Exhibit 10.10

FORMATION AND EXCHANGE AGREEMENT

BY AND AMONG

WILLIAMS FIELD SERVICES GROUP, LLC,

WILLIAMS LAUREL MOUNTAIN, LLC

ATLAS PIPELINE PARTNERS, L.P.

ATLAS PIPELINE OPERATING PARTNERSHIP, L.P.

and

APL LAUREL MOUNTAIN, LLC

March 31, 2009

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Exhibits

 

 

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FORMATION AND EXCHANGE AGREEMENT

This Formation and Exchange Agreement (the “ Agreement ”) is made and entered into as of March 31, 2009, by and between Williams Field Services Group, LLC, a Delaware limited liability company (“ WFSG ”), Williams Laurel Mountain, LLC, a Delaware limited liability company (“ WFSG Sub ,” and with WFSG, the “ WFSG Parties ”), Atlas Pipeline Partners, L.P., a Delaware limited partnership (“ APL ”), Atlas Pipeline Operating Partnership, L.P., a Delaware limited partnership (“ APL Operating ”) and APL Laurel Mountain, LLC, a Delaware limited liability company (“ APL Sub ,” and with APL and APL Operating, the “ APL Parties ”).

W I T N E S S E T H:

WHEREAS, APL Operating owns 100% of the limited liability company membership interest of each of Atlas Pipeline New York, LLC, a Pennsylvania limited liability company (“ APL New York ”), Atlas Pipeline Ohio, LLC, a Pennsylvania limited liability company (“ APL Ohio ”), and Atlas Pipeline Pennsylvania, LLC, a Pennsylvania limited liability company (“ APL Pennsylvania ”); and APL Pennsylvania owns 100% of the limited liability company membership interests of Atlas Pipeline McKean, LLC, a Pennsylvania limited liability company (“ APL McKean ,” and collectively with APL New York, APL Ohio and APL Pennsylvania, the “ Subject Entities ”);

WHEREAS, the Subject Entities and Atlas America, LLC, a Pennsylvania limited liability company (“ Atlas LLC ”), collectively own the assets used or held for use in the conduct of the Appalachian Business;

WHEREAS, WFSG is in the business of owning and operating midstream natural gas assets;

WHEREAS, WFSG and APL desire to form a joint venture to acquire and own the Subject Entities and conduct the Appalachian Business;

WHEREAS, on the Closing Date, the following transactions will occur in sequential order:

(i) prior to the Closing, WFSG will cause WFSG Sub to form Laurel Mountain Midstream, LLC, a Delaware limited liability company (“ Newco ”), as a wholly-owned subsidiary of WFSG Sub; and immediately thereafter,

(ii) prior to the Closing, APL Operating will cause APL Sub to form Laurel Mountain Midstream Operating LLC, a Delaware limited liability company (“ Merger Sub ”), as a wholly-owned subsidiary of APL Sub; and immediately thereafter,

(iii) prior to the Closing, APL Operating, APL Pennsylvania and APL Sub will cause each of APL New York, APL Pennsylvania and APL McKean (the “ Merged Subject Entities ”) to merge with and into Merger Sub, pursuant to, and subject to the terms and conditions of, that certain Agreement and Plan of Merger and Reorganization, the form of which is attached hereto as Exhibit A (the “ Plan of Merger ”), and as a result of such merger (the “ Merger ”), all of the rights, privileges,

 

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powers and franchises the Merged Subject Entities, as well as all of the debts, liabilities and obligations of the Merged Subject Entities, will be vested by operation of Law in the Surviving Company (as defined herein);

(iv) prior to the Closing, APL Operating will contribute its 100% limited liability company membership interest in APL Ohio (the “ APL Ohio Interest ”) to APL Sub;

(v) prior to the Closing, WFSG will cause WFSG Sub to contribute $102 million in cash to Newco and issue to Newco a three-year note from WFSG Sub with a principal amount of $25.5 million, which note will be in the form attached hereto as Exhibit B (the “ WFSG Sub Note ”);

(vi) prior to the Closing, WFSG and WFSG Sub will cause Newco to purchase from Atlas LLC certain assets described in the ATN Asset Purchase Agreement that are used, held for use or intended to be used in the Appalachian Business (the “ ATN Assets ”); and immediately thereafter;

(vii) at the Closing, APL Sub will exchange 100% of the limited liability company membership interests in the Surviving Company (the “ Surviving Company Interest ”) and the APL Ohio Interest (collectively, with the Surviving Company Interest, the “ Exchanged Interests ”) with Newco for $87.795 million in cash and the issuance of a 49% limited liability company membership interest in Newco and the Preferred Distribution Rights (such limited liability company membership interest collectively with the Preferred Distribution Rights, the “ Subject Interest ”);

WHEREAS, concurrently with the Closing, WFSG Sub will contribute $2.295 million in cash to Newco as a capital contribution, while APL Sub has agreed to reduce the amount of cash otherwise payable to it by $2.205 million and instead allow such money to remain in Newco, resulting in a collective provision of $4.5 million of capital to Newco as initial working capital;

WHEREAS, following the Closing of the transactions contemplated under this Agreement, WFSG Sub will own a 51% limited liability company membership interest in Newco, and APL Sub will own a 49% limited liability company membership interest in Newco;

WHEREAS, on the Closing Date, Newco, APL, APL Operating, Atlas LLC, Resource Energy, LLC, a Delaware limited liability company (“ Resource Energy ”), Viking Resources, LLC, a Pennsylvania limited liability company (“ Viking Resources ”), Atlas Energy Resources, LLC, a Delaware limited liability company (“ ATN ”), Atlas Energy Operating Company, LLC, a Delaware limited liability company (“ ATN Operating ”), and Atlas Noble, LLC, a Delaware limited liability company (“ Atlas Noble ”) will enter into the Legacy System Gathering Agreement in the form attached hereto as Exhibit C (the “ Legacy System Gathering Agreement ”) and the Expansion System Gathering Agreement in the form attached hereto as Exhibit D (the “ Expansion System Gathering Agreement ,” and with the Legacy System Gathering Agreement, the “ Master Gathering Agreements ”);

WHEREAS, on the Closing Date, Atlas America, Inc., a Delaware corporation (“ Atlas America ”), Newco will enter into a Transition Services Agreement in the form attached hereto

 

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as Exhibit E (the “ Transition Services Agreement ”) pursuant to which Atlas America will provide certain services necessary to operate, manage, maintain and report the operating results of the Appalachian Assets and the Appalachian Business; and

NOW, THEREFORE, in consideration of the premises and the respective representations, warranties, covenants, agreements and conditions contained herein, the Parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions . The respective terms defined in this Section 1.1 shall, when used in this Agreement, have the respective meanings specified herein, with each such definition equally applicable to both singular and plural forms of the terms so defined:

“ Accounting Arbitrator ” has the meaning ascribed to such term in Section 2.8(b) .

“ Adjustment Period ” means the period from (and including) April 1, 2009 to (but not including) the Closing Date.

“ Affiliate ” when used with respect to a Person, means any other Person that directly or indirectly controls, is controlled by or is under common control with such first Person. As of the date of this Agreement, the respective Affiliates of the parties hereto include those identified on Schedule 1.1(a) .

“ Aggregate Title Cap ” has the meaning ascribed to such term in Section 11.6 .

“ Aggregate Title Deductible ” has the meaning ascribed to such term in Section 11.6 .

“ Aggregate Title Defect Threshold ” has the meaning ascribed to such term in Section 11.6 .

“ Agreement ” has the meaning ascribed to such term in the preamble.

“ APL ” has the meaning ascribed to such term in the preamble.

“ APL Board ” means the board of directors of the APL General Partner.

“ APL Closing Certificate ” has the meaning ascribed to such term in Section 7.1(a) .

“ APL Conflicts Committee ” means the conflicts committee of the APL Board.

“ APL Credit Facility ” means the Revolving Credit and Term Loan Agreement and the Loan Documents (as defined therein), by and among, APL, APL Operating, the Subject Entities and Wachovia Bank, National Association, and the lenders named therein, dated as of July 27, 2007.

“ APL Fundamental Representations ” has the meaning ascribed to such term in Section 10.4 .

 

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“ APL General Partner ” means Atlas Pipeline Partners GP, LLC, a Delaware limited liability company and the general partner of APL and APL Operating.

“ APL Indemnified Parties ” has the meaning ascribed to such term in Section 10.2 .

“ APL Material Adverse Effect ” means any effect or change that is materially adverse to (a) the business, assets, liabilities, properties, financial condition or results of operations of the Subject Entities, taken as a whole, (b) the Appalachian Business or the Appalachian Assets, taken as a whole, or (c) the ability of any of the APL Parties to perform its obligations under this Agreement or to consummate the transactions contemplated hereby or (d) the ability of any member of the Appalachia Group to perform its obligations under any Transaction Document to which it is a party; provided, however, that an APL Material Adverse Effect shall not include any such adverse effect or change arising from or relating to (i) changes in state of the natural gas gathering industry generally (including any change in the price of natural gas, natural gas liquids or other hydrocarbons), (ii) changes in United States or global economic conditions or financial, banking, or securities markets (including any disruption thereof) in general, (iii) changes in national or international political or social conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack, (iv) changes in GAAP or in applicable Law, (v) the taking of any action expressly consented to by the WFSG Parties pursuant to Section 6.1(b) , (vi) the announcement of the execution of this Agreement or the Transaction Documents or the proposed or actual consummation of the transactions contemplated hereby and thereby, unless the execution, delivery and performance of this Agreement or the Transaction Documents would otherwise result in a breach of any Material Contract; provided , further, that in the case of clauses (i) , (ii)  and (iii)  the impact of such change is not materially disproportionate to the impact on similarly situated parties, including parties engaged in the gathering of natural gas anywhere within the United States.

“ APL McKean ” has the meaning ascribed to such term in the recitals.

“ APL New York ” has the meaning ascribed to such term in the recitals.

“ APL Ohio ” has the meaning ascribed to such term in the recitals.

“ APL Ohio Contribution Agreement ” has the meaning ascribed to such term in Section 2.2(c) .

“ APL Ohio Interest ” has the meaning ascribed to such term in the recitals.

“ APL Operating ” has the meaning ascribed to such term in the preamble.

“ APL Parties ” has the meaning ascribed to such term in the preamble.

“ APL Pennsylvania ” has the meaning ascribed to such term in the recitals.

“ APL Sub ” has the meaning ascribed to such term in the preamble.

 

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“ Appalachian Assets ” means (i) all of the assets and properties owned, used or held for use by any of the Subject Entities, including all those assets and properties listed on Schedules 4.6(b) through (e)  and (ii) the ATN Assets. For the avoidance of doubt, the Appalachian Assets do not include any assets permitted to be owned, developed or operated by a shipper pursuant to the terms of a gathering services agreement to which any of the Subject Entities is a party.

“ Appalachian Business ” means the natural gas gathering and transportation business and the natural gas liquids extraction business conducted utilizing the Appalachian System by APL and its Affiliates in western New York, eastern Ohio, western Pennsylvania and northern West Virginia. For the avoidance of doubt, the Appalachian Business does not include (i) the business of exploring or producing oil, gas or other hydrocarbons or (ii) the natural gas gathering business or natural gas liquids extraction business conducted by APL and its Affiliates outside of western New York, eastern Ohio, western Pennsylvania and northern West Virginia.

“ Appalachian Group ” means, collectively, the APL Parties, the Subject Entities and, at the Closing, the Merger Sub.

“ Appalachian Real Property ” means (i) the real property owned by the Subject Entities, and, in the case of the ATN Assets, the real property to be owned by Newco at the Closing, (ii) the leases and subleases under which any of the Subject Entities is lessee and, in the case of the ATN Assets, the leases and subleases under which Newco will be lessee at the Closing and (iii) the Easements used or held for use by the Subject Entities and, in the case of the ATN Assets, the Easements will be used or held for use by Newco at the Closing.

“ Appalachian System ” has the meaning ascribed to such term in Section 4.6(a) .

“ Atlas America ” has the meaning ascribed to such term in the recitals.

“ Atlas LLC ” has the meaning ascribed to such term in the recitals.

“ Atlas Marks ” has the meaning ascribed to such term in Section 6.12(a) .

“ Atlas Noble ” has the meaning ascribed to such term in the recitals.

“ ATN ” has the meaning ascribed to such term in the recitals.

“ ATN Asset Purchase Agreement ” means the Asset Purchase Agreement, to be dated as of the Closing Date, by and between Newco and Atlas LLC, in substantially the form attached hereto as Exhibit P .

“ ATN Assets ” has the meaning ascribed to such term in the recitals.

“ ATN Board ” means the board of directors of ATN.

“ ATN Conflicts Committee ” means the conflicts committee of the ATN Board.

“ ATN Operating ” has the meaning ascribed to such term in the recitals.

 

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“ Audited Liabilities ” has the meaning ascribed to such term in Section 2.7(b) .

“ Audited Statement of Assets and Liabilities ” has the meaning ascribed to such term in Section 6.7 .

“ Business Day ” means any day on which commercial banks are generally open for business in New York, New York and not a Saturday, a Sunday or a day observed as a holiday in New York, New York under the applicable Law of the State of New York or the United States of America.

“ Capital Account ” has the meaning ascribed to such term in the LLC Agreement.

“ Cash Purchase Price ” has the meaning ascribed to such term in Section 2.7(a) .

“ Ceiling Amount ” has the meaning ascribed to such term in Section 10.9(a) .

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act.

“ Closing ” has the meaning ascribed to such term in Section 3.1 .

“ Closing Date ” has the meaning ascribed to such term in Section 3.1 .

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

“ Confidentiality Agreement ” has the meaning ascribed to such term in Section 6.2(b) .

“ Contract ” means any agreement, contract, lease, sublease, indenture, mortgage, license, concession, commitment, consensual obligation, promise or undertaking (whether written or oral and whether express or implied).

“ control ” and its derivatives, mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person.

“ CPR ” has the meaning ascribed to such term in Section 11.7 .

“ Cure Period ” has the meaning ascribed to such term in Section 11.2 .

“ DE Certificate of Merger ” has the meaning ascribed to such term in Section 2.2(b) .

“ Deductible Amount ” has the meaning ascribed to such term in Section 10.9(a) .

“ Defensible Title ” shall mean such title that, subject to Permitted Liens (except as qualified in the definition of Title Defect):

(i) with respect to the real property owned by the Subject Entities and, in the case of the ATN Assets, the real property to be owned by Newco at the Closing, is good title, free and clear of any Liens;

 

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(ii) with respect to the leases and subleases under which any of the Subject Entities is lessee and, in the case of the ATN Assets, the leases and subleases under which Newco will be lessee at the Closing is valid and subsisting, in full force and effect, and free and clear of all Liens; or

(iii) with respect to the Easements used or held for use by the Subject Entities and in the case of the ATN Assets, the Easements that will be used or held for use by Newco at the Closing, is defensible, and free and clear of all Liens.

“ Delaware Act ” means the Limited Liability Company Act of the State of Delaware, as amended.

“ Derivative Transaction ” means any futures, derivative, swap, collar, put, call, cap, warrant, option or other Contract that is intended to benefit from, relate to, or reduce or eliminate the risk of increases or decreases in interest rates, basis risk, or the price of commodities (including hydrocarbons), currencies, indexes, equity securities, bonds or loans, or any other similar transaction, to which a party or such party’s assets is bound.

“ Direct Costs ” means the direct transportation and compression expenses (including direct payroll and benefits costs of the Subject Employees, consistent with current levels), of the Subject Entities, on a consolidated basis, for the Adjustment Period. For the avoidance of doubt, the Direct Costs shall not include (A) allocations of any general and administrative costs and expenses or other overhead allocations and (B) non-cash expenses, such as depreciation.

“ Easements ” means any easements, rights of way, surface use agreements, servitudes, other real property rights and similar instruments with respect to the use or occupation of real property.

“ Effective Time ” has the meaning ascribed to such term in Section 2.2(b) .

“ Employee Plans ” has the meaning ascribed to such term in Section 4.14(a) .

“ Environmental Laws ” means, without limitation, any federal, state or local statutes, laws, ordinances, rules, regulations, orders, codes, decisions, injunctions or decrees that regulate or otherwise pertain to the protection of human health and safety, the environment or pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous or regulated substances, wastes, or materials, including the management, control, discharge, emission, treatment, containment, handling, removal, use, generation, permitting, migration, storage, release, transportation, disposal, remediation, manufacture, processing or distribution of Hazardous Materials that are or may present a threat to the environment including, but in no way limited to, the following laws, in effect as of the Closing Date or at any previous time, as in place or amended: (i) the Resource Conservation and Recovery Act; (ii) the Clean Air Act; (iii) CERCLA; (iv) the Federal Water Pollution Control Act; (v) the Safe Drinking Water Act; (vi) the Toxic Substances Control Act; (vii) the Emergency Planning and Community Right-to Know Act; (viii) the National Environmental Policy Act; (ix) the Pollution Prevention Act of 1990; (x) the Oil Pollution Act of 1990; (xi) the Hazardous Materials Transportation Act and (xii) all rules, regulations, orders, judgments, publications, or decrees promulgated or issued with respect to the foregoing by Governmental Authorities with appropriate jurisdiction.

 

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“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Exchanged Interests ” has the meaning ascribed to such term in the recitals.

“ Excluded Assets ” has the meaning ascribed to such term in Section 6.13 .

“ Excluded Liabilities ” has the meaning ascribed to such term in Section 6.13 .

“ Expansion System Gathering Agreement ” has the meaning ascribed to such term in the recitals.

“ FERC ” means the U.S. Federal Energy Regulatory Commission.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governing Documents ” means, (i) with respect to a limited partnership, its certificate of limited partnership and its limited partnership agreement, or equivalent governing documents, and (ii) with respect to a limited liability company, its certificate of formation and its operating agreement, or equivalent governing documents.

“ Governmental Authority ” means any (a) national, state, county, municipal, or local government (whether domestic or foreign) and any political subdivision thereof, (b) any court or administrative tribunal, (c) any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity of competent jurisdiction (including any zoning authority, state public utility commission, FERC, or any comparable authority), (d) any non-governmental agency, tribunal or entity that is properly vested by a governmental authority with applicable jurisdiction, or (e) any arbitrator with authority to bind a party at law.

“ Hazardous Materials ” means any pollutant, contaminant, waste, or chemical, or any toxic, radioactive, ignitable, corrosive, reactive, or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics and regulated under any Environmental Law and any substance, whether solid, liquid, or gaseous: (i) which is listed, defined, or regulated as a “hazardous material,” “hazardous waste,” “solid waste,” “hazardous substance,” “toxic substance,” “pollutant,” or “contaminant,” or otherwise classified as hazardous or toxic, in or pursuant to any Environmental Law; or (ii) which is or contains asbestos, polychlorinated biphenyls, radon, urea formaldehyde foam insulation, explosives, or radioactive materials; or (iii) any petroleum, petroleum hydrocarbons, petroleum products, crude oil and any components, fractions, or derivatives thereof, any oil or gas exploration or production waste, and any natural gas, synthetic gas and any mixtures thereof; or (iv) which causes or poses a threat to cause contamination or nuisance on any properties, or any adjacent property or a hazard to the environment or to the health or safety of persons on or about any properties.

 

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“ Hired Employees ” shall have the meaning ascribed to such term in Section 6.11(a) .

“ HSR Act ” shall have the meaning ascribed to such term in Section 4.5(b) .

“ Indemnified Party ” means an APL Indemnified Party or a WFSG Indemnified Party.

“ Indemnifying Party ” has the meaning ascribed to such in term in Section 10.5 .

“ Indemnity Claim ” has the meaning ascribed to such term in Section 10.5 .

“ Individual Title Defect Threshold ” has the meaning ascribed to such term in Section 11.6 .

“ Initial Newco LLC Agreement ” has the meaning ascribed to such term in Section 2.1(a) .

“Insurance Policies ” has the meaning ascribed to such term in Section 4.15 .

“ Intellectual Property ” means all intellectual property rights, statutory or common law, worldwide, including (i) trademarks, service marks, trade dress, slogans, logos and all goodwill associated therewith, and any applications or registrations for any of the foregoing; (ii) copyrights and any applications or registrations for any of the foregoing; and (iii) patents, all confidential know-how, trade secrets and similar proprietary rights in confidential inventions, discoveries, improvements, processes, techniques, devices, methods, patterns, formulae, specifications, and lists of suppliers, vendors, customers, and distributors.

“ Knowledge ” means, (a) with respect to the APL Parties, the actual knowledge after reasonable inquiry of each person listed on Schedule 1.1(b), and (b) with respect to the WFSG Parties, the actual knowledge after reasonable inquiry of each person listed on Schedule 1.1(c) .

“ Law ” means all applicable statutes, law, rules, regulations, orders, ordinances, judgments and decrees of any Governmental Authority, including the common or civil law of any Governmental Authority.

“ Legacy System Gathering Agreement ” has the meaning ascribed to such term in the recitals.

“ Liabilities ” means liabilities and obligations, whether accrued, contingent, absolute, determined, determinable or otherwise, including all losses, deficiencies, costs, expenses, fines, interest, expenditures, claims, suits, proceedings, judgments, damages, and reasonable attorneys’ fees and reasonable expenses of investigating, defending and prosecuting litigation.

“ Lien ” means, with respect to any property or asset, any mortgage, deed of trust, lien, security interest, pledge, conditional sales contract, charge or encumbrance in respect of such property or asset.

“ LLC Agreement ” has the meaning ascribed to such term in Section 2.9 .

 

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“ Master Gathering Agreements ” has the meaning ascribed to such term in the recitals.

“ Material Contract ” has the meaning ascribed to such term in Section 4.12(a) .

“ Memoranda of Agreement ” means the memoranda of agreement relating to the Master Gathering Agreements entered into by and among APL, APL Operating, Atlas LLC, ATN, ATN Operating, Resource Energy, Viking Resources, Atlas Noble and Newco to be filed in each of the counties in the Commonwealth of Pennsylvania listed on Schedule 1.1(d) .

“ Merged Subject Entities ” has the meaning ascribed to such term in the recitals.

“ Merger ” has the meaning ascribed to such term in the recitals.

“ Merger Sub ” has the meaning ascribed to such term in the recitals.

“ Merger Sub Certificate of Formation ” has the meaning ascribed to such term in Section 2.1(b) .

“ Merger Sub LLC Agreement ” has the meaning ascribed to such term in Section 2.1(b) .

“ Month ” means, for purposes of Section 2.8 , a calendar month, so that a period of less than a full calendar month shall be represented by a fraction, the numerator of which is the number of days in such period and the denominator of which is the number of days in such calendar month.

“ Natural Gas Act ” means the Natural Gas Act of 1938, as amended.

“ Natural Gas Policy Act ” means the Natural Gas Policy Act of 1978, as amended.

“ Net Accumulated Cash Flow ” means, for the Adjustment Period, an amount (whether positive or negative) equal to the remainder of (A) the Net Revenues of the Subject Entities minus (B) the sum of (x) the Direct Costs of the Subject Entities, (y) Permitted Capital Expenditures of the Subject Entities, and (z) the Pro-Rata Allocation.

“ Net Revenues ” means the revenues of the Subject Entities, on a consolidated basis, for the Adjustment Period less related product costs.

“ Newco ” has the meaning ascribed to such term in the recitals.

“ Newco Certificate of Formation ” has the meaning ascribed to such term in Section 2.1(a) .

“ Note Guaranty Agreement ” has the meaning ascribed to such term in Section 2.3 .

“ Notice ” has the meaning ascribed to such term in Section 12.2 .

“ Notice of Disagreement ” has the meaning ascribed to such term in Section 2.8(b) .

 

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“ PA Certificate of Merger ” has the meaning ascribed to such term in Section 2.2(b) .

“ Parties ” means the parties to this agreement, the APL Parties and the WFSG Parties, collectively, and “ Party ” refers to any of them, individually; provided , where appropriate, Party refers to the APL Parties (collectively), on the one hand, and the WFSG Parties (collectively), on the other hand.

“ Pennsylvania Code ” means the Pennsylvania Consolidated Statutes, as amended.

“ Permits ” means all permits, licenses, certificates, orders, approvals, authorizations, registrations, grants, consents, concessions, warrants, franchises and similar rights and privileges granted by a Governmental Authority.

“ Permitted Capital Expenditures ” means the lesser of (A) the actual capital expenditures of the Subject Entities, on a consolidated basis, for the Adjustment Period or (B) $3.74 million times the number of Months in the Adjustment Period.

“ Permitted Liens ” means: (i) any mechanics’, materialmen’s, carriers’, workmen’s, repairmen’s, vendors’, operators’ or other like Liens, if any, arising in the ordinary course of business which accounts secured thereby are not past due or are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and that do not materially detract from the value of or materially interfere with the conduct of the Appalachian Business as currently conducted; (ii) any Liens arising under original purchase price conditional sales contracts and equipment leases with other Persons entered into in the ordinary course of business; (iii) any title defects or Liens that, individually or in the aggregate, do not or would not materially detract from the value, use or occupancy of the Appalachian Assets, taken as a whole, or materially interfere with the conduct of the Appalachian Business as currently conducted, except in each case for Liens securing the payment of indebtedness; (iv) any Liens for Taxes that are not due and payable or that may thereafter be paid without penalty or that are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established; (v) liens supporting surety bonds, performance bonds and similar obligations issued in connection with the Appalachian Business in the ordinary course of such business; (vi) current zoning and subdivision Laws applicable to the Appalachian Assets; (vii) any covenants, conditions, restrictions or Liens contained in or otherwise created by the conveyance document filed of record creating any interest in the Appalachian Real Property; provided , that the Subject Entity that is bound by such covenant, condition, restriction or Lien, or with respect to the Appalachian Real Property that constitutes ATN Assets, ATN, or at the Closing, the Surviving Company or Newco, is not in violation or breach of such covenant, condition, restriction or Lien; (viii) the express terms and conditions of any Material Contract; (ix) any Lien that will be released on or prior to Closing; and (ix) any Lien listed on Schedule 1.1(e) .

“ Person ” means an individual or entity, including any partnership, corporation, association, trust, limited liability c