any payment of principal or conversion with respect to any SOFR Loan (pursuant to Sections 2 or 7 or otherwise) on any day other than the last day of the Interest Period applicable thereto (including as a consequence of any assignment made pursuant to Section 2.19 or any acceleration of the Loans under Section 7), (b) if the Borrower fails to borrow or pay any SOFR Loan after notice has been given by the Borrower to the Administrative Agent in accordance with Section 2.02, 2.04, 2.08 or otherwise, (c) if the Borrower fails to make any prepayment of any SOFR Loan on the date specified in a notice of prepayment given by the Borrower, (d) if there is any other failure by the Borrower to make any payments with respect to SOFR Loans made to it when due hereunder or (e) any assignment of a SOFR Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 2.19, the Borrower shall reimburse each Bank on demand for any resulting losses and expenses incurred by it, including, without limitation, any losses incurred in obtaining, liquidating or employing deposits from third parties but excluding any loss of margin for the period after any such payment; provided that (i) with respect to losses resulting from the circumstances described in clause (a), the Borrower shall not reimburse any Bank if such losses are the result of a default by such Bank and (ii) such Bank shall have delivered to the Borrower a certificate setting forth in reasonable detail the calculation of the amount of such losses and expenses, which calculation shall be conclusive in the absence of manifest error.
2.11 Basis for Determining Interest Rate Inadequate or Unfair.
(a) Circumstances Affecting Benchmark Availability. Subject to clause (b) below, in connection with any request for a SOFR Loan or a conversion to or continuation thereof or
otherwise, if for any reason (i) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for ascertaining Adjusted Term SOFR for the applicable Interest Period with respect to a proposed SOFR Loan on or prior to the first day of such Interest Period or (ii) the Required Banks shall determine (which determination shall be conclusive and binding absent manifest error) that Adjusted Term SOFR does not adequately and fairly reflect the cost to such Banks of making or maintaining such Loans during such Interest Period and, in the case of clause (ii), the Required Banks have provided notice of such determination to the Administrative Agent, then, in each case, the Administrative Agent shall promptly give notice thereof to the Borrower. Upon notice thereof by the Administrative Agent to the Borrower, any obligation of the Banks to make SOFR Loans, and any right of the Borrower to convert any Loan to or continue any Loan as a SOFR Loan, shall be suspended (to the extent of the affected SOFR Loans or the affected Interest Periods) until the Administrative Agent (with respect to clause (ii), at the instruction of the Required Banks) revokes such notice. Upon receipt of such notice, (A) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected SOFR Loans or the affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans in the amount specified therein and (B) any outstanding affected SOFR Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.10.
(b) Benchmark Replacement Setting.
(i) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Transaction Document, upon the occurrence of a Benchmark Transition Event, the Administrative Agent and the Borrower may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all affected Banks and the Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Banks comprising the Required Banks. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.11(b)(i) will occur prior to the applicable Benchmark Transition Start Date.
(ii) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Transaction Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Transaction Document.
(iii) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Banks of (A) the implementation of any Benchmark Replacement and (B) the effectiveness of any Conforming Changes in
connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will promptly notify the Borrower of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.11(b)(iv). Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Bank (or group of Banks) pursuant to this Section 2.11(b), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Transaction Document, except, in each case, as expressly required pursuant to this Section 2.11(b).
(iv) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Transaction Document, at any time (including in connection with the implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (1) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (2) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above either (1) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (2) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(v) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, (A) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans and (B) any outstanding affected SOFR Loans will be deemed to have been converted to Base Rate Loans at the end of the applicable Interest Period. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.
2.12 Illegality. If, after the Effective Date, any Bank shall have determined that a Regulatory Change shall make it unlawful or impossible for such Bank to make, maintain, convert, continue or fund its SOFR Loans to the Borrower, such Bank shall forthwith give notice thereof to the Administrative Agent and the Borrower. Upon such notice (a) the Borrower shall convert
all of its then outstanding SOFR Loans from such Bank on either (i) the last day of the then current Interest Period applicable to such SOFR Loan if such Bank may lawfully continue to maintain and fund such SOFR Loan to such day or (ii) immediately if such Bank may not lawfully continue to fund and maintain such SOFR Loan to such day, to a Base Rate Loan in an equal principal amount (interest accrued on each such SOFR Loan prior to any such conversion shall be due and payable on the date of such conversion together with any funding losses and other amounts due under Section 2.10), (b) the obligation of such Bank to make, to convert Base Rate Loans into, or to continue SOFR Loans shall be suspended (including pursuant to any borrowing for which the Administrative Agent has received a Notice of Borrowing or Notice of Election but for which the date of such borrowing has not arrived), and (c) any Notice of Borrowing or Notice of Election given at any time thereafter with respect to SOFR Loans shall, as to such Bank, be deemed to be a request for a Base Rate Loan, in each case until such Bank shall have determined that the circumstances giving rise to such suspension no longer exist and shall have so notified the Administrative Agent, and the Administrative Agent shall have so notified the Borrower.
2.13 Increased Cost. If any Regulatory Change shall: (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Bank (except any reserve requirement reflected in Adjusted Term SOFR) or (ii) subject any Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (c) and (d) of the definition of “Excluded Taxes” and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto or (iii) impose on any Bank, any other condition, cost or expense (other than Taxes) affecting this Agreement or SOFR Loans made by such Bank or participation in any SOFR Loan; and the result of any of the foregoing is to increase the cost to (or in the case of Regulation D, to impose a cost on or increase the cost to) such Bank of making or maintaining any SOFR Loan (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Bank under this Agreement, then upon notice by such Bank to the Administrative Agent and the Borrower, which notice shall set forth such Bank’s supporting calculations and the details of the Requirements of Law, the Borrower shall pay such Bank as additional interest such additional amount or amounts as will compensate such Bank for such increased cost or reduction. The determination by any Bank under this Section of the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount or amounts, the Banks may use any reasonable averaging and attribution methods.
2.14 Base Rate Loans Substituted for Affected SOFR Loans. If notice has been given by a Bank pursuant to Sections 2.11 or 2.12 requiring SOFR Loans of any Bank to be repaid, then, unless and until such Bank notifies the Administrative Agent and the Borrower that the circumstances giving rise to such repayment no longer apply, all Loans which would otherwise be made by such Bank to the Borrower as SOFR Loans shall be made instead as Base Rate Loans. Such Bank shall promptly notify the Administrative Agent and the Borrower if and when the circumstances giving rise to such repayment no longer apply.
2.15 Capital Adequacy. If, after the date of this Agreement, any Bank shall have determined in good faith that a Regulatory Change affecting such Bank or any Lending Office of such Bank or such Bank’s holding company, if any, regarding capital or liquidity requirements has
or would have the effect of reducing the rate of return on such Bank’s capital or on the capital of such Bank’s holding company, if any, as a consequence of this Agreement, the Delayed Draw Term Loan Commitments of such Bank or the Loans made by such Bank, to a level below that which such Bank or such Bank’s holding company could have achieved but for such Regulatory Change (taking into consideration such Bank’s policies and the policies of such Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Bank such additional amount or amounts as will compensate such Bank or such Bank’s holding company for any such reduction suffered. All determinations made in good faith by such Bank of the additional amount or amounts required to compensate such Bank in respect of the foregoing shall be conclusive in the absence of manifest error. In determining such amount or amounts, such Bank may use any reasonable averaging and attribution methods. No amount payable pursuant to this Section 2.15 shall be duplicative of any amount payable pursuant to Section 2.13.
2.16 Survival of Indemnities. All indemnities and all provisions relating to reimbursement to the Banks of amounts sufficient to protect the yield to the Banks with respect to the Loans, including, without limitation, Sections 2.10, 2.13 and 2.15 hereof, shall survive the payment of the Loans, the termination of the Delayed Draw Term Loan Commitments and the other Borrower’s Obligations and the expiration or termination of this Agreement. Notwithstanding the foregoing, if any Bank fails to notify the Borrower of any funding loss or increased costs or reduction incurred which would entitle such Bank to compensation pursuant to Sections 2.10, 2.13 and/or 2.15 hereof within ninety (90) days after such Bank obtains knowledge of such funding loss or increased costs or reduction, then such Bank shall not be entitled to any compensation from the Borrower for such funding loss or increased costs or reduction.
2.17 Discretion of Banks as to Manner of Funding. Notwithstanding any provision contained in this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all or any part of its SOFR Loans in any manner it elects, it being understood, however, that for purposes of this Agreement all determinations hereunder (including, without limitation, the determination of each Bank’s funding losses and expenses under Section 2.10) shall be made as if such Bank had actually funded and maintained each SOFR Loan through the purchase of deposits having a maturity corresponding to the maturity of the applicable Interest Period relating to the applicable SOFR Loan and bearing an interest rate equal to the applicable Term SOFR Reference Rate.
2.18 Obligations of Banks are Several; Sharing of Payments.
(a) The obligations of the Banks hereunder to make Delayed Draw Term Loans and to make payments pursuant to Section 9.03(c) are several and not joint. The failure of any Bank to make any Delayed Draw Term Loan or to make any payment under Section 9.03(c) on any date required hereunder shall not relieve any other Bank of its corresponding obligation to do so on such date, and no Bank shall be responsible for the failure of any other Bank to so make its Delayed Draw Term Loan or to make its payment under Section 9.03(c).
(b) The Banks agree among themselves that, in the event that any Bank shall directly or indirectly obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, banker’s lien or counterclaim, through the realization, collection, sale or liquidation of
any collateral or otherwise) on account of or in respect of any of the Loans or any of the other Borrower’s Obligations in excess of its Pro Rata Share of all such payments, such Bank shall (a) notify the Administrative Agent of such fact and (b) purchase (for cash at face value) from the other Banks participations in the Loans or other Borrower’s Obligations owed to such other Banks in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that the Banks share such payment ratably in accordance with their respective Pro Rata Shares of the outstanding Loans and other Borrower’s Obligations. The Banks further agree among themselves that (i) if any such excess payment to a Bank shall be rescinded or must otherwise be restored, the other Banks which shall have shared the benefit of such payment shall, by repurchase of participation theretofore sold, or otherwise, return its share of that benefit to the Bank whose payment shall have been rescinded or otherwise restored, without interest and (ii) the provisions of this Section shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement. The Borrower agrees that any Banks so purchasing a participation in the Loans or other Borrower’s Obligations of the Borrower to the other Banks may exercise all rights of set-off, banker’s lien and/or counterclaim as fully as if such Banks were a holder of such Loan or other Borrower’s Obligations in the amount of such participation. If under any applicable Debtor Relief Law any Bank receives a secured claim in lieu of a set-off to which this Section 2.18 would apply, such Banks shall, to the extent practicable, exercise their rights in respect of such secured claim in a manner consistent with the rights of the Banks entitled under this Section 2.18 to share in the benefits of any recovery of such secured claim.
2.19 Substitution of Bank. If (i) the obligation of any Bank to make SOFR Loans has been suspended pursuant to Section 2.12, (ii) any Bank has demanded compensation under Sections 2.13 and/or 2.15 or payments from the Borrower under Section 2.20 or (iii) any Bank becomes a Defaulting Bank or Non-Consenting Bank (in each case, an “Affected Bank”), the Borrower shall have the right, with the assistance of the Administrative Agent, to, without recourse (and in accordance with and subject to the restrictions contained in, and consents required by, Section 9.09), seek a mutually satisfactory substitute bank, or other financial institution (or any combination of any of the foregoing) (which may be one or more of the Banks) (each a “Purchasing Bank”) to purchase the Delayed Draw Term Loan and Delayed Draw Term Loan Note, if any, or assume the Delayed Draw Term Loan Commitment of such Affected Bank. The Affected Bank shall be obligated to sell its Delayed Draw Term Loan Note and Delayed Draw Term Loans or assign its Delayed Draw Term Loan Commitment to such Purchasing Bank or Purchasing Banks within fifteen (15) days after receiving notice from the Borrower requiring it to do so, at an aggregate price equal to the outstanding principal amount of such Delayed Draw Term Loan plus unpaid interest accrued thereon up to but excluding the date of sale plus the amount of any compensation that would be due to the Affected Bank under Section 2.10 if the Borrower had prepaid the outstanding SOFR Loans of the Affected Bank on the date of such sale. In connection with any such sale, and as conditions thereof, (A) the Borrower shall pay to the Affected Bank the sum of (y) all fees accrued for its account under this Agreement to but excluding the date of such sale, and (z) any additional compensation accrued for its account under Sections 2.13 and/or 2.15 to but excluding the date of such sale, (B) in the case of such assignment resulting from a request for compensation under Sections 2.13 and/or 2.15 or payment required to be made under Section 2.20, such assignment will result in a reduction of such compensation or payments thereafter, (C) in the case of an assignment resulting from a Bank becoming a Non-Consenting Bank, the applicable assignee shall have consented to the applicable waiver, consent or amendment and (D)
such assignment does not conflict with applicable Requirements of Law. Upon such sale, (1) the Purchasing Bank or Purchasing Banks shall assume the Affected Bank’s Delayed Draw Term Loan Commitment or Delayed Draw Term Loan, as applicable, and the Affected Bank shall be released from its obligations under this Agreement to a corresponding extent and (2) the Affected Bank, as assignor, such Purchasing Bank, as assignee, the Borrower and the Administrative Agent shall enter into an Assignment and Assumption Agreement in accordance with Section 9.09(c), whereupon such Purchasing Bank shall be a Bank party to this Agreement, shall be deemed to be an Assignee under this Agreement and shall have all the rights and obligations of a Bank with a Delayed Draw Term Loan Commitment or Delayed Draw Term Loan in an amount equal to the Delayed Draw Term Loan Commitment or Delayed Draw Term Loan of the Affected Bank. In connection with any assignment pursuant to this Section, the Borrower shall pay to the Administrative Agent the administrative fee of $3,500 for processing such assignment referred to in Section 9.09(c). Upon the consummation of any sale pursuant to this Section 2.19, the Affected Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if requested, each Purchasing Bank receives a new Note.
2.20 Taxes.
(a) Any and all payments by the Borrower to or for the account of any Bank or the Administrative Agent under any Transaction Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from or in respect of any sum payable under any Transaction Document to any Bank or the Administrative Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.20(a)) such Bank or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deduction for Taxes been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) Without limiting the provisions of Section 2.20(a), the Borrower shall timely pay any Other Taxes of the Borrower to the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower agrees to indemnify each Bank and the Administrative Agent for the full amount of any Indemnified Taxes or Other Taxes, respectively (including, without limitation, any Indemnified Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section 2.20), paid by such Bank or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. This indemnification shall be made within fifteen (15) days from the date such Bank or the Administrative Agent (as the case may be) makes demand therefor, accompanied by a certificate of such Bank or the Administrative Agent (as the case may be) setting forth in reasonable detail its computation of the amount or amounts to be paid to it hereunder.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall furnish to the Administrative Agent (who shall forward the same to the applicable Bank), at its address specified in Schedule 9.04, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Bank that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Transaction Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Bank, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Bank is subject to backup withholding or information reporting requirements.
(f) Without limiting the generality of the foregoing, in the event that the Borrower is a resident for tax purposes in the United States, any Foreign Bank shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Bank becomes a Bank under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Bank is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN-E (or W-8BEN, as applicable) claiming eligibility for benefits of an income tax treaty to which the United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Bank claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Bank is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN-E (or W-8BEN, as applicable),
(iv) if a payment made to a Bank under any Transaction Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Bank fails to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Bank shall deliver to the Withholding Agent (as defined below) (A) a certification signed by the chief financial officer, principal accounting officer, treasurer or controller and (B) other documentation
reasonably requested by the Withholding Agent sufficient for the Withholding Agent to comply with its obligations under FATCA and to determine that such Bank has complied with such applicable reporting requirements. “Withholding Agent” means the Borrower or the Administrative Agent, or
(v) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made; provided, however, that such Bank shall inform the Borrower at such time as any previously provided tax form pursuant to Section 2.20(e) or (f) expires or becomes obsolete, other than as a result of a change in law.
(g) If the Administrative Agent or any Bank determines, in its sole discretion acting in good faith, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Bank or the Administrative Agent, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of such Bank or the Administrative Agent, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Bank in the event the Administrative Agent or such Bank is required to repay such refund to such Governmental Authority. This Section 2.20(g) shall not be construed to require any Bank or the Administrative Agent to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.
(h) Each Bank shall severally indemnify the Administrative Agent for (i) any Indemnified Taxes attributable to such Bank (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Bank’s failure to comply with the provisions of Section 9.09(b) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Bank, in each case, that are paid or payable by the Administrative Agent or the Borrower (as applicable) in connection with any Transaction Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The indemnity under this Section 2.20(h) shall be paid within ten (10) days after the Administrative Agent delivers to the applicable Bank a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error. Each Bank hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Bank under any Transaction Document or otherwise payable by the Administrative Agent to such Bank from any other source against any amount due to the Administrative Agent under this Section 2.20(h).
(i) The provisions of this Section 2.20 shall survive any expiration or termination of this Agreement and the payment of the Loans and the other Borrower’s Obligations.
2.21 Defaulting Banks.
(a) Notwithstanding anything to the contrary contained in this Agreement, if any Bank becomes a Defaulting Bank, then, until such time as such Bank is no longer a Defaulting Bank, to the extent permitted by applicable law:
(i) Such Defaulting Bank’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Banks and in Section 9.07.
(ii) Any commitment fee payable to each Bank in respect to its unused Delayed Draw Term Loan Commitment shall cease to accrue on such Defaulting Bank’s Pro Rata Share of the average daily Delayed Draw Term Loan Commitments.
(iii) Any payment of principal, interest, fees (other than any fees described in clause (ii) above) or other amounts received by the Administrative Agent for the account of such Defaulting Bank (whether voluntary or mandatory, at maturity, pursuant to Section 7 or otherwise) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Bank to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan for the Borrower in respect of which that Defaulting Bank has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of such Defaulting Bank to fund Loans under this Agreement; fourth, to the payment of any amounts owing to the Banks as a result of any judgment of a court of competent jurisdiction obtained by any Bank against that Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement; fifth, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Bank as a result of such Defaulting Bank’s breach of its obligations under this Agreement; and sixth, to such Defaulting Bank or as otherwise directed by a court of competent jurisdiction; provided that if (A) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Bank has not fully funded its appropriate share, and (B) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all non-Defaulting Banks on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Bank. Any payments, prepayments or other amounts paid or payable to a Defaulting Bank that are applied (or held) to pay amounts owed by a Defaulting Bank pursuant to this Section shall be deemed paid to and redirected by such Defaulting Bank, and each Bank irrevocably consents hereto.
(iv) [Reserved].
(v) [Reserved].
(b) If the Borrower and the Administrative Agent agree in writing in their sole discretion that a Defaulting Bank should no longer be deemed to be a Defaulting Bank, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Bank will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Banks or take such other actions as the Administrative Agent may determine to be necessary to cause the Delayed Draw Term Loans to be held on a pro rata basis by the Banks in accordance with their respective Pro Rata Shares (without giving effect to Section 2.21(a)(iii)), whereupon such Bank will cease to be a Defaulting Bank; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Bank was a Defaulting Bank; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Bank to Bank will constitute a waiver or release of any claim of any party hereunder arising from that Bank’s having been a Defaulting Bank.
SECTION 3. [RESERVED]
SECTION 4. CONDITIONS PRECEDENT.
4.01 Conditions to Effective Date. This Agreement shall become effective on the date that each of the following conditions shall have been satisfied (or waived in accordance with Section 9.07):
(a) receipt by the Administrative Agent of (x) this Agreement, executed by a duly authorized officer of the Borrower and each other party hereto and (y) Notes in favor of each Bank requesting a Note, all executed by a duly authorized officer of the Borrower;
(b) receipt by the Administrative Agent of a certificate of an authorized officer of the Borrower, dated as of the Effective Date, in form and substance reasonably satisfactory to the Administrative Agent, certifying and attaching the following:
(i) a copy of resolutions of the Board of Directors of the Borrower, duly adopted, which authorize the execution, delivery and performance of this Agreement, the Notes and the other Transaction Documents;
(ii) a copy of the Articles of Incorporation of the Borrower, including any amendments thereto;
(iii) a copy of the Bylaws of the Borrower, including any amendments thereto;
(iv) an incumbency certificate, executed by the Secretary of the Borrower, which shall identify by name and title and bear the signatures of all of the officers of the Borrower executing any of the Transaction Documents;
(v) a certificate of corporate good standing of the Borrower issued by the appropriate Governmental Authorities of its jurisdiction of incorporation;
(c) the Administrative Agent shall have received a customary legal opinion of Sidley Austin LLP as New York counsel to the Borrower;
(d) receipt by the Administrative Agent of a certificate, signed by an authorized officer of the Borrower, dated the Effective Date and in form and substance reasonably satisfactory to the Administrative Agent, certifying that (i) all representations and warranties of the Borrower contained in this Agreement and the other Transaction Documents (A) that are qualified by materiality or Material Adverse Effect are true and correct as so qualified and (B) that are not qualified by materiality or Material Adverse Effect are true and correct in all material respects, in each case as of the Effective Date (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct as of such date), (ii) no Default or Event of Default has occurred and is continuing, (iii) no Material Adverse Effect has occurred since June 30, 2025, and there exists no event, condition or state of facts that could reasonably be expected to result in a Material Adverse Effect and (iv) all conditions to the initial extensions of credit hereunder set forth in this Section 4.01 and in Section 4.02 have been satisfied or waived as required hereunder;
(e) the Borrower shall have paid to the Administrative Agent (i) for its own account and for the account of the Banks, as applicable, all fees due on or prior to the Effective Date as shall have been separately agreed upon in writing in the amounts so specified and (ii) the reasonable expenses of the Administrative Agent required under the Commitment Letter or any Transaction Document to be paid on or prior to the Effective Date (including, to the extent invoiced at least two (2) Business Days prior to the Effective Date, reasonable fees and expenses of counsel to the Administrative Agent) in connection with the Transactions, this Agreement and the other Transaction Documents;
(f) receipt by the Administrative Agent of copies of the financial statements referred to in Section 5.09;
(g) receipt by the Administrative Agent and the Banks of all documentation and other information requested by the Administrative Agent or such Bank that is required to satisfy applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act;
(h) receipt by the Administrative Agent, and any Bank requesting the same, at least five (5) Business Days prior to the Effective Date of a Beneficial Ownership Certification in relation to the Borrower (or a certification that such Borrower qualifies for an express exclusion from the “legal entity customer” definition under the Beneficial Ownership Regulations), in each case if requested at least ten (10) Business Days prior to the Effective Date;
(i) the Lead Arranger (as defined in the Commitment Letter) shall have received a written notice from the Borrower that the Tranche B Commitments (as defined in the Commitment Letter) are reduced to $0;
(j) receipt by the Administrative Agent of a Solvency Certificate certifying that the Borrower and its Subsidiaries, on a consolidated basis as of the Effective Date, are Solvent; and
(k) such other agreements, documents, instruments and certificates as the Administrative Agent or any Bank may reasonably request no later than five (5) Business Days prior to the Effective Date.
Without limiting the generality of the provisions of Section 8.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Bank that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Bank unless the Administrative Agent shall have received notice from such Bank prior to the proposed Effective Date specifying its objection thereto.
4.02 All Extensions of Credit. Notwithstanding any provision contained in this Agreement to the contrary, no Bank shall have any obligation to make any Loan to the Borrower unless:
(a) the Administrative Agent shall have received from such Borrower a Notice of Borrowing in accordance with Section 2.02(a);
(b) both immediately prior to and after the making of such Loan, no Event of Default under Section 7.01, 7.02, 7.07 or 7.08 shall exist;
(c) the Administrative Agent shall have received a Solvency Certificate certifying that the Borrower and its Subsidiaries, on a consolidated basis as of the Funding Date after giving effect to the Transactions, are Solvent;
(d) since July 27, 2025, no fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Specified Acquisition Agreement Material Adverse Effect, shall have occurred;
(e) the Administrative Agent and the Banks shall have received at least three (3) Business Days prior to the Funding Date, to the extent requested by the Administrative Agent or any Bank, all documentation and other information required by the Beneficial Ownership Regulation and regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the PATRIOT Act to the extent reasonably requested by the Administrative Agent or such Bank at least ten (10) business days prior to the Funding Date;
(f) the Administrative Agent shall have received (in each case, solely with respect to any financial statements with respect to the Specified Acquired Business, to the extent delivered to the Borrower by the Seller pursuant to the Specified Acquisition Agreement), (i) copies of (A) audited consolidated financial statements for the Borrower and its Subsidiaries (for the avoidance of doubt, not including the Specified Acquired Business) for the three (3) fiscal years most recently ended at least 60 days prior to the Funding Date and interim unaudited financial statements for the Borrower and its Subsidiaries (for the avoidance of doubt, not including the Specified Acquired Business) for each subsequent quarterly period (other than the fourth (4th) fiscal quarter) ended at least 40 days prior to the Funding Date (which, in the case of interim statements, shall have been reviewed by the independent accountants for the Borrower as provided in Statement on Auditing Standards No. 100), (B) audited consolidated balance sheets of the Specified Acquired Business
as of the fiscal years ended December 31, 2023 and December 31, 2024 and for each fiscal year of the Specified Acquired Business occurring after July 27, 2025 most recently ended at least 75 days prior to the Funding Date (which may be prepared on a carveout basis) (it being understood and agreed that the Borrower is under no obligation to conduct an audit of the Specified Acquired Business to the extent such audited financial statements are not available and not required by applicable law), (C) audited consolidated statements of operations and comprehensive income for the fiscal years ended December 31, 2023 and December 31, 2024 and for each fiscal year of the Specified Acquired Business occurring after July 27, 2025 most recently ended at least 75 days prior to the Funding Date (which may be prepared on a carve-out basis) (it being understood and agreed that the Borrower is under no obligation to conduct an audit of the Specified Acquired Business to the extent such audited financial statements are not available and not required by applicable law), (D) unaudited interim condensed consolidated balance sheets of the Specified Acquired Business and the related unaudited consolidated statements of operations, comprehensive income cash flows and changes in equity as of September 30, 2025 and for the nine-month period ended September 30, 2025 and 2024, and for the three-month period ended December 31, 2024, and to the extent any audited financial statements are delivered pursuant to the foregoing clause (B) and (C) for the year ending December 31, 2025, as of and for each of the fiscal quarters (that is not a fiscal year-end) ending after the date of the most recent financial statements delivered pursuant to the foregoing clauses (B) and (C) and at least 45 days prior to the Funding Date (in each case, which may be prepared on a carve-out basis) and (ii) pro forma consolidated financial statements for the Borrower and its Subsidiaries for the four-quarter period most recently ended at least 45 days prior to the Funding Date for which financial statements are available (provided that, if such four-quarter period ends September 30 or December 31 and is not at least 75 days prior to the Funding Date, then such financial statements shall be as of the four fiscal quarter period ended June 30 or September 30, respectively) giving pro forma effect to the Specified Acquisition and the other Transactions (prepared in accordance with Regulation S-X under the Securities Act of 1933, as amended, and all other rules and regulations of the Securities and Exchange Commission under such Securities Act of 1933, and including other adjustments reasonably acceptable to the Administrative Agent) and a pro forma balance sheet of the Borrower and its Subsidiaries as of the Funding Date giving pro forma effect to the Specified Acquisition and the other Transactions;
(g) the Borrower shall have paid to the Administrative Agent (i) for its own account and for the account of the Banks, as applicable, all fees due on or prior to the Funding Date as shall have been separately agreed upon in writing in the amounts so specified and (ii) the reasonable expenses of the Administrative Agent required hereunder or any Transaction Document to be paid on or prior to the Funding Date (including, to the extent invoiced at least two (2) Business Days prior to the Funding Date, reasonable fees and expenses of counsel to the Administrative Agent) in connection with the Transactions, this Agreement and the other Transaction Documents;
(h) the Specified Acquisition shall have been consummated in accordance with the terms of the Specified Acquisition Agreement;
(i) (i) the Specified Acquisition Agreement Representations shall be true and correct in all material respects (except any representation and warranty that is qualified as to “materiality”, “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)), and (ii) the Specified Representations shall be true and
correct in all material respects (except any representation and warranty that is qualified as to “materiality”, “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)), in each case except to the extent such representation relates to a specific date or period, in which case such representation shall be true and correct in all material respects (except any representation and warranty that is qualified as to “materiality”, “material adverse effect” or similar language shall be true and correct in all respects (after giving effect to any such qualification therein)) as of such specific date or period; and
(j) the Administrative Agent shall have received a customary legal opinion from Missouri counsel to the Borrower.
Each giving of a Notice of Borrowing and the making of each Loan shall be deemed to be a representation and warranty by the Borrower on the date of such Loan as to the facts specified in clauses (b) and (i) of this Section 4.02. Without limiting the generality of the provisions of Section 8.04, for purposes of determining compliance with the conditions specified in this Section 4.02, each Bank that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Bank unless the Administrative Agent shall have received notice from such Bank prior to the proposed Effective Date specifying its objection thereto.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to the Administrative Agent and each Bank that:
5.01 Corporate Existence and Power. The Borrower: (a) is duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (b) has all requisite corporate powers required to carry on its business as now conducted; and (c) is qualified to transact business as a foreign corporation in, and is in good standing under the laws of, all states in which it is required by applicable law to maintain such qualification and good standing except for those states in which the failure to qualify or maintain good standing could not reasonably be expected to have a Material Adverse Effect.
5.02 Corporate Authorization. The execution, delivery and performance by the Borrower of this Agreement, the Notes and the other Transaction Documents to which it is a party are within its corporate powers and have been duly authorized by all necessary corporate and other action by it.
5.03 Binding Effect. This Agreement, the Notes and the other Transaction Documents have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
5.04 Governmental and Third-Party Authorization. No consent, approval, authorization or other action by, notice to, or registration or filing with, any Governmental Authority is or will
be required as a condition to or otherwise in connection with the due execution, delivery and performance by the Borrower of this Agreement or any of the other Transaction Documents to which it is or will be a party or the legality, validity or enforceability hereof or thereof, other than (i) consents, authorizations and filings that have been (or on or prior to the Effective Date will have been) made or obtained and that are (or on the Effective Date will be) in full force and effect, which consents, authorizations and filings are listed on Schedule 5.04 and (ii) consents and filings the failure to obtain or make which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The Borrower has, and is in good standing with respect to, all governmental approvals, licenses, permits and authorizations necessary to conduct its business as presently conducted and to own or lease and operate its properties, except for those the failure to obtain which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.05 Litigation. Except as disclosed in filings with the Securities and Exchange Commission prior to the Effective Date, there are no actions, investigations, suits or proceedings pending or, to the knowledge of the Borrower, threatened, at law, in equity or in arbitration, before any court, other Governmental Authority, arbitrator or other Person, (i) against the Borrower or any of its properties that, if adversely determined, could reasonably be expected to have a Material Adverse Effect, or (ii) which questions the validity or enforceability with respect to the Borrower of this Agreement, any of the other Transaction Documents to which it is a party or any of the transactions contemplated hereby or thereby.
5.06 Taxes. The Borrower has filed all United States federal income tax returns and other material tax returns and reports required to be filed by it and has paid all taxes, assessments, fees and other charges levied upon it or upon its properties that are shown thereon as due and payable, other than those that are not yet delinquent or that are being contested in good faith and by proper proceedings and for which adequate reserves have been established in accordance with GAAP.
5.07 Subsidiaries. Schedule 5.07 sets forth, as of the Effective Date (i) all of the Material Subsidiaries, if any, of the Borrower and (ii) as to the Borrower and each of its Material Subsidiaries, if any, the number of shares, units or other interests of each class of Capital Stock outstanding, and the number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and similar rights. All outstanding shares of Capital Stock of the Borrower and each of its Material Subsidiaries, if any, are duly and validly issued, fully paid and nonassessable. Except for the shares of Capital Stock and the other equity arrangements expressly indicated on Schedule 5.07, as of the Effective Date there are no shares of Capital Stock, warrants, rights, options or other equity securities, or other Capital Stock of the Borrower of any of its Material Subsidiaries, if any, outstanding or reserved for any purpose.
5.08 No Material Adverse Effect. Except as disclosed in filings with the Securities and Exchange Commission prior to the Effective Date (but excluding any statement therein that is a risk factor or cautionary, predictive or forward-looking in nature), as of the Effective Date there has been no Material Adverse Effect since June 30, 2025, and there exists no event, condition or state of facts that could reasonably be expected to result in a Material Adverse Effect.
5.09 Financial Statements. The Borrower has made available to the Administrative Agent and the Banks (x) the audited consolidated balance sheets and statements of income, capitalization, common shareholders’ equity and cash flows of the Borrower and its Subsidiaries as of and for the fiscal year of the Borrower ended September 30, 2024, all certified by such Borrower’s independent certified public accountants, which financial statements have been prepared in accordance with GAAP consistently applied and (y) the unaudited consolidated balance sheets and statements of income, capitalization, common shareholders’ equity and cash flows of such Borrower and its Subsidiaries as of and for the 6-month period ended June 30, 2025. Such Borrower further represents and warrants to the Administrative Agent and each Bank that the financial statements of such Borrower referred to above and their accompanying notes (if any) fairly present in all material respects the financial condition of such Borrower and its Subsidiaries as of the dates thereof.
5.10 Compliance with Other Instruments; None Burdensome. None of the execution and delivery by the Borrower of the Transaction Documents, the performance by the Borrower of its obligations under the Transaction Documents or the borrowing and/or repayment of Loans by the Borrower under this Agreement will conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under or result in any violation of, any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Borrower, any of the provisions of the Articles of Incorporation or Bylaws of the Borrower or any of the provisions of any indenture, agreement, document, instrument or undertaking to which the Borrower is a party or subject, or by which the Borrower or any property or assets of the Borrower is bound, or result in the creation or imposition of any security interest, lien or encumbrance on any of the property or assets of the Borrower pursuant to the terms of any such material indenture, agreement, document, instrument or undertaking.
5.11 ERISA.
(a) (i) Except as would not result or be reasonably expected to result in a Material Adverse Effect: the Borrower is in compliance with the applicable provisions of ERISA, and each of its Plans is and has been administered in compliance with all applicable Requirements of Law, including, without limitation, the applicable provisions of ERISA and the Code, (ii) no ERISA Event with respect to the Borrower or any ERISA Affiliates (x) has occurred within the five-year period prior to the Effective Date, (y) has occurred and is continuing or (z) to the knowledge of the Borrower, is reasonably expected to occur with respect to any Plan and (iii) the Borrower and ERISA Affiliates have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and have not incurred any liability to the PBGC or a Plan under Title IV of ERISA in connection with the termination of a Plan.
(b) As of the Effective Date, the Borrower is not nor will be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans to repay the Loans or the Delayed Draw Term Loan Commitments.
5.12 Regulation U. The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of The Board of Governors of the Federal Reserve System, as amended) and no part of the proceeds of any Loan will be used (a) to purchase or carry
margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund or repay indebtedness originally incurred for such purpose, in each case, in a manner that would violate Regulations T, U or X of the Board of Governors of the Federal Reserve System, as in effect from time to time, or (b) for any purpose which entails a violation of, or which is inconsistent with, the provisions of any of the Regulations of The Board of Governors of the Federal Reserve System, including, without limitation, Regulations U, T or X thereof, as amended. If requested by the Administrative Agent or any Bank, the Borrower shall furnish to the Administrative Agent and each Bank a statement in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U.
5.13 Investment Company Act of 1940. The Borrower is not an “investment company” as that term is defined in the Investment Company Act of 1940, as amended.
5.14 [Reserved].
5.15 Labor Relations. The Borrower is not engaged in any unfair labor practice within the meaning of the National Labor Relations Act of 1947, as amended, except for any unfair labor practice that has not had or would not reasonably be expected to have a Material Adverse Effect.
5.16 Use of Proceeds. The proceeds of the Loans shall be used by the Borrower to (a) finance the Specified Acquisition and (b) pay fees, commissions and expenses in connection with the Transactions.
5.17 Compliance with Laws. The Borrower is in compliance with all laws, rules, regulations, orders and decrees applicable to it or to its properties, except where failure to be in compliance would not have or would not reasonably be expected to have a Material Adverse Effect.
5.18 Full Disclosure. All factual information heretofore, contemporaneously or hereafter furnished in writing to the Administrative Agent, the Lead Arranger or any Bank by or on behalf of the Borrower or any of its Subsidiaries for purposes of or in connection with this Agreement and the other Transaction Documents to which it is a party, when taken together with disclosures made in the Borrower’s filings with the Securities and Exchange Commission, is or will be true and accurate in all material respects on the date as of which such information is dated or certified (or, if such information has been updated, amended or supplemented, on the date as of which any such update, amendment or supplement is dated or certified) and not made incomplete by omitting to state a material fact necessary to make the statements contained herein and therein, in light of the circumstances under which such information was provided, not misleading in any material respect; provided that, with respect to projections, budgets and other estimates, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
5.19 OFAC; Anti-Terrorism Laws; Anti-Corruption Laws.
(a) The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective directors,
officers, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
(b) The Borrower and its Subsidiaries are in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, the International Emergency Economic Powers Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (ii) the USA PATRIOT Act.
(c) Neither the Borrower nor any of its Subsidiaries nor, to the knowledge of the Borrower, any director, officer, employee, agent or Affiliate of the Borrower or any of its Subsidiaries is a Designated Person, nor is the Borrower or any of its Subsidiaries located, organized or resident in any country or territory that is the subject of Sanctions.
(d) No part of the proceeds of the Loans will be used by the Borrower (i) in violation of Anti-Corruption Laws or applicable Sanctions or (ii) for the purpose of financing any activities or business of or with any Designated Person.
(e) The Borrower will notify the Administrative Agent and each Bank that previously received a Beneficial Ownership Certification of any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified therein.
5.20 No Default. No Default or Event of Default under this Agreement has occurred and is continuing.
5.21 Affected Financial Institutions. The Borrower is not an Affected Financial Institution.
5.22 Solvency. The Borrower and its Subsidiaries, on a consolidated basis, are Solvent.
SECTION 6. COVENANTS.
6.01 Affirmative Covenants. The Borrower covenants and agrees that, so long as (a) any Bank has any obligation to make any Loan to it under this Agreement and/or (b) any of such Borrower’s Obligations remain unpaid (other than contingent indemnification or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted):
(a) Information. The Borrower will make available, deliver or cause to be delivered to the Administrative Agent (who shall forward copies thereof to each Bank):
(i) within ninety (90) days (or such additional extended period as allowed by the Securities and Exchange Commission, not to exceed fifteen (15) days) after the end of each fiscal year of the Borrower: an audited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and the related audited consolidated statements of income, capitalization, common shareholders’ equity and cash flows for such fiscal year, including notes thereto, setting forth in each case, in comparative form, the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, together with a report and opinion thereon by Deloitte & Touche LLP or any other independent certified public accounting firm of recognized national standing reasonably acceptable to the Administrative Agent prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Borrower or any of its Subsidiaries not in accordance with GAAP; provided, however, that making available to the Administrative Agent copies of the Annual Report on Form 10-K of the Borrower for such fiscal year filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6.01(a)(i);
(ii) within forty-five (45) days (or such additional extended period as allowed by the Securities and Exchange Commission, not to exceed fifteen (15) days) after the end of the first three (3) fiscal quarters of each fiscal year of the Borrower, an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal quarter and the related unaudited consolidated statements of income, common shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year ended at the end of such fiscal quarter, setting forth in each case in comparative form, the figures for the corresponding fiscal quarter and the corresponding portion of the Borrower’s previous fiscal year, all in reasonable detail and satisfactory in form to the Required Banks and certified (subject to normal year-end adjustments and absence of footnote disclosures) as to fairness of presentation, consistency and compliance with GAAP by the chief financial officer of the Borrower; provided, however, that making available to the Administrative Agent copies of the Quarterly Report on Form 10-Q of the Borrower for such fiscal quarter filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6.01(a)(ii);
(iii) within the timeframes outlined in Sections 6.01(a)(i) and (ii) above, as applicable, a certificate of a Financial Officer of the Borrower substantially in the form attached hereto as Exhibit C and incorporated herein by reference (A) stating whether there exists on the date of such certificate any Default or Event of Default and, if any such Default or Event of Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto and (B) certifying whether the Borrower is in compliance with the financial covenant contained in Section 6.02; and
(iv) with reasonable promptness, such further information regarding the business, affairs and financial condition of the Borrower as the Administrative Agent or any Bank may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) the Borrower notifies the Administrative Agent that such documents have become available on the Security Exchange Commission’s EDGAR Database; (ii) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the internet at the website address listed in Schedule 9.04; or (iii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Bank and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Bank that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Bank and (ii) the Borrower shall notify the Administrative Agent and each Bank (by facsimile or electronic mail) of the posting of any such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Bank shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.
(b) Corporate Existence; Maintenance of Properties; Insurance. The Borrower will do all things necessary to (i) preserve and keep in full force and effect at all times its corporate existence and all permits, licenses, franchises and other rights material to its business except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect, (ii) be duly qualified to do business and be in good standing in all jurisdictions where the nature of its business or its ownership of property or assets requires such qualification except for those jurisdictions in which the failure to qualify or be in good standing could not reasonably be expected to have a Material Adverse Effect, (iii) keep all material properties in good working order and condition (normal wear and tear and damage by casualty excepted) and from time to time make all necessary repairs to and renewals and replacements of such properties, except to the extent that any of such properties are obsolete or are being replaced or, in the good faith judgment of the Borrower, are no longer useful or desirable in the conduct of the business of the Borrower and (iv) maintain with financially sound and reputable insurance companies insurance or through its own program of self-insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.
(c) Compliance with Laws, Regulations, Etc. The Borrower will, and will cause each of its Subsidiaries, to comply with any and all Requirements of Law applicable in respect of the conduct of its business and ownership and operation of its properties and obtain any and all licenses, permits, franchises and other governmental and regulatory authorizations necessary to the ownership of its properties or assets or to the conduct of its business, the violation of which or the failure to comply with or obtain would reasonably be expected to have a Material Adverse Effect.
(d) Notices. The Borrower will notify the Administrative Agent in writing of any of the following within five (5) Business Days (as to Section 6.01(d)(i) below to the extent continuing on the date of such statement) and within fifteen (15) Business Days (as to Sections 6.01(d)(ii), 6.01(d)(iii) and 6.01(d)(iv) below) after any of the Financial Officers of the Borrower has actual knowledge thereof, describing the same and, if applicable, the steps being taken by the Person(s) affected with respect thereto:
(i) the occurrence of any Default or Event of Default;
(ii) the entry of any judgment against the Borrower or any Subsidiary of the Borrower in an amount of at least $75,000,000 (to the extent not paid or covered by insurance provided by a carrier who has acknowledged coverage);
(iii) any environmental claim or any other action or investigation with respect to the existence or potential existence of any hazardous substances instituted or threatened with respect to the Borrower or any Subsidiary of the Borrower or any of the properties or facilities owned, leased or operated by the Borrower or such Subsidiary which could reasonably be expected to have a Material Adverse Effect, and any known condition or occurrence on any of the properties or facilities owned, leased or operated by the Borrower or such Subsidiary which constitutes a violation of any Environmental Laws or which gives rise to a reporting obligation or requires removal or remediation under any Environmental Laws in each case which could reasonably be expected to have a Material Adverse Effect; and
(iv) the occurrence of any ERISA Event, together with (A) a written statement of a Financial Officer of the Borrower specifying the details of such ERISA Event and the action that the Borrower or its ERISA Affiliates have taken and propose to take with respect thereto, (B) a copy of any notice with respect to such ERISA Event that may be required to be filed by the Borrower or its ERISA Affiliates with the PBGC and (C) a copy of any notice delivered by the PBGC to the Borrower or an ERISA Affiliate with respect to such ERISA Event.
(e) Payment of Obligations. The Borrower will, and will cause each of its Subsidiaries to, (i) pay, discharge or otherwise satisfy at or before maturity all liabilities and obligations as and when due (subject to any applicable subordination, grace and notice provisions), except to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect, and (ii) pay and discharge all material taxes, assessments and governmental charges or levies imposed upon it, upon its income or profits or upon any of its properties, prior to the date on which penalties would attach thereto, and all lawful claims that, if unpaid, would become a Lien (other than a Permitted Lien) upon any of the Borrower’s properties; provided, however, that the Borrower shall not be required to pay any such tax, assessment, charge, levy or claim that is being contested in good faith and by proper proceedings and as to which the Borrower is maintaining adequate reserves with respect thereto in accordance with GAAP.
(f) Maintenance of Books and Records; Inspection. The Borrower will and will cause each of its Subsidiaries to, (i) maintain in all material respects complete and adequate books and records of its transactions in accordance with good accounting practices on the basis of GAAP and in material compliance with the requirements of any Governmental Authority having jurisdiction over it, and (ii) permit employees or agents of the Administrative Agent or any Bank to visit and inspect its properties and examine or audit its books and records and their accounts receivable and inventory and make copies and memoranda of them, and to discuss its affairs, finances and accounts with its officers and employees, in each case, all at the expense of the Administrative Agent or Bank, upon ten (10) Business Days’ prior notice to the Borrower and during the Borrower’s normal business hours and no more frequently than once during any fiscal year unless
an Event of Default has occurred and is continuing; provided, however, that the Borrower reserves the right to restrict access to any of its or its Subsidiaries’ facilities in accordance with reasonably adopted procedures relating to safety and security.
(g) Environmental Laws. The Borrower will, and will cause each of its Subsidiaries to, (i) comply in all material respects with all applicable Environmental Laws and obtain and comply in all material respects with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect, and (ii) comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws, except to the extent that the same are being contested in good faith by appropriate proceedings or to the extent the failure to conduct or complete any of the foregoing could not reasonably be expected to have a Material Adverse Effect.
(h) Further Assurances. The Borrower will execute and deliver to the Administrative Agent and each Bank, at any time and from time to time, any and all further agreements, documents and instruments, and take any and all further actions which may be required under applicable law, or which the Administrative Agent or any Bank may from time to time reasonably request, in order to effectuate the transactions contemplated by this Agreement and the other Transaction Documents to which the Borrower is a party.
(i) Subsidiaries. If the Borrower creates, forms or acquires any Subsidiary which owns more than 10% of the consolidated assets of such Borrower and its Subsidiaries on or after the date of this Agreement, the Borrower will, contemporaneously with the creation, formation or acquisition of such Subsidiary, cause such Subsidiary to execute a guaranty agreement with respect to the Borrower’s Obligations of the Borrower in a form reasonably acceptable to the Administrative Agent, provided that no such Subsidiary shall be required to execute a guaranty agreement so long as prohibited to do so by any regulatory authority having jurisdiction over it. Notwithstanding the foregoing, (i) in no event shall Spire Missouri or Spire Alabama, or any of their respective Subsidiaries, be required to guarantee any obligations of Parent, and (ii) no Subsidiary that is a Foreign Subsidiary of any Borrower shall be required to execute a guaranty agreement if, in the reasonable opinion of the Borrower, entering into such guaranty agreement may have adverse tax consequences under Section 956 of the Code or other applicable laws.
6.02 Maximum Consolidated Capitalization Ratio. The Borrower will have, at the end of each of its fiscal quarters (commencing with the first fiscal quarter end date occurring after the Funding Date), a Consolidated Capitalization Ratio of not more than seventy percent (70%).
6.03 Negative Covenants. The Borrower covenants and agrees that, so long as the Administrative Agent and any Bank have any obligation to make any Loan under this Agreement, or any of the Borrower’s Obligations remain unpaid, unless the prior written consent of the Required Banks is obtained (other than contingent indemnification or expense reimbursement obligations to the extent no claim giving rise thereto has been asserted):
(a) Limitation on Liens. The Borrower will not, and will not cause or permit any Subsidiary of the Borrower to, create, incur or assume, or suffer to be incurred or to exist, any Lien
on any of its property, whether now owned or hereafter acquired, or upon any income or profits therefrom, except for Permitted Liens.
(b) Consolidation, Merger, Sale of Property, Etc.
(i) The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, directly or indirectly merge or consolidate with or into any other Person or permit any other Person to merge into or with or consolidate with it, except that, if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing, provided that in any merger or consolidation involving the Borrower, (A) the Borrower shall be the surviving Person, (B) after giving effect thereto, at least two of the Borrower’s Debt Ratings by S&P, Moody’s and Fitch shall be no lower than BBB-, Baa3, BBB-, respectively and (C) such merger or consolidation would not reasonably be expected to materially and adversely affect the Borrower’s ability to perform its obligations under this Agreement.
(ii) The Borrower will not, and will not cause or permit any Subsidiary of the Borrower to, (A) sell, assign, lease, transfer, abandon or otherwise dispose of any of its property (including, without limitation, any shares of Capital Stock or other equity interests of a Subsidiary owned by the Borrower or another Subsidiary of the Borrower) or (B) issue, sell or otherwise dispose of any shares of Capital Stock or other equity interests of any Subsidiary of the Borrower; provided, however, that the Borrower and such Subsidiary may (1) sell, assign, lease, transfer, abandon or otherwise dispose of (x) any of its natural gas inventory or past-due accounts receivable in the ordinary course of business, (y) any of its property to the Borrower or any Subsidiary of the Borrower, provided that, if at any time more than ten percent (10%) of the consolidated assets of the Borrower and all of its Subsidiaries are transferred from the Borrower to a Subsidiary of the Borrower, such Subsidiary shall then execute a guaranty agreement with respect to the Borrower’s Obligations in a form reasonably acceptable to the Administrative Agent and Required Banks (except that no such Subsidiary shall be required to execute a guaranty agreement if such Subsidiary is expressly exempted from providing a guaranty agreement pursuant to Section 6.01(i)), and (z) any of its other property (whether in one transaction or a series of transactions) so long as the value of such property sold, assigned, leased, transferred, abandoned or otherwise disposed of in any fiscal year under this subsection (z) (including in connection with Permitted Securitizations) shall not exceed ten percent (10%) of the consolidated assets of the Borrower and all of its Subsidiaries as determined on a consolidated basis as of the last day of the immediately preceding fiscal year, and (2) issue to any Person shares of Capital Stock of any non-Material Subsidiary that is not a guarantor hereunder; and provided further, however, that (A) nothing in this Agreement shall limit or restrict the Borrower’s use of financial instruments or natural gas contracts under its gas supply risk management program, (B) nothing in this Section shall restrict the Borrower or any of its Subsidiaries from (x) forming any Subsidiary or (y) issuing any Capital Stock or other equity interests of such Person to the Borrower or any of its direct or indirect wholly-owned Domestic Subsidiaries, and (C) nothing in this Agreement shall restrict the Borrower from issuing Capital Stock if such issuance would not result in a Change of Control Event.
(c) Sale or Discount of Accounts. The Borrower will not, and it will not cause or permit any Subsidiary to, sell or discount (other than prompt payment discounts granted in the ordinary course of business) any of its notes or accounts receivable or chattel paper generated from the sale of natural gas, except for (i) past due accounts that may be disposed of as provided in Section 6.03(b)(ii), and (ii) Permitted Securitizations that comply with clause (3) of Section 6.03(b)(ii).
(d) Transactions with Affiliates. The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, enter into or be a party to any transaction or arrangement with any Affiliate (including, without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate) except pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not an Affiliate; provided that the foregoing restrictions shall not apply to: (i) any issuances of stock to the Borrower, (ii) payment of any lawful distributions on its issued stock, and (iii) payment or grant of reasonable compensation, benefits and indemnities to any director, officers, employee or agent of the Borrower or any Subsidiary of the Borrower. Notwithstanding the foregoing, nothing in this Section 6.03(d) shall restrict transactions with any Affiliate that have been approved by or are entered into pursuant to any orders or decisions of any Governmental Authority having jurisdiction over the Borrower or any of its Subsidiaries, including without limitation the Federal Energy Regulatory Commission, the Missouri Public Service Commission or the Alabama Public Service Commission (or any successor commission or organization).
(e) Changes in Nature of Business. The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, materially alter the general nature of the business of the Borrower and its Subsidiaries, considered as a whole, from the general nature of the business and reasonable extensions thereof engaged in by the Borrower and its Subsidiaries as of the date of this Agreement.
(f) Permitted Investments; Acquisitions. The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, directly or indirectly, make any Investments except for Permitted Investments. The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, directly or indirectly, make any Acquisitions the result of which would be to change substantially the general nature of the business engaged in by the Borrower and its Subsidiaries, considered as a whole, as of the date of this Agreement and reasonable extensions thereof.
(g) Limitations on Restrictive Agreements. The Borrower will not, and it will not cause or permit any Subsidiary of the Borrower to, enter into, or permit to exist, any agreement with any Person which prohibits the Borrower or such Subsidiary, as the case may be, from performing its contractual obligations under this Agreement.
6.04 Use of Proceeds. The Borrower covenants and agrees that the proceeds of the Loans will be used exclusively to (a) finance the Specified Acquisition and (b) pay fees, commissions and expenses in connection with the Transactions. The Borrower shall not, and shall ensure that none of its Subsidiaries will, directly or indirectly use the proceeds of any Loan for any purpose which would breach the U.K. Bribery Act 2010, the United States Foreign Corrupt
Practices Act of 1977 or other similar legislation in other jurisdictions, to fund, finance or facilitate any activities, business or transaction of or with any Designated Person or in any Sanctioned Country, or otherwise in violation of Sanctions, as such Sanctions Lists or Sanctions are in effect from time to time, or in any other manner that will result in the violation of any applicable Sanctions by any Person participating in the financing transaction contemplated by this Agreement, whether as Bank, Lead Arranger, Administrative Agent or otherwise.
SECTION 7. EVENTS OF DEFAULT.
If any of the following shall occur and be continuing (each of the following herein sometimes called an “Event of Default”):
7.01 The Borrower shall fail to pay any of the Borrower’s Obligations constituting principal due under the Loans as and when the same shall become due and payable, whether by reason of demand, maturity, acceleration or otherwise;
7.02 The Borrower shall fail to pay any of the Borrower’s Obligations constituting interest, fees or other amounts (other than principal due under the Loans) within five (5) Business Days after the date the same shall first become due and payable, whether by reason of demand, maturity, acceleration or otherwise;
7.03 Any representation or warranty made by the Borrower in this Agreement, in any other Transaction Document or in any certificate, agreement, instrument or written statement furnished or made or delivered pursuant hereto or thereto or in connection herewith or therewith, shall prove to have been untrue or incorrect in any material respect on the date as of which it was deemed made;
7.04 The Borrower shall fail to perform or observe any term, covenant or provision contained in Sections 6.01(d), 6.02, 6.03, or 6.04 above, or the Borrower shall fail to perform or observe any term, covenant or provision contained in Sections 2.01(b) or 6.01(a) above and such failure shall continue unremedied for a period of five (5) Business Days after the earlier of any Financial Officer of the Borrower obtaining actual knowledge of such failure or written notice thereof given to the Borrower by the Administrative Agent.
7.05 The Borrower shall fail to perform or observe any other term, covenant or provision contained in this Agreement (other than those specified in Sections 7.01, 7.02, 7.03 or 7.04 above) and any such failure shall remain unremedied for thirty (30) days after the earlier of (i) written notice of default is given to the Borrower by the Administrative Agent or any Bank or (ii) any Financial Officer of the Borrower obtaining actual knowledge of such default;
7.06 This Agreement or any of the other Transaction Documents to which the Borrower is a party shall at any time for any reason (other than termination of this Agreement or such other Transaction Documents, as the case may be, in accordance with its terms) cease to be in full force and effect with respect to the Borrower or shall be declared to be null and void by a court of competent jurisdiction with respect to the Borrower, or if the validity or enforceability thereof shall be contested or denied by the Borrower in writing, or if the transactions completed hereunder or thereunder shall be contested by the Borrower or if the Borrower shall deny in writing that it has any further liability or obligation hereunder or thereunder;
7.07 The Borrower or any Material Subsidiary of the Borrower, if any, shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) consent to the institution of, or fail to contravene in a timely and appropriate manner, any such proceeding or the filing of any such petition, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official of itself or of a substantial part of its property or assets, (iv) file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any corporate or other action for the purpose of effecting any of the foregoing;
7.08 An involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Borrower or any Material Subsidiary of the Borrower, if any, or of a substantial part of the property or assets of the Borrower or such Material Subsidiary, under Title 11 of the United States Code or any other Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official of the Borrower or any Material Subsidiary of the Borrower, if any, or of a substantial part of the property or assets of the Borrower or such Material Subsidiary or (iii) the winding-up or liquidation of the Borrower or any Material Subsidiary of the Borrower, if any, and such proceeding or petition shall continue undismissed for sixty (60) consecutive days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty (60) consecutive days;
7.09 (i) The Borrower or any Material Subsidiary of the Borrower, if any, (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Debt (other than Debt of the Borrower hereunder and Debt under Swap Contracts) having an aggregate principal amount of more than $75,000,000, or (B) fails to observe or perform any other agreement or condition relating to any such Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Debt or the beneficiary or beneficiaries of any Guarantee in respect thereof (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Debt to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Debt to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Material Subsidiary of the Borrower, if any, is the Defaulting Party (as defined in such Swap Contract) or (B) any Additional Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Material Subsidiary of the Borrower, if any, is the Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Material Subsidiary of the Borrower, if any, as a result thereof is greater than $75,000,000;
7.10 The Borrower or any Material Subsidiary of the Borrower, if any, shall have a final judgment in an amount in excess of $75,000,000 (to the extent not paid or covered by insurance
provided by a carrier who has acknowledged coverage) entered against it by a court having jurisdiction in the premises and such judgment shall continue unsatisfied for sixty (60) days; provided, however, that if such judgment provides for periodic payments over time, then the Borrower or such Material Subsidiary of the Borrower, if any, shall have a grace period of thirty (30) days with respect to such periodic payment;
7.11 The occurrence of any Change of Control Event; or
7.12 Any ERISA Event or any other event or condition shall occur or exist with respect to any Plan or Multiemployer Plan that, when taken together with all other ERISA Events and other events or conditions that have occurred or are then existing, has or could reasonably be expected to result in a Material Adverse Effect; then, and in each such event (other than an event described in Sections 7.07 or 7.08), the Administrative Agent may, with the consent of the Required Banks, or shall, upon the request of the Required Banks, (i) declare that the obligation of the Banks to make Delayed Draw Term Loans under this Agreement have terminated, whereupon such obligations of the Banks shall be immediately and forthwith terminated, (ii) declare the entire outstanding principal balance of and all accrued and unpaid interest on the Loans and all of the other Borrower’s Obligations to be forthwith due and payable, whereupon all of the unpaid principal balance of and all accrued and unpaid interest on the Loans and all of such other Borrower’s Obligations shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, (iii) [reserved] and (iv) exercise any and all other rights and remedies against the Borrower which they may have under any of the other Transaction Documents or under applicable law; provided, however, that upon the occurrence of any event described in Sections 7.07 or 7.08, the obligation of the Banks to make Delayed Draw Term Loans under this Agreement shall automatically terminate and the entire outstanding principal balance of and all accrued and unpaid interest on the Loans and all of the other Borrower’s Obligations shall automatically become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, and the Administrative Agent and the Banks may exercise any and all other rights and remedies which they may have under any of the other Transaction Documents or under applicable law.
SECTION 8. ADMINISTRATIVE AGENT
8.01 Appointment and Authority. Each of the Banks hereby irrevocably appoints BMO to act on its behalf as the Administrative Agent hereunder and under the other Transaction Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. Except as set forth in Section 8.06, the provisions of this Section are solely for the benefit of the Administrative Agent and the Banks and neither the Borrower nor any of its Subsidiaries shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Transaction Document (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties.
8.02 Rights as a Bank. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Bank as any other Bank and may exercise the same as though it were not the Administrative Agent and the term “Bank” or “Banks” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Banks.
8.03 Exculpatory Provisions. The Administrative Agent and its Related Parties shall not have any duties or obligations except those expressly set forth herein and in the other Transaction Documents, and their duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent, the Lead Arranger and their respective Related Parties:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Transaction Documents that the Administrative Agent is required to exercise as directed in writing by the Required Banks (or such other number or percentage of the Banks as shall be expressly provided for herein or in the other Transaction Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Transaction Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Bank in violation of any Debtor Relief Law; and
(c) shall not, except as expressly set forth herein and in the other Transaction Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent, the Lead Arranger or their respective Related Parties in any capacity.
None of the Administrative Agent, the Lead Arranger or their respective Related Parties shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Banks (or such other number or percentage of the Banks as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 9.07 and Section 7) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent in writing by the Borrower or a Bank.
None of the Administrative Agent, the Lead Arranger or their respective Related Parties shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Transaction Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Transaction Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than, with respect to the Administrative Agent, to confirm receipt of items expressly required to be delivered to the Administrative Agent.
8.04 Reliance. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Bank, the Administrative Agent may presume that such condition is satisfactory to such Bank unless the Administrative Agent shall have received notice to the contrary from such Bank prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
8.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Transaction Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
8.06 Resignation of Administrative Agent. The Administrative Agent may resign as Administrative Agent for the Banks under this Agreement and the other Transaction Documents at any time by giving notice in writing to the Banks and the Borrower. Such resignation shall take effect upon appointment of such successor Administrative Agent. Upon receipt of any such notice of resignation and subject to the consent of the Borrower (which consent shall not be unreasonably withheld or delayed), the Required Banks shall have the right to appoint a successor Administrative Agent who shall be a Bank and who shall be entitled to all of the rights of, and vested with the
same powers as, the original Administrative Agent under this Agreement and the other Transaction Documents. In the event a successor Administrative Agent shall not have been appointed within the thirty (30) day period following the giving of notice by the Administrative Agent, subject to the consent of the Borrower (which consent shall not be unreasonably withheld or delayed), the Administrative Agent may appoint its own successor; provided that if the Administrative Agent shall notify the Borrower and the Banks that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Banks under any of the Transaction Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Bank directly, until such time as the Required Banks appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Transaction Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Transaction Documents, the provisions of this Section and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
8.07 Non-Reliance on Administrative Agent and Other Banks. Each Bank expressly acknowledges that none of the Administrative Agent, the Lead Arranger or any of their respective Related Parties has made any representations or warranties to it and that no act taken or failure to act by the Administrative Agent, the Lead Arranger or any of their respective Related Parties, including any consent to, and acceptance of any assignment or review of the affairs of the Borrower and its Subsidiaries or Affiliates shall be deemed to constitute a representation or warranty of the Administrative Agent, the Lead Arranger or any of their respective Related Parties to any Bank as to any matter, including whether the Administrative Agent, the Lead Arranger or any of their respective Related Parties have disclosed material information in their (or their respective Related Parties’) possession. Each Bank expressly acknowledges, represents and warrants to the Administrative Agent and the Lead Arranger that (a) the Transaction Documents set forth the terms of a commercial lending facility, (b) it is engaged in making, acquiring, purchasing or holding commercial loans in the ordinary course and is entering into this Agreement and the other Transaction Documents to which it is a party as a Bank for the purpose of making, acquiring, purchasing and/or holding the commercial loans set forth herein as may be applicable to it, and not for the purpose of investing in the general performance or operations of the Borrower and its Subsidiaries, or for the purpose of making, acquiring, purchasing or holding any other type of financial instrument such as a security, (c) it is sophisticated with respect to decisions to make, acquire, purchase or hold the commercial loans applicable to it and either it or the Person exercising discretion in making its decisions to make, acquire, purchase or hold such commercial
loans is experienced in making, acquiring, purchasing or holding commercial loans, (d) it has, independently and without reliance upon the Administrative Agent, the Lead Arranger, any other Bank or any of their respective Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and appraisal of, and investigations into, the business, prospects, operations, property, assets, liabilities, financial and other condition and creditworthiness of the Borrower and its Subsidiaries, all applicable bank or other regulatory applicable laws relating to the transactions contemplated by this Agreement and the other Transaction Documents and (e) it has made its own independent decision to enter into this Agreement and the other Transaction Documents to which it is a party and to extend credit hereunder and thereunder. Each Bank also acknowledges and agrees that (i) it will, independently and without reliance upon the Administrative Agent, the Lead Arranger or any other Bank or any of their respective Related Parties (A) continue to make its own credit analysis, appraisals and decisions in taking or not taking action under or based upon this Agreement, any other Transaction Document or any related agreement or any document furnished hereunder or thereunder based on such documents and information as it shall from time to time deem appropriate and its own independent investigations and (B) continue to make such investigations and inquiries as it deems necessary to inform itself as to the Borrower and its Subsidiaries and (ii) it will not assert any claim under any federal or state securities law or otherwise in contravention of this Section 8.07.
8.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Administrative Agent, Lead Arranger or other agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Transaction Documents, except in its capacity, as applicable, as the Administrative Agent or a Bank hereunder, but each such Person shall have the benefit of the indemnities and exculpatory provisions hereof.
8.09 Enforcement. Each Bank hereby agrees that, except as otherwise provided in any Transaction Documents or with the written consent of the Administrative Agent and the Required Banks, it will not take any enforcement action, accelerate obligations under any Transaction Documents, or exercise any right that it might otherwise have under applicable law to credit bid at foreclosure sales, Uniform Commercial Code sales or other similar dispositions of collateral, if any.
8.10 [Reserved].
8.11 Erroneous Payments.
(a) Each Bank and any other party hereto hereby severally agrees that if (i) the Administrative Agent notifies (which such notice shall be conclusive absent manifest error) such Bank or any other Person that has received funds from the Administrative Agent or any of its Affiliates, either for its own account or on behalf of a Bank (each such recipient, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives any payment from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not
preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts specified in clauses (i) or (ii) of this Section 8.11(a), whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise; individually and collectively, an “Erroneous Payment”), then, in each case, such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided that nothing in this Section shall require the Administrative Agent to provide any of the notices specified in clauses (i) or (ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payments, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine.
(b) Without limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall promptly notify the Administrative Agent in writing of such occurrence.
(c) In the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and upon demand from the Administrative Agent such Payment Recipient shall (or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds and in the currency so received, together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with immediately preceding clause (c), from any Bank that is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Bank, an “Erroneous Payment Return Deficiency”), then at the sole discretion of the Administrative Agent and upon the Administrative Agent’s written notice to such Bank, such Bank shall be deemed to have made a cashless assignment of the full face amount of the portion of its Loans (but not its Delayed Draw Term Loan Commitments) to the Administrative Agent or, at the option of the Administrative Agent, the Administrative Agent’s applicable lending affiliate in an amount that is equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Delayed Draw Term Loan Commitments), the “Erroneous Payment Deficiency Assignment”) plus any accrued and unpaid interest on such assigned amount, without further consent or approval of any party hereto and without any payment by the Administrative Agent or its applicable lending affiliate as the assignee of such Erroneous
Payment Deficiency Assignment. The parties hereto acknowledge and agree that (1) any assignment contemplated in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms and conditions of Section 9.09 and (3) the Administrative Agent may reflect such assignments in the Register without further consent or action by any other Person.
(e) Each party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Administrative Agent (1) shall be subrogated to all the rights of such Payment Recipient with respect to such amount and (2) is authorized to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Transaction Document against any amount due to the Administrative Agent under this Section 8.11 or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other satisfaction of any Borrower’s Obligations, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrower for the purpose of making a payment on its Borrower’s Obligations and (z) to the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Borrower’s Obligations, the Borrower’s Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received.
(f) Each party’s obligations under this Section 8.11 shall survive the resignation or replacement of the Administrative Agent or any transfer of right or obligations by, or the replacement of, a Bank, the termination of the Delayed Draw Term Loan Commitments or the repayment, satisfaction or discharge of all Borrower’s Obligations (or any portion thereof) under any Transaction Document.
(g) Nothing in this Section 8.11 will constitute a waiver or release of any claim of the Administrative Agent hereunder arising from any Payment Recipient’s receipt of an Erroneous Payment.
SECTION 9. GENERAL.
9.01 No Waiver; Remedies Cumulative. No failure or delay by the Administrative Agent or any Bank in exercising any right, remedy, power or privilege under this Agreement or under any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies provided in this Agreement and in the other Transaction Documents are cumulative and not exclusive of any remedies provided by law. Nothing herein contained shall in any way affect the right of the Administrative Agent or any Bank to exercise any statutory or common law right of banker’s lien or set-off. No course of dealing between the Borrower, the Administrative Agent or the Banks or their agents or employees shall be effective to amend, modify or discharge any provision of this Agreement or any other Transaction Document or to constitute a waiver of any Default or Event of Default. No notice to
or demand upon the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the right of the Administrative Agent or any Bank to exercise any right or remedy or take any other or further action in any circumstances without notice or demand.
9.02 Right of Set-Off. Upon the occurrence and during the continuance of any Event of Default, each Bank and each of its Affiliates is hereby authorized at any time and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower) and to the fullest extent permitted by law, to set-off and apply any and all deposits (general or special, time or demand, provisional or final, but specifically excluding any trust or segregated accounts) at any time held by such Bank and any and all other indebtedness at any time owing by such Bank or any such Affiliate to or for the credit or account of the Borrower against any and all of such Borrower’s Obligations now or hereafter existing under this Agreement irrespective of whether or not such Bank shall have made any demand under this Agreement or under any of the other Transaction Documents and although such obligations may be contingent or unmatured or are owed to a branch or office of such Bank different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Bank shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.21 and, pending such payment, shall be segregated by such Defaulting Bank from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Banks, and (y) the Defaulting Bank shall provide promptly to the Administrative Agent a statement describing in reasonable detail the obligations owing to such Defaulting Bank as to which it exercised such right of setoff. Each Bank agrees to promptly notify the Borrower after any such set-off and application made by such Bank, provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Banks under this Section 9.02 are in addition to any other rights and remedies (including, without limitation, other rights of set-off) which the Banks may have.
9.03 Costs and Expenses; General Indemnity.
(a) Costs and Expenses. The Borrower agrees, whether or not any Loan is made under this Agreement, to pay or reimburse the Administrative Agent and each Bank upon demand for (i) all reasonable documented out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Administrative Agent and its Affiliates in connection with the syndication, preparation, documentation, negotiation and/or execution of this Agreement and/or any of the other Transaction Documents, subject to any limitation described in the Commitment Letter, (ii) all recording, filing and search fees and expenses incurred by the Administrative Agent in connection with this Agreement and/or any of the other Transaction Documents, (iii) all reasonable documented out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Administrative Agent in connection with the (A) the preparation, documentation, negotiation and execution of any amendment, modification, extension, renewal or restatement of this Agreement and/or any of the other Transaction Documents or (B) the preparation of any waiver or consent under this Agreement or under any of the other Transaction Documents, (iv) if an Event of Default occurs, all reasonable documented out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Administrative Agent or any Bank in connection with such
Event of Default and collection and other enforcement proceedings resulting therefrom and (v) any civil penalty or fine assessed by OFAC against, and all reasonable documented costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof by, the Administrative Agent or any Bank as a result of the conduct of the Borrower that violates Sanctions enforced by OFAC. The Borrower acknowledges and agrees that such attorneys’ fees and expenses referred to above shall be determined on the basis of rates then generally applicable to the attorneys (and all paralegals, accountants and other staff employed by such attorneys) retained by the Administrative Agent or any Bank. All of the obligations of the Borrower under this Section 9.03(a) shall survive the satisfaction and payment of the Borrower’s Obligations and the termination of this Agreement.
(b) Indemnity by the Borrower. In addition to the payment of expenses pursuant to Section 9.03(a), whether or not the transactions contemplated hereby shall be consummated, the Borrower hereby agrees to defend, indemnify, pay and hold the Administrative Agent (and any sub-agent thereof), the Lead Arranger, each Bank, any holders of the Loans, and any Related Party of any of the foregoing Persons (collectively, the “Indemnitees”) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, disbursements, costs and expenses of any kind or nature whatsoever (including, without limitation, the reasonable out-of-pocket fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitees shall be designated a party thereto, provided that the Indemnitees shall share counsel to defend their interests to the extent legally practicable), that may be imposed on, incurred by or asserted against the Indemnitees by any third party or by the Borrower, in any manner relating to or arising out of (i) the execution or delivery of this Agreement, any of the other Transaction Documents or any other agreement, document or instrument executed and delivered by the Borrower in connection herewith or therewith, the statements contained in any commitment letters delivered by the Administrative Agent or any Bank, the agreement of the Banks to make the Loans under this Agreement, (ii) any Loan or the use or intended use of the proceeds thereof, (iii) any actual or alleged presence or release of hazardous substances on or from any property owned or operated by the Borrower, or any environmental claim related in any way to the Borrower or any of its Subsidiaries and (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto (collectively, the “Indemnified Liabilities”); provided that no Indemnitee will have any right to indemnification for any of the foregoing to the extent resulting from (x) such Indemnitee’s own fraud, gross negligence or willful misconduct or a material breach in bad faith by such Indemnitee of its obligations hereunder or (y) a claim brought by the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s funding obligations under this Agreement, in each case as determined by a final non-appealable judgment of a court of competent jurisdiction. To the extent that the Borrower’s undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all such Indemnified Liabilities incurred by the Indemnitees or any of them. The provisions of the undertakings and indemnification set out in this Section 9.03(b) shall survive satisfaction and payment of the Borrower’s Obligations and the termination of this Agreement.
(c) Indemnity by Banks. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Sections 9.03(a) and (b) to be paid by it to the Administrative Agent (or any sub-agent thereof), the Lead Arranger or any Related Party of any of the foregoing, each Bank severally agrees to pay to the Administrative Agent (or any such sub-agent), the Lead Arranger or such Related Party, as the case may be, such Bank’s proportion (based on the percentages as used in determining the Required Banks as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the Lead Arranger in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Lead Arranger in connection with such capacity. The obligations of the Banks under this Section 9.03(c) are subject to the provisions of Section 2.18(a).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no party hereunder shall assert, and each party hereunder hereby waives, any claim against any other party hereunder or any Related Party of the foregoing, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Transaction Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof; provided however that the obligation of the Borrower to indemnify the Indemnitees as otherwise set forth herein arising from claims brought by third parties shall not be limited by the foregoing. None of the Administrative Agent, the Lead Arranger, any Bank or any Related Party of the foregoing shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Transaction Documents or the transactions contemplated hereby or thereby; provided, however, that such use was not due to the gross negligence, willful misconduct or material breach in bad faith by such Person as determined by a final non-appealable judgment of a court of competent jurisdiction.
9.04 Notices.
(a) Notices Generally. Each notice, request, demand, consent, confirmation or other communication under this Agreement shall be in writing and delivered in person or sent by facsimile, recognized overnight courier or registered or certified mail, return receipt requested and postage prepaid, to the applicable party as follows: (a) if to the Borrower or the Administrative Agent, to it at the address (or facsimile number) specified for such Person on Schedule 9.04 and (b) if to any Bank, to it at its address (or facsimile number) set forth in its Administrative Questionnaire. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile, when provided in legible form, shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).
(b) Electronic Communications. Notices and other communications to the Banks hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Bank pursuant to Section 2 or 3 if such Bank has notified the Administrative Agent that is incapable of receiving notices under such Section by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
9.05 Consent to Jurisdiction; Waiver of Jury Trial. EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT, TO THE EXTENT PERMITTED BY LAW, OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY OR, IF SUCH FEDERAL COURT IS NOT AVAILABLE DUE TO LACK OF JURISDICTION, ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, AS THE INITIATING PARTY MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY OF SUCH COURTS. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PARTY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND EACH PARTY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY AUTHORIZES THE SERVICE OF PROCESS UPON THE BORROWER BY OVERNIGHT COURIER, SIGNATURE REQUIRED SENT TO ITS ADDRESS SPECIFIED IN SCHEDULE 9.04. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
9.06 Governing Law. This Agreement and the other Transaction Documents shall be governed by and construed in accordance with the substantive laws of the State of New York (including Sections 5-1401 and 5-1402 of the New York General Obligations of Law, but excluding all other choice of law and conflicts of law rules).
9.07 Amendments and Waivers.
(a) Any provision of this Agreement or any of the other Transaction Documents to which the Borrower is a party may be amended, modified, discharged, terminated or waived if, but only if, such amendment, modification, waiver, discharge or termination is in writing and is signed by the Borrower and the Required Banks (or by the Administrative Agent at the direction or with the consent of the Required Banks); provided, however, that no such amendment, modification, waiver, discharge or termination shall (i) unless signed by each Bank directly affected thereby (A) increase the Delayed Draw Term Loan Commitment of a Bank (it being understood that a waiver of any condition precedent set forth in Section 4.02 or of any Default or Event of Default, if agreed to by the Required Banks or all Banks (as may be required hereunder with respect to such waiver), shall not constitute such an increase), (B) reduce the principal amount of or rate of interest on any Loan or any fees hereunder (provided that only the consent of the Required Banks shall be required to waive the applicability of any post-default increase in interest rates), (C) decrease the Delayed Draw Term Loan Commitment of any Bank (other than ratable decreases of the Delayed Draw Term Loan Commitments of each Bank affected in accordance with Section 2.01(d)) or (D) waive, extend or postpone the date fixed for any payment of principal of or interest on any Loan or any fees hereunder (other than fees payable to the Administrative Agent or the Lead Arranger for its own account), or extend the term of the Availability Period, (ii) unless signed by each Bank, (A) change any provision of this Section or reduce the percentages specified in the definitions of “Required Banks” or change the definition of “Pro Rata Share” or change any other provision hereof specifying the number or percentage of Banks required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, or (B) amend Section 2.09(a) or 2.18 in a manner that would alter the pro rata sharing required thereby or amend or modify any provision of Section 2.09(d), and (iii) unless signed by the Administrative Agent in addition to the Banks as provided hereinabove to take such action, affect the rights or obligations of the Administrative Agent hereunder or under any of the other Transaction Documents. Notwithstanding anything to the contrary herein, each Bank hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent of any Bank (but with the consent of the Borrower and the Administrative Agent), to amend and restate this Agreement and the other Transaction Documents if, upon giving effect to such amendment and restatement, such Bank shall no longer be a party to this Agreement (as so amended and restated), the Delayed Draw Term Loan Commitments of such Bank shall have terminated, such Bank shall have no other commitment or other obligation hereunder and shall have been paid in full all
principal, interest and other amounts owing to it or accrued for its account under this Agreement and the other Transaction Documents.
(b) Notwithstanding anything to the contrary herein, (i) no Defaulting Bank shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Banks or each affected Bank may be effected with the consent of the applicable Banks other than Defaulting Banks), except that (A) the Delayed Draw Term Loan Commitment of any Defaulting Bank may not be increased or extended without the consent of such Bank and (B) any waiver, amendment or modification requiring the consent of all Banks or each affected Bank that by its terms affects any Defaulting Bank more adversely than other affected Banks shall require the consent of such Defaulting Bank and (ii) if the Administrative Agent and the Borrower shall have jointly identified (each in its sole discretion) an obvious error or omission of a technical or immaterial nature, in each case, in any provision of the Transaction Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Transaction Document if the same is not objected to in writing by the Required Banks within five (5) Business Days following the posting of such amendment to the Banks.
(c) Notwithstanding the fact that the consent of all Banks is required in certain circumstances as set forth above, each Bank is entitled to vote as such Bank sees fit on any bankruptcy reorganization plan that affects the Loans, and each Bank acknowledges that the provisions of Section 1126(c) of title 11 of the U.S. Code supersedes the unanimous consent provisions set forth herein.
9.08 References; Headings for Convenience. Unless otherwise specified herein, all references herein to Section numbers refer to Section numbers of this Agreement, all references herein to Exhibits refer to annexed Exhibits, which are hereby incorporated herein by reference and all references herein to Schedules refer to annexed Schedules, which are hereby incorporated herein by reference. The Section headings are furnished for the convenience of the parties and are not to be considered in the construction or interpretation of this Agreement.
9.09 Successors and Assigns.
(a) Subject to paragraphs (b), (c) and (d) of this Section 9.09, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, the Borrower may not assign or otherwise transfer any of its rights or delegate any of its obligations or duties under this Agreement without the prior written consent of the Administrative Agent and each Bank.
(b) Any Bank may at any time, without the consent of, or notice to (except as provided below), the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in its Delayed Draw Term Loan Commitments, any or all of its Loans and/or any or all of its other rights and/or obligations under this Agreement. In the event of any such grant by a Bank of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, such Bank shall remain responsible for the performance of its obligations
under this Agreement, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Bank in connection with such Bank’s rights and obligations under this Agreement. Any agreement pursuant to which any Bank may grant such a participating interest shall provide that such Bank shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder including, without limitation, the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that the applicable Bank will not agree to any amendment, modification or waiver of this Agreement described in clauses (a)(i)(A), (a)(i)(B) or (a)(i)(D) of Section 9.07 without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 2.10, 2.11, 2.12, 2.13, 2.14, 2.15, 2.16, 2.17 and 2.20 of this Agreement with respect to its participating interest, but the Borrower’s liability in respect thereof shall not be greater than its liability thereunder to the Bank granting the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.02 as though it were a Bank; provided such Participant agrees to be subject to Section 2.18 as though it were a Bank. Each Bank that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Bank shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Delayed Draw Term Loan Commitments, Loans or its other obligations under this Agreement) except to the extent that such disclosure is necessary to establish that such Delayed Draw Term Loan Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Bank shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. Notwithstanding the foregoing, so long as no Event of Default under this Agreement has occurred and is continuing, any Bank that desires to sell a participation to a Person that is not an Affiliate of such Bank shall first provide to the Borrower written notice of such participation, including the amount of the participation and the identity of the Participant.
(c) Any Bank may at any time assign to one or more assignees (each, an “Assignee”) all, or a proportionate part of all, of its rights and obligations under this Agreement (including all or a portion of its Delayed Draw Term Loan Commitments and the Loans at the time owing to it) and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit D attached hereto executed by such Assignee and such transferor Bank, with (and subject to) the consent of the Borrower (provided that the Borrower shall be deemed to have given its consent (x) in the case of an assignment of Delayed Draw Term Loan Commitments, ten (10) Business Days after the date written notice thereof has been delivered by the assigning Bank (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such tenth (10th) Business Day and (y) in the case of an assignment of Delayed Draw Term Loans, five (5) Business Days after the date written notice thereof has been delivered by the assigning Bank (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such fifth (5th) Business Day) and, in each case, the Administrative Agent which, in each case, shall not be unreasonably withheld or delayed; provided, however, that (i) the minimum amount of any such assignment
shall be $5,000,000 (except in the case of an assignment of the entire remaining amount of the assigning Bank’s Delayed Draw Term Loan Commitment or Delayed Draw Term Loans, in which case no minimum amount need be assigned), (ii) if any Assignee is an Affiliate of a Bank, an Approved Fund or, immediately prior to such assignment, already a Bank, no consent shall be required for such assignment and (iii) if any Event of Default under this Agreement has occurred and is continuing, the consent of the Borrower to such assignment shall not be required. Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (h) of this Section, upon execution and delivery of such instrument and payment by such Assignee to such transferor Bank of an amount equal to the purchase price agreed between such transferor Bank and such Assignee, such Assignee shall be a Bank party to this Agreement and shall have all the rights and obligations of a Bank with a Delayed Draw Term Loan Commitment or Delayed Draw Term Loans, in each case, as set forth in such instrument of assumption, and the transferor Bank shall be released from its obligations hereunder to a corresponding extent, and no further consent or action by any party shall be required but the transferor Bank shall continue to be entitled to the benefits of Sections 2.10, 2.13, 2.15, 2.17, 2.20 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon the consummation of any assignment pursuant to this subsection (c), the transferor Bank, the Administrative Agent and the Borrower shall make appropriate arrangements so that, if requested, new Notes are issued to the assignor and/or the Assignee, as applicable. In connection with any such assignment, the transferor Bank shall pay to the Administrative Agent an administrative fee for processing such assignment in the amount of $3,500 and if it is not a Bank, shall deliver to the Administrative Agent an Administrative Questionnaire; provided that in the case of an assignment to a Bank, Approved Fund or Affiliate of a Bank, no such fee shall be required.
(d) Any Bank may at any time pledge or assign all or any portion of its rights under this Agreement and its Loans to secure its obligations, including to a Federal Reserve Bank or other central bank having jurisdiction over such Bank in accordance with applicable law. No such pledge or assignment shall release the transferor Bank from any of its obligations hereunder.
(e) No such assignment shall be made to (A) the Borrower or any of its Affiliates or Subsidiaries or (B) to any Defaulting Bank or any of its Subsidiaries, or any Person who, upon becoming a Bank hereunder, would constitute any of the foregoing Persons described in this clause (B).
(f) No such assignment shall be made to a natural person (or holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).
(g) In connection with any assignment of rights and obligations of any Defaulting Bank hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or sub-participations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Bank, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Bank to the Administrative Agent or any Bank hereunder (and interest accrued
thereon), and (y) acquire (and fund as appropriate) its full Pro Rata Share of all Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Bank hereunder shall become effective under applicable Requirement of Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Bank for all purposes of this Agreement until such compliance occurs.
(h) The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at its address for notices specified in Schedule 9.04, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Banks, and the Delayed Draw Term Loan Commitments of, and principal amounts of the Loans owing to, each Bank pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Banks may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Bank hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, revocation of designation, of any Bank as a Defaulting Bank. The Register shall be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice. In addition, at any time that a request for a consent for a material or substantive change to the Transaction Documents is pending, any Bank wishing to consult with other Banks in connection therewith may request and receive from the Administrative Agent a copy of the Register.
9.10 Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings (oral or written) relating to the subject matter hereof.
9.11 Severability. In the event any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
9.12 Counterparts. This Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf” or “tif”) shall be effective as delivery of an original executed counterpart of this Agreement. The words “execute,” “execution,” “signed,” “signature,” “delivery” and words of like import in or related to this Agreement, any other Transaction Document or any document, amendment, approval, consent, waiver, modification, information, notice, certificate, report, statement, disclosure, or authorization to be signed or delivered in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby shall be deemed to include Electronic Signatures or execution in the form of an Electronic Record, and contract formations on electronic platforms approved by the Administrative Agent, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and
Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Each party hereto agrees that any Electronic Signature or execution in the form of an Electronic Record shall be valid and binding on itself and each of the other parties hereto to the same extent as a manual, original signature. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the parties of a manually signed paper which has been converted into electronic form (such as scanned into PDF format), or an electronically signed paper converted into another format, for transmission, delivery and/or retention. Notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided that without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept such Electronic Signature from any party hereto, the Administrative Agent and the other parties hereto shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of the executing party without further verification and (ii) upon the request of the Administrative Agent or any Bank, any Electronic Signature shall be promptly followed by an original manually executed counterpart thereof. Without limiting the generality of the foregoing, each party hereto hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Banks and the Borrower, electronic images of this Agreement or any other Transaction Document (in each case, including with respect to any signature pages thereto) shall have the same legal effect, validity and enforceability as any paper original, and (B) waives any argument, defense or right to contest the validity or enforceability of the Transaction Documents based solely on the lack of paper original copies of any Transaction Documents, including with respect to any signature pages thereto.
9.13 Confidentiality. Any information received by any Bank or the Lead Arranger from the Borrower (or from the Administrative Agent on the Borrower’s behalf), (i) shall be treated as confidential by such Bank or the Lead Arranger in accordance with its customary practices and procedures and (ii) with respect to any information or materials received prior to the Effective Date, shall be used solely for the purposes of providing the services that are subject to the Commitment Letter and for no other purpose. Notwithstanding such agreement, nothing herein contained shall limit or impair the right or obligation of any Bank or the Lead Arranger to disclose such information: (a) to its auditors, attorneys, trustees, employees, directors, officers, advisors, Affiliates or agents (collectively, the “Representatives”) and such Affiliates’ Representatives who are informed of the confidential nature of such information and are or have been advised of their obligation to keep information of this type confidential and, with respect to any information or material received prior to the Effective Date, to use such information solely for the purposes of providing services that are the subject of the Commitment Letter and for no other purpose; provided that such Bank or the Lead Arranger shall remain liable for any breach by its Representatives of such confidentiality provisions, (b) when and as required by any law, ordinance, subpoena or governmental order, rule or regulation (in which case, such Bank or the Lead Arranger shall promptly notify the Borrower, in advance to the extent permitted by law, and will only disclose that portion of the nonpublic information received by it that such Bank or the Lead Arranger is so required to disclose), (c) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (d) which is publicly available or readily ascertainable from public sources, to the extent any such information becomes publicly available other than by reason of disclosure by such Bank or the Lead Arranger,
or their respective affiliates or Representatives in breach of this Section, or which is received by any Bank or the Lead Arranger from a third Person which is not known by such Bank or the Lead Arranger to be bound to keep the same confidential, (e) in connection with any proceeding, case or matter pending (or on its face purported to be pending) before any court, tribunal or any governmental agency, commission, authority, board or similar entity (in which case, such Bank or the Lead Arranger shall promptly notify the Borrower, in advance to the extent permitted by law, and will only disclose that portion of the nonpublic information received by it that such Bank or the Lead Arranger is so required to disclose), (f) in connection with protection of its interests under this Agreement, the Notes or any of the other Transaction Documents, including, without limitation, the enforcement of the terms and conditions of this Agreement, the Notes and the other Transaction Documents or for purposes of establishing a “due diligence” defense, (g) to any actual or prospective Participant or Assignee (it being understood and agreed that prior to disclosure of any confidential information to any actual or prospective Participant or Assignee, such actual or prospective Participant or Assignee shall have agreed in writing to be bound by the terms and provisions of this Section 9.13), (h) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder or (i) on a confidential basis to a rating agency in connection with rating such Bank or its Subsidiaries or the credit facility. For the avoidance of doubt, nothing herein prohibits any individual from communicating or disclosing information regarding suspected violations of laws, rules, or regulations to a governmental, regulatory, or self-regulatory authority. For purposes of this Section, “information” means all information received from the Borrower or any of its Subsidiaries relating to the Borrower or such Subsidiary or any of their respective businesses, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.
9.14 USA Patriot Act Notice. Each Bank that is subject to the PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Bank) hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower or any of its Subsidiaries, which information includes the name and address of the Borrower and its Subsidiaries and other information that will allow such Bank or the Administrative Agent, as applicable, to identify the Borrower and its Subsidiaries in accordance with the PATRIOT Act.
9.15 Subsidiary Reference. Any reference in this Agreement to a Subsidiary of the Borrower, and any financial definition, ratio, restriction or other provision of this Agreement which is stated to be applicable to the Borrower and its Subsidiaries or which is to be determined on a “consolidated” or “consolidating” basis, shall apply only to the extent the Borrower has any Subsidiaries and, if applicable, to the extent any such Subsidiaries are consolidated with the Borrower for financial reporting purposes in accordance with GAAP.
9.16 No Fiduciary Duty. The Borrower agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Lead Arranger, the Banks and their respective Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lead Arranger, the Banks or their respective Affiliates and no such duty will be deemed to have
arisen in connection with any such transactions or communications. The Administrative Agent, the Banks, and their respective Affiliates may be involved in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and the Administrative Agent and the Banks have no obligation to disclose any of such interests to the Borrower or any of its Affiliates.
9.17 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Transaction Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Transaction Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Transaction Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.
9.18 Certain ERISA Matters.
(a) Each Bank (x) represents and warrants, as of the date such Person became a Bank party hereto, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent, the Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:
(i) such Bank is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) of one or more Benefit Plans with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Delayed Draw Term Loan Commitments or this Agreement;
(ii) the prohibited transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions
involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable so as to exempt from the prohibitions of Section 406 of ERISA and Section 4975 of the Code such Bank’s entrance into, participation in, administration of and performance of the Loans, the Delayed Draw Term Loan Commitments and this Agreement;
(iii) (A) such Bank is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Bank to enter into, participate in, administer and perform the Loans, the Delayed Draw Term Loan Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Delayed Draw Term Loan Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Bank, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Bank’s entrance into, participation in, administration of and performance of the Loans, the Delayed Draw Term Loan Commitments and this Agreement; or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Bank.
(b) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to a Bank or (2) a Bank has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (a), such Bank further (x) represents and warrants, as of the date such Person became a Bank party hereto, to, and (y) covenants, from the date such Person became a Bank party hereto to the date such Person ceases being a Bank party hereto, for the benefit of, the Administrative Agent, the Lead Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that none of the Administrative Agent, the Lead Arranger and their respective Affiliates is a fiduciary with respect to the assets of such Bank involved in such Bank’s entrance into, participation in, administration of and performance of the Loans, the Delayed Draw Term Loan Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Transaction Document or any documents related hereto or thereto).
9.19 Acknowledgement Regarding Any Supported QFCs. To the extent that the Transaction Documents provide support, through a guarantee or otherwise, for Swap Contracts or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and, each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the FDIC under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the
Transaction Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Transaction Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Transaction Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Bank shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) As used in this Section 9.19, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“FDIC” means the Federal Deposit Insurance Corporation.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
[Signature pages to follow]
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and the Banks have executed this Agreement as of the day and year first above written.
BORROWER: SPIRE INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
Signature Page to Spire 2025 Delayed Draw Term Loan Agreement
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Administrative Agent: BANK OF MONTREAL, as a Bank and the Administrative Agent
By: _____________________________
Name: _____________________________
Title: _____________________________
Signature Page to Spire 2025 Delayed Draw Term Loan Agreement
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BANK: [ ], as a Bank
By: _____________________________
Name: _____________________________
Title: ___________________________
Signature Page to Spire 2025 Delayed Draw Term Loan Agreement
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