Document:

Exhibit 4.3

 

EXECUTION VERSION

 

 

CLOUD PEAK ENERGY RESOURCES LLC,

 

CLOUD PEAK ENERGY FINANCE CORP., as Issuers,

 

CLOUD PEAK ENERGY INC., as Parent Guarantor,

 

THE SUBSIDIARIES NAMED HEREIN, as Subsidiary Guarantors

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

 

 

6.375% Senior Notes due 2024

 

 

FIRST SUPPLEMENTAL INDENTURE

 

Dated as of March 11, 2014

 

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture
    Act Section
    	
 
    	
Supplemental
   Indenture
   Section(s)
    
	
310(a)(1)
    	
 
    	
8.10
    
	
      (a)(2)
    	
 
    	
8.10
    
	
      (a)(3)
    	
 
    	
N.A.
    
	
      (a)(4)
    	
 
    	
N.A.
    
	
      (a)(5)
    	
 
    	
8.10
    
	
      (b)
    	
 
    	
8.10
    
	
      (c)
    	
 
    	
N.A.
    
	
311 (a)
    	
 
    	
8.11
    
	
      (b)
    	
 
    	
8.11
    
	
      (c)
    	
 
    	
N.A.
    
	
312(a)
    	
 
    	
3.08
    
	
      (b)
    	
 
    	
13.02
    
	
      (c)
    	
 
    	
13.02
    
	
313(a)
    	
 
    	
8.06
    
	
      (b)(1)
    	
 
    	
N.A.
    
	
      (b)(2)
    	
 
    	
8.06
    
	
      (c)
    	
 
    	
8.06; 13.02
    
	
      (d)
    	
 
    	
8.06
    
	
314(a)
    	
 
    	
5.03; 5.17; 13.02
    
	
      (b)
    	
 
    	
N.A.
    
	
      (c)(1)
    	
 
    	
13.04
    
	
      (c)(2)
    	
 
    	
13.04
    
	
      (c)(3)
    	
 
    	
N.A.
    
	
      (d)
    	
 
    	
N.A.
    
	
      (e)
    	
 
    	
12.05
    
	
      (f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
7.01
    
	
      (b)
    	
 
    	
8.05; 13.02
    
	
      (c)
    	
 
    	
8.01
    
	
      (d)
    	
 
    	
8.01; 7.05
    
	
      (e)
    	
 
    	
7.11
    
	
316(a)(last sentence)
    	
 
    	
3.11
    
	
      (a)(1)(A)
    	
 
    	
7.05
    
	
      (a)(1)(B)
    	
 
    	
7.04
    
	
      (a)(2)
    	
 
    	
N.A.
    
	
      (b)
    	
 
    	
7.07
    
	
      (c)
    	
 
    	
10.04
    
	
317(a)(1)
    	
 
    	
7.08
    
	
      (a)(2)
    	
 
    	
7.09
    
	
      (b)
    	
 
    	
3.07
    
	
318(a)
    	
 
    	
13.01
    
	
      (b)
    	
 
    	
N.A.
    

 

i

 

	
Trust Indenture
    Act Section
    	
 
    	
Supplemental
   Indenture
   Section(s)
    
	
      (c)
    	
 
    	
13.01
    

 

N.A. means not applicable.

 

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

 

ii

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   APPLICATION OF SUPPLEMENTAL INDENTURE
    	
2
    
	
 
    	
 
    
	
Section 1.01
    	
Application of this Supplemental   Indenture
    	
2
    
	
Section 1.02
    	
Effect of Supplemental Indenture
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II   DEFINITIONS AND INCORPORATION BY REFERENCE
    	
4
    
	
 
    	
 
    
	
Section 2.01
    	
Definitions
    	
4
    
	
Section 2.02
    	
Other Definitions
    	
30
    
	
Section 2.03
    	
Incorporation by Reference of Trust   Indenture Act
    	
31
    
	
Section 2.04
    	
Rules of Construction
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE III   THE NOTES
    	
32
    
	
 
    	
 
    
	
Section 3.01
    	
Forms Generally
    	
 
    	
32
    
	
Section 3.02
    	
Form of Legend for Global   Notes
    	
 
    	
33
    
	
Section 3.03
    	
Title and Terms
    	
 
    	
33
    
	
Section 3.04
    	
Denominations
    	
 
    	
34
    
	
Section 3.05
    	
Execution and Authentication
    	
 
    	
34
    
	
Section 3.06
    	
Registration, Registration of   Transfer and Exchange
    	
 
    	
35
    
	
Section 3.07
    	
Paying Agent to Hold Money in Trust
    	
 
    	
36
    
	
Section 3.08
    	
Holder Lists
    	
 
    	
37
    
	
Section 3.09
    	
Mutilated, Destroyed, Lost and   Stolen Notes
    	
 
    	
37
    
	
Section 3.10
    	
Outstanding Notes
    	
 
    	
37
    
	
Section 3.11
    	
Treasury Notes
    	
 
    	
38
    
	
Section 3.12
    	
Payment of Interest; Interest   Rights Preserved
    	
 
    	
38
    
	
Section 3.13
    	
Persons Deemed Owners
    	
 
    	
39
    
	
Section 3.14
    	
Temporary Notes
    	
 
    	
39
    
	
Section 3.15
    	
Cancellation
    	
 
    	
39
    
	
Section 3.16
    	
Computation of Interest
    	
 
    	
39
    
	
Section 3.17
    	
Global Securities
    	
 
    	
39
    
	
Section 3.18
    	
CUSIP Numbers
    	
 
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IV   REDEMPTION AND PREPAYMENT OF NOTES
    	
 
    	
40
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Notices to Trustee
    	
 
    	
40
    
	
Section 4.02
    	
Selection of Notes to Be Redeemed
    	
 
    	
40
    
	
Section 4.03
    	
Notice of Redemption
    	
 
    	
41
    
	
Section 4.04
    	
Effect of Notice of Redemption
    	
 
    	
42
    
	
Section 4.05
    	
Deposit of Redemption Price
    	
 
    	
42
    
	
Section 4.06
    	
Notes Redeemed in Part
    	
 
    	
42
    
	
Section 4.07
    	
Optional Redemption
    	
 
    	
42
    
					

 

iii

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.08
    	
Mandatory Redemption
    	
 
    	
43
    
	
Section 4.09
    	
Offer to Purchase by Application of   Net Proceeds
    	
 
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE V   COVENANTS
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.01
    	
Payment of Notes
    	
 
    	
45
    
	
Section 5.02
    	
Maintenance of Office or Agency
    	
 
    	
46
    
	
Section 5.03
    	
Compliance Certificate
    	
 
    	
46
    
	
Section 5.04
    	
Taxes
    	
 
    	
46
    
	
Section 5.05
    	
Stay, Extension and Usury Laws
    	
 
    	
47
    
	
Section 5.06
    	
Change of Control
    	
 
    	
47
    
	
Section 5.07
    	
Asset Sales
    	
 
    	
49
    
	
Section 5.08
    	
Restricted Payments
    	
 
    	
51
    
	
Section 5.09
    	
Incurrence of Debt and Issuance of   Disqualified Stock
    	
 
    	
55
    
	
Section 5.10
    	
Liens
    	
 
    	
59
    
	
Section 5.11
    	
Dividend and Other Payment   Restrictions Affecting Subsidiaries
    	
 
    	
59
    
	
Section 5.12
    	
Transactions With Affiliates
    	
 
    	
61
    
	
Section 5.13
    	
Additional Subsidiary Guarantees
    	
 
    	
63
    
	
Section 5.14
    	
Designation of Restricted and   Unrestricted Subsidiaries
    	
 
    	
63
    
	
Section 5.15
    	
Business Activities
    	
 
    	
64
    
	
Section 5.16
    	
Consents
    	
 
    	
65
    
	
Section 5.17
    	
Reports
    	
 
    	
65
    
	
Section 5.18
    	
Termination of Covenants
    	
 
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VI   SUCCESSORS
    	
 
    	
66
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Merger, Consolidation, or Sale of   Assets
    	
 
    	
66
    
	
Section 6.02
    	
Successor Entity Substituted
    	
 
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VII   DEFAULTS AND REMEDIES
    	
 
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.01
    	
Events of Default
    	
 
    	
69
    
	
Section 7.02
    	
Acceleration
    	
 
    	
70
    
	
Section 7.03
    	
Other Remedies
    	
 
    	
71
    
	
Section 7.04
    	
Waiver of Past Defaults
    	
 
    	
71
    
	
Section 7.05
    	
Control by Majority
    	
 
    	
71
    
	
Section 7.06
    	
Limitation on Suits
    	
 
    	
72
    
	
Section 7.07
    	
Rights of Holders of Notes to   Receive Payment
    	
 
    	
72
    
	
Section 7.08
    	
Collection Suit by Trustee
    	
 
    	
72
    
	
Section 7.09
    	
Trustee May File Proofs of   Claim
    	
 
    	
73
    
	
Section 7.10
    	
Priorities
    	
 
    	
73
    
	
Section 7.11
    	
Undertaking for Costs
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE VIII   TRUSTEE
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.01
    	
Duties of Trustee
    	
 
    	
74
    
	
Section 8.02
    	
Rights of Trustee
    	
 
    	
75
    
	
Section 8.03
    	
Individual Rights of Trustee
    	
 
    	
77
    
					

 

iv

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.04
    	
Trustee’s Disclaimer
    	
 
    	
77
    
	
Section 8.05
    	
Notice of Defaults
    	
 
    	
77
    
	
Section 8.06
    	
Reports by Trustee to Holders of   the Notes
    	
 
    	
78
    
	
Section 8.07
    	
Compensation and Indemnity
    	
 
    	
78
    
	
Section 8.08
    	
Replacement of Trustee
    	
 
    	
79
    
	
Section 8.09
    	
Successor Trustee by Merger, Etc
    	
 
    	
80
    
	
Section 8.10
    	
Eligibility; Disqualification
    	
 
    	
80
    
	
Section 8.11
    	
Preferential Collection of Claims   Against Issuers
    	
 
    	
80
    
	
Section 8.12
    	
USA PATRIOT Act
    	
 
    	
81
    
	
Section 8.13
    	
Force Majeure
    	
 
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE IX   LEGAL DEFEASANCE AND COVENANT DEFEASANCE
    	
 
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
Section 9.01
    	
Option to Effect Legal Defeasance   or Covenant Defeasance
    	
 
    	
81
    
	
Section 9.02
    	
Legal Defeasance and Discharge
    	
 
    	
81
    
	
Section 9.03
    	
Covenant Defeasance
    	
 
    	
82
    
	
Section 9.04
    	
Conditions to Legal Defeasance or   Covenant Defeasance
    	
 
    	
82
    
	
Section 9.05
    	
Deposited Money and Government   Securities to be Held in Trust, Other Miscellaneous Provisions
    	
 
    	
83
    
	
Section 9.06
    	
Reinstatement
    	
 
    	
84
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE X   AMENDMENT, SUPPLEMENT AND WAIVER
    	
 
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
Section 10.01
    	
Without Consent of Holders of Notes
    	
 
    	
85
    
	
Section 10.02
    	
With Consent of Holders of Notes
    	
 
    	
86
    
	
Section 10.03
    	
Compliance with Trust Indenture Act
    	
 
    	
87
    
	
Section 10.04
    	
Revocation and Effect of Consents
    	
 
    	
87
    
	
Section 10.05
    	
Notation or Exchange of Notes
    	
 
    	
88
    
	
Section 10.06
    	
Trustee to Sign Amendments, Etc
    	
 
    	
88
    
	
Section 10.07
    	
Effect of Supplemental Indentures
    	
 
    	
88
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XI   NOTE GUARANTEES
    	
 
    	
88
    
	
 
    	
 
    	
 
    	
 
    
	
Section 11.01
    	
Note Guaranties
    	
 
    	
88
    
	
Section 11.02
    	
Limitation of Guarantor’s Liability
    	
 
    	
89
    
	
Section 11.03
    	
Execution and Delivery of Notations   of Note Guaranties
    	
 
    	
90
    
	
Section 11.04
    	
Releases
    	
 
    	
90
    
	
Section 11.05
    	
“Trustee” to Include Paying Agent
    	
 
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XII   SATISFACTION AND DISCHARGE
    	
 
    	
91
    
	
 
    	
 
    	
 
    
	
Section 12.01
    	
Satisfaction and Discharge
    	
 
    	
91
    
	
Section 12.02
    	
Application of Trust
    	
 
    	
93
    
	
Section 12.03
    	
Repayment of the Issuers
    	
 
    	
93
    
	
Section 12.04
    	
Reinstatement
    	
 
    	
93
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE XIII   MISCELLANEOUS
    	
 
    	
94
    
					

 

v

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 13.01
    	
Notices
    	
 
    	
94
    
	
Section 13.02
    	
Communication by Holders of Notes   with Other Holders of Notes
    	
 
    	
95
    
	
Section 13.03
    	
Certificate and Opinion as to   Conditions Precedent
    	
 
    	
95
    
	
Section 13.04
    	
Statements Required in Certificate   or Opinion
    	
 
    	
96
    
	
Section 13.05
    	
No Personal   Liability of Directors, Officers, Employees and Unitholders and No Recourse   Against General Partner
    	
 
    	
96
    
	
Section 13.06
    	
No Adverse Interpretation of Other   Agreements
    	
 
    	
97
    
	
Section 13.07
    	
Successors
    	
 
    	
97
    
	
Section 13.08
    	
Counterpart Originals
    	
 
    	
97
    
	
Section 13.09
    	
Indenture and Notes to Be Construed   in Accordance with the Laws of the State of New York
    	
 
    	
97
    
	
Section 13.10
    	
Provisions Required by TIA to   Control
    	
 
    	
97
    
	
Section 13.11
    	
Rules by Trustee, Paying Agent   and Registrar
    	
 
    	
97
    
	
Section 13.12
    	
Severability
    	
 
    	
98
    
	
Section 13.13
    	
Table of Contents, Headings, Etc
    	
 
    	
98
    
	
 
    	
 
    
	
Subsidiary Guarantors
    	
 
    	
Schedule A
    
	
Form of Note
    	
 
    	
Exhibit A
    
	
Form of Notation of   Note Guaranty
    	
 
    	
Exhibit B
    
	
Form of Supplemental   Indenture
    	
 
    	
Exhibit C
    
							

 

vi

 

THIS FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) dated as of March 11, 2014 is among Cloud Peak Energy Resources LLC, a Delaware limited liability company (the “Company”), Cloud Peak Energy Finance Corp., a Delaware corporation (the “Co-issuer” and, together with the Company, the “Issuers”), Cloud Peak Energy Inc., as Delaware corporation (the “Parent Guarantor”), the Subsidiary Guarantors (as defined herein) listed on Schedule A hereto, and Wells Fargo Bank, National Association, a national banking association, as Trustee under the Indenture, dated as of March 11, 2014 among the Issuers, the Parent Guarantor, the Subsidiary Guarantors named therein and the Trustee (the “Base Indenture” and, as amended and supplemented by this Supplemental Indenture in respect of the 6.375% Senior Notes due 2024, the “Indenture”).

 

RECITALS

 

The Issuers, the Parent Guarantor, certain of the Subsidiary Guarantors and the Trustee have duly authorized, executed and delivered the Base Indenture to provide for the issuance from time to time of the Issuers’ debentures, notes, bonds or other evidences of indebtedness, to be issued in one or more series unlimited as to principal amount (herein called “Debt Securities”), which Debt Securities may be guaranteed by the Parent Guarantor and each of the Subsidiary Guarantors, as the Base Indenture provides.

 

Section 9.01 of the Base Indenture provides, among other things, that the Issuers, the Parent Guarantor, the Subsidiary Guarantors and the Trustee may enter into indentures supplemental to the Base Indenture, without the consent of any Holders of Debt Securities, to establish the form or terms of any Debt Security as permitted by Sections 2.01 and 2.03 of the Base Indenture.

 

Pursuant to Sections 2.01 and 2.03 of the Base Indenture, the Issuers desire to execute this Supplemental Indenture to establish the form and terms, and to provide for the issuance, of a first series of senior notes designated as 6.375% Senior Notes due 2024 in an aggregate principal amount of $200,000,000 (the “Initial Notes”).

 

From time to time subsequent to the Issue Date, the Issuers may, if permitted to do so pursuant to the terms of the Indenture, the Initial Notes and the terms of their other Debt existing on such future date, issue additional senior notes of the same series as the Initial Notes (the “Additional Notes” and, together with the Initial Notes, the “Notes”), pursuant to this Supplemental Indenture.

 

The Issuers, the Parent Guarantor and the Subsidiary Guarantors are members of the same consolidated group of companies.  The Parent Guarantor and the Subsidiary Guarantors will derive direct and indirect economic benefit from the issuance of the Notes.  Accordingly, the Parent Guarantor and each Subsidiary Guarantor has duly authorized the execution and delivery of this Supplemental Indenture to provide for its full, unconditional and joint and several Guarantee of the Notes to the extent provided in or pursuant to the Indenture.

 

The Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, that are required to be a part of an indenture qualified under such Act and shall, to the extent applicable, be governed by such provisions.

 

 

All things necessary have been done to make the Notes, when executed by the Issuers and authenticated and delivered hereunder and duly issued by the Issuers, the valid obligations of the Issuers, and all things necessary have been done to make the Note Guaranties, when the Notes have been executed by the Issuers and authenticated and delivered hereunder and duly issued by the Issuers, the valid obligations of the Parent Guarantor and the Subsidiary Guarantors.

 

All things necessary to make this Supplemental Indenture a valid agreement of each of the Issuers, the Parent Guarantor and the Subsidiary Guarantors, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:

 

ARTICLE I
 APPLICATION OF SUPPLEMENTAL INDENTURE

 

Section 1.01                             Application of this Supplemental Indenture.

 

Notwithstanding any other provision of this Supplemental Indenture, the provisions of this Supplemental Indenture, including as provided in Section 1.02 below, are expressly and solely for the benefit of the Holders of the Notes and the Note Guaranties and shall not apply to any other series of Debt Securities that have been issued or that may be issued hereafter under the Base Indenture.  The Notes constitute a series of Debt Securities as provided in the Base Indenture.  Unless otherwise expressly specified, references in this Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Supplemental Indenture, and not the Base Indenture or any other document.

 

Section 1.02                             Effect of Supplemental Indenture.

 

With respect to the Notes (and any notation of Note Guaranty endorsed thereon) only, the Base Indenture shall be supplemented and amended pursuant to Section 9.01 thereof to establish the form and terms of the Notes (and any notation of Note Guaranty endorsed thereon) as set forth in this Supplemental Indenture, including as follows:

 

(a)                                 Definitions.  Article I of the Base Indenture is deleted and replaced in its entirety by the provisions of Article II of this Supplemental Indenture;

 

(b)                                 Security Forms.  Article II of the Base Indenture is deleted and replaced in its entirety by the provisions of Article III of this Supplemental Indenture;

 

(c)                                  Redemption.  The provisions of Article III of the Base Indenture are deleted and replaced in their entirety by the provisions of Article IV of this Supplemental Indenture;

 

2

 

(d)                                 Covenants.  The provisions of Article IV of the Base Indenture are deleted and replaced in their entirety by the provisions of Article V of this Supplemental Indenture;

 

(e)                                  Holders’ Lists and Reports by Trustee.  The provisions of Article V of the Base Indenture are deleted in their entirety;

 

(f)                                   Remedies of the Trustee and Holders in Event of Default.  The provisions of Article VI of the Base Indenture are deleted and replaced in their entirety by the provisions of Article VII of this Supplemental Indenture;

 

(g)                                  The Trustee.  The provisions of Article VII of the Base Indenture are deleted and replaced in their entirety by the provisions of Article VIII of this Supplemental Indenture;

 

(h)                                 The Holders.  The provisions of Article VIII of the Base Indenture are deleted in their entirety;

 

(i)                                     Supplemental Indentures.  The provisions of Article IX of the Base Indenture are deleted and replaced in their entirety by the provisions of Article X of this Supplemental Indenture;

 

(j)                                    Consolidation, Merger, Sale of Assets.  The provisions of Article X of the Base Indenture are deleted and replaced in their entirety by the provisions of Article VI of this Supplemental Indenture;

 

(k)                                 Satisfaction and Discharge; Defeasance.  The provisions of Article XI of the Base Indenture are deleted and replaced in their entirety by the provisions of Article IX and Article XII of this Supplemental Indenture;

 

(l)                                     Guarantees.  The provisions of Article XIV of the Base Indenture are deleted and replaced in their entirety by the provisions of Article XI of this Supplemental Indenture; and

 

(m)                             Miscellaneous.  The provisions of Article XIII of the Base Indenture are deleted and replaced in their entirety by the provisions of Article XIII of this Supplemental Indenture:

 

To the extent that the provisions of this Supplemental Indenture (including those referred to in clauses (a) through (m) above) conflict with any provision of the Base Indenture, the provisions of this Supplemental Indenture shall govern and be controlling, solely with respect to the Notes (and any notation of Note Guaranty endorsed thereon).

 

3

 

ARTICLE II
 DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 2.01                             Definitions.

 

“Accounts Receivable Securitization Facility” means the Receivables Purchase Agreement, dated as of February 11, 2013, as amended, among Cloud Peak Energy Receivables LLC, as seller, the Company, as servicer, the various conduit purchasers, related committed purchasers and purchaser agents from time to time party thereto, and PNC Bank, National Association, as administrator, establishing a $75 million receivables securitization program.

 

“Acquired Debt” means Debt of a Person existing at the time the Person is acquired by, or merges with or into, the Parent Guarantor or any Restricted Subsidiary or becomes a Restricted Subsidiary; provided that such Debt is not Incurred in connection with, or in contemplation of, the Person being acquired by or merging with or into or becoming a Restricted Subsidiary.

 

“Additional Assets” means all or substantially all of the assets of a Permitted Business, or Voting Stock of another Person engaged in a Permitted Business that will, on the date of acquisition, be a Restricted Subsidiary, or other assets (other than cash and Cash Equivalents or securities (including Equity Interests)) that are to be used in a Permitted Business.

 

“Affiliate” means, 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, such specified Person. For purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and a Person shall be presumed to “control” another Person if (A) the first Person either (i) is the Beneficial Owner, directly or indirectly, of 35% or more of the total voting power of the Voting Stock of such specified Person or (ii) (x) is the Beneficial Owner, directly or indirectly, of 10% or more of the total voting power of the Voting Stock of such specified Person and (y) has the right to appoint or nominate, or has an officer or director that is, at least one member of the Board of Directors of such specified Person, or (B) if the specified Person is a limited liability company, the first Person is the managing member. “Controlled” has a meaning correlative thereto.

 

“Agent” means any Registrar or Paying Agent.

 

“Applicable Premium” means with respect to any Note on any redemption date the greater of (i) 1.0% of the principal amount of such Note and (ii) the excess (if any) of (a) the present value at such redemption date of (1) the redemption price of such Note at March 15, 2019,  as set forth under Section 4.07 plus (2) all required interest payments due on such Note from the redemption date through March 15, 2019 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate with respect to such redemption date plus 50 basis points over (b) the principal amount of such Note.

 

“Asset Sale” means any sale, lease (other than operating leases or capital leases entered into in the ordinary course of a Permitted Business), transfer or other disposition of any assets by the Parent Guarantor or any Restricted Subsidiary outside of the ordinary course of business, including by means of a merger, consolidation or similar transaction and including any sale or

 

4

 

issuance of the Equity Interests of any Restricted Subsidiary (each of the above referred to as a “disposition”); provided that the following are not included in the definition of “Asset Sale”:

 

(a)                                 a disposition to the Parent Guarantor or a Restricted Subsidiary, including the sale or issuance by the Parent Guarantor or any Restricted Subsidiary of any Equity Interests of any Restricted Subsidiary to the Parent Guarantor or any Restricted Subsidiary;

 

(b)                                 the sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof, and dispositions of Receivables and related assets by a Securitization Subsidiary in connection with a Permitted Receivables Financing;

 

(c)                                  a transaction covered by Section 6.01;

 

(d)                                 a Restricted Payment permitted under Section 5.08 or a Permitted Investment;

 

(e)                                  any transfer of property or assets that consists of grants by the Parent Guarantor or its Restricted Subsidiaries in the ordinary course of business of licenses or sub-licenses, including with respect to intellectual property rights;

 

(f)                                   the sale of Capital Stock of an Unrestricted Subsidiary;

 

(g)                                  the sale of assets by the Parent Guarantor and its Restricted Subsidiaries consisting of leases and subleases of real property solely to the extent that such real property is not necessary for the normal conduct of operations of the Parent Guarantor and its Restricted Subsidiaries;

 

(h)                                 foreclosure of assets of the Parent Guarantor or any of its Restricted Subsidiaries to the extent not constituting a Default;

 

(i)                                     the sale or other disposition of cash or Cash Equivalents;

 

(j)                                    the unwinding of any Hedging Agreements;

 

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

 

(l)                                     the issuance of Disqualified Stock or Preferred Stock pursuant to Section 5.09;

 

(m)                             (a) the sale of damaged, obsolete, unusable or worn out equipment or equipment that is no longer needed in the conduct of the business of the Parent Guarantor and its Restricted Subsidiaries and (b) sales of inventory, used or surplus equipment or reserves and dispositions related to the burn-off of mines;

 

(n)                                 any disposition in a transaction or series of related transactions of assets with a Fair Market Value of less than $7.5 million;

 

5

 

(o)                                 dispositions of assets by virtue of an asset exchange or swap with a third party in any transaction (w) with an aggregate Fair Market Value less than or equal to $12.5 million, (x) involving a coal-for-coal swap, (y) to the extent that an exchange is for Fair Market Value and for credit against the purchase price of similar replacement property or (z) consisting of a coal swap involving any Real Property; and

 

(p)                                 exchanges and relocation of easements for pipelines, oil and gas infrastructure and similar arrangements in the ordinary course of business.

 

If, in connection with an acquisition by the Parent Guarantor or any Restricted Subsidiary, a portion of the acquired assets are disposed of within 90 days of such acquisition, such disposition shall not be deemed to be an Asset Sale; provided that such assets are disposed of for Fair Market Value.

 

“Average Life” means, as of the date of determination with respect to any Debt, the quotient obtained by dividing (i) the sum of the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment of such Debt and (y) the amount of such principal payment by (ii) the sum of all such principal payments.

 

“Attributable Indebtedness” means, at any date, in respect of Capital Leases of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared in accordance with GAAP.

 

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

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have correlative meanings. For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase agreement, merger agreement, amalgamation agreement, arrangement agreement or similar agreement until consummation of the transactions or, as applicable, series of related transactions contemplated thereby.

 

“Board of Directors” means:

 

(1)                                 with respect to the Company, its board of members or, if the Company does not have a board of members, the board of directors of the Parent Guarantor;

 

(2)                                 with respect to the Parent Guarantor, the board of directors of the Parent Guarantor; and

 

(3)                                 with respect to any other Person, (i) if the Person is a corporation, the board of directors of the corporation, (ii) if the Person is a partnership, the board of

 

6

 

directors of the general partner of the partnership and (iii) with respect to any other Person, the board or committee of such Person serving a similar function.

 

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

 

“Business Day” means any day other than a Legal Holiday.

 

“Capital Lease” means, with respect to any Person, any lease of any property which, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

 

“Capital Stock” means

 

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

 

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

 

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

 

(4)                                 any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“Cash Equivalents” means:

 

(1)                                 U.S. Government Obligations or certificates representing an ownership interest in U.S. Government Obligations with maturities not exceeding two years from the date of acquisition,

 

(2)                                 (i) demand deposits, (ii) time deposits and certificates of deposit with maturities of two years or less from the date of acquisition, (iii) bankers’ acceptances with maturities not exceeding two years from the date of acquisition, and (iv) overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States or any state thereof (including any branch of a foreign bank licensed under any such laws) having capital, surplus and undivided profits in excess of $250 million (or the foreign currency equivalent thereof) whose short-term debt is rated A-2 or higher by S&P or P-2 or higher by Moody’s,

 

(3)                                 commercial paper maturing within 364 days from the date of acquisition thereof and having, at such date of acquisition, ratings of at least A-1 by S&P or P-1 by Moody’s,

 

(4)                                 readily marketable direct obligations issued by any state, commonwealth or territory of the U.S. or any political subdivision thereof, in each case rated at least A-1

 

7

 

by S&P or P-1 by Moody’s with maturities not exceeding one year from the date of acquisition,

 

(5)                                 bonds, debentures, notes or other obligations with maturities not exceeding two years from the date of acquisition issued by any corporation, partnership, limited liability company or similar entity whose long-term unsecured debt has a credit rate of A2 or better by Moody’s and A or better by S&P;

 

(6)                                 investment funds at least 95% of the assets of which consist of investments of the type described in clauses (1) through (6) above (determined without regard to the maturity and duration limits for such investments set forth in such clauses, provided that the weighted average maturity of all investments held by any such fund is two years or less),

 

(7)                                 fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (1) above and entered into with a financial institution satisfying the criteria described in clause (2) above and

 

(8)                                 in the case of a Foreign Restricted Subsidiary, substantially similar investments, of comparable credit quality, denominated in the currency of any jurisdiction in which such Person conducts business.

 

“Certificated Note” means a Note in certificated form registered in the name of the Holder thereof and issued in accordance with Article III hereof, in substantially the form of Exhibit A hereto, except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Change of Control” means:

 

(1)                                 any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than (in the case of the Company) the Parent Guarantor, is or becomes the “beneficial owner” (as such term is used in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Parent Guarantor or the Company;

 

(2)                                 individuals who on the Issue Date constituted the Board of Directors of the Parent Guarantor (or, from and after the time, if any, at which the Company shall have a board of directors, individuals who, on such date, constituted the board of directors of the Company), together with any new directors whose election by the Board of Directors or whose nomination for election by the holders of the Voting Stock of the Company or the Parent Guarantor was approved by a majority of the directors then still in office who were either directors or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors of the Company or the Parent Guarantor then in office;

 

(3)                                 the Parent Guarantor ceases to be the managing member of the Company; or

 

8

 

(4)                                 the adoption of a plan relating to the liquidation or dissolution of the Parent Guarantor or the Company.

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations thereunder, and any successor thereto.

 

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

 

“common equity,” when used with respect to a contribution of capital to the Parent Guarantor, means a capital contribution to the Parent Guarantor in a manner that does not constitute Disqualified Equity Interests.

 

“Common Stock” means Capital Stock not entitled to any preference on dividends or distributions, upon liquidation or otherwise.

 

“Consolidated Current Liabilities” means, as of any date of determination, the aggregate amount of liabilities of the Parent Guarantor and its consolidated Restricted Subsidiaries which may properly be classified as current liabilities (including Taxes accrued as estimated, but excluding Specified Coal Agreement Obligations), after eliminating (a) all intercompany items between the Parent Guarantor and any Restricted Subsidiary or between Restricted Subsidiaries and (b) all current maturities of long-term Debt.

 

“Consolidated Net Income” means, for any period, the aggregate net income (or loss) of the Parent Guarantor and its Restricted Subsidiaries for such period determined on a consolidated basis in conformity with GAAP; provided that the following (without duplication) will be excluded in computing Consolidated Net Income:

 

(1)                                 the net income (or loss) of any Person that is a non-Wholly Owned Restricted Subsidiary (including any joint venture that is a Restricted Subsidiary), except to the extent of the Parent Guarantor’s share, determined pro rata with its percentage interest (direct or indirect) of Common Stock of such Person, of such Person’s net income earned during such period;

 

9

 

(2)                                 the net income (or loss) of any Person other than a Restricted Subsidiary (including any joint venture that is not a Restricted Subsidiary), except to the extent of dividends or other distributions actually paid in cash to the Parent Guarantor or any of its Restricted Subsidiaries by such Person during such period;

 

(3)                                 the net income (or loss) of any Person (other than the Company and the Subsidiary Guarantors) to the extent that the declaration or payment of dividends or similar distributions by such Person of its net income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Person or the holders of its Common Stock, unless such restriction with respect to the payment of dividends or in similar distributions has been legally waived;

 

(4)                                 any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to asset sales or other dispositions, in each case other than in the ordinary course of business;

 

(5)                                 any net after-tax extraordinary gains or losses; and

 

(6)                                 the cumulative effect of a change in accounting principles.

 

“Consolidated Net Tangible Assets” means, as of any date of determination, (a) the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the Parent Guarantor and its Restricted Subsidiaries minus (b) the sum of all amounts that would, in accordance with GAAP, be set forth opposite the captions “goodwill” or other intangible categories (or any like caption) on a consolidated balance sheet of the Parent Guarantor and its Restricted Subsidiaries minus (c) Consolidated Current Liabilities, all determined as of such date and after giving pro forma effect to any transactions occurring on such date.

 

“continuing” means, with respect to any Default or Event of Default, that such Default or Event of Default has not been cured or waived.

 

“Corporate Trust Office” shall be at the address of the Trustee specified in Section 13.01 hereof or such other address as to which the Trustee may give notice to the Issuers.

 

“Credit Agreement” means the Credit Agreement dated as of February 21, 2014, among the Company, the guarantors party thereto, the lenders party thereto, the issuing banks party thereto, PNC Bank, National Association, as administrative agent and swingline lender, and the arrangers, bookrunners, syndication agent and documentation agents named therein, together with any related documents (including any security documents and guarantee agreements), as such agreement may be amended, restated, modified, supplemented, extended, renewed, refunded, restructured, refinanced or replaced or substituted from time to time and whether by the same or any other agent, lender or group of lenders or other party.

 

“Credit Facilities” means (i) one or more credit facilities (including the Credit Agreement) with banks or other lenders providing for revolving credit loans, term loans, receivables

 

10

 

financing (including a Permitted Receivables Financing through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or the issuance of letters of credit or bankers’ acceptances or the like, (ii) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments), or (iii) instruments or agreements evidencing any other Debt, in each case, with the same or different borrowers or issuers and, in each case, as amended, restated, modified, supplemented, extended, renewed, refunded, restructured, refinanced or replaced or substituted in whole or in part from time to time and whether by the same or any other agent, lender or group of lenders or other party.

 

“Debt” means, with respect to any Person, without duplication,

 

(1)                                 all indebtedness of such Person for borrowed money;

 

(2)                                 all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (other than any obligations in respect of performance bonds, bid bonds, appeal bonds, surety bonds, reclamation bonds and completion guarantees and similar obligations in respect of Specified Coal Agreements or under any Mining Law or Environmental Law or with respect to workers’ compensation benefits);

 

(3)                                 all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (solely to the extent such letters of credit, bankers’ acceptances or other similar instruments have been drawn);

 

(4)                                 all obligations of such Person to pay the deferred and unpaid purchase price of property or services provided by third-party service providers which are recorded as liabilities under GAAP, excluding (i) trade payables arising in the ordinary course of business, (ii) inter-company payables, (iii) working capital-based and other customary post-closing adjustments in acquisition transactions and (iv) salary and other employee compensation obligations Incurred in the ordinary course;

 

(5)                                 the Attributable Indebtedness of such Person in respect of Capital Leases;

 

(6)                                 the amount of all Permitted Receivables Financings of such Person;

 

(7)                                 all Debt of other Persons Guaranteed by such Person to the extent so Guaranteed;

 

(8)                                 all Debt of other Persons secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person; and

 

(9)                                 all obligations of such Person under Hedging Agreements;

 

provided that in no event shall Debt include (i) Specified Coal Agreement Obligations or asset retirement obligations, (ii) obligations (other than obligations with respect to Debt for borrowed money or other Funded Debt) related to surface rights under an agreement for the acquisition of surface rights for the production of coal reserves in the ordinary course of business in a manner consistent with historical practice of the Company (including RTEA, as its predecessor) and its Subsidiaries or (iii) obligations under the Tax Receivable Agreement.

 

11

 

The amount of Debt of any Person will be deemed to be:

 

(A)                               with respect to Debt secured by a Lien on an asset of such Person but not otherwise the obligation, contingent or otherwise, of such Person, the lesser of (x) the Fair Market Value of such asset on the date the Lien attached and (y) the amount of such Debt;

 

(B)                               with respect to any Debt issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt;

 

(C)                               with respect to any Hedging Agreement, the amount payable (determined after giving effect to all contractually permitted netting) if such Hedging Agreement terminated at that time; and

 

(D)                               otherwise, the outstanding principal amount thereof.

 

“Debt Security” or “Debt Securities” has the meaning stated in the first recital of this Supplemental Indenture.

 

“Decker” means Decker Coal Company, an unincorporated joint venture under the laws of Montana, of which the Company indirectly owns 50% of the Equity Interests.

 

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 3.06 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of the Indenture.

 

“Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Parent Guarantor or any of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate, less the amount of Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.

 

“Disqualified Equity Interests” means Equity Interests that by their terms (or by the terms of any security into which such Equity Interests are convertible, or for which such Equity Interests are exchangeable, in each case at the option of the holder thereof) or upon the happening of any event

 

(1)                                 mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or are required to be redeemed or redeemable at the option of the holder for consideration other than Qualified Equity Interests, or

 

(2)                                 are convertible at the option of the holder into Disqualified Equity Interests or exchangeable for Debt,

 

12

 

in each case prior to the date that is 91 days after the Stated Maturity of the Notes; provided that Equity Interests will not constitute Disqualified Equity Interests solely because of provisions giving Holders thereof the right to require the repurchase or redemption upon an “asset sale” or “change of control” occurring prior to 91 days after the Stated Maturity of the Notes if those provisions

 

(A)                               are no more favorable to the holders of such Equity Interests than the provisions of the Indenture described in Section 5.06 and Section 5.07, and

 

(B)                               specifically state that repurchase or redemption pursuant thereto will not be required prior to the Company’s repurchase of the Notes as required by the Indenture.

 

“Disqualified Stock” means Capital Stock constituting Disqualified Equity Interests.

 

“Domestic Restricted Subsidiary” means any Restricted Subsidiary formed under the laws of the United States of America or any jurisdiction thereof.

 

“EBITDA” means, for any period, the sum of

 

(1)                                 Consolidated Net Income, plus

 

(2)                                 Fixed Charges, to the extent deducted in calculating Consolidated Net Income, plus

 

(3)                                 to the extent deducted in calculating Consolidated Net Income and as determined on a consolidated basis for the Parent Guarantor and its Restricted Subsidiaries in conformity with GAAP (and without duplication):

 

(A)                               the provision for Taxes based on income, profits or capital, including, without limitation, state franchise and similar Taxes;

 

(B)                               depreciation, depletion, amortization (including, without limitation, amortization of intangibles, deferred financing fees and any amortization included in pension, OPEB or other employee benefit expenses) and all other non-cash items reducing Consolidated Net Income (including, without limitation, write-downs and impairment of property, plant, equipment and intangibles and other long-lived assets and the impact of purchase accounting) but excluding, in each case, non-cash charges in a period which reflect cash expenses paid or to be paid in another period), less all non-cash items increasing Consolidated Net Income; and

 

(C)                               all non-recurring or unusual gains (and less all non-recurring or unusual losses);

 

(D)                               all non-cash start-up and transition costs, business optimization expenses and other non-cash restructuring charges;

 

(E)                                the non-cash portion of “straight-line” rent expense;

 

13

 

(F)                                 non-cash compensation expense or other non-cash expenses or charges arising from the granting of stock options, the granting of stock appreciation rights and similar arrangements (including any repricing, amendment, modification, substitution or change of any such stock option, stock appreciation rights or similar arrangements);

 

(G)                               any debt extinguishment costs;

 

(H)                              accretion of asset retirement obligations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 410, Asset Retirement and Environmental Obligations, and any similar accounting in prior periods;

 

(I)                                   net after-tax losses attributable to asset sales, and net after-tax extraordinary losses;

 

(J)                                   (A) mark-to-market gains (and less any mark-to-market losses) relating to any Permitted Hedging Agreements and (B) any mark-to-market losses attributed to short positions in any actual or synthetic forward sales contracts relating to coal or any other similar device or instrument or other instrument classified as a “derivative” pursuant to FASB ASC Topic No. 815, Derivatives and Hedging;

 

(K)                              commissions, premiums, discounts, fees or other charges relating to performance bonds, bid bonds, appeal bonds, surety bonds, reclamation and completion guarantees and other similar obligations; and

 

(L)                                any provision for Tax Receivable Agreement expense;

 

provided that, with respect to any Restricted Subsidiary, such items will be added only to the extent and in the same proportion that the relevant Restricted Subsidiary’s net income was included in calculating Consolidated Net Income. Any reimbursement or equity contribution which is included in calculating EBITDA shall be excluded for purposes of calculations under Section 5.08(a)(iii)(B);

 

minus

 

(1)                                 the sum of (in each case without duplication and to the extent the respective amounts described in subclauses (A) and (B) of this clause (1) increased such Consolidated Net Income for the respective period for which EBITDA is being determined):

 

(A)                               non-cash items increasing Consolidated Net Income for such period (but excluding any such items in respect of which cash was received in a prior period or will be received in a future period or which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period), and

 

(B)                               the cash portion of “straight-line” rent expense which exceeds the amount expensed in respect of such rent expense.

 

14

 

“Environment” means soil, land surface or subsurface strata, water, surface waters (including navigable waters, ocean waters within applicable territorial limits, streams, ponds, drainage basins, and wetlands), ground waters, drinking water supply, water related sediments, air, plant and animal life, and any other environmental medium.

 

“Environmental Laws” means all laws (including common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, the preservation, restoration or reclamation of natural resources, or the presence, use, storage, discharge, management, release or threatened release of any pollutants, contaminants or hazardous or toxic substances, wastes or material or the effect of the environment on human health and safety.

 

“Equity Interests” means all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but excluding Debt convertible into, or exchangeable for, Capital Stock.

 

“Equity Offering” means an offer and sale of Qualified Stock of the Parent Guarantor or the Company after the Issue Date other than an issuance registered on Form S-4 or S-8 or any successor thereto or any issuance pursuant to employee benefit plans or otherwise relating to compensation to officers, directors or employees.

 

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

 

“Fair Market Value” means, with respect to any property, the price that could be negotiated in an arm’s-length transaction between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined, except as otherwise provided, (a) if such property has a Fair Market Value equal to or less than $20.0 million, by any officer; or (b) if such property has a Fair Market Value in excess of $20.0 million, by at least a majority of the disinterested members of the Board of Directors of the Parent Guarantor and evidenced by a resolution of the Board of Directors delivered to the Trustee.

 

“Fixed Charge Coverage Ratio” means, on any date (the “transaction date”), the ratio of

 

(x)                                 the aggregate amount of EBITDA for the four fiscal quarters immediately prior to the transaction date for which internal financial statements are available (the “reference period”) to

 

(y)                                 the aggregate Fixed Charges during such reference period.

 

In making the foregoing calculation,

 

(1)                                 pro forma effect will be given to any Debt, Disqualified Stock or Preferred Stock Incurred during or after the reference period to the extent the Debt, Disqualified Stock or Preferred Stock is outstanding or is to be Incurred on the transaction date as if the Debt, Disqualified Stock or Preferred Stock had been Incurred on the first day of the reference period;

 

15

 

(2)                                 pro forma calculations of interest on Debt bearing a floating interest rate will be made as if the rate in effect on the transaction date (taking into account any Hedging Agreement applicable to the Debt if the Hedging Agreement has a remaining term of at least 12 months) had been the applicable rate for the entire reference period;

 

(3)                                 Fixed Charges related to any Debt, Disqualified Stock or Preferred Stock no longer outstanding or to be repaid or redeemed on the transaction date, except for Interest Expense accrued during the reference period under a revolving Credit Facility to the extent of the commitments thereunder (or under any successor revolving credit) in effect on the transaction date, will be excluded;

 

(4)                                 pro forma effect will be given to

 

(A)                               the creation, designation or redesignation of Restricted and Unrestricted Subsidiaries,

 

(B)                               the acquisition or disposition of companies, divisions or lines of businesses by the Parent Guarantor and its Restricted Subsidiaries, including any acquisition or disposition of a company, division or line of business since the beginning of the reference period by a Person that became a Restricted Subsidiary after the beginning of the reference period, and

 

(C)                               the discontinuation of any discontinued operations but, in the case of Fixed Charges, only to the extent that the obligations giving rise to the Fixed Charges will not be obligations of the Parent Guarantor or any Restricted Subsidiary following the transaction date

 

that have occurred since the beginning of the reference period as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of the reference period. To the extent that pro forma effect is to be given to an acquisition or disposition of a company, division or line of business, the pro forma calculation will be based upon the most recent four full fiscal quarters for which the relevant financial information is available.

 

“Fixed Charges” means, for any period, the sum of

 

(1)                                 Interest Expense for such period; and

 

(2)                                 the product of

 

(x)                                 cash and non-cash dividends paid, declared, accrued or accumulated on any Disqualified Stock of the Parent Guarantor or any Preferred Stock of a Restricted Subsidiary, except for dividends payable in the Parent Guarantor’s Qualified Stock or paid to the Parent Guarantor or to a Restricted Subsidiary, and

 

(y)                                 a fraction, the numerator of which is one and the denominator of which is one minus the sum of the currently effective combined Federal, state, local and foreign tax rate applicable to the Parent Guarantor and its Restricted Subsidiaries.

 

16

 

“Foreign Restricted Subsidiary” means any Restricted Subsidiary that is not a Domestic Restricted Subsidiary.

 

“Funded Debt” means, at any time, and determined on a consolidated basis without duplication, the consolidated Debt of the Parent Guarantor and its Restricted Subsidiaries of the type referred to in clauses (1), (2), (3) (but only with respect to reimbursement obligations related thereto), (5), (6), (7) and (8) in the definition of Debt (but in the case of clauses (7) and (8), only to the extent that the Debt of other Persons so Guaranteed or secured is itself of the type referred to in clauses (1), (2), (3) (but only with respect to reimbursement obligations related thereto), (5) or (6) of such definition.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect on the Issue Date.

 

“Global Note” means a Note in global form registered in the name of the Depositary or its nominee and issued in accordance with Article III hereof, in substantially the form of Exhibit A hereto, bearing the Global Note Legend and having the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Global Note Legend” means the legend set forth in Section 3.02, which is required to be placed on all Global Notes issued under the Indenture.

 

“Governmental Authority” means the government of the United States, any other nation or 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.

 

“Guarantee” by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing any Debt or other obligation of any other Person (the “primary obligor”), whether directly or indirectly, and including any written obligation of the guarantor, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment thereof, (b) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation or (c) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or other obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.

 

“Guarantors” means collectively the Parent Guarantor and the Subsidiary Guarantors.

 

“Hedging Agreement” means (i) any interest rate swap agreement, interest rate cap agreement, interest rate future agreement, interest rate option agreement, interest rate hedge agreement or other agreement or arrangement designed to protect against or mitigate interest rate risk, (ii) any foreign exchange forward contract, currency swap agreement, currency option agreements or other agreement or arrangement designed to protect against or mitigate foreign exchange risk or (iii) any commodity or raw material futures contract, commodity hedge agreement, any actual or synthetic forward sale contract or other similar device or instrument or any other agreement designed to protect against or mitigate raw material price risk.

 

17

 

“Holder,” “Holder of Notes” or other similar terms means the Person in whose name a Note is registered in the Register (as defined in Section 3.06).

 

“Incur” means, with respect to any Debt or Capital Stock, to incur, create, issue, assume or Guarantee such Debt or Capital Stock. If any Person becomes a Restricted Subsidiary on any date after the date of the Indenture (including by redesignation of an Unrestricted Subsidiary or failure of an Unrestricted Subsidiary to meet the qualifications necessary to remain an Unrestricted Subsidiary), the Debt and Capital Stock of such Person outstanding on such date will be deemed to have been Incurred by such Person on such date for purposes of Section 5.09, but will not be considered the sale or issuance of Equity Interests for purposes of Section 5.07.

 

“Interest Expense” means, for any period, the consolidated interest expense (net of any interest income) of the Parent Guarantor and its Restricted Subsidiaries, plus, to the extent not included in such consolidated interest expense, and to the extent incurred, accrued or payable by the Parent Guarantor or its Restricted Subsidiaries, without duplication, (i) interest expense attributable to Capital Leases and imputed interest expense in respect of Specified Coal Agreement Obligations, (ii) amortization of debt discount and debt issuance costs, (iii) capitalized interest, (iv) non-cash interest expense, (v) any of the above expenses with respect to Debt of another Person Guaranteed by the Parent Guarantor or any of its Restricted Subsidiaries and (vi) any interest, premiums, fees, discounts, expenses and losses on the sale of accounts receivable (and any amortization thereof) payable by the Parent Guarantor or any Restricted Subsidiary in connection with a Permitted Receivables Financing, and any yields or other charges or other amounts comparable to, or in the nature of, interest payable by the Parent Guarantor or any Restricted Subsidiary under any Permitted Receivables Financing, but excluding (a) amortization of deferred financing charges incurred in respect of any of the 2017 Notes, the 2019 Notes, the Notes, the Credit Agreement and any other Funded Debt, and (b) the write off of any deferred financing fees or debt discount, all as determined on a consolidated basis and in accordance with GAAP. Interest Expense shall be determined for any period after giving effect to any net payments made or received and costs incurred by the Parent Guarantor and its Restricted Subsidiaries with respect to any related interest rate Hedging Agreements.

 

“Interest Payment Date” means Stated Maturity of an installment of interest on the Notes.

 

“Investment” means

 

(1)                                 any advance, loan or other extension of credit to another Person (but excluding (i) advances to customers, suppliers, joint venture partners or the like in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivables, prepaid expenses or deposits on the balance sheet of the Parent Guarantor or its Restricted Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business, (ii) commission, travel and similar advances to officers and employees made in the ordinary course of business and (iii) advances, loans or extensions of trade credit in the ordinary course of business by the Parent Guarantor or any of its Restricted Subsidiaries),

 

(2)                                 any capital contribution to another Person, by means of any transfer of cash or other property or in any other form,

 

18

 

(3)                                 any purchase or acquisition of Equity Interests, bonds, notes or other Debt, or other instruments or securities issued by another Person, including the receipt of any of the above as consideration for the disposition of assets or rendering of services, or

 

(4)                                 any Guarantee of any Debt or Disqualified Stock of another Person.

 

If the Parent Guarantor or any Restricted Subsidiary (x) sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary so that, after giving effect to that sale or disposition, such Person is no longer a Subsidiary of the Parent Guarantor, or (y) designates any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with the provisions of the Indenture, all remaining Investments of the Parent Guarantor and the Restricted Subsidiaries in such Person shall be deemed to have been made at such time. The acquisition by the Parent Guarantor or any Restricted Subsidiary of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the Person or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investment held by the acquired Person in such third Person on the date of such acquisition.

 

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

 

“Issue Date” means March 11, 2014.

 

“Issuer Order” means a written request or order signed on behalf of each Issuer by an Officer thereof and delivered to the Trustee.

 

“LBA” means the acquisition of federal coal through an application for a federal coal lease submitted in accordance with the Bureau of Land Management competitive leasing regulations.

 

“LBM” means the acquisition of federal coal through an application to modify an existing coal lease submitted in accordance with the Bureau of Land Management non-competitive leasing regulations.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of Denver, Colorado, Dallas, Texas or New York, New York or at a place of payment are authorized by law, regulation or executive order to remain closed.  If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or Capital Lease).

 

“Mining Laws” means any and all applicable federal, state, local and foreign statutes, laws, regulations, legally-binding guidance, ordinances, rules, judgments, orders, decrees or common law causes of action relating to mining operations and activities under the Mineral Leasing Act of 1920, the Federal Coal Leasing Amendments Act or the Surface Mining Control and Reclamation Act, each as amended or its replacement, and their state and local counterparts or equivalents.

 

19

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash (including (i) payments in respect of deferred payment obligations to the extent corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds from the conversion of other consideration received when converted to cash), net of

 

(1)                                 brokerage commissions and other fees and expenses related to such Asset Sale, including fees and expenses of counsel, accountants and investment bankers and any relocation expenses incurred as a result thereof;

 

(2)                                 provisions for Taxes as a result of such Asset Sale taking into account the consolidated results of operations of the Parent Guarantor and its Restricted Subsidiaries;

 

(3)                                 payments required to be made to holders of minority interests in Restricted Subsidiaries as a result of such Asset Sale or to repay Debt outstanding at the time of such Asset Sale that is secured by a Lien on the property or assets sold; and

 

(4)                                 appropriate amounts to be provided as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and indemnification obligations associated with such Asset Sale, with any subsequent reduction of the reserve other than by payments made and charged against the reserved amount to be deemed a receipt of cash.

 

“Non-Recourse Debt” means Debt as to which (i) neither the Parent Guarantor nor any Restricted Subsidiary provides any Guarantee and as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Parent Guarantor or any Restricted Subsidiary and (ii) no default thereunder would, as such, constitute a default under any Debt of the Parent Guarantor or any Restricted Subsidiary.

 

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

 

“Note Guaranty” means the Guarantee of the Notes pursuant to Article XI hereof, which may be evidenced by a notation on the Notes substantially in the form attached hereto as Exhibit B.

 

“Obligations” means, with respect to any Debt, all obligations (whether in existence on the Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees, indemnification, reimbursement, expenses, damages and other amounts payable and liabilities with respect to such Debt, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is allowed as a claim in such case or proceeding.

 

20

 

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

 

“Officers’ Certificate” means a certificate signed on behalf of each of the Company and the Co-issuer by two of its Officers, one of whom must be the principal executive officer, the principal financial officer or the principal accounting officer of such Person, that meets the requirements of Section 13.04 hereof.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.04 hereof. The counsel may be an employee of or counsel to the Company or the Parent Guarantor (or any Subsidiary Guarantor, if applicable), any Subsidiary or the Trustee.

 

“Parent Guarantor” means Cloud Peak Energy Inc., a Delaware corporation, and its successors.

 

“Permitted Business” means any of the following, whether domestic or foreign: the mining, production, marketing, sale, trading and transportation  (including, without limitation, any business related to terminals) of natural resources including coal, ancillary natural resources and mineral products, exploration of natural resources, any acquired business activity so long as a material portion of such acquired business was otherwise a Permitted Business, and any business that is ancillary or complementary to the foregoing.

 

“Permitted Hedging Agreements” means Hedging Agreements entered into in the ordinary course of business of the Parent Guarantor and its Restricted Subsidiaries to hedge interest rate, foreign currency or commodity risk or otherwise for non-speculative purposes (regardless of whether such agreement or instrument is classified as a “derivative” pursuant to FASB ASC Topic No. 815 and required to be marked-to-market).

 

“Permitted Investments” means:

 

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

 

(2)                                 any Investment in cash or Cash Equivalents;

 

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

 

(A)                               such Person becomes a Restricted Subsidiary of the Parent Guarantor, or

 

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

 

21

 

(4)                                 Investments received as non-cash consideration in an asset sale made pursuant to and in compliance with Section 5.07;

 

(5)                                 any Investment acquired solely in exchange for Qualified Stock of the Parent Guarantor or in exchange for Capital Stock of the Parent Guarantor which the Parent Guarantor did not receive in exchange for a cash payment, Debt or Disqualified Stock;

 

(6)                                 Permitted Hedging Agreements;

 

(7)                                 (i) receivables owing to the Parent Guarantor or any Restricted Subsidiary if created or acquired in the ordinary course of business, (ii) endorsements for collection or deposit in the ordinary course of business, and (iii) securities, instruments or other obligations received in compromise or settlement of debts created in the ordinary course of business, or by reason of a composition or readjustment of debts or reorganization of another Person, or in satisfaction of claims or judgments;

 

(8)                                 Investments in Unrestricted Subsidiaries and joint ventures in an aggregate amount, taken together with all other Investments made in reliance on this clause, not to exceed the greater of (x) $150.0 million and (y) 8% of Consolidated Net Tangible Assets (net of, with respect to the Investment in any particular Person, the cash return thereon received after the Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), not to exceed the amount of Investments in such Person made after the Issue Date in reliance on this clause); provided, however, that if any Investment pursuant to this clause (8) is made in any Person that is not a Restricted Subsidiary of the Parent Guarantor at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Parent Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (8) for so long as such Person continues to be a Restricted Subsidiary of the Parent Guarantor;

 

(9)                                 to the extent they involve an Investment, payroll, travel and other loans or advances to, or Guarantees issued to support the obligations of, current or former officers, managers, directors, consultants and employees, in each case in the ordinary course of business, not in excess of $7.5 million outstanding at any time; and

 

(10)                          to the extent they involve an Investment, extensions of credit to customers, suppliers and joint venture partners in the ordinary course of business;

 

(11)                          Investments arising as a result of any Permitted Receivables Financing;

 

(12)                          any Production Payments, royalties, dedication of reserves under supply agreements or similar rights or interests granted, taken subject to, or otherwise imposed on properties with normal practices in the mining industry;

 

(13)                          to the extent they involve an Investment, purchases and acquisitions, in the ordinary course of business, of inventory, supplies, material or equipment or the licensing or contribution of intellectual property;

 

22

 

(14)                          any Investments required to be made pursuant to binding agreements as in effect on the Issue Date to pay asset retirement obligations of Decker in an aggregate amount not to exceed $30.0 million;

 

(15)                          Investments made pursuant to surety bonds, reclamation bonds, performance bonds, bid bonds, appeal bonds and similar obligations, in each case, to the extent such surety bonds, reclamation bonds, performance bonds, bid bonds, appeal bonds and similar obligations are permitted under the Indenture;

 

(16)                          Investments resulting from pledges and deposits permitted under the definition of “Permitted Liens”;

 

(17)                          Investments consisting of indemnification obligations in respect of performance bonds, bid bonds, appeal bonds, surety bonds, reclamation bonds and completion guarantees and similar obligations in respect of Specified Coal Agreements or under any Mining Law or Environmental Law or with respect to workers’ compensation benefits, in each case entered into in the ordinary course of business, and pledges or deposits made in the ordinary course of business in support of obligations under existing coal sales contracts (and extensions or renewals thereof on similar terms); and

 

(18)                          in addition to Investments listed above, Investments in Persons engaged in Permitted Businesses in an aggregate amount, taken together with all other Investments made in reliance on this clause, not to exceed the greater of (x) $100.0 million and (y) 6% of Consolidated Net Tangible Assets (net of, with respect to the Investment in any particular Person made pursuant to this clause, the cash return thereon received after the Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income) not to exceed the amount of such Investments in such Person made after the Issue Date in reliance on this clause) provided, however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary of the Parent Guarantor at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Parent Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary of the Parent Guarantor.

 

“Permitted Liens” means

 

(1)                                 Liens existing on the Issue Date;

 

(2)                                 Liens securing the Notes or any Note Guaranties and other Obligations under the Indenture and in respect thereof;

 

(3)                                 Liens securing (i) Debt Incurred under clause (1) of the definition of Permitted Debt (and all Obligations incurred, issued or arising under secured Credit Facilities that permit borrowings not in excess of the limit set out in such clause (1)) and (ii) Obligations of the Parent Guarantor and its Subsidiaries under Hedging Agreements and other agreements, including in respect of cash management services provided by lenders under the Debt referred to in the preceding clause (i) or their affiliates (so long as such

 

23

 

Persons remain lenders (or affiliates thereof) after entry into such agreements or arrangements);

 

(4)                                 Liens securing Debt in an aggregate amount (and all Obligations in respect thereof) not to exceed an amount (measured on the date of Incurrence) equal to 15% of the Parent Guarantor’s Consolidated Net Tangible Assets (it being understood that any decrease in Consolidated Net Tangible Assets following the date of Incurrence shall not create a Default with respect to such previously incurred Debt or Liens);

 

(5)                                 (A) pledges or deposits under worker’s compensation laws, unemployment insurance and other social security laws or regulations or similar legislation, or to secure liabilities to insurance carriers under insurance arrangements in respect of such obligations, or good faith deposits, prepayments or cash payments in connection with bids, tenders, contracts or leases, or to secure public or statutory obligations, surety bonds, customs duties and the like, or for the payment of rent, in each case incurred in the ordinary course of business, (B) Liens in support of obligations under existing coal sales contracts (and extensions or renewals thereof on similar terms) and (C) Liens on the property or assets of the Parent Guarantor or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, contractual arrangements with suppliers, reclamation bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money or the obtaining of advances or credit;

 

(6)                                 Liens imposed by law, such as carriers’, vendors’, warehousemen’s and mechanics’ liens, in each case for sums not yet due or being contested in good faith and by appropriate proceedings and in respect of Taxes and other governmental assessments and charges or claims which are not yet due or which are being contested in good faith and by appropriate proceedings;

 

(7)                                 customary Liens in favor of trustees and escrow agents, and netting and setoff rights, banker’s liens and the like in favor of financial institutions and counterparties to financial obligations and instruments, including Hedging Agreements;

 

(8)                                 Liens on assets pursuant to merger agreements, stock or asset purchase agreements and similar agreements in respect of the disposition of such assets;

 

(9)                                 options, put and call arrangements, rights of first refusal and similar rights relating to Investments in joint ventures, partnerships and the like and Liens on joint venture interests in favor of joint venture partners to secure obligations arising under the respective joint venture agreements;

 

(10)                          judgment liens so long as no Event of Default then exists as a result thereof, and Liens securing appeal bonds or letters of credit issued in support of or in lieu of appeal bonds;

 

(11)                          Liens incurred in the ordinary course of business securing obligations not securing Debt for borrowed money and not in the aggregate materially detracting from

 

24

 

the value of the properties or their use in the operation of the business of the Parent Guarantor and its Restricted Subsidiaries;

 

(12)                          Liens securing obligations in respect of trade-related letters of credit permitted under clause (6) of “Permitted Debt” covering only the goods (or the documents of title in respect of such goods) financed by such letters of credit and the proceeds and products thereof;

 

(13)                          Liens (including the interest of a lessor under a Capital Lease) on property that secure Debt Incurred pursuant to clause (10) of Permitted Debt for the purpose of financing all or any part of the purchase price or cost of construction or improvement of such property, provided that the Lien does not (x) extend to any additional property or (y) secure any additional obligations, in each case other than the initial property so subject to such Lien and the Debt and other obligations originally so secured;

 

(14)                          Liens on property of a Person at the time such Person becomes a Restricted Subsidiary of the Parent Guarantor, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Parent Guarantor or any Restricted Subsidiary;

 

(15)                          Liens on property at the time the Parent Guarantor or any of the Restricted Subsidiaries acquires such property, including any acquisition by means of a merger or consolidation with or into the Parent Guarantor or a Restricted Subsidiary of such Person, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Parent Guarantor or any Restricted Subsidiary;

 

(16)                          Liens securing Debt or other obligations of the Parent Guarantor or a Restricted Subsidiary to the Company or a Guarantor;

 

(17)                          Liens incurred or assumed in connection with the issuance of revenue bonds the interest on which is tax-exempt under the Internal Revenue Code;

 

(18)                          Liens on specific items of inventory, equipment or other goods and proceeds of any Person securing such Person’s obligations in respect thereof or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(19)                          Liens on Capital Stock of any Unrestricted Subsidiary;

 

(20)                          Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Parent Guarantor or any Restricted Subsidiary on deposit with or in possession of such bank;

 

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

 

(22)                          Liens on assets of Foreign Subsidiaries securing Debt of Foreign Subsidiaries;

 

25

 

(23)                          extensions, renewals or replacements of any Lien referred to in clauses (1), (2), (13), (14) or (15) in connection with the refinancing of the obligations secured thereby, provided that such Lien does not extend to any other property and, except as contemplated by the definition of “Permitted Refinancing Debt,” the aggregate principal amount of Debt secured by such Lien is not increased;

 

(24)                          Liens on accounts receivable and related assets and proceeds thereof arising in connection with a Permitted Receivables Financing;

 

(25)                          surface use agreements, easements, zoning restrictions, rights of way, encroachments, pipelines, leases (other than Capital Lease Obligations), licenses, special assessments, trackage rights, transmission and transportation lines related to Mining Leases or mineral right or other Real Property including any re-conveyance obligations to a surface owner following mining, royalty payments and other obligations under surface owner purchase or leasehold arrangements necessary to obtain surface disturbance rights to access the subsurface coal deposits and similar encumbrances on Real Property imposed by law or arising in the ordinary course of business that do not secure any monetary obligation and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Parent Guarantor or any Subsidiary;

 

(26)                          pledges, deposits or non-exclusive licenses to use intellectual property rights of the Parent Guarantor or its Subsidiaries to secure the performance of bids, tenders, trade contracts, leases, public or statutory obligations, surety and appeal bonds, reclamation bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

 

(27)                          Production Payments, royalties, dedication of reserves under supply agreements, Liens in connection with any Mining Leases, or similar rights or interests granted, taken subject to, or otherwise imposed on properties consistent with normal practices in the mining industry and any precautionary UCC financing statement filings in respect of leases (and not any Debt) entered into in the ordinary course of business; and

 

(28)                          Liens for Specified Coal Agreements arising as a result of Specified Coal Agreement Obligations or obligations to grant surface or water rights.

 

“Permitted Receivables Financing” means the Accounts Receivable Securitization Facility and any other receivables financing facility or arrangement pursuant to which a Securitization Subsidiary purchases or otherwise acquires Receivables of the Parent Guarantor or any Restricted Subsidiary and enters into a third party financing thereof on terms that the Board of Directors of the Parent Guarantor has concluded are customary and fair to the Parent Guarantor and its Restricted Subsidiaries.

 

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof.

 

26

 

“Preferred Stock” means, with respect to any Person, any and all Capital Stock which is preferred as to the payment of dividends or distributions, upon liquidation or otherwise, over another class of Capital Stock of such Person.

 

“Prior Issue Date” means November 25, 2009, the date of original issuance of the 2017 Notes and the 2019 Notes.

 

“Private Coal Agreement” means an agreement between the Parent Guarantor or one or more of its Subsidiaries, on the one hand, and a seller or lessee (in each case, that is not a Governmental Authority) (the “Transferee”) under which the Parent Guarantor or one or more of its Subsidiaries acquire coal through (i) a lease from such Transferee, (ii) the purchase of one or more coal deposit or other assets from such Transferee or (iii) the exchange of coal assets between the Parent Guarantor or one or more of its Subsidiaries, on the one hand, and such Transferee, on the other.

 

“Production Payments” means with respect to any Person, all production payment obligations and other similar obligations with respect to coal and other natural resources of such Person that are recorded as a liability or deferred revenue on the financial statements of such Person in accordance with GAAP.

 

“Prospectus” means the prospectus of the Issuers dated February 27, 2014 relating to the offering of the Initial Notes.

 

“Qualified Equity Interests” means all Equity Interests of a Person other than Disqualified Equity Interests.

 

“Qualified Stock” means all Capital Stock of a Person other than Disqualified Stock.

 

“Rating Agencies” means S&P and Moody’s; provided, that if either S&P or Moody’s (or both) shall cease issuing a rating on the Notes for reasons outside the control of the Parent Guarantor, the Parent Guarantor may select a nationally recognized statistical rating agency to substitute for S&P or Moody’s (or both).

 

“Real Property” shall mean, collectively, all right, title and interest of the Parent Guarantor or any Subsidiary (including any leasehold or mineral estate) in and to any and all parcels of real property owned or operated by the Parent Guarantor or any Subsidiary, whether by lease, license or other use agreement, including but not limited to, coal leases and surface use agreements, together with, in each case, all improvements and appurtenant fixtures (including all conveyors, preparation plants or other coal processing facilities, silos, shops and load out and other transportation facilities), easements and other property and rights incidental to the ownership, lease or operation thereof, including but not limited to, access rights, water rights and extraction rights for minerals.

 

“Receivables” means accounts receivable (including all rights to payment created by or arising from the sale of goods, leases of goods or the rendition of services, no matter how evidenced (including in the form of a chattel paper)).

 

27

 

“Responsible Officer,” when used with respect to the Trustee, means the officer in the Corporate Trust Office of the Trustee having direct responsibility for administration of the Indenture.

 

“Restricted Subsidiary” means any Subsidiary of a Person other than any Unrestricted Subsidiary of such Person.  Unless otherwise specified, “Restricted Subsidiary” means a Restricted Subsidiary of the Parent Guarantor.  For the avoidance of doubt, each of the Company and the Co-issuer shall constitute a Restricted Subsidiary.

 

“RTEA” means Rio Tinto Energy America Inc., a Delaware corporation.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., and its successors.

 

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

 

“Securitization Subsidiary” means CPE Receivables LLC and any other Subsidiary of the Parent Guarantor

 

(1)                                 that is designated a “Securitization Subsidiary” by the Parent Guarantor,

 

(2)                                 that does not engage in, and whose charter prohibits it from engaging in, any activities other than Permitted Receivables Financings and any activity necessary, incidental or related thereto,

 

(3)                                 no portion of the Debt or any other obligation, contingent or otherwise, of which

 

(A)                               is Guaranteed by the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor,

 

(B)                               is recourse to or obligates the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor in any way, or

 

(C)                               subjects any property or asset of the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor, directly or indirectly, contingently or otherwise, to the satisfaction thereof,

 

(4)                                 with respect to which neither the Parent Guarantor nor any other Restricted Subsidiary of the Parent Guarantor (other than an Unrestricted Subsidiary) has any obligation to maintain or preserve its financial condition or cause it to achieve certain levels of operating results

 

other than, in respect of clauses (3) and (4), pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Permitted Receivables Financing.

 

“Significant Restricted Subsidiary” means (i) the Co-issuer and (ii) any Restricted Subsidiary, or group of Restricted Subsidiaries, that would, taken together, be a “significant subsidiary” as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities Act, as such regulation is in effect on the date of the Indenture.

 

28

 

“Specified Coal Agreement Obligations” means installment or deferred payment obligations or royalty payment obligations or obligations in connection with the acquisition of related surface rights, in each case in connection with a Specified Coal Agreement owed solely to the seller or lessor thereunder (and not to a bank or other third-party financer), but, (i) in the case of any such obligations under a Private Coal Agreement, only to the extent that the proven and probable coal reserves and other non-reserve coal deposits acquired under all such Private Coal Agreements do not in the aggregate exceed 15% of the total proven and probable coal reserves and other non-reserve coal deposits of the Parent Guarantor and its Restricted Subsidiaries at such time, and (ii) excluding, in any event, any Funded Debt.

 

“Specified Coal Agreements” means any LBA, LBM, State Coal Lease and Private Coal Agreements.

 

“State Coal Lease” means the acquisition of coal owned by a state in accordance with the coal leasing regulations of such state.

 

“Stated Maturity” means (i) with respect to any Debt, the date specified as the fixed date on which the final installment of principal of such Debt is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Debt, the date specified as the fixed date on which such installment is due and payable as set forth in the documentation governing such Debt, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for payment.

 

“Subordinated Debt” means any Debt of an Issuer or any Guarantor which is subordinated in right of payment to the Notes or the Note Guaranty, as applicable, pursuant to a written agreement to that effect.

 

“Subsidiary” means with respect to any Person, any corporation, association, limited liability company or other business entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of which are, such Person and one or more Subsidiaries of such Person (or a combination thereof). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Parent Guarantor.

 

“Subsidiary Guarantor” means (i) each Domestic Restricted Subsidiary of the Company in existence on the Issue Date (other than the Co-issuer) that Guarantees Debt of the Company under the Credit Agreement, (ii) each Restricted Subsidiary of the Parent Guarantor that executes a supplemental indenture in the form of Exhibit C hereto, and (iii) any successor obligor under its Note Guaranty, in each case unless and until such Subsidiary Guarantor is released from its Note Guaranty pursuant to the Indenture.

 

“Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of November 19, 2009, by and between RTEA and the Parent Guarantor.

 

“Taxes” means any present or future tax, levy, import, duty, charge, deduction, withholding, assessment or fee of any nature (including interest, penalties, and additions thereto) that is imposed by any Governmental Authority or other taxing authority.

 

29

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C.  §§ 77aaa-77bbbb), as in effect on the date on which this Supplemental Indenture was executed and, to the extent required by law, as amended.

 

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to March 15, 2019; provided, however, that if the period from the redemption date to such date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The Company will calculate the Treasury Rate at least two but no more than four Business Days prior to the applicable redemption date and file with the Trustee, before such redemption date, a written statement setting forth the Applicable Premium and showing the calculation of the Applicable Premium in reasonable detail, and the Trustee will have no responsibility for verifying any such calculation.

 

“Trustee” initially means Wells Fargo Bank, National Association and any other Person or Persons appointed as such from time to time pursuant to the Indenture, and, subject to the provisions of Article VIII, includes its or their successors and assigns.

 

“2017 Notes” means the Issuers’ 8.250% Senior Notes due 2017.

 

“2019 Notes” means the Issuers’ 8.500% Senior Notes due 2019.

 

“U.S. Government Obligations” means obligations issued or directly and fully guaranteed or insured by the United States of America or by any agency or instrumentality thereof; provided that the full faith and credit of the United States of America is pledged in support thereof.

 

“Unrestricted Subsidiary” means any Subsidiary of the Parent Guarantor that at the time of determination has previously been designated, and continues to be, an Unrestricted Subsidiary in accordance with the Section 5.14.

 

“Voting Stock” means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

“Wholly Owned” means, with respect to any Restricted Subsidiary, a Restricted Subsidiary all of the outstanding Capital Stock of which (other than any director’s qualifying shares) is owned by the Parent Guarantor and one or more Wholly Owned Restricted Subsidiaries (or a combination thereof).

 

Section 2.02                             Other Definitions.

 

	
Term
    	
 
    	
Defined in Section
    
	
“Additional Notes”
    	
 
    	
Recitals
    
	
“Alternate Offer”
    	
 
    	
5.06(f)
    

 

30

 

	
“Base Indenture”
    	
 
    	
Preamble
    
	
“Offer to Purchase”
    	
 
    	
4.09
    
	
“Change of Control Payment”
    	
 
    	
5.06(a)
    
	
“Change of Control Payment Date”
    	
 
    	
5.06(b)
    
	
“Covenant Defeasance”
    	
 
    	
9.03
    
	
“Discharge”
    	
 
    	
12.01(e)
    
	
“DTC”
    	
 
    	
3.06
    
	
“Event of Default”
    	
 
    	
7.01
    
	
“Excess Proceeds”
    	
 
    	
5.07(d)
    
	
“Fixed Charge Coverage Ratio Test”
    	
 
    	
5.09
    
	
“Indenture”
    	
 
    	
Preamble
    
	
“Initial Notes”
    	
 
    	
Recitals
    
	
“Issuers”
    	
 
    	
Preamble
    
	
“Legal Defeasance”
    	
 
    	
9.02
    
	
“Notes”
    	
 
    	
Recitals
    
	
“Offer Amount”
    	
 
    	
4.09
    
	
“Offer Period”
    	
 
    	
4.09
    
	
“Offer to Purchase”
    	
 
    	
4.09
    
	
“Paying Agent”
    	
 
    	
3.06
    
	
“Permitted Debt”
    	
 
    	
5.09(b)
    
	
“Purchase Date”
    	
 
    	
4.09
    
	
“Register”
    	
 
    	
3.06
    
	
“Registrar”
    	
 
    	
3.06
    
	
“Regular Record Date”
    	
 
    	
3.03
    
	
“Related Party Transaction”
    	
 
    	
5.12
    
	
“Restricted Investment”
    	
 
    	
5.08
    
	
“Restricted Payments”
    	
 
    	
5.08(a)
    
	
“Surviving Company”
    	
 
    	
6.01
    

 

Section 2.03                             Incorporation by Reference of Trust Indenture Act.

 

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

 

The following TIA term used in this Supplemental Indenture has the following meaning:

 

“obligor” on the Notes means the Company, the Co-issuer, the Parent Guarantor or any Subsidiary Guarantor and any successor obligor upon the Notes.

 

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

 

Section 2.04                             Rules of Construction.

 

Unless the context otherwise requires:

 

31

 

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

 

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

 

(c)                                  “or” is not exclusive;

 

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

 

(e)                                  provisions apply to successive events and transactions;

 

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

 

(g)                                  unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Supplemental Indenture;

 

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

 

(i)                                     when used to express an obligation or command, the words “will” and “shall” have the same meanings.

 

ARTICLE III
 THE NOTES

 

Section 3.01                             Forms Generally.

 

The Notes and the Trustee’s certificate of authentication shall be in substantially the form set forth in Exhibit A hereto, and the notations of Guarantee shall be in substantially the form set forth in Exhibit B hereto.  The Notes may have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Notes as evidenced by their execution thereof.

 

The terms and provisions contained in the Notes (including the notations of Note Guaranties) shall constitute, and are hereby expressly made, a part of the Indenture, and the Issuers, the Parent Guarantor, the Subsidiary Guarantors and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

32

 

The Certificated Notes shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Notes, as evidenced by their execution of such Notes.

 

The Initial Notes shall be issued initially in the form of a Global Note, which shall be deposited with the Trustee, as Note Custodian.  The aggregate principal amount of any Global Note may from time to time be increased or decreased by adjustments made on the schedule attached to such Global Note or on other records of the Trustee, acting as Note Custodian.

 

Section 3.02                             Form of Legend for Global Notes.

 

Every Global Note authenticated and delivered under the Indenture shall bear the Global Note Legend in substantially the following form:

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.  OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

Section 3.03                             Title and Terms.

 

The Notes shall be titled the “6.375% Senior Notes due 2024.” The Trustee shall authenticate the Notes to be authenticated and delivered under this Supplemental Indenture on the Issue Date in an aggregate amount equal to $200,000,000, upon delivery of an Issuer Order.

 

The Notes will mature on March 15, 2024.  Interest on the Notes will accrue at the rate of 6.375% per annum and will be payable semiannually in cash on each Interest Payment Date to the Persons who are registered Holders of Notes at the close of business on the March 1 and

 

33

 

September 1 (the “Regular Record Date”) immediately preceding the applicable Interest Payment Date.  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance to but excluding the actual Interest Payment Date.  If an Interest Payment Date falls on a day that is not a Business Day, the interest payment to be made on such Interest Payment Date will be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date, and no additional interest will accrue as a result of such delayed payment.

 

The Notes shall be redeemable as provided in Article IV and subject to Legal Defeasance and Covenant Defeasance as provided in Article IX. The Notes shall have such other terms as are indicated in Exhibit A.

 

Section 3.04                             Denominations.

 

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

 

Section 3.05                             Execution and Authentication.

 

One Officer of the Company and one Officer of the Co-issuer shall sign the Notes for the Company and the Co-issuer, respectively, by manual or facsimile signature.  If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid.

 

A Note shall not be valid until authenticated by the manual signature of the Trustee.  Such signature shall be conclusive evidence that the Note has been authenticated under the Indenture.

 

The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture is unlimited.  The Issuers may, subject to Section 5.09 and applicable law, issue Additional Notes under the Indenture.  The Initial Notes and any Additional Notes subsequently issued shall be treated as a single class for all purposes under the Indenture, including waivers, amendments, redemptions and offers to purchase.

 

At any time and from time to time after the execution of this Supplemental Indenture, the Trustee shall, upon receipt of an Issuer Order, authenticate Notes for original issue in an aggregate principal amount specified in such Issuer Order.  The Issuer Order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated.  The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in the Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of either of the Issuers.

 

Each Note shall be dated the date of its authentication.

 

No Note shall be entitled to any benefit under the Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the

 

34

 

form provided for in Exhibit A, signed manually in the name of the Trustee by an authorized signatory, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.  Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuers, and the Issuers shall deliver such Note to the Trustee for cancellation as provided in Section 3.15, for all purposes of the Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of the Indenture.

 

Section 3.06                             Registration, Registration of Transfer and Exchange.

 

The Issuers, the Parent Guarantor and the Subsidiary Guarantors shall maintain in the continental United States a registrar with an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and a paying agent with an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register (the “Register”) of the Notes and of their transfer and exchange.  The Issuers may appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.  The Issuers may change any Paying Agent or Registrar without prior notice to any Holder.  The Issuers shall notify the Trustee in writing of the name and address of any Agent not a party to the Indenture.  If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such.  The Parent Guarantor or a Subsidiary may act as Paying Agent or Registrar.

 

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

 

The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes at the Corporate Trust Office.

 

Upon surrender for registration of transfer of any Note at the office of the Registrar, the Issuers shall execute and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes, of any authorized denominations and of like tenor and aggregate principal amount.

 

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuers evidencing the same debt, and entitled to the same benefits under the Indenture, as the Notes surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Issuers or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuers and the Registrar duly executed, by the Holder thereof or its attorney duly authorized in writing.

 

No service charge shall be made for any registration of transfer or exchange of any Notes, but the Issuers may require payment of a sum sufficient to cover any transfer tax or similar governmental charge that may be imposed by law or the Indenture in connection with any registration of transfer or exchange of any Notes.

 

35

 

If the Notes are to be redeemed in part, the Issuers shall not be required (A) to issue, register the transfer of or exchange any Notes during a period of 15 days before a selection of Notes for redemption under Section 4.02, or (B) to register the transfer of or exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.  Further, the Issuers shall not be required to register the transfer of or exchange any Notes after a record date and on or before the next succeeding Interest Payment Date.

 

The provisions of clauses (a) through (d) below shall apply only to Global Notes:

 

(a)                                 Each Global Note authenticated under the Indenture shall be registered in the name of the Depositary designated for such Global Note or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Note shall constitute a single Note for all purposes of the Indenture.

 

(b)                                 Notwithstanding any other provision in the Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof, unless (A) such Depositary (i) has notified the Issuers that it is no longer willing or able to discharge its responsibilities properly as Depositary for such Global Note or (ii) has ceased to be a clearing agency registered under the Exchange Act, and in either case the Issuers have not appointed a qualified successor within 90 days, (B) an Event of Default has occurred and is continuing and the Depositary has notified the Issuers and the Trustee of its desire to exchange such Global Note for Certificated Notes or (C) subject to the Depositary’s rules, the Issuers, at their option, have elected to terminate the book-entry system through the Depositary.

 

(c)                                  Subject to clause (b) above, any exchange of a Global Note for other Notes may be made in whole or in part, and all Notes issued in exchange for a Global Note or any portion thereof shall be registered in such names as the Depositary for such Global Note shall direct.

 

(d)                                 Every Note authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Note or any portion thereof, whether pursuant to this Section or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Note, unless such Note is registered in the name of a Person other than the Depositary for such Global Note or a nominee thereof.

 

Section 3.07                             Paying Agent to Hold Money in Trust.

 

The Issuers shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest, on the Notes, and will notify the Trustee of any default by the Company, the Co-issuer, the Parent Guarantor or the Subsidiary Guarantors in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than the Parent Guarantor or a Subsidiary) shall have

 

36

 

no further liability for the money.  If the Parent Guarantor or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to the Company or the Parent Guarantor, the Trustee shall serve as Paying Agent for the Notes.

 

Section 3.08                             Holder Lists.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a).  If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Issuers shall otherwise comply with TIA Section 312(a).

 

Section 3.09                             Mutilated, Destroyed, Lost and Stolen Notes.

 

If any mutilated Note is surrendered to the Trustee or either of the Issuers and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers shall issue and the Trustee, upon receipt of an Issuer Order, shall authenticate a replacement Note (accompanied by a notation of the Note Guaranties duly endorsed by the Parent Guarantor and the Subsidiary Guarantors) if the Trustee’s requirements are met.  An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Parent Guarantor, the Subsidiary Guarantors, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.  The Issuers may charge for their expenses in replacing a Note.

 

Every replacement Note is an additional obligation of the Issuers, the Parent Guarantor and the Subsidiary Guarantors and shall be entitled to all of the benefits of the Indenture equally and proportionately with all other Notes duly issued hereunder.  The provisions of this Section 3.09 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Notes.

 

Section 3.10                             Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interests in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding.  Except as set forth in Section 3.11 hereof, a Note does not cease to be outstanding because an Issuer or an Affiliate of an Issuer holds the Note.

 

If a Note is replaced pursuant to Section 3.09 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the principal amount of any Note is considered paid under Section 5.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

37

 

If the Paying Agent (other than an Issuer, the Parent Guarantor or a Subsidiary or an Affiliate of an Issuer) holds, on a redemption date or other maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

Section 3.11                             Treasury Notes.

 

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by an Issuer, by the Parent Guarantor, by any Subsidiary Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with an Issuer, the Parent Guarantor or any Subsidiary Guarantor, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded.

 

Section 3.12                             Payment of Interest; Interest Rights Preserved.

 

If a Holder has given wire transfer instructions to the Issuers, the Issuers will make all payments of principal of, premium, if any, and interest on the Notes in accordance with those instructions.  All other payments in respect of the Notes shall be made at the office or agency of the Paying Agent in Dallas, Texas; provided that the Issuers may, at their option, pay interest on the Notes by check mailed to the Holders at their registered address as it appears in the Register.

 

The Company shall pay principal of, premium, if any, and interest on the Global Notes registered in the name of or held by DTC or its nominee in immediately available funds to DTC or its nominee, as the case may be, as the registered Holder of such Global Notes.

 

Interest on any Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Note is registered at the close of business on the Regular Record Date for such interest.

 

If any of the Company, the Co-issuer, the Parent Guarantor or any Subsidiary Guarantor defaults in a payment of interest on the Notes, it or they (to the extent of their obligations under the Note Guaranties) shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 3.03 hereof.  The Issuers shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note, the special record date and the date of the proposed payment.  The Issuers shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) shall send or cause to be sent to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

38

 

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

 

Section 3.13                             Persons Deemed Owners.

 

Prior to due presentment of a Note for registration of transfer, the Issuers, the Parent Guarantor, the Subsidiary Guarantors, the Trustee and any agent of the Issuers or the Trustee may treat the Person in whose name such Note is registered as the owner of such Note for the purpose of receiving payment of principal of, and any premium and (subject to Section 4.07) any interest on, such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuers, the Parent Guarantor, the Subsidiary Guarantors, the Trustee nor any of their respective agents shall be affected by notice to the contrary.

 

Section 3.14                             Temporary Notes.

 

Until Certificated Notes are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Issuer Order, shall authenticate temporary Notes (accompanied by a notation of the Note Guaranties duly endorsed by the Subsidiary Guarantors).  Temporary Notes shall be substantially in the form of Certificated Notes but may have variations that the Issuers consider appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee.  Without unreasonable delay, the Issuers shall prepare and the Trustee, upon receipt of an Issuer Order, shall authenticate Certificated Notes (accompanied by a notation of the Note Guaranties duly endorsed by the Parent Guarantor and the Subsidiary Guarantors) in exchange for temporary Notes.

 

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

 

Section 3.15                             Cancellation.

 

Either of the Issuers at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall treat such canceled Notes in accordance with its documents retention policies.  The Issuers may not issue new Notes to replace Notes that have been paid or that have been delivered to the Trustee for cancellation.

 

Section 3.16                             Computation of Interest.

 

Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 3.17                             Global Securities.

 

Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.

 

39

 

Section 3.18                             CUSIP Numbers.

 

The Issuers in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if they do so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

ARTICLE IV
 REDEMPTION AND PREPAYMENT OF NOTES

 

Section 4.01                             Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 4.07 hereof, they shall furnish to the Trustee, at least ten Business Days (unless a shorter period is acceptable to the Trustee) before the date of giving notice of the redemption pursuant to Section 4.03, an Officers’ Certificate setting forth (i) the paragraph of the Notes or Section of this Supplemental Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price and (v) whether the Issuers request the Trustee to give notice of such redemption.  Any such notice may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereby be void and of no effect.

 

Section 4.02                             Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

 

(a)                                 if the Notes are listed for trading on a national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are so listed; or

 

(b)                                 if the Notes are not so listed or there are no such requirements, on a pro rata basis (or, in the case of Notes in global form, the Trustee will select Notes for redemption  in accordance with DTC’s prescribed).

 

No Notes of $2,000 or less shall be redeemed in part.  Notices of redemption may not be conditional, except that any redemption described in Section 4.07(b) may, at the Issuers’ discretion, be subject to completion of the related Equity Offering.

 

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed.  A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note.

 

40

 

Section 4.03                             Notice of Redemption.

 

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

 

The notice shall identify the Notes to be redeemed (including CUSIP numbers) and shall state:

 

(a)                                 the redemption date;

 

(b)                                 the redemption price (if then determined and otherwise the basis for its determination);

 

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

 

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

 

(e)                                  that Notes called for redemption (other than a Global Note) must be surrendered to the Paying Agent to collect the redemption price;

 

(f)                                   that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

 

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

 

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

 

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

 

At the Issuers’ request, the Trustee shall give the notice of redemption in the Issuers’ names and at their expense; provided, however, that the Issuers shall have delivered to the Trustee, as provided in Section 4.01, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

41

 

Section 4.04                             Effect of Notice of Redemption.

 

Once notice of redemption is given in accordance with Section 4.03 hereof, Notes called for redemption without a condition become irrevocably due and payable on the redemption date at the redemption price.  On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption, unless the Issuers default in making such redemption payment.

 

Section 4.05                             Deposit of Redemption Price.

 

Not later than 11:00 a.m., New York City time, on the redemption date, the Issuers shall deposit with the Trustee or with the Paying Agent (or, if the Parent Guarantor or a Subsidiary thereof is acting as its own Paying Agent, segregate and hold in trust as provided in Section 3.07 hereof) money sufficient to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed on that date.  The Trustee or the Paying Agent shall promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest on, all Notes to be redeemed.

 

If the Issuers comply with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption.  If a Note is redeemed after an interest record date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date.  If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 3.03 hereof.

 

Section 4.06                             Notes Redeemed in Part.

 

Upon surrender of a Note that is redeemed in part, the Issuers shall issue and, upon receipt of an Issuer Order, the Trustee shall authenticate for the Holder at the expense of the Issuers a new Note (accompanied by a notation of the Note Guaranties duly endorsed by the Parent Guarantor and the Subsidiary Guarantors) equal in principal amount to the unredeemed portion of the Note surrendered.

 

Section 4.07                             Optional Redemption.

 

(a)                                 The Issuers may redeem all or, from time to time, a part of the Notes, at a redemption price equal to:

 

(i)                                     if the redemption date is prior to March 15, 2019, 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium, and accrued and unpaid interest, if any, to, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date); or

 

42

 

(ii)                                  if the redemption date is on or after March 15, 2019, the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date):

 

	
12-month period commencing March 15 in Year
    	
 
    	
Percentage
    	
 
    
	
2019 
    	
 
    	
103.188
    	
%
    
	
2020 
    	
 
    	
102.125
    	
%
    
	
2021 
    	
 
    	
101.063
    	
%
    
	
2022 and thereafter 
    	
 
    	
100.000
    	
%
    

 

(b)                                 At any time and from time to time prior to March 15, 2017, the Issuers may redeem up to 35% of the original aggregate principal amount of the Notes (including any Additional Notes) at a redemption price equal to 106.375% of the principal amount plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), but in an aggregate principal amount not to exceed the net cash proceeds of one or more Equity Offerings, provided that

 

(i)                                     in each case, the redemption takes place not later than 180 days after the closing of the related Equity Offering, and

 

(ii)                                  not less than 65% of the aggregate principal amount of the Notes originally issued under the Indenture (including any Additional Notes) remains outstanding immediately thereafter.

 

The Issuers may also redeem all of the Notes at the time, at the redemption price and subject to the conditions set forth in Section 5.06(e).

 

Any redemption pursuant to this Section 4.07 shall be made pursuant to the provisions of Section 4.01 through 4.06 hereof.

 

Section 4.08                             Mandatory Redemption.

 

Except for any repurchase offers required to be made pursuant to Sections 5.06 and 5.07 hereof, the Issuers shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

Section 4.09                             Offer to Purchase by Application of Net Proceeds.

 

In the event that, pursuant to Section 5.07 hereof, the Company shall be required to commence a pro rata offer (an “Offer to Purchase”) to all Holders and all holders of other Debt that is pari passu with the Notes containing provisions similar to those set forth in this Section 4.09 and Section 5.07 hereof with respect to offers to purchase or redeem with the Net Proceeds of sales of assets to purchase Notes and such other pair passu Debt, it shall follow the procedures specified below.

 

43

 

The Offer to Purchase shall remain open for a period of at least 30 days following its commencement but no longer than 60 days, except to the extent that a longer period is required by applicable law (the “Offer Period”).  Promptly after the termination of the Offer Period (the “Purchase Date”), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 5.07 hereof (the “Offer Amount”) or, if less than the Offer Amount has been tendered, all Notes tendered and not withdrawn in response to the Offer to Purchase.  Payment for any Notes so purchased shall be made in the same manner as interest payments are made.

 

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

 

(a)                                 that the Offer to Purchase is being made pursuant to this Section 4.09 and Section 5.07 hereof and the length of time the Offer to Purchase shall remain open;

 

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

 

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

 

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

 

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

 

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

 

(g)                                  that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof, shall be purchased); and

 

(h)                                 that Holders whose Notes were purchased only in part shall be issued new Notes (accompanied by a notation of the Note Guaranties duly endorsed by the Parent 

 

44

 

Guarantor and the Subsidiary Guarantors) equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

 

On the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof validly tendered and not properly withdrawn pursuant to the Offer to Purchase, or if less than the Offer Amount has been validly tendered and not properly withdrawn, all Notes so tendered and not withdrawn, shall deposit by 11:00 a.m., New York City time, with the Paying Agent or depositary an amount equal to the purchase price in respect of all Notes or portions thereof accepted for payment, and shall deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.09.  Upon surrender and cancellation of a Certificated Note that is purchased in part, the Issuers shall promptly issue and the Trustee, upon receipt of an Issuer Order, shall authenticate and deliver to the surrendering Holder of such Certificated Note a new Certificated Note equal in principal amount to the unpurchased portion of such surrendered Certificated Note; provided that each such new Certificated Note shall be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.  Respecting a Global Note that is purchased in part pursuant to an Offer to Purchase, the Trustee shall make an endorsement thereon to reduce the principal amount of such Global Note to an amount equal to the unpurchased portion of such Global Note, as provided in Section 3.06 hereof.  The depositary or the Paying Agent, as the case may be, shall promptly mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Issuers shall promptly issue a new Note (in each case, accompanied by a notation of the Note Guaranties duly endorsed by the Parent Guarantor and the Subsidiary Guarantors), and the Trustee, upon receipt of an Issuer Order, shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof.  The Company shall publicly announce the results of the Offer to Purchase on or as soon as practicable after the Purchase Date.

 

ARTICLE V
 COVENANTS

 

Section 5.01                             Payment of Notes.

 

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

 

Each Issuer shall pay interest on overdue principal or premium, if any, at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

45

 

Section 5.02                             Maintenance of Office or Agency.

 

The Company shall maintain in the United States (in or outside such place of payment) an office or agency where the Notes may be surrendered for transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served. Initially, such office or agency shall be the Corporate Trust Office of the Trustee, except that the office or agency where such notices and demands to or upon the Company may be served shall be the office of the Trustee indicated in Section 13.01 hereof. The Company will give prompt written notice to the Trustee of any change in the location of any such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

 

The Company may also from time to time designate different or additional offices or agencies to be maintained for such purposes (in or outside such place of payment), and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations described in the preceding paragraph.  The Company shall give prompt written notice to the Trustee of any such additional designation or rescission of designation and any change in the location of any such different or additional office or agency.

 

Section 5.03                             Compliance Certificate.

 

(a)                                 The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after December 31, 2014, an Officers’ Certificate stating that a review of the activities of the Parent Guarantor and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers of the Issuers with a view to determining whether each obligor on such Notes has kept, observed, performed and fulfilled its obligations under the Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge each obligor on such Notes has kept, observed, performed and fulfilled each and every covenant contained in the Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof, without regard to any grace period or requirement of notice required by the Indenture (or, if a Default or Event of Default has occurred and is continuing, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or proposes to take with respect thereto).

 

(b)                                 The Issuers shall, so long as any of the Notes are outstanding, deliver to the Trustee within 30 days after either Issuer becomes aware of the occurrence of a Default, a written notice setting for the details of the Default, and (unless such Default has already been cured) the action which such Issuer proposes to take with respect thereto.

 

Section 5.04                             Taxes.

 

So long as any of the Notes are outstanding, the Parent Guarantor shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all taxes, assessments 

 

46

 

and governmental charges levied or imposed upon the Parent Guarantor or any of its Subsidiaries or upon the income, profits or property of the Parent Guarantor or any of its Subsidiaries, if failure to pay or discharge the same could reasonably be expected to have a material adverse effect on the ability of the Issuers or any other obligor on the Notes to perform its obligations hereunder and (ii) all lawful claims for labor, materials and supplies which, if unpaid, would by law become a Lien upon the property of the Parent Guarantor or any of its Subsidiaries, except for any Lien permitted to be incurred under the terms of the Indenture, if failure to pay or discharge the same could reasonably be expected to have a material adverse effect on the ability of the Parent Guarantor or any other obligor on the Notes to perform its obligations hereunder; provided, however, that the Parent Guarantor shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

 

Section 5.05                             Stay, Extension and Usury Laws.

 

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

 

Section 5.06                             Change of Control.

 

(a)                                 If a Change of Control occurs, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes pursuant to the offer described below (the “Offer to Purchase”).  The Company shall make an Offer to Purchase all outstanding notes at a purchase price equal to 101% of the principal amount of Notes plus accrued and unpaid interest thereon, if any, to the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date; provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase the Notes pursuant to this covenant in the event that (i) prior to the requirement to commence the Offer to Purchase the Company has given the notice to exercise its right to redeem all the Notes under the terms described in Section 4.07 and redeemed the Notes in accordance with such notice or (ii) a third party makes the Offer to Purchase in the manner, at the time and otherwise in compliance with the requirements set forth in the Indenture applicable to an Offer to Purchase made by the Company and purchases all Notes properly tendered and not withdrawn under the offer.  The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of the Notes pursuant to an Offer to Purchase.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 5.06, the Company shall comply with the applicable 

 

47

 

securities laws and regulations and shall not be deemed to have breached its obligations under this Section 5.06 by virtue of such compliance.

 

(b)                                 Not later than 30 days following any Change of Control, the Company shall send to each Holder a notice, which shall govern the terms of the Offer to Purchase, with a copy of such notice to the Trustee.  In addition to including information concerning the business of the Company and its Subsidiaries that the Company in good faith believes will enable the Holders to make an informed decision with respect to the Offer to Purchase, the notice shall also state, among other things:

 

(i)                                     that a Change of Control has occurred and an Offer to Purchase is being made as provided for herein, and that, although Holders are not required to tender their Notes, all Notes that are validly tendered shall be accepted for payment;

 

(ii)                                  the Change of Control Payment and the expiration date of the Offer to Purchase, which will be no earlier than 30 days and no later than 60 days after the date such notice is sent and a settlement date for purchase (the “Change of Control Payment Date”) not more than five Business Days after the expiration date;

 

(iii)                               that any Note accepted for payment pursuant to the Offer to Purchase (and duly paid for on the Change of Control Payment Date) shall cease to accrue interest after the Change of Control Payment Date;

 

(iv)                              that any Notes (or portions thereof) not validly tendered shall continue to accrue interest;

 

(v)                                 that any Holder electing to have a Note purchased pursuant to any Offer to Purchase shall be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least one (1) Business Day before the Change of Control Payment Date;

 

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

 

(vii)                           the instructions and any other information necessary to enable Holders to tender their Notes (or portions thereof) and have such Notes (or portions thereof) purchased pursuant to the Offer to Purchase.

 

(c)                                  On or before the Change of Control Payment Date, the Company shall, to the extent lawful, accept for payment all Notes or portions thereof properly tendered and not withdrawn pursuant to the Offer to Purchase.  Promptly after such acceptance, on the Change of Control Payment Date, the Company will:

 

48

 

(i)                                     deposit by 11:00 a.m., New York City time, with the Paying Agent or depositary an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

 

(ii)                                  deliver or cause to be delivered to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

 

(d)                                 On the Change of Control Payment Date, the Paying Agent shall mail to each Holder of Notes accepted for payment the Change of Control Payment for such Notes (or, if all the Notes are then in global form, make such payment through the facilities of DTC), and the Issuers shall promptly issue a new Note (in each case, accompanied by a notation of the Note Guaranties duly endorsed by the Subsidiary Guarantors), and the Trustee, upon receipt of an Issuer Order, shall authenticate and mail (or cause to be transferred by book entry) to each Holder such new Note equal in principal amount to any unpurchased portion of the Notes surrendered; provided that each such new Note shall be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

 

(e)                                  In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept an Offer to Purchase and the Company (or the third party making the Offer to Purchase in lieu of the Company) purchases all of the Notes held by such Holders, the Issuers will have the right, upon not less than 30 nor more than 60 days’ notice, given not more than 30 days following the purchase pursuant to the Offer to Purchase, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment plus accrued and unpaid interest on the Notes redeemed to the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).

 

Section 5.07                             Asset Sales.

 

The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Sale unless the following conditions are met:

 

(a)                                 The Asset Sale is for at least Fair Market Value.

 

(b)                                 At least 75% of the aggregate consideration received by the Parent Guarantor or its Restricted Subsidiaries for such Asset Sale and all other Asset Sales since the Issue Date consists of cash or Cash Equivalents. For purposes of this clause (b), each of the following shall be considered to be cash or Cash Equivalents:

 

(i)                                     the assumption by the purchaser of Debt or other obligations or liabilities (as shown on the Parent Guarantor’s most recent balance sheet or in the footnotes thereto) (other than Subordinated Debt or other obligations or liabilities subordinated in right of payment to the Notes) of the Parent Guarantor or a Restricted Subsidiary pursuant to operation of law or a customary novation or assumption agreement;

 

(ii)                                  Additional Assets;

 

49

 

(iii)                               instruments, notes, securities or other obligations received by the Parent Guarantor or such Restricted Subsidiary from the purchaser that are promptly, but in any event within 90 days of the closing, converted by the Parent Guarantor or such Restricted Subsidiary to cash or Cash Equivalents, to the extent of the cash or Cash Equivalents actually so received; and

 

(iv)                              any Designated Non-cash Consideration received by the Parent Guarantor or such Restricted Subsidiary in the Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (iv) that is at that time outstanding, not to exceed the greater of (x) $20.0 million and (y) 1.0% of the Parent Guarantor’s Consolidated Net Tangible Assets at the time of receipt of such outstanding Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall in each case be considered cash or Cash Equivalents.

 

(c)                                  Within 360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Parent Guarantor or a Restricted Subsidiary may apply such Net Cash Proceeds at its option:

 

(i)                                     to permanently repay secured Debt of the Company or a Guarantor or any Debt of a Restricted Subsidiary that is neither the Issuer nor a Guarantor owing to a Person other than the Parent Guarantor or a Restricted Subsidiary and, in the case of a revolving credit, permanently reduce the commitments thereunder by such amount; or

 

(ii)                                  to acquire Additional Assets or to make capital expenditures in a Permitted Business.

 

A binding commitment to make an acquisition referred to in clause (ii) shall be treated as a permitted application of the Net Cash Proceeds from the date of such commitment; provided that (x) such investment is consummated within 360 days after the earlier of the making of such commitment and the end of the 360-day period referred to in the first sentence of this clause (c) (it being understood that if such commitment is for an LBA, LBM or any other purchase, lease or other arrangement for mineral or surface rights, the Net Cash Proceeds need only be applied as and when installments are due and payable) and (y) if such acquisition is not consummated within the period set forth in subclause (x) or such binding commitment is terminated, the Net Cash Proceeds not so applied will be deemed to be Excess Proceeds (as defined below).

 

(d)                                 The Net Cash Proceeds of an Asset Sale not applied pursuant to clause (c) within 360 days of the Asset Sale constitute “Excess Proceeds.” Excess Proceeds of less than $25.0 million will be carried forward and accumulated. When the aggregate amount of the accumulated Excess Proceeds equals or exceeds such amount, the Company must, within 30 days, make an Offer to Purchase Notes having a principal amount equal to

 

(i)                                     accumulated Excess Proceeds, multiplied by

 

(ii)                                  a fraction (x) the numerator of which is equal to the outstanding aggregate principal amount of the Notes and (y) the denominator of which is equal to the outstanding 

 

50

 

aggregate principal amount of the Notes and all pari passu Debt similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale,

 

rounded down to the nearest $1,000. The purchase price for the Notes will be 100% of the principal amount plus accrued interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date). If the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of $1,000 principal amount (and in a minimum amount of $2,000) will be purchased. Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by the Indenture.

 

(e)                                  The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each purchase of Notes pursuant to an Offer to Purchase.  To the extent that the provisions of any securities laws or regulations conflict with Section 4.09 or this Section 5.07, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under Section 4.09 or this Section 5.07 by virtue of such conflict.

 

Section 5.08                             Restricted Payments.

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)                                     declare or pay any dividend or make any distribution on its Equity Interests (other than dividends or distributions paid in the Parent Guarantor’s Qualified Equity Interests) held by Persons other than the Parent Guarantor or any of its Restricted Subsidiaries;

 

(ii)                                  purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Parent Guarantor held by Persons other than the Parent Guarantor or any of its Restricted Subsidiaries;

 

(iii)                               repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt (other than a payment of interest or principal at Stated Maturity thereof or the redemption, repurchase or other acquisition or retirement for value of any Subordinated Debt in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of acquisition); or

 

(iv)                              make any Investment other than a Permitted Investment (a “Restricted Investment’)

 

51

 

(all such payments and other actions set forth in clauses (a) through (d) above being collectively referred to as “Restricted Payments”); unless, at the time of, and after giving effect to, the proposed Restricted Payment:

 

(i)                                     no Default has occurred and is continuing;

 

(ii)                                  the Parent Guarantor could Incur at least $1.00 of Debt under the Fixed Charge Coverage Ratio Test, and

 

(iii)                               the aggregate amount expended for all Restricted Payments made on or after the Prior Issue Date would not, subject to paragraph (c), exceed the sum of

 

(A)                               50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the amount of the loss) accrued on a cumulative basis during the period, taken as one accounting period, beginning on the first day of the fiscal quarter in which the Prior Issue Date occurred and ending on the last day of the Parent Guarantor’s most recently completed fiscal quarter for which internal financial statements are available, plus

 

(B)                               subject to paragraph (c), the aggregate net proceeds, including cash proceeds and the Fair Market Value of property other than cash, received by the Parent Guarantor (other than from a Subsidiary) after the Prior Issue Date

 

(1)                                 from the issuance and sale of its Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted into Qualified Equity Interests of the Parent Guarantor, or

 

(2)                                 as a contribution to its common equity, plus

 

(C)                               an amount equal to the sum, for all Unrestricted Subsidiaries, of the following:

 

(1)                                 the cash return, after the Prior Issue Date, on Restricted Investments in an Unrestricted Subsidiary made after the Prior Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), plus

 

(2)                                 the portion (proportionate to the Parent Guarantor’s equity interest in such Subsidiary) of the Fair Market Value of the assets less liabilities of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary,

 

not to exceed, in the case of any Unrestricted Subsidiary, the amount of Restricted Investments made after the Prior Issue Date by the Parent Guarantor and its Restricted Subsidiaries in such Unrestricted Subsidiary, plus

 

52

 

(D)                               the cash return, after the Prior Issue Date, on any other Restricted Investment made after the Prior Issue Date, as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), not to exceed the amount of such Restricted Investment so made; plus

 

(E)                                any amount which previously qualified as a Restricted Payment on account of any Guarantee entered into by the Parent Guarantor or any Restricted Subsidiary; provided that such Guarantee has not been called upon and the obligation arising under such Guarantee no longer exists.

 

The amount of any Restricted Payment, if other than in cash, will be the Fair Market Value, on the date of the Restricted Payment, of the assets or securities proposed to be transferred or issued to or by the Parent Guarantor or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment, except that the Fair Market Value of any non-cash dividend or distribution paid within 60 days after the date of its declaration shall be determined as of such date.

 

(b)                                 The preceding provisions of this Section 5.08 shall not prohibit:

 

(i)                                     the payment of any dividend or distribution within 60 days after the date of declaration thereof if, at the date of declaration, such payment would comply with paragraph (a);

 

(ii)                                  dividends or distributions by a Restricted Subsidiary payable, on a pro rata basis or on a basis more favorable to the Parent Guarantor, to all holders of any class of Equity Interests of such Restricted Subsidiary a majority of which is held, directly or indirectly through Restricted Subsidiaries, by the Parent Guarantor;

 

(iii)                               the repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of Subordinated Debt with the proceeds of, or in exchange for, Permitted Refinancing Debt;

 

(iv)                              the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Parent Guarantor in exchange for, or out of the proceeds of a substantially concurrent offering (with any offering within 45 days deemed as substantially concurrent) of, Qualified Equity Interests of the Parent Guarantor or of a contribution to the common equity of the Parent Guarantor, including a contribution of the Capital Stock of the Parent Guarantor;

 

(v)                                 the repayment, redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Debt in exchange for, or out of the proceeds of, a cash or non-cash contribution to the capital of the Parent Guarantor or a substantially concurrent offering (with any offering within 45 days deemed as substantially concurrent) of, Qualified Equity Interests of the Parent Guarantor;

 

(vi)                              any Investment acquired as a capital contribution to the Parent Guarantor, or made in exchange for, or out of the net cash proceeds of, a substantially concurrent offering 

 

53

 

(with any offering within 45 days deemed as substantially concurrent) of Qualified Equity Interests of the Parent Guarantor;

 

(vii)                           amounts paid to the Parent Guarantor for the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Parent Guarantor held by current officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries under their estates or their immediate family members), of the Parent Guarantor or any of its Restricted Subsidiaries upon death, disability, retirement, severance or termination of employment or pursuant to any agreement under which the Equity Interests were issued, and Investments in the Equity Interests of the Parent Guarantor in connection with certain purchases or redemptions of Equity Interests held by officers, directors and employees or any employee pension benefit plan of a type specified in the Indenture; provided that the aggregate cash consideration paid therefor in any twelve-month period after the Issue Date does not exceed an aggregate amount of $5.0 million;

 

(viii)                        the repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of any Subordinated Debt or Disqualified Stock at a purchase price not greater than 101% of the principal amount or liquidation preference thereof in the event of (x) a change of control pursuant to a provision no more favorable to the holders thereof than in Section 5.06 or (y) an asset sale pursuant to a provision no more favorable to the holders thereof than in Section 5.07; provided that, in each case, prior to the repurchase the Company has made an Offer to Purchase and repurchased all Notes issued under the Indenture that were validly tendered for payment in connection with the Offer to Purchase;

 

(ix)                              payments of dividends on the Parent Guarantor’s Common Stock or purchases by the Parent Guarantor of its Common Stock, in an aggregate amount in any year not to exceed the product of (x) 2.5%, (y) the average price of the Parent Guarantor’s Common Stock over the calendar year immediately preceding the date of such dividend or purchase, as applicable (adjusted appropriately to reflect subsequent stock splits, subdivisions and reclassifications), and (z) the number of shares of the Parent Guarantor’s Common Stock outstanding on the last Business Day of such preceding calendar year;

 

(x)                                 cash payments in lieu of fractional shares upon exercise of options or warrants or conversion or exchange of convertible securities, repurchases of Equity Interests deemed to occur upon the exercise of options, warrants or other convertible securities to the extent such securities represent a portion of the exercise price of such options, warrants or other convertible securities and repurchases of Equity Interests in connection with the withholding of a portion of the Equity Interests granted or awarded to a director or an employee to pay for the Taxes payable by such director or employee upon such grant or award; and

 

(xi)                              Restricted Payments in an aggregate amount not to exceed $30.0 million since the Prior Issue Date;

 

54

 

provided that, in the case of clauses (vii), (viii), (ix) and (xi), no Default has occurred and is continuing or would occur as a result thereof.

 

(c)                                  Proceeds of the issuance of Qualified Equity Interests will be included under subsection (a)(iii)(B) only to the extent they are not applied as described in (b)(iv), (v) or (vi). Restricted Payments permitted pursuant to clause (ii), (iii), (iv), (v) or (vi) will not be included in making the calculations under any of subclauses (A)-(E) of clause (iii) of paragraph (a).

 

(d)                                 For purposes of determining compliance with this Section 5.08, in the event that a Restricted Payment permitted pursuant to this Section 5.08 or a Permitted Investment meets the criteria of more than one of the categories of Restricted Payment described in clauses (i) through (xi) above or one or more clauses of the definition of Permitted Investments, the Parent Guarantor shall be permitted to classify such Restricted Payment or Permitted Investment on the date it is made, or later reclassify all or a portion of such Restricted Payment or Permitted Investment, in any manner that complies with this Section 5.08, and such Restricted Payment or Permitted Investment shall be treated as having been made pursuant to only one of such clauses of this Section 5.08 or of the definition of Permitted Investments. For purposes of compliance with this Section 5.08, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less any amount paid, repaid, returned, distributed or otherwise received in cash in respect of such Investment.

 

Section 5.09                             Incurrence of Debt and Issuance of Disqualified Stock.

 

(a)                                 The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to Incur any Debt or Disqualified Stock, and shall not permit any of its Restricted Subsidiaries to Incur any Preferred Stock (other than Disqualified Stock or Preferred Stock of Restricted Subsidiaries held by the Parent Guarantor or a Restricted Subsidiary, so long as it is so held); provided, that the Parent Guarantor or any Restricted Subsidiary may Incur Debt (including Acquired Debt), or Disqualified Stock and any Restricted Subsidiary may Incur Preferred Stock if, on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, the Fixed Charge Coverage Ratio is not less than 2.0:1.0 (the “Fixed Charge Coverage Ratio Test”); provided that the maximum aggregate principal amount of Debt, Disqualified Stock or Preferred Stock that Restricted Subsidiaries that are neither Issuers nor Guarantors may Incur under this subsection (a) is $10.0 million outstanding at any time.

 

(b)                                 Notwithstanding the prohibitions of Section 5.09(a), the Parent Guarantor and, to the extent provided below, any Restricted Subsidiary may Incur any of the following items of Debt or Disqualified Stock (collectively, “Permitted Debt”):

 

(i)                                     Debt of the Parent Guarantor or any of its Restricted Subsidiaries pursuant to Credit Facilities; provided that the aggregate principal amount at any time outstanding does not exceed the greater of (i) $700.0 million and (ii) 35% of Consolidated Net Tangible Assets;

 

(ii)                                  Debt of the Parent Guarantor or any Restricted Subsidiary owed to the Parent Guarantor or any Restricted Subsidiary so long as such Debt continues to be owed to the Parent Guarantor or a Restricted Subsidiary and which, if the obligor is an Issuer or 

 

55

 

a Guarantor and if the Debt is owed to a Restricted Subsidiary that is neither an Issuer nor a Guarantor, is subordinated in right of payment to the Notes;

 

(iii)                               Debt of the Issuers pursuant to the Notes (other than Additional Notes) and Debt of any Guarantor pursuant to a Note Guaranty of the Notes (including Additional Notes);

 

(iv)                              Debt constituting an extension or renewal of, replacement of, or substitution for, or issued in exchange for, or the net proceeds of which are used to repay, redeem, repurchase, replace, refinance or refund, including by way of defeasance (all of the above, for purposes of this clause, “refinance”) then outstanding Debt (“Permitted Refinancing Debt”) in an amount not to exceed the principal amount of the Debt so refinanced, plus premiums, fees and expenses; provided that:

 

(A)                               in case the Debt to be refinanced is subordinated in right of payment to the Notes, the new Debt, by its terms or by the terms of any agreement or instrument pursuant to which it is outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent that the Debt to be refinanced is subordinated to the Notes;

 

(B)                               the new Debt does not have a Stated Maturity prior to the Stated Maturity of the Debt to be refinanced, and the Average Life of the new Debt is at least equal to the remaining Average Life of the Debt to be refinanced;

 

(C)                               in no event may Debt of an Issuer or any Guarantor be refinanced pursuant to this clause by means of any Debt of any Restricted Subsidiary that is neither a Guarantor nor an Issuer; and

 

(D)                               Debt Incurred pursuant to clauses (i), (ii), (v), (vi), (vii) and (xi) through (xviii) may not be refinanced pursuant to this clause but Debt incurred pursuant to subsection (a) or any other clause of this subsection (b) may be refinanced under this clause

 

(v)                                 Permitted Hedging Agreements of the Parent Guarantor or any Restricted Subsidiary;

 

(vi)                              Debt of the Parent Guarantor or any Restricted Subsidiary in connection with one or more standby or trade-related letters of credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, issued by the Parent Guarantor or a Restricted Subsidiary in the ordinary course of business or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances;

 

(vii)                           Debt arising from agreements of the Parent Guarantor or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;

 

56

 

(viii)                        Acquired Debt, provided that after giving effect to the Incurrence thereof on a pro forma basis, either (a) the Parent Guarantor (or the Successor Company, as applicable) could Incur at least $1.00 of Debt under the Fixed Charge Coverage Ratio Test or (b) the Fixed Charge Coverage Ratio of the Parent Guarantor (or the Successor Company, as applicable) and its Restricted Subsidiaries on a consolidated basis is greater than immediately prior to such Incurrence;

 

(ix)                              Debt of the Parent Guarantor or any Restricted Subsidiary (other than any Debt incurred pursuant to clauses (i) and (iii) above) outstanding on the Issue Date (and, for purposes of clause (iv)(D), not otherwise constituting Permitted Debt);

 

(x)                                 Debt of the Parent Guarantor or any Restricted Subsidiary (A) in existence on the date any Person becomes a Restricted Subsidiary as a result of an acquisition by the Parent Guarantor or any of its other Restricted Subsidiaries or (B) Incurred to finance the acquisition, construction or improvement of any assets, including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets before the acquisition thereof; provided that the aggregate principal amount at any time outstanding of any Debt Incurred pursuant to this clause, including all Permitted Refinancing Debt Incurred to refund, refinance or replace any Debt Incurred pursuant to this clause (x), may not exceed the greater of (x) $150.0 million or (y) 8% of Consolidated Net Tangible Assets;

 

(xi)                              Debt of the Issuers or any Guarantor consisting of Guarantees (or co-issuances in the case of the Co-issuer) of Debt of the Issuers or any Guarantor otherwise permitted under this Section 5.09;

 

(xii)                           Preferred Stock of a Restricted Subsidiary issued to the Parent Guarantor or another Restricted Subsidiary; provided that any subsequent transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Preferred Stock (except to the Parent Guarantor or another Restricted Subsidiary) shall be deemed, in each case, to be an issue of Preferred Stock;

 

(xiii)                        Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;

 

(xiv)                       any Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100.0 million or (y) 5% of Consolidated Net Tangible Assets;

 

(xv)                          Debt Incurred by any Foreign Restricted Subsidiary for general corporate purposes in an aggregate principal amount not to exceed, at any one time outstanding and together with any other Debt incurred under this clause (xv), $10.0 million;

 

57

 

(xvi)                       Debt of the Parent Guarantor or any Restricted Subsidiary consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply or other arrangements;

 

(xvii)                    Debt of the Parent Guarantor or any Restricted Subsidiary Incurred on or after the Issue Date not otherwise permitted hereunder in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $150.0 million and (y) 8% of Consolidated Net Tangible Assets; and

 

(xviii)                 Guarantees by the Parent Guarantor or any Restricted Subsidiary of borrowings by current or former officers, managers, directors, employees or consultants in connection with the purchase of Equity Interests of the Parent Guarantor by any such person in an aggregate principal amount not to exceed $2.5 million at any one time outstanding.

 

(c)                                  For purposes of determining compliance with this Section 5.09, in the event that an item of Debt or Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in paragraphs (b)(i) through (b)(xviii) above, or is entitled to be incurred pursuant to Section 5.09(a), the Parent Guarantor shall, in its sole discretion, be permitted to classify such item in any manner that complies with this Section 5.09, and such Debt or Disqualified Stock or Preferred Stock will be treated as having been Incurred pursuant to the clauses of Permitted Debt or Section 5.09(a) hereof, as the case may be, designated by the Parent Guarantor, and from time to time may change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 5.09 at any time, including pursuant to Section 5.09(a); provided that Debt under the Credit Agreement outstanding on the Issue Date shall be deemed at all times to be Incurred under Section 5.09(b)(i).

 

(d)                                 The accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Debt, Disqualified Stock or Preferred Stock of the same class shall not be deemed to be an Incurrence of Debt, Disqualified Stock or Preferred Stock for purposes of this Section 5.09 but will be included in subsequent calculations of the amount of outstanding Debt for purposes of Incurring future Debt; provided that such accrual, accretion, amortization or payment is included in the calculation of Fixed Charges to the extent specified in the definition of such term.  Notwithstanding any other provision of this Section 5.09, the maximum amount of Debt that the Parent Guarantor or any Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.  Further, the accounting reclassification of any obligation of the Parent Guarantor or any of its Restricted Subsidiaries as Debt will not be deemed an Incurrence of Debt for purposes of this Section 5.09.

 

(e)                                  Neither the Issuers nor any Guarantor may Incur any Debt that is subordinated in right of payment to other Debt of the Issuers or the Guarantor unless such Debt is also subordinated in right of payment to the Notes or the relevant Note Guaranty on substantially identical terms.

 

58

 

Section 5.10                             Liens.

 

The Parent Guarantor shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur or permit to exist any Lien of any nature whatsoever on any of its properties or assets, whether owned at the Issue Date or thereafter acquired, to secure any Debt other than Permitted Liens, without effectively providing that the Notes or the relevant Note Guaranty, as the case may be, is secured equally and ratably with (or, if the Obligation to be secured by the Lien is subordinated in right of payment to the Notes or such Note Guaranty, prior to) the Obligations so secured for so long as such Obligations are so secured.

 

Section 5.11                             Dividend and Other Payment Restrictions Affecting Subsidiaries.

 

(a)                                 The Parent Guarantor shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to:

 

(i)                                     pay dividends or make any other distributions on its Equity Interests to the Parent Guarantor or any other Restricted Subsidiary;

 

(ii)                                  pay any Debt owed to the Parent Guarantor or any other Restricted Subsidiary;

 

(iii)                               make loans or advances to the Parent Guarantor or any other Restricted Subsidiary; or

 

(iv)                              transfer any of its property or assets to the Parent Guarantor or any other Restricted Subsidiary.

 

(b)                                 The restrictions contained in Section 5.11(a) shall not apply to any encumbrances or restrictions:

 

(i)                                     existing on the Issue Date in the Credit Agreement, the Indenture or any other agreements in effect on the Issue Date, and any amendments, modifications, restatements, extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the amendment, modification, restatement, extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Holders of the Notes than the encumbrances or restrictions being amended, modified, restated, extended, renewed, replaced or refinanced;

 

(ii)                                  existing pursuant to the Indenture, the Notes or the Note Guaranty;

 

(iii)                               existing under or by reason of applicable law, rule, regulation or order;

 

(iv)                              existing under any agreements or other instruments of, or with respect to

 

(A)                               any Person, or the property or assets of any Person, at the time the Person is acquired by the Parent Guarantor or any Restricted Subsidiary, or

 

59

 

(B)                               any Unrestricted Subsidiary at the time it is designated or is deemed to become a Restricted Subsidiary;

 

which encumbrances or restrictions (i) are not applicable to any other Person or the property or assets of any other Person and (ii) were not put in place in anticipation of such event and any amendments, modifications, restatements, extensions, renewals, replacements or refinancings of any of the foregoing, provided that the encumbrances and restrictions in the amendment, modification, restatement, extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Holders of the Notes than the encumbrances or restrictions being amended, modified, restated, extended, renewed, replaced or refinanced;

 

(v)                                 of the type described in Section 5.11(a)(iv) arising or agreed to (i) in the ordinary course of business that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license, conveyance or similar contract, including with respect to intellectual property, (ii) that restrict in a customary manner, pursuant to provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements, the transfer of ownership interests in, or assets of, such partnership, limited liability company, joint venture or similar Person or (iii) by virtue of any Lien on, or agreement to transfer, option or similar right with respect to any property or assets of, the Parent Guarantor or any Restricted Subsidiary;

 

(vi)                              with respect to a Restricted Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of the Capital Stock of, or property and assets of, the Restricted Subsidiary pending closing of such sale or disposition that is permitted hereunder;

 

(vii)                           consisting of customary restrictions pursuant to any Permitted Receivables Financing;

 

(viii)                        existing pursuant to Permitted Refinancing Debt; provided that the encumbrances and restrictions contained in the agreements governing such Permitted Refinancing Debt are, taken as a whole, no less favorable in any material respect to the Holders of the Notes than those contained in the agreements governing the Debt being refinanced;

 

(ix)                              consisting of restrictions on cash or other deposits or net worth imposed by customers, suppliers or required by insurance surety bonding companies, in each case, in the ordinary course of business;

 

(x)                                 existing pursuant to purchase money obligations for property acquired in the ordinary course of business and Capital Leases or operating leases or Specified Coal Agreements or Mining Leases that impose encumbrances or restrictions noted in Section 5.11(a)(iv) on the property so acquired or covered thereby;

 

60

 

(xi)                              existing pursuant to any Debt Incurred by, or other agreement of, a Foreign Restricted Subsidiary, which encumbrances or restrictions are customary for a financing or agreement of such type;

 

(xii)                           existing pursuant to customary provisions in joint venture, operating or similar agreements, asset sale agreements and stock sale agreements required in connection with the entering into of such transaction; or

 

(xiii)                        existing pursuant to any agreement or instrument relating to any Debt permitted to be Incurred subsequent to the Issue Date by Section 5.09 (A) if the encumbrances and restrictions contained in any such agreement or instrument are, taken as a whole, no less favorable in any material respect to the Holders of the Notes than the encumbrances and restrictions contained in the Credit Agreement in effect as of the Issue Date (as determined in good faith by the Parent Guarantor) or (B) such encumbrances and restrictions are, taken as a whole, no less favorable in any material respect to the Holders of the Notes than is customary in comparable financings (as determined in good faith by the Parent Guarantor), and the Parent Guarantor determines in good faith that such encumbrances and restrictions will not materially affect the Company’s ability to make principal or interest payments on the Notes as and when they become due.

 

Section 5.12                             Transactions With Affiliates.

 

(a)                                 The Parent Guarantor shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any transaction or arrangement including the purchase, sale, lease or exchange of property or assets, or the rendering of any service with any Affiliate of the Parent Guarantor or any Restricted Subsidiary (a “Related Party Transaction”) involving aggregate consideration in excess of $2.0 million, unless the Related Party Transaction is on fair and reasonable terms that are not materially less favorable (as reasonably determined by the Parent Guarantor) to the Parent Guarantor or the relevant Restricted Subsidiary than those that could be obtained in a comparable arm’s-length transaction with a Person that is not an Affiliate of the Parent Guarantor.

 

(b)                                 Any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $15.0 million must first be approved by a majority of the Board of Directors who are disinterested in the subject matter of the transaction pursuant to a Board Resolution.

 

(c)                                  The following items shall not be subject to the provisions of Section 5.12(a) and Section 5.12(b):

 

(i)                                     any transaction between the Parent Guarantor and any of its Restricted Subsidiaries or between Restricted Subsidiaries of the Parent Guarantor;

 

(ii)                                  the payment of reasonable and customary regular fees to directors of the Company or the Parent Guarantor who are not employees of the Company or the Parent Guarantor;

 

61

 

(iii)                               any Permitted Investment or any Restricted Payment permitted in Section 5.08;

 

(iv)                              any issuance of Equity Interests (other than Disqualified Equity Interests) of the Parent Guarantor;

 

(v)                                 loans or advances to officers, directors or employees of the Company or the Parent Guarantor in the ordinary course of business of the Parent Guarantor or its Restricted Subsidiaries or Guarantees in respect thereof or otherwise made on their behalf (including payment on such Guarantees) but only to the extent permitted by applicable law, including the Sarbanes-Oxley Act of 2002;

 

(vi)                              any employment, consulting, service or termination agreement, or reasonable and customary indemnification arrangements, entered into by the Parent Guarantor or any of its Restricted Subsidiaries with officers and employees of the Parent Guarantor or any of its Restricted Subsidiaries that are Affiliates of the Parent Guarantor and the payment of compensation to such officers and employees (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans) so long as such agreement has been entered into in the ordinary course of business;

 

(vii)                           transactions with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services (including pursuant to joint venture agreements) in the ordinary course of business on terms at least as favorable as might reasonably have been obtained at such time from a Person that is not an Affiliate of the Parent Guarantor, as determined in good faith by the Parent Guarantor;

 

(viii)                        transactions arising under any contract, agreement, instrument or other arrangement in effect on the Issue Date, as amended, modified or replaced from time to time so long as the amended, modified or new arrangements, taken as a whole at the time such arrangements are entered into, are not materially less favorable to the Parent Guarantor and its Restricted Subsidiaries than those in effect on the Issue Date;

 

(ix)                              transactions entered into as part of a Permitted Receivables Financing;

 

(x)                                 transactions with any Affiliate in its capacity as a holder of Debt or Equity Interests; provided that such Affiliate owns less than a majority of the interests of the relevant class and is treated the same as other holders; and

 

(xi)                              payments to or from, and transactions with, any joint ventures or similar arrangements (including, without limitation, any cash management activities relating thereto); provided that such arrangements are on terms no less favorable to the Parent Guarantor and its Restricted Subsidiaries, on the one hand, than to the relevant joint venture partner and its Affiliates, on the other hand, taking into account all related agreements and transactions entered in by the Parent Guarantor and its Restricted Subsidiaries, on the one hand, and the relevant joint venture partner and its Affiliates, on the other hand.

 

62

 

Section 5.13                             Additional Subsidiary Guarantees.

 

If and for so long as any Domestic Restricted Subsidiary of the Parent Guarantor (other than an Issuer), directly or indirectly, Guarantees any Debt of an Issuer or a Guarantor under the Credit Agreement, such Domestic Restricted Subsidiary shall provide a Note Guaranty within 15 days, and, if the guaranteed Debt is Subordinated Debt, the Guarantee of such guaranteed Debt must be subordinated in right of payment to the Note Guaranty to at least the extent that the guaranteed Debt is subordinated to the Notes.

 

Section 5.14                             Designation of Restricted and Unrestricted Subsidiaries.

 

(a)                                 The Parent Guarantor may designate any Subsidiary, including a newly acquired or created Subsidiary (other than the Company or the Co-issuer), to be an Unrestricted Subsidiary if it meets the following qualifications and the designation would not cause a Default.

 

(i)                                     Such Subsidiary does not own any Capital Stock of the Parent Guarantor or any Restricted Subsidiary or hold any Debt of, or any Lien on any property of, the Parent Guarantor or any Restricted Subsidiary.

 

(ii)                                  At the time of the designation, the designation would be permitted under Section 5.08.

 

(iii)                               To the extent the Debt of the Subsidiary is not Non-Recourse Debt, any Guarantee or other credit support thereof by the Parent Guarantor or any Restricted Subsidiary is permitted under Section 5.09 and Section 5.08.

 

(iv)                              The Subsidiary is not party to any transaction or arrangement with the Parent Guarantor or any Restricted Subsidiary that would not be permitted under Section 5.12 after giving effect to the exceptions thereto.

 

(v)                                 Neither the Parent Guarantor nor any Restricted Subsidiary has any obligation to subscribe for additional Equity Interests of the Subsidiary or to maintain or preserve its financial condition or cause it to achieve specified levels of operating results, except to the extent permitted by Section 5.09 and Section 5.08.

 

Once so designated the Subsidiary will remain an Unrestricted Subsidiary, subject to paragraph (b).

 

(b)                                 (1) A Subsidiary previously designated an Unrestricted Subsidiary which fails to meet the qualifications set forth in subsection (a) will be deemed to become at that time a Restricted Subsidiary, subject to the consequences set forth in subsection (d).

 

(2)                                 The Board of Directors may designate an Unrestricted Subsidiary to be a Restricted Subsidiary if the designation would not cause a Default.

 

(c)                                  Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary,

 

63

 

(i)                                     all existing Investments of the Parent Guarantor and the Restricted Subsidiaries therein (valued at the Parent Guarantor’s proportional share of the Fair Market Value of its assets less liabilities) will be deemed made at that time;

 

(ii)                                  all existing Capital Stock or Debt of the Parent Guarantor or a Restricted Subsidiary held by it will be deemed Incurred at that time, and all Liens on property of the Parent Guarantor or a Restricted Subsidiary held by it will be deemed Incurred at that time;

 

(iii)                               all existing transactions between it and the Parent Guarantor or any Restricted Subsidiary will be deemed entered into at that time;

 

(iv)                              it shall be released at that time from its Note Guaranty, if any; and

 

(v)                                 it will cease to be subject to the provisions hereof as a Restricted Subsidiary.

 

(d)                                 Upon an Unrestricted Subsidiary becoming, or being deemed to become, a Restricted Subsidiary,

 

(i)                                     all of its Debt and Disqualified Stock or Preferred Stock will be deemed Incurred at that time for purposes of Section 5.09 but will not be considered the sale or issuance of Equity Interests for purposes of Section 5.07;

 

(ii)                                  Investments therein previously charged under Section 5.08 will be credited thereunder;

 

(iii)                               it may be required to issue a Note Guaranty pursuant to Section 5.13; and

 

(iv)                              it will thenceforward be subject to the provisions hereof as a Restricted Subsidiary.

 

(e)                                  Any designation by the Parent Guarantor of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary will be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to the designation and an Officers’ Certificate certifying that the designation complied with the foregoing provisions.

 

Section 5.15                             Business Activities.

 

The Co-issuer may not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided that it may be a co-obligor with respect to the Notes or any other Debt issued by the Company, and may engage in any activities directly related thereto or necessary in connection therewith. The Co-issuer shall be a Wholly Owned Subsidiary of the Company at all times.

 

64

 

Section 5.16                             Consents.

 

Neither the Parent Guarantor nor any of its Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver or amendment.

 

Section 5.17                             Reports.

 

Whether or not the Parent Guarantor is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any Notes are outstanding the Parent Guarantor must provide the Trustee and Holders of the Notes (or make available on EDGAR) within the time periods specified in those sections with:

 

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

 

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

 

Any and all Defaults or Events of Default arising from a failure to furnish or file in a timely manner any information or report required by this Section 5.17 shall be deemed cured (and the Parent Guarantor shall be deemed to be in compliance with this Section 5.17) upon furnishing or filing such information or report as contemplated by this Section 5.17 (but without regard to the date on which such information or report is so furnished or filed); provided that such cure shall not otherwise affect the rights of the Holders of the Notes under Article VII hereof if the principal and interest have been accelerated in accordance with the terms of Article VII hereof and such acceleration has not been rescinded or cancelled prior to such cure.

 

Delivery of such reports, information and documents to the Trustee pursuant to this Section 5.17 is for informational purposes only and the Trustee’s receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including either of the Issuers’ or any other Person’s compliance with any of its covenants hereunder or under the Notes (as to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).

 

Section 5.18                             Termination of Covenants.

 

If at any time after the Issue Date (a) the Notes have an Investment Grade Rating by each of S&P and Moody’s (or, if either (or both) of S&P and Moody’s have been substituted in accordance with the definition of “Rating Agencies,” by each of the then applicable Rating Agencies), 

 

65

 

(b) no Default has occurred and is continuing and (c) the Issuers have delivered to the Trustee an Officers’ Certificate certifying to (a) and (b) of this Section 5.18, the Parent Guarantor and its Restricted Subsidiaries shall no longer be subject to the provisions of Sections 4.09, 5.07, 5.08, 5.09, 5.11, 5.12 and 6.01(a)(iii).  If the covenants are terminated, the Parent Guarantor may not thereafter designate any Restricted Subsidiary as an Unrestricted Subsidiary.

 

ARTICLE VI
 SUCCESSORS

 

Section 6.01                             Merger, Consolidation, or Sale of Assets.

 

(a)                                 Neither the Company nor the Parent Guarantor will:  (x) consolidate or merge with or into any Person; or (y) sell, convey, transfer or otherwise dispose of all or substantially all of its assets, in one transaction or a series of related transactions, to any Person unless:

 

(i)                                     either (x) the Company or the Parent Guarantor, as applicable, is the continuing Person or (y) the resulting, surviving or transferee Person (the “Surviving Company”) is a corporation, partnership (including a limited partnership), trust or limited liability company organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and expressly assumes by supplemental indenture (or other joinder agreement, as applicable) all of the Obligations of its predecessor, the Notes and the Note Guaranties, as applicable;

 

(ii)                                  immediately after giving effect to the transaction, no Default has occurred and is continuing;

 

(iii)                               immediately after giving effect to the transaction on a pro forma basis, the Parent Guarantor (or the Surviving Company, as applicable) (i) could Incur at least $1.00 of Debt under the Fixed Charge Coverage Ratio Test or (ii) would have a Fixed Charge Coverage Ratio on a pro forma basis that is at least equal to the Fixed Charge Coverage Ratio of the Parent Guarantor immediately prior to such transaction; and

 

(iv)                              the Parent Guarantor delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the consolidation, merger or transfer and the supplemental indenture (if any) comply with the Indenture;

 

provided, that clauses (B) and (C) shall not apply (i) to the consolidation, merger, sale, conveyance, transfer or other disposition of either the Company or the Parent Guarantor with or into a Wholly Owned Restricted Subsidiary or the consolidation, merger, sale, conveyance, transfer or other disposition of a Wholly Owned Restricted Subsidiary with or into either the Company or the Parent Guarantor or (ii) if, in the good faith determination of the Board of Directors of the Parent Guarantor, whose determination is evidenced by a Board Resolution, the sole purpose of the transaction is to change the jurisdiction of formation or incorporation of the Company or the Parent Guarantor, as applicable.

 

(b)                                 Neither the Company nor the Parent Guarantor shall lease all or substantially all of its assets, whether in one transaction or a series of transactions, to one or more other Persons.

 

66

 

(c)                                  Upon the consummation of any transaction effected in accordance with these provisions, if the Company or the Parent Guarantor, as applicable, is not the continuing Person, the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company or the Parent Guarantor, as applicable, under the Notes and the Note Guaranties, as applicable, with the same effect as if such Successor Company had been named as the Company or the Parent Guarantor, as applicable, in the Indenture. Upon any such substitution in the case of the Company, except for its sale, conveyance, transfer or disposition of less than all its assets, the Company will be released from its obligations under the Indenture and the Notes, and, upon any such substitution in the case of the Parent Guarantor, it will be released from its obligations under the Indenture and its Note Guaranty as described in Article XI.

 

(d)                                 The Co-issuer shall not consolidate or merge with or into any Person, or permit any Person to merge with or into the Co-issuer unless:

 

(i)                                     concurrently therewith, a corporate Wholly Owned Restricted Subsidiary of the Company organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia (which may be the continuing Person as a result of such transaction) shall expressly assume, by a supplemental indenture (or other joinder agreement, as applicable), all of the Obligations of the Co-issuer under the Indenture and the Notes; or

 

(ii)                                  after giving effect thereto, at least one obligor on the Notes shall be a corporation organized and validly existing under the laws of the United States of America or any jurisdiction thereof; and

 

(iii)                               immediately after such transaction, no Default has occurred and is continuing.

 

(e)                                  No Subsidiary Guarantor may

 

(i)                                     consolidate or merge with or into any Person, or

 

(ii)                                  sell, convey, transfer or otherwise dispose of all or substantially all of the Subsidiary Guarantor’s assets, in one transaction or a series of related transactions, to any Person, unless:

 

(A)                               the other Person is the Parent Guarantor, the Company or any Restricted Subsidiary that is Subsidiary Guarantor or becomes a Subsidiary Guarantor concurrently with the transaction; or

 

(B)                               (i) either (x) the Subsidiary Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes by supplemental indenture (or other joinder agreement, as applicable) all of the obligations of the Subsidiary Guarantor under its Note Guaranty; and (ii) immediately after giving effect to the transaction, no Default has occurred and is continuing; or

 

(3)                                 the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Subsidiary Guarantor or the sale or disposition of all or 

 

67

 

substantially all the assets of the Subsidiary Guarantor (in each case other than to the Parent Guarantor or a Restricted Subsidiary) otherwise permitted by the Indenture.

 

Section 6.02                             Successor Entity Substituted.

 

(a)                                 Upon the consummation of any transaction effected in accordance with Section 6.01, if the Company or the Parent Guarantor, as applicable, is not the continuing Person, the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company or the Parent Guarantor, as applicable, under the Indenture, the Notes and the Note Guaranties, as applicable, with the same effect as if such Successor Company had been named as the Company or the Parent Guarantor, as applicable, in the Indenture. Upon any such substitution in the case of the Company, except for its sale, conveyance, transfer or disposition of less than all its assets, the Company will be released from its obligations under the Indenture and the Notes, and, upon any such substitution in the case of the Parent Guarantor, it will be released from its obligations under the Indenture and its Note Guaranty as described in Article XI.

 

(b)                                 If a surviving entity shall have succeeded to and been substituted for an Issuer, such surviving entity may cause to be signed, and may issue either in its own name or in the name of the applicable Issuer prior to such succession any or all of the Notes issuable hereunder which theretofore shall not have been signed by such Issuer and delivered to the Trustee; and, upon the order of such surviving entity, instead of such Issuer, and subject to all the terms, conditions and limitations in the Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes which previously shall have been signed and delivered by the Officers of such Issuer to the Trustee for authentication, and any Notes which such surviving entity thereafter shall cause to be signed and delivered to the Trustee for that purpose (in each instance with notations of Note Guaranties thereon by the Parent Guarantor and the Subsidiary Guarantors).  All of the Notes so issued and so endorsed shall in all respects have the same legal rank and benefit under the Indenture as the Notes theretofore or thereafter issued and endorsed in accordance with the terms of the Indenture and the Note Guaranties as though all such Notes had been issued and endorsed at the date of the execution hereof.

 

(c)                                  In case of any such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued or the notations of Note Guaranties to be endorsed thereon as may be appropriate.

 

(d)                                 For all purposes of the Indenture and the Notes, Subsidiaries of any surviving entity (other than an Issuer) will, upon such transaction or series of transactions, become Restricted Subsidiaries or Unrestricted Subsidiaries as provided pursuant to the Indenture and all Debt, and all Liens on property or assets, of such surviving entity and its Restricted Subsidiaries immediately prior to such transaction or series of transactions shall be deemed to have been incurred upon such transaction or series of transactions.

 

68

 

ARTICLE VII
 DEFAULTS AND REMEDIES

 

Section 7.01                             Events of Default.

 

Each of the following is an “Event of Default”:

 

(a)                                 the Issuers default in the payment of the principal of any Note when the same becomes due and payable at final maturity, upon acceleration or redemption, or otherwise (other than pursuant to an Offer to Purchase);

 

(b)                                 the Issuers default in the payment of interest on any Note when the same becomes due and payable, and the default continues for a period of 30 days;

 

(c)                                  the Company fails to make an Offer to Purchase and thereafter accept and pay for Notes tendered when and as required pursuant to Section 5.06 or the Issuers or any Guarantor fails to comply with Section 6.01;

 

(d)                                 the Issuers or the Parent Guarantor defaults in the performance of or breach any other of its covenants or agreements in the Indenture or under the Notes (other than a default specified in clause (a), (b) or (c) above) and the default or breach continues for a period of 60 consecutive days (or 90 consecutive days in the case of a failure to comply with Section 5.17) after written notice to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes;

 

(e)                                  there occurs with respect to any Debt of the Parent Guarantor or any of its Significant Restricted Subsidiaries having an outstanding principal amount of $50.0 million or more in the aggregate for all such Debt of all such Persons (i) an event of default that results in such Debt being due and payable prior to its scheduled maturity or (ii) failure to make a principal payment on such Debt when due and such defaulted payment is not made, waived or extended within the applicable grace period;

 

(f)                                   one or more final judgments or orders for the payment of money are rendered against the Parent Guarantor or any of its Restricted Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $50.0 million (in excess of amounts which the Parent Guarantor’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;

 

(g)                                  the Parent Guarantor, either Issuer or any Significant Restricted Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

 

(i)                                     commences a voluntary case,

 

(ii)                                  consents to the entry of an order for relief against it in an involuntary case,

 

69

 

(iii)                               consents to the appointment of a custodian of it or for all or substantially all of its property,

 

(iv)                              makes a general assignment for the benefit of its creditors, or

 

(v)                                 generally is not paying its debts as they become due;

 

(h)                                 a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                     is for relief against the Parent Guarantor, either Issuer or any Significant Restricted Subsidiary in an involuntary case,

 

(ii)                                  appoints a custodian of the Parent Guarantor, either Issuer or any Significant Restricted Subsidiary or for all or substantially all of the property of the Parent Guarantor, either Issuer or any Significant Restricted Subsidiary, or

 

(iii)                               orders the liquidation of the Parent Guarantor, either Issuer or any Significant Restricted Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days; or

 

(i)                                     any Note Guaranty ceases to be in full force and effect, other than in accordance the terms of the Indenture, or a Guarantor denies or disaffirms its obligations under its Note Guaranty.

 

Section 7.02                             Acceleration.

 

If any Event of Default (other than an Event of Default specified in Section 7.01(g) or (h) hereof with respect to the Parent Guarantor or the Company) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Issuers (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued interest on the Notes to be immediately due and payable.  Upon a declaration of acceleration, such principal and accrued interest shall become due and payable immediately.  Notwithstanding the foregoing, if an Event of Default specified in Section 7.01(g) or (h) hereof occurs with respect to the Parent Guarantor or the Company, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of a majority in principal amount of the outstanding Notes by written notice to the Issuers and to the Trustee may waive all past Defaults and rescind and annul a declaration of acceleration and its consequences if:

 

(1) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by the declaration of acceleration, have been cured or waived, and

 

70

 

(2) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

In the event of a declaration of acceleration of the Notes because an Event of Default described in Section 7.01(e) has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically annulled, without any action by the Trustee or the Holders, if the Event of Default or payment default triggering such Event of Default pursuant to Section 7.01(e) shall be remedied or cured, or rescinded or waived by the holders of the Debt, or the Debt that gave rise to such Event of Default shall have been discharged in full, within 30 days after the declaration of acceleration with respect thereto and if (i) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (ii) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

 

Section 7.03                             Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or the Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative to the extent permitted by law.

 

Section 7.04                             Waiver of Past Defaults.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except as provided in Section 7.02 and Section 10.02.  Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 7.05                             Control by Majority.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines in good faith may be unduly prejudicial to the rights of other Holders of Notes (it being understood that the Trustee has no affirmative duty to determine whether or not such direction is unduly prejudicial to such Holders) or that may involve the Trustee in personal liability. In addition, the Trustee may take any other action it deems proper that is not inconsistent with any such direction received from the Holders of Notes. The Trustee shall not be obligated to take any action 

 

71

 

at the direction of Holders unless such Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee.

 

Section 7.06                             Limitation on Suits.

 

A Holder of a Note may not institute any proceeding, judicial or otherwise, with respect to the Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy under the Indenture or the Notes, unless:

 

(a)                                 the Holder of a Note gives to the Trustee written notice of a continuing Event of Default;

 

(b)                                 the Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to institute proceedings in respect of the Event of Default in its own name as Trustee under the Indenture;

 

(c)                                  such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

 

(d)                                 the Trustee does for 60 days after its receipt of such notice, request and offer of indemnity fails to institute any such proceeding; and

 

(e)                                  during such 60-day period, the Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such written request.

 

A Holder of a Note may not use the Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 7.07                             Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of the Indenture, the right of any Holder of a Note to receive payment of principal of or interest on its Note on or after the Stated Maturities thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 7.08                             Collection Suit by Trustee.

 

If an Event of Default specified in Section 7.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover a judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

72

 

Section 7.09          Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to an Issuer or any of the Subsidiary Guarantors (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07 hereof.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 7.10          Priorities.

 

If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order:

 

First:  to the Trustee, its agents and attorneys for amounts due under Section 8.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second:  to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and interest, respectively; and

 

Third:  to the Issuers, the Parent Guarantor or the Subsidiary Guarantors or to such other party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 7.10.

 

73

 

Section 7.11          Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 7.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

 

ARTICLE VIII
 TRUSTEE

 

Section 8.01          Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise that a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

(b)           Except during the continuance of an Event of Default:

 

(i)            the duties of the Trustee shall be determined solely by the express provisions of the Indenture and the Trustee need perform only those duties that are specifically set forth in the Indenture and no others, and no implied covenants or obligations shall be read into the Indenture against the Trustee; and

 

(ii)           in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of the Indenture.  However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)           The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(i)            this paragraph does not limit the effect of paragraph (b) of this Section;

 

(ii)           the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)          the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to any provision 

 

74

 

of the Indenture relating to the time, method and place of conducting any proceeding or remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under the Indenture.

 

(d)           Whether or not therein expressly so provided, every provision of the Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section.

 

(e)           No provision of the Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability.  The Trustee shall be under no obligation to exercise any of its rights and powers under the Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security or indemnity satisfactory to it against any loss, liability or expense.

 

(f)            The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company or the Parent Guarantor.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 8.02          Rights of Trustee.

 

(a)           Subject to the provisions of Section 8.01(a) hereof, the Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or matter stated in the document, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinion.

 

(b)           Before the Trustee acts or refrains from acting in the administration of the Indenture, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(c)           The Trustee may execute any of its trusts or powers or perform any duties under the Indenture either directly by or through agents or attorneys, and may in all cases pay, subject to reimbursement as provided herein, such reasonable compensation as it deems proper to all such agents and attorneys employed or retained by it, and the Trustee shall not be responsible for any misconduct or negligence of any agent or attorney appointed with due care.

 

(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by the Indenture.

 

(e)           Unless otherwise specifically provided in the Indenture, any demand, request, direction or notice from an Issuer, the Parent Guarantor or any Subsidiary Guarantor shall be sufficient if signed by an Officer of the Company (in the case of the Company), by an Officer of the Co-issuer (in the case of the Co-issuer), by an Officer of the Parent Guarantor (in the case of the Parent Guarantor) or by an Officer of such Subsidiary Guarantor (in the case of such Subsidiary Guarantor).

 

75

 

(f)            The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the claims, costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(g)           The Trustee is not required to make any inquiry or investigation into facts or matters stated in any document but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee determines to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney at the sole cost of the Issuers and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

 

(h)           The Trustee is not required to take notice or shall not be deemed to have notice of any Default or Event of Default hereunder except Defaults or Events of Default under Sections 7.01(a) and 7.01(b) hereof, unless a Responsible Officer of the Trustee has actual knowledge thereof or has received notice in writing of such Default or Event of Default from the Issuers or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding and such notice references the Notes and this Supplemental Indenture, and in the absence of any such notice, the Trustee may conclusively assume that no such Default or Event of Default exists.

 

(i)            The Trustee is not required to give any bond or surety with respect to the performance of its duties or the exercise of its powers under the Indenture.

 

(j)            Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Notes.

 

(k)           In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders of Notes, each representing less than the aggregate principal amount of Notes outstanding required to take any action hereunder, the Trustee, in its sole discretion may determine what action, if any, shall be taken.

 

(l)            The Trustee’s immunities and protections from liability and its right to indemnification in connection with the performance of its duties under the Indenture shall extend to the Trustee’s officers, directors, agents, attorneys and employees.  Such immunities and protections and right to indemnification, together with the Trustee’s right to compensation, shall survive the Trustee’s resignation of removal, the discharge of the Indenture and final payments of the Notes.

 

(m)          The permissive right of the Trustee to take actions permitted by the Indenture shall not be construed as an obligation or duty to do so.

 

(n)           Except for information provided by the Trustee concerning the Trustee, the Trustee shall have no responsibility for any information and any offering memorandum, disclosure material or prospectus distributed with respect to the Notes.

 

(o)           The Trustee shall not be liable for any action taken or omitted by it in good faith at the direction of the Holders of not less than a majority in aggregate principal amount of the 

 

76

 

Notes as to the time, method, and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by the Indenture.

 

(p)           Subject to Section 8.01(d), whether or not therein expressly so provided, every provision of the Indenture relating to the conduct of, or affecting the liability of, or affording protection to the Trustee shall be subject to the provisions of this Section 8.02.

 

(q)           Any action taken, or omitted to be taken, by the Trustee in good faith, pursuant to the Indenture upon the request or authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the Holder of any Note shall be conclusive and binding upon all future Holders of that Note and upon securities executed and delivered in exchange therefore or in place thereof.

 

(r)            In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

Section 8.03          Individual Rights of Trustee.

 

The Trustee in its commercial banking or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Parent Guarantor or any Affiliate of the Parent Guarantor with the same rights it would have if it were not Trustee.  Any Affiliate of the Trustee or Agent may do the same with like rights and duties.  However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) after a Default has occurred and is continuing it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign.  The Trustee is also subject to Sections 8.10 and 8.11 hereof.

 

Section 8.04          Trustee’s Disclaimer.

 

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of the Indenture, the Notes or the Note Guaranties, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to an Issuer or upon an Issuer’s direction under any provision of the Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to the Indenture other than its certificate of authentication.

 

Section 8.05          Notice of Defaults.

 

If a Default or Event of Default known to the Trustee occurs and is continuing, the Trustee shall send to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs, unless the Default has been cured. Except in the case of a Default or Event of Default in payment of principal of or interest on any Note, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

77

 

Section 8.06          Reports by Trustee to Holders of the Notes.

 

Within 60 days after each May 15 beginning with the May 15 following the date of this Supplemental Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA Section 313(b)(2).  The Trustee shall also transmit by mail all reports as required by TIA Section 313(c).

 

A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d).  The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 8.07          Compensation and Indemnity.

 

The Issuers, the Parent Guarantor and the Subsidiary Guarantors shall pay to the Trustee from time to time such compensation as shall be agreed upon in writing between the Issuers and the Trustee for its acceptance of the Indenture and services hereunder.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuers, the Parent Guarantor and the Subsidiary Guarantors shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services.  Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Issuers, the Parent Guarantor and the Subsidiary Guarantors, jointly and severally, shall indemnify each of the Trustee or any successor Trustee against any and all losses, damages, claims, liabilities or expenses (including reasonable attorneys’ fees and expenses) incurred by it arising out of or in connection with the acceptance or administration of its duties under the Indenture, including the costs and expenses of enforcing the Indenture against either of the Issuers, the Parent Guarantor or any Subsidiary Guarantor (including this Section 8.07) and defending itself against any claim (whether asserted by an Issuer, the Parent Guarantor, any Subsidiary Guarantor, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith.  The Trustee shall notify the Issuers promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Issuers shall not relieve the Issuers, the Parent Guarantor and the Subsidiary Guarantors of their obligations hereunder.  The Issuers, the Parent Guarantor and the Subsidiary Guarantors shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the Issuers, the Parent Guarantor and the Subsidiary Guarantors shall pay the reasonable fees and expenses of such separate counsel; provided that the Issuers, the Parent Guarantor and the Subsidiary Guarantors will not be required to pay such fees and expenses if they assume the Trustee’s defense with counsel acceptable to and approved by the Trustee (such approval not to be unreasonably withheld) and there is no conflict of interest between the Issuers and the Trustee in connection with such defense.  The Issuers, the Parent Guarantor and the Subsidiary Guarantors need not pay for any settlement made without their consent, which consent 

 

78

 

shall not be unreasonably withheld.  None of the Issuers, the Parent Guarantor or the Subsidiary Guarantors need reimburse the Trustee for any expense or indemnity against any liability or loss of the Trustee to the extent such expense, liability or loss is attributable to the negligence or bad faith of the Trustee.

 

The obligations of the Issuers, the Parent Guarantor and the Subsidiary Guarantors under this Section 8.07 shall survive the satisfaction and discharge of the Indenture.

 

To secure the Issuers’, the Parent Guarantor’s and the Subsidiary Guarantors’ payment obligations in this Section, the Trustee shall have a Lien (which it may exercise through right of set-off) prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Notes.  Such Lien shall survive the satisfaction and discharge of the Indenture.  When the Trustee incurs expenses or renders services after an Event of Default specified in Section 7.01(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable.

 

Section 8.08          Replacement of Trustee.

 

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.  The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers.  The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing.  The Issuers may remove the Trustee if:

 

(a)           the Trustee fails to comply with Section 8.10 hereof;

 

(b)           the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(c)           a custodian or public officer takes charge of the Trustee or its property; or

 

(d)           the Trustee becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers shall promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

 

If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, the Parent Guarantor, any Subsidiary Guarantor or the Holders of Notes of at least 10% in aggregate principal amount of the then outstanding 

 

79

 

Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 8.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under the Indenture.  The successor Trustee shall mail a notice of its succession to Holders of the Notes.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 8.07 hereof.  Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Issuers’, the Parent Guarantor’s and the Subsidiary Guarantors’ obligations under Section 8.07 hereof shall continue for the benefit of the retiring Trustee.

 

Section 8.09          Successor Trustee by Merger, Etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or association, the successor corporation or association without any further act shall be the successor Trustee.  As soon as practicable, the successor Trustee shall mail a notice of its succession to the Issuers and the Holders of the Notes.

 

Section 8.10          Eligibility; Disqualification.

 

There shall at all times be a Trustee hereunder that is a corporation or association organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trust powers, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition.

 

The Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5).  The Trustee is subject to TIA Section 310(b), provided, however, that there shall be excluded from the operation of TIA Section 310(b)(l) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements of such exclusion set forth in TIA Section 310(b)(l) are met.  For purposes of the preceding sentence, the optional provision permitted by the second sentence of Section 310(b)(9) of the Trust Indenture Act shall be applicable.

 

Section 8.11          Preferential Collection of Claims Against Issuers.

 

The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

 

80

 

Section 8.12          USA PATRIOT Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Supplemental Indenture agree that they will provide the Trustee with such information within their possession or control as it may reasonably request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

 

Section 8.13          Force Majeure.

 

In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

ARTICLE IX
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 9.01          Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Issuers may, at the option of the Board of Directors of the Company or the Parent Guarantor, evidenced by a resolution set forth in an Officers’ Certificate, at any time, elect to have either Section 9.02 or 9.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article IX.

 

Section 9.02          Legal Defeasance and Discharge.

 

Upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.02, the Issuers, the Parent Guarantor and the Subsidiary Guarantors shall, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be deemed to have been discharged from their respective Obligations and certain other obligations with respect to all outstanding Notes and Note Guaranties, as applicable, on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Issuers, the Parent Guarantor and the Subsidiary Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 hereof and the other Sections of this Supplemental Indenture referred to in clauses (a) and (b) of this sentence below, and to have satisfied all its other obligations under such Notes and the Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described 

 

81

 

in Section 9.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest on, such Notes when such payments are due, (b) the Issuers’ obligations with respect to such Notes under Sections 3.05, 3.06, 3.07, 3.09, 3.14 and 5.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’, the Parent Guarantor’s and the Subsidiary Guarantors’ obligations in connection therewith and (d) this Article IX.  Subject to compliance with this Article IX, the Issuers may exercise the option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03 hereof.

 

Section 9.03          Covenant Defeasance.

 

Upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.03, the Issuers, the Parent Guarantors and the Subsidiary Guarantors shall, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be released from their obligations under the covenants contained in Sections 4.09, 5.04, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 6.01(a)(ii) and 6.01(a)(iii) hereof and any covenant added to the Indenture subsequent to the Issue Date pursuant to Section 10.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes to the extent permitted by GAAP).  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Issuers may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 7.01 hereof, but, except as specified above, the remainder of the Indenture and such Notes shall be unaffected thereby.  In addition, upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.03 hereof, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, Sections 7.01(c) through 7.01(f)  and Section 7.01(i) hereof shall not constitute Events of Default.

 

Section 9.04          Conditions to Legal Defeasance or Covenant Defeasance.

 

The following shall be the conditions to the application of either Section 9.02 or 9.03 hereof to the outstanding Notes:

 

(a)           the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, U.S. Government Obligations, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest, on the outstanding Notes at the Stated Maturity thereof or on the applicable redemption date, as the case may be, and the Issuers must specify whether the Notes are being defeased to Stated Maturity or to a particular redemption date;

 

82

 

(b)           in the case of an election under Section 9.02 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(c)           in the case of an election under Section 9.03 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(d)           no Default or Event of Default shall have occurred and be continuing either on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other Debt), and the granting of Liens to secure such borrowings);

 

(e)           such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture or any agreement governing other Debt being defeased, discharged or replaced) to which the Parent Guarantor or any of its Subsidiaries is a party or by which the Parent Guarantor or any of its Subsidiaries is bound;

 

(f)            the Issuers shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders over any other creditors of the Issuers, the Parent Guarantor or the Subsidiary Guarantors or with the intent of defeating, hindering, delaying or defrauding other creditors of the Issuers; and

 

(g)           the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 9.05          Deposited Money and Government Securities to be Held in Trust, Other Miscellaneous Provisions.

 

Subject to Section 12.03 hereof, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 9.05, the “Trustee”) pursuant to Section 9.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and the Indenture, to the payment, either directly or through any Paying 

 

83

 

Agent (including either the Parent Guarantor or a Subsidiary thereof acting as a Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

 

The Issuers, the Parent Guarantor and the Subsidiary Guarantors shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to Section 9.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Anything in this Article IX to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from time to time upon the request of the Issuers any money or non-callable U.S. Government Obligations held by it as provided in Section 9.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 9.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

If the Issuers exercise either their Legal Defeasance or Covenant Defeasance option, the Parent Guarantor and each Subsidiary Guarantor shall be released and relieved of any obligations under its Note Guaranty and any security for the Notes (other than the trust fund described in Section 9.04 hereof) shall be released.

 

Section 9.06          Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Obligations in accordance with Section 9.02 or 9.03 hereof, as the case may be, by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers’, the Parent Guarantor’s and the Subsidiary Guarantors’ Obligations under the Indenture, the Notes and the Note Guaranties, as applicable, shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 or 9.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 9.02 or 9.03 hereof, as the case may be; provided, however, that, if the Issuers, the Parent Guarantor or the Subsidiary Guarantors make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its Obligations, the Issuers, the Parent Guarantor and the Subsidiary Guarantors shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

84

 

ARTICLE X
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 10.01       Without Consent of Holders of Notes.

 

Notwithstanding Section 10.02 of the Indenture, the Issuers and the Trustee may amend or supplement the Indenture or the Notes without notice to or consent of any Holder of a Note:

 

(a)           to cure any ambiguity, defect, omission or inconsistency in the Indenture or the Notes;

 

(b)           to comply with the requirements of Section 6.01;

 

(c)           to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA;

 

(d)           to evidence and provide for the acceptance of an appointment by a successor Trustee;

 

(e)           to provide for uncertificated Notes in addition to or in place of Certificated Notes, provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code;

 

(f)            to provide for any Guarantee of the Notes, to secure the Notes or to confirm and evidence the release, termination or discharge of any Guarantee of or Lien securing the Notes when such release, termination or discharge is permitted by the Indenture;

 

(g)           to provide for the issuance of Additional Notes in accordance with the terms of the Indenture;

 

(h)           to conform to the provisions of the Prospectus;

 

(i)            to make any other change that does not materially and adversely affect the rights of any Holder of a Note.

 

Upon the request of the Issuers accompanied by a resolution of the Board of Directors of the Company, authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 10.06 hereof, the Trustee shall join with the Issuers in the execution of any amended or supplemental indenture authorized or permitted by the terms of the Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under the Indenture or otherwise.

 

85

 

Section 10.02       With Consent of Holders of Notes.

 

Except as provided below in this Section 10.02, the Issuers and the Trustee may amend or supplement the Indenture (including Sections 4.09, 5.06 and 5.07 hereof) and the Notes with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes), and, subject to Sections 7.04 and 7.07 hereof, any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes).

 

Upon the request of the Issuers accompanied by a resolution of the Board of Directors of the Company authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 10.06 hereof, the Trustee shall join with the Issuers in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture.

 

It shall not be necessary for the consent of the Holders of Notes under this Section 10.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section becomes effective, the Issuers shall send to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuers to send such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

Subject to Sections 7.04 and 7.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive future compliance in a particular instance by the Issuers with any provision of the Indenture or the Notes.  However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):

 

(a)           reduce the principal amount of or change the Stated Maturity of any installment of principal of any Note;

 

(b)           reduce the rate of or change the Stated Maturity of any interest payment on any Note;

 

(c)           reduce the amount payable upon the redemption of any Note or, in respect of an optional redemption, the times at which any Note may be redeemed or, once notice of redemption has been given, the time at which it must thereupon be redeemed;

 

86

 

(d)           after the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase date thereunder;

 

(e)           make any Note payable in money other than that stated in the Note;

 

(f)            impair the right of any Holder of Notes to receive any principal payment or interest payment on such Holder’s Notes or Note Guaranty, on or after the Stated Maturity thereof, or to institute suit for the enforcement of any such payment;

 

(g)           make any change in the percentage of the principal amount of the Notes whose Holders must consent to an amendment or waiver;

 

(h)           modify or change any provision affecting the ranking of the Notes or any Note Guaranty in a manner materially adverse to the Holders of the Notes; or

 

(i)            make any change in any Note Guaranty that would adversely affect the Holder of Notes.

 

Section 10.03       Compliance with Trust Indenture Act.

 

Every amendment or supplement to the Indenture, the Note Guaranties, or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.

 

Section 10.04       Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver.  If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.  No consent shall be valid or effective for more than 90 days after such record date except to the extent that the requisite number of consents to the amendment, supplement or waiver have been obtained within such 90-day period or as set forth in the next paragraph of this Section 10.04.

 

87

 

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (i) of Section 10.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder’s Note.

 

Section 10.05       Notation or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The Issuers in exchange for all Notes may issue and the Trustee, upon receipt of an Issuer Order, shall authenticate new Notes (accompanied by a notation of the Note Guaranties duly endorsed by the Subsidiary Guarantors) that reflect the amendment, supplement or waiver.  Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

Section 10.06       Trustee to Sign Amendments, Etc.

 

The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article X if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 8.01) shall be fully protected in relying upon, an Officers’ Certificate of the Company and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by the Indenture and that all conditions precedent have been satisfied.

 

Section 10.07       Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture under this Article X, the Indenture or the Notes shall be modified in accordance therewith, and such supplemental indenture shall form a part of the Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

ARTICLE XI
 NOTE GUARANTEES

 

Section 11.01       Note Guaranties.

 

Subject to the provisions of this Article XI, the Parent Guarantor and each of the Subsidiary Guarantors hereby, jointly and severally, unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the other Obligations of the Issuers hereunder or thereunder, that:  (a) the principal of, premium, if any, and interest on the Notes shall be promptly paid in full when due, whether at the Stated Maturity or interest payment or mandatory repurchase date, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes to the extent lawful, and all other Obligations of the Issuers to the Holders or the Trustee under the Indenture and the Notes shall be promptly paid in full or performed, all in accordance with the terms of the Indenture and the Notes; and (b) in case of any extension of time of payment or renewal of any Notes or any of 

 

88

 

such other Obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at Stated Maturity, by acceleration or otherwise.  Failing payment when so due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Parent Guarantor and the Subsidiary Guarantors shall be jointly and severally obligated to pay or perform the same immediately.  The Parent Guarantor and the Subsidiary Guarantors hereby agree that to the fullest extent permitted by applicable law, their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions of the Indenture and the Notes, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance (other than complete performance) which might otherwise constitute a legal or equitable discharge or defense of the Parent Guarantor or a Subsidiary Guarantor.  To the fullest extent permitted by applicable law, the Parent Guarantor and each Subsidiary Guarantor hereby waive diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that its Note Guaranty shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.

 

If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Parent Guarantor or Subsidiary Guarantors, or any custodian, trustee, liquidator or other similar official acting in relation to any of the Issuers, the Parent Guarantor or Subsidiary Guarantors, any amount paid by any of them to the Trustee or such Holder, these Note Guaranties, to the extent theretofore discharged, shall be reinstated in full force and effect.  Each of the Parent Guarantor and the Subsidiary Guarantors agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby until payment in full of all Obligations guaranteed hereby.

 

The Parent Guarantor and each Subsidiary Guarantor further agree that, as between the Parent Guarantor and the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article VII hereof for the purposes of these Note Guaranties, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article VII hereof, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Parent Guarantor and the Subsidiary Guarantors for the purpose of these Note Guaranties.  The Parent Guarantor and the Subsidiary Guarantors shall have the right to seek contribution from the non-paying Parent Guarantor or any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under these Note Guaranties.

 

Section 11.02       Limitation of Guarantor’s Liability.

 

Each Guarantor and, by its acceptance hereof, each Holder hereby confirms that it is its intention that the Note Guaranty of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the 

 

89

 

Note Guaranties.  To effectuate the foregoing intention, each such Person hereby irrevocably agrees that the Obligation of each Guarantor under its Note Guaranty under this Article XI shall be limited to the maximum amount as shall, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of the Guarantor that are relevant under such laws, and after giving effect to any rights to contribution of such Guarantor pursuant to any agreement providing for an equitable contribution among such Guarantor and other Affiliates of the Issuers of payments made by guarantees by such parties, result in the Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent conveyance.  Each Holder, by accepting the benefits hereof, confirms its intention that, in the event of bankruptcy, reorganization or other similar proceeding of any of the Issuers, the Parent Guarantor or any Subsidiary Guarantor in which concurrent claims are made upon a Guarantor hereunder, to the extent such claims shall not be fully satisfied, each such claimant with a valid claim against such Guarantor shall be entitled to a ratable share of all payments by such Guarantor in respect of such concurrent claims.

 

Section 11.03       Execution and Delivery of Notations of Note Guaranties.

 

To evidence the Note Guaranties set forth in Section 11.01 hereof, each Guarantor hereby agrees that a notation of its Note Guaranty substantially in the form of Exhibit B shall be endorsed on each Note authenticated and delivered by the Trustee and that such Note Guaranty shall be executed on behalf of such Guarantor by one of its Officers.

 

The Parent Guarantor and each Subsidiary Guarantor hereby agree that the Note Guaranties set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of the Note Guaranties.  If an Officer whose signature is on the notation of Note Guaranties no longer holds that office at the time the Trustee authenticates the Note on which the notation of the Note Guaranties is endorsed, the Note Guaranties shall be valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guaranties set forth in this Article XI on behalf of the Parent Guarantor and the Subsidiary Guarantors.

 

Section 11.04       Releases.

 

Concurrently with any sale of assets (including, if applicable, all of the Equity Interests of any Subsidiary Guarantor), any Liens in favor of the Trustee in the assets sold thereby shall be released; provided that in the event of an Asset Sale, the Net Cash Proceeds from such sale or other disposition are treated in accordance with the provisions of Section 5.07 hereof.  The Note Guaranty and all other obligations under the Indenture of a Subsidiary Guarantor will terminate and be released:  (i) in connection with any sale or other disposition (including by way of consolidation or merger or otherwise) of the Subsidiary Guarantor or the sale or other disposition of all or substantially all the assets of the Subsidiary Guarantor (other than to the Parent Guarantor or a Restricted Subsidiary), if that sale or other disposition does not violate Section 5.07 hereof; or (ii) upon a disposition of the majority of the Capital Stock of the Subsidiary Guarantor to a third Person, if that sale or other disposition does not violate Section 5.07 hereof and the Subsidiary Guarantor ceases to be a Restricted Subsidiary as a result of the sale or other disposition; or (iii) 

 

90

 

upon a liquidation or dissolution of the Subsidiary Guarantor so long as no Default occurs as a result thereof; or (iv) in connection with the designation by the Parent Guarantor in accordance with Section 5.14 of the Subsidiary Guarantor as an Unrestricted Subsidiary or the Subsidiary Guarantor otherwise ceases to be a Restricted Subsidiary in accordance with Section 5.14; or (v) upon Legal Defeasance or Covenant Defeasance pursuant to Article IX hereof or upon satisfaction and discharge of the Indenture pursuant to Article XII hereof; or (vi) in connection with the release, other than the discharge through payment by the Subsidiary Guarantor, of all other Guarantees by such Restricted Subsidiary of Debt of either Issuer or another Guarantor under the Credit Agreement.

 

Upon delivery by the Company to the Trustee of an Officers’ Certificate to the effect that such sale or other disposition was made in accordance with the provisions of the Indenture, including without limitation Section 5.07 hereof, or such Note Guaranty is to be released pursuant to the provisions of the immediately preceding sentence, the Trustee shall execute any documents reasonably required in order to evidence the release of any Subsidiary Guarantor from all of its obligations under its Note Guaranty and the Indenture.  Any Subsidiary Guarantor not released from its obligations under its Note Guaranty shall remain liable for the full amount of principal of and interest on the Notes and for the other Obligations it has guaranteed pursuant to this Article XI.

 

Section 11.05       “Trustee” to Include Paying Agent.

 

In case at any time any Paying Agent other than the Trustee shall have been appointed by the Issuers and be then acting hereunder, the term “Trustee” as used in this Article XI shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully and for all intents and purposes as if such Paying Agent were named in this Article XI in place of the Trustee.

 

ARTICLE XII
 SATISFACTION AND DISCHARGE

 

Section 12.01       Satisfaction and Discharge.

 

The Indenture shall upon an Issuer Order cease to be of further effect (except for the Issuers’ obligations under Section 8.07 hereof, the Issuers’ rights of optional redemption under Article IV hereof, and the Trustee’s and the Paying Agent’s obligations under Section 12.02 and 12.03 hereof and except as provided in the penultimate paragraph of this Section 12.01) and the Trustee, at the expense of the Issuers, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture when

 

(a)           either

 

(i)            all Notes theretofore authenticated and delivered (other than (A) Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.09 and (B) Notes for whose payment money has been deposited in trust with the Trustee or any Paying Agent and thereafter paid 

 

91

 

to the Issuers or discharged from such trust) have been delivered to the Trustee for cancellation; or

 

(ii)           all such Notes not theretofore delivered to the Trustee for cancellation

 

(A)        have become due and payable;

 

(B)        shall become due and payable at their Stated Maturity within one year by reason of the giving of a notice of redemption or otherwise, or

 

(C)        are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuers,

 

and the Issuers or any Guarantor, in the case of clause (A), (B) or (C) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the benefit of the Holders, cash in U.S. dollars, U.S. Government Obligations or a combination of cash in U.S. dollars and U.S. Government Obligations, in amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of fixed maturity or redemption;

 

(b)           in respect of Section 12.01(a)(ii), no Event of Default shall have occurred and be continuing on the date of such deposit (other than an Event of Default resulting from the borrowing of funds to be applied to such deposit and any similar deposit relating to other Debt and, in each case, the granting of Liens to secure such borrowings) and such deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which the Parent Guarantor or any of its Subsidiaries is a party or by which the Parent Guarantor or any of its Subsidiaries is bound (other than with respect to the borrowing of funds to be applied concurrently to make the deposit required to effect such satisfaction and discharge and any similar concurrent deposit relating to other Debt, and in each case the granting of Liens to secure such borrowings);

 

(c)           the Issuers, the Parent Guarantor or any Subsidiary Guarantor has paid or caused to be paid all sums then due and payable hereunder by the Issuers;

 

(d)           the Issuers have delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at fixed maturity or the redemption date, as the case may be; and

 

(e)           the Issuers have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the Indenture (“Discharge”) have been satisfied.

 

92

 

Notwithstanding the satisfaction and discharge of the Indenture, the Issuers’ obligations in 3.05, 3.06, 3.07, 3.09, 3.14, 5.02, 8.07, 8.08, 12.02, 12.03 and 12.04, and the Trustee’s and Paying Agent’s obligations in Section 12.03 shall survive until the Notes are no longer outstanding.  Thereafter, only the Issuers’ obligations in Section 12.03 shall survive.

 

In order to have money available on a payment date to pay principal (and premium, if any, on) or interest on the Notes, the U.S. Government Obligations shall be payable as to principal (and premium, if any) or interest at least one Business Day before such payment date in such amounts as shall provide the necessary money.  The U.S. Government Obligations shall not be callable at the issuer’s option.

 

Section 12.02       Application of Trust.

 

All money deposited with the Trustee pursuant to Section 12.01 shall be held in trust and, at the written direction of the Issuers, be invested prior to maturity in U.S. Government Obligations, and applied by the Trustee in accordance with the provisions of the Notes and the Indenture, to the payment, either directly or through any Paying Agent as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

Section 12.03       Repayment of the Issuers.

 

The Trustee and the Paying Agent shall promptly pay to the Issuers upon a written request any excess money or securities held by them at any time.

 

Subject to applicable escheat laws, the Trustee and the Paying Agent shall notify the Issuers of, and pay to the Issuers upon written request, any money held by them for the payment of principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided that the Issuers shall have either caused notice of such payment to be sent to each Holder of the Notes entitled thereto no less than 30 days prior to such repayment or within such period shall have published such notice in a financial newspaper of widespread circulation published in The City of New York, including, without limitation, The Wall Street Journal (national edition).  After payment to the Issuers, Holders entitled to the money must look to the Issuers for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease.  In the absence of a written request from the Issuers to return unclaimed funds to the Issuers, the Trustee shall from time to time deliver all unclaimed funds to or as directed by applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance with the customary practices and procedures of the Trustee.

 

Section 12.04       Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 12.01 by reason of any legal proceeding or by reason of any order or judgment of any court of governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’, the Parent Guarantor’s and Subsidiary Guarantors’ Obligations 

 

93

 

under the Indenture, the Notes and the Note Guaranties, as applicable, shall be revived and reinstated as though no deposit has occurred pursuant to Section 12.01 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 12.02, provided, however, that if the Issuers, the Parent Guarantor or the Subsidiary Guarantors have made any payment of interest or premium, if any, on or principal of any Notes because of the reinstatement of their Obligations, the Issuers, the Parent Guarantor or such Subsidiary Guarantors shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE XIII
 MISCELLANEOUS

 

Section 13.01       Notices.

 

Any notice or communication by the Issuers or the Trustee to the others is duly given if in writing (in the English language) and delivered in person or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Issuers, the Parent Guarantor or any Subsidiary Guarantor:

 

Cloud Peak Energy Inc.
 385 Interlocken Crescent, Suite 400
 Broomfield, Colorado 80021

Telecopier No.: (720) 566-3095

Attention:  General Counsel

 

With a copy to:

 

Vinson & Elkins L.L.P.
 666 Fifth Avenue, 26th Floor
 New York, New York 10103-0040
 Telecopier No.:  (917) 849-5353
 Attention:  Shelley Barber

 

If to the Trustee or Paying Agent:

 

Wells Fargo Bank, National Association
 750 St. Paul Place, Suite 1750
 Dallas, Texas 75201
 Attention:  Corporate, Municipal & Escrow Services
 Telecopier No.:  (214) 756-7401

 

The Issuers, the Parent Guarantor, any Subsidiary Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

 

94

 

All notices and communications (other than those sent to Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if sent by facsimile transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder of a Certificated Note shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication to the Holder of a Global Note shall be given in accordance with the applicable procedures of the Depositary. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA.  Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

If either of the Issuers gives a notice or communication to Holders, it shall give a copy to the Trustee and each Agent at the same time.

 

Section 13.02       Communication by Holders of Notes with Other Holders of Notes.

 

The Trustee is subject to TIA Section 312(b), and Holders may communicate pursuant thereto with other Holders with respect to their rights under the Indenture or the Notes.  The Issuers, the Parent Guarantor, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

Section 13.03       Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuers, the Parent Guarantor or any Subsidiary Guarantor to the Trustee to take any action under the Indenture, the Issuers, the Parent Guarantor or such Subsidiary Guarantors shall furnish to the Trustee:

 

(a)           an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.04 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in the Indenture relating to the proposed action have been satisfied; and

 

(b)           an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.04 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one 

 

95

 

or more such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Officer of an Issuer, the Parent Guarantor or any Subsidiary Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel may be based, and may state that it is so based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer or Officers of an Issuer, the Parent Guarantor or such Subsidiary Guarantor stating that the information with respect to such factual matters is in possession of an Issuer, the Parent Guarantor or such Subsidiary Guarantor, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate of opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under the Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 13.04       Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include:

 

(a)           a statement that the person making such certificate or opinion has read such covenant or condition;

 

(b)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(c)           a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(d)           a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

 

Section 13.05       No Personal Liability of Directors, Officers, Employees and Unitholders and No Recourse Against General Partner.

 

No director, officer, employee, incorporator, member or stockholder of the Issuers, the Parent Guarantor or any Subsidiary Guarantor, as such, shall have any liability for any Obligations of the Issuers, the Parent Guarantor or such Subsidiary Guarantor hereunder or under the Notes or any Note Guaranty or for any claim based on, in respect of, or by reason of, such Obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

96

 

Section 13.06       No Adverse Interpretation of Other Agreements.

 

The Indenture may not be used to interpret any other indenture, loan or debt agreement of the Parent Guarantor or any Subsidiary of the Parent Guarantor or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret the Indenture or the Note Guaranties.

 

Section 13.07       Successors.

 

All agreements of the Issuers, the Parent Guarantor and the Subsidiary Guarantors in the Indenture, the Notes and the Note Guaranties shall bind their respective successors.  All agreements of the Trustee in the Indenture shall bind its successors.  Any act or proceeding pursuant to any provision of the Indenture authorized or required to be done or performed by any board, committee or officer of an Issuer shall and may be done and performed with like force and effect by the like board, committee or officer of any successor.

 

Section 13.08       Counterpart Originals.

 

The parties may sign any number of copies of this Supplemental Indenture, and each party hereto may sign any number of separate copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 13.09       Indenture and Notes to Be Construed in Accordance with the Laws of the State of New York.

 

THIS SUPPLEMENTAL INDENTURE, THE INDENTURE, EACH NOTE AND THE NOTE GUARANTIES SHALL BE DEEMED TO BE NEW YORK CONTRACTS, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.

 

Section 13.10       Provisions Required by TIA to Control.

 

If and to the extent that any provision of the Indenture limits, qualifies or conflicts with another provision included in the Indenture which is required to be included in an indenture qualified under the TIA by any of Sections 310 to 318, inclusive, of the TIA, such required provision shall control.

 

Section 13.11       Rules by Trustee, Paying Agent and Registrar.

 

The Trustee may make reasonable rules for action by or a meeting of Holders.  The Registrar and any Paying Agent may make reasonable rules for their functions.

 

97

 

Section 13.12       Severability.

 

In case any provision in the Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 13.13       Table of Contents, Headings, Etc.

 

The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

[Signatures on following pages]

 

98

 

IN WITNESS WHEREOF, the parties have executed this Supplemental Indenture as of the date first written above.

 

 

	
 
    	
CLOUD PEAK ENERGY RESOURCES LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Pechersky
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CLOUD PEAK ENERGY FINANCE   CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Pechersky
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CLOUD PEAK ENERGY INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Pechersky
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    

 

Signature Page to First Supplemental Indenture

 

 

	
 
    	
ARROWHEAD I LLC
    
	
 
    	
ARROWHEAD   II LLC
    
	
 
    	
ARROWHEAD   III LLC
    
	
 
    	
YOUNGS   CREEK HOLDINGS I LLC
    
	
 
    	
YOUNGS   CREEK HOLDINGS II LLC
    
	
 
    	
YOUNGS   CREEK MINING COMPANY, LLC
    
	
 
    	
BIG   METAL COAL CO. LLC
    
	
 
    	
CORDERO   MINING LLC
    
	
 
    	
CORDERO   MINING HOLDINGS LLC
    
	
 
    	
CORDERO   OIL AND GAS LLC
    
	
 
    	
CABALLO ROJO LLC
    
	
 
    	
CABALLO ROJO HOLDINGS LLC
    
	
 
    	
NERCO LLC
    
	
 
    	
NERCO COAL LLC
    
	
 
    	
ANTELOPE   COAL LLC
    
	
 
    	
SPRING   CREEK COAL LLC
    
	
 
    	
NERCO   COAL SALES LLC
    
	
 
    	
PROSPECT   LAND AND DEVELOPMENT LLC
    
	
 
    	
CLOUD   PEAK ENERGY LOGISTICS LLC
    
	
 
    	
KENNECOTT   COAL SALES LLC
    
	
 
    	
RESOURCE   DEVELOPMENT LLC
    
	
 
    	
WESTERN   MINERALS LLC
    
	
 
    	
SEQUATCHIE   VALLEY COAL CORPORATION
    
	
 
    	
CLOUD   PEAK ENERGY SERVICES COMPANY,
    
	
 
    	
as Subsidiary   Guarantors
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Pechersky
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    

 

Signature Page to First Supplemental Indenture

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Patrick T. Giordano
    
	
 
    	
 
    	
Patrick T. Giordano
    
	
 
    	
 
    	
Vice President
    

 

Signature Page to First Supplemental Indenture

 

 

SCHEDULE A

 

Schedule of Subsidiary Guarantors

 

ARROWHEAD I LLC

ARROWHEAD II LLC

ARROWHEAD III LLC

YOUNGS CREEK HOLDINGS I LLC

YOUNGS CREEK HOLDINGS II LLC

YOUNGS CREEK MINING COMPANY, LLC

BIG METAL COAL CO. LLC

CORDERO MINING LLC

CORDERO MINING HOLDINGS LLC

CORDERO OIL AND GAS LLC

CABALLO ROJO LLC

CABALLO ROJO HOLDINGS LLC

NERCO LLC

NERCO COAL LLC

ANTELOPE COAL LLC

SPRING CREEK COAL LLC

NERCO COAL SALES LLC

PROSPECT LAND AND DEVELOPMENT LLC

CLOUD PEAK ENERGY LOGISTICS LLC

KENNECOTT COAL SALES LLC

RESOURCE DEVELOPMENT LLC

WESTERN MINERALS LLC

SEQUATCHIE VALLEY COAL CORPORATION

CLOUD PEAK ENERGY SERVICES COMPANY

 

Schedule A

 

 

Exhibit A

 

FORM OF NOTE

 

[Face of Note]

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.  OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.*

 

CUSIP:  18911X AA5

 

6.375% Senior Note due 2024

 

	
No.       
    	
 
    	
$            
    

 

CLOUD PEAK ENERGY RESOURCES LLC

and

CLOUD PEAK ENERGY FINANCE CORP.

 

promise to pay to                                                or registered assigns, the principal sum of                            dollars of the United States of America [or such greater or lesser amount as may from time to time be endorsed on the Schedule of Exchanges of Interests in the Global Note]†  on March 15, 2024.

 

* This is included in Global Notes only.

 

† This is included in Global Notes only.

 

Exhibit A-1

 

Interest Payment Dates:  March 15 and September 15 of each year

 

Record Dates:  March 1 and September 1

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authorization hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit of the Indenture or be valid or obligatory for any purpose.

 

	
CLOUD PEAK ENERGY RESOURCES LLC
    	
CLOUD PEAK ENERGY FINANCE CORP.
    
	
 
    	
 
    
	
By:
    	
 
    	
By:
    	
 
    
	
Name:
    	
 
    	
Name:
    	
 
    
	
Title:
    	
 
    	
Title:
    	
 
    
						

 

Certificate of Authentication:

 

This is one of the Notes referred to in the within-mentioned Indenture.

 

	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    
	
Date of Authentication:                            ,
    	
 
    

 

Exhibit A-2

 

[Back of Note]

 

6.375% Senior Note due 2024

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.                                      Interest.  Cloud Peak Energy Resources LLC, a Delaware limited liability company (the “Company”), and Cloud Peak Energy Finance Corp., a Delaware corporation (the “Co-issuer” and, together with the Company, the “Issuers”), promise to pay interest on the principal amount of this Note at 6.375% per annum.  The Issuers will pay interest semi-annually on March 15 and September 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from March 11, 2014; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be September 15, 2014.  The Issuers shall pay interest on overdue principal and premium, if any, from time to time on demand at the rate then in effect; the Issuers shall pay interest on overdue installments of interest, without regard to any applicable grace periods, from time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

2.                                      Method of Payment.  The Issuers will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date, even if such Notes are cancelled after such record date and on or before such Interest Payment Date, except as provided in Section 3.12 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium and interest at the office or agency of the Paying Agent maintained for such purpose in Dallas, Texas, or, at the option of the Issuers, payment of interest may be made by check mailed to the Holders at their addresses set forth in the Register, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of, interest and premium on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Issuers or the Paying Agent.  Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

3.                                      Paying Agent and Registrar.  Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or Registrar without prior notice to any Holder.  The Issuers, the Parent Guarantor or any of their Subsidiaries may act in any such capacity.

 

4.                                      Indenture.  The Issuers issued the Notes under an Indenture dated as of March 11, 2014 among the Issuers, the Parent Guarantor, the Subsidiary Guarantors named therein and the Trustee, as supplemented and amended by the First Supplemental Indenture, dated as of March 11, 2014 among the Issuers, the Parent Guarantor, the Subsidiary Guarantors and the Trustee.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture 

 

Exhibit A-3

 

by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb).  The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling to the extent permitted by law.  The Notes are unsecured general obligations of the Issuers.

 

5.                                      Optional Redemption.  Subject to the additional terms and conditions set forth in the Indenture:

 

At any time and from time to time on or after March 15, 2019, the Issuers may redeem the Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).

 

	
12-month period commencing March 15 in Year
    	
 
    	
Percentage
    	
 
    
	
2019
    	
 
    	
103.188
    	
%
    
	
2020
    	
 
    	
102.125
    	
%
    
	
2021
    	
 
    	
101.063
    	
%
    
	
2022 and thereafter
    	
 
    	
100.000
    	
%
    

 

At any time and from time to time prior to March 15, 2017, the Issuers may redeem up to 35% of the original aggregate principal amount of the Notes issued under the Indenture (including any Additional Notes) at a redemption price equal to 106.375% of the principal amount plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), but in an aggregate principal amount not to exceed the net cash proceeds of one or more Equity Offerings; provided that:

 

(i)                  in each case, the redemption takes place not later than 180 days after the closing of the related Equity Offering, and

 

(ii)               not less than 65% of the aggregate principal amount of the Notes originally issued under the Indenture (including any Additional Notes) remains outstanding immediately thereafter.

 

In the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept an Offer to Purchase and the Company (or the third party making the Offer to Purchase in lieu of the Company) purchases all of the Notes held by such Holders, the Issuers will have the right, upon not less than 30 nor more than 60 days’ notice, given not more than 30 days following the purchase pursuant to the Offer to Purchase, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment plus accrued and unpaid interest on the Notes redeemed to the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).

 

Exhibit A-4

 

6.                                      Mandatory Redemption.  Except as set forth in paragraph 7 below, the Issuers shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes or to repurchase the Notes at the option of the Holders.

 

7.                                      Repurchase at Option of Holders.  Subject to the additional terms and conditions set forth in the Indenture:

 

If there is a Change of Control, each Holder of Notes will have the right (except as provided in the proviso to Section 5.06(a) of the Indenture) to require the Company to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes (the “Offer to Purchase”) at a purchase price equal to 101% of the aggregate principal amount of the Notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date).  Within 30 days following any Change of Control, the Company shall send a notice to each Holder setting forth the procedures governing the Offer to Purchase as required by the Indenture and information regarding such other matters as is required under Section 5.06 of the Indenture.  The Holder of this Note may elect to have this Note or a portion hereof in an authorized denomination purchased by completing the form entitled “Option of Holder to Elect Purchase” appearing below and tendering this Note pursuant to the Offer to Purchase.

 

If the Parent Guarantor or any Restricted Subsidiary of the Parent Guarantor consummates an Asset Sale, in certain circumstances specified in Section 5.07 the Company shall commence a pro rata offer to all Holders of Notes and all holders of other Debt that is pari passu in right of payment with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Offer to Purchase”) pursuant to Section 4.09 of the Indenture to purchase the maximum principal amount of Notes and such other pari passu Debt that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date) in accordance with the procedures set forth in the Indenture.  If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds allocated for repurchase of Notes, the Company shall select the Notes to be purchased on a pro rata basis.  Holders of Notes that are the subject of an Offer to Purchase will receive an offer to purchase from the Issuers prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

 

8.                                      Notice of Redemption.  Notice of redemption will be given at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a redemption date if the notice is issued in connection with a Legal Defeasance, Covenant Defeasance or Discharge.  Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 unless all of the Notes held by a Holder are to be redeemed.  On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption unless the Issuers default in making such redemption payment.

 

Exhibit A-5

 

9.                                      Denominations, Transfer, Exchange.  The Notes are in registered form without coupons in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any transfer tax or similar governmental charge required by law or permitted by the Indenture.  The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the portion of any Note being redeemed in part that is not being redeemed.  Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes for redemption or during the period between a record date and the corresponding Interest Payment Date.

 

10.                               Persons Deemed Owners.  The registered Holder of a Note may be treated as its owner for all purposes.

 

11.                               Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes.  Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented for any of the purposes set forth in Section 10.01 of the Indenture, including, without limitation, to cure any ambiguity, defect, omission or inconsistency, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture and to make any other change that does not materially and adversely affect the rights of any Holder.

 

12.                               Defaults and Remedies.  Events of Default include in summary form:  (i) default in the payment of the principal of any Note when the same becomes due and payable at final maturity, upon acceleration or redemption, or otherwise (other than pursuant to an Offer to Purchase); (ii) default in the payment of interest on any Note when the same becomes due and payable, and the default continues for a period of 30 days; (iii) failure by the Company to make an Offer to Purchase and thereafter accept and pay for Notes tendered when and as required pursuant to Section 5.06 or failure by the Issuers or any Guarantor to comply with Section 6.01; (iv) default by the Issuers of the Parent Guarantor in the performance of or breach any other of its covenants or agreements in the Indenture or under the Notes (other than a default specified in clause (i), (ii) or (iii) above) and the default or breach continues for a period of 60 consecutive days (or 90 consecutive days in the case of a failure to comply with the reporting obligations described in Section 5.17) after written notice to the Issuers by the Trustee or to the Issuers and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes; (v) with respect to any Debt of the Parent Guarantor or any of its Significant Restricted Subsidiaries having an outstanding principal amount of $50.0 million or more in the aggregate for all such Debt of all such Persons (i) an event of default that results in such Debt being due and payable prior to its scheduled maturity or (ii) the failure to make a principal payment on such Debt when due and such defaulted payment is not made, waived or extended within the applicable grace period; (vi) one or more final judgments or orders for the payment of money rendered against the Parent Guarantor or any of its Restricted Subsidiaries and not paid or discharged, and there is a period 

 

Exhibit A-6

 

of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $50.0 million (in excess of amounts which the Parent Guarantor’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect; (vii) certain bankruptcy defaults with respect to the Parent Guarantor or any Significant Restricted Subsidiary; or (viii) any Note Guaranty ceases to be in full force and effect, other than in accordance the terms of the Indenture, or a Guarantor denies or disaffirms its obligations under its Note Guaranty.  If any Event of Default (other than an Event of Default specified in the preceding clause (vii)) occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Issuers (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued interest on the Notes to be immediately due and payable.  Upon any such declaration, the Notes shall become due and payable immediately.  Notwithstanding the foregoing, if an Event of Default specified in the preceding clause (vii) occurs with respect to the Parent Guarantor or the Company, all outstanding Notes shall be due and payable immediately without further action or notice. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in principal amount of the then outstanding Notes by written notice to the Issuers and to the Trustee may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived and the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal or premium, if any, of the Notes.  The Company is required to deliver to the Trustee annually an Officers’ Certificate regarding compliance with the Indenture, and each Issuer is required, within 30 days of becoming aware of any Default, to notify the Trustee of such Default and what action it proposes to take with respect thereto.

 

13.                               Trustee Dealings with Parent Guarantor.  The Trustee, in its commercial banking or any other capacity, may make loans to, accept deposits from, and perform services for the Parent Guarantor or its Affiliates, and may otherwise deal with the Parent Guarantor or its Affiliates, as if it were not the Trustee.

 

14.                               Personal Liability of Directors, Officers, Employees and Unitholders.  No past, present or future director, officer, employee, incorporator, member or stockholder of the Issuers, the Parent Guarantor or any Subsidiary Guarantor, as such, shall have any liability for any Obligations of the Issuers, the Parent Guarantor or the Subsidiary Guarantors under the Notes, any Note Guaranty or the Indenture, or for any claim based on, in respect of, or by reason of, such 

 

Exhibit A-7

 

Obligations.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.

 

15.                               Authentication.  This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

16.                               Abbreviations.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

17.                               CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture.

 

Requests may be made to:

 

Cloud Peak Energy Inc.

385 Interlocken Crescent, Suite 400

Broomfield, Colorado 80021

Attention:  General Counsel

 

Exhibit A-8

 

ASSIGNMENT

 

To assign this Note, fill in the form below:  (I) or (we) assign and transfer this Note to:

 

(Insert assignee’s soc.  sec.  or tax I.D.  no.)

 

(Print or type name, address and zip code of assignee)

 

and irrevocably appoint                                                                                                                      to transfer this Note on the books of the Issuers.  The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as name appears on the other side of   this Note)
    

 

Signature Guarantee*

 

*                                         NOTICE:  The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs:

 

(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee.

 

Exhibit A-9

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Sections 4.09 and 5.07 or Section 5.06 of the Indenture, check the box below:

 

	
o Sections 4.09 and 5.07
    	
 
    	
o Section 5.06
    

 

If you want to elect to have only part of the Note purchased by the Issuers pursuant to Sections 4.09 and 5.07 or Section 5.06 of the Indenture, state the amount you elect to have purchased (must be a minimum of $2,000 or an integral multiple of $1,000 in excess thereof):

 

	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as name appears on the other side of   this Note)
    

 

Signature Guarantee*

 

*                                         NOTICE:  The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs:

 

(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to the Trustee.

 

Exhibit A-10

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global Note or Certificated Note for an interest in this Global Note, have been made:

 

	
Date of
   Exchange
    	
 
    	
Signature of
   authorized
   signatory
   of Trustee or Note
   Custodian
    	
 
    	
Amount of
   decrease
   in Principal
   amount
   of this Global
   Note
    	
 
    	
Amount of
   increase
   in Principal
   amount
   of this Global
   Note
    	
 
    	
Principal amount
   of this Global
   Note
   following such
   decrease or
   increase
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*                                         This schedule should only be included if the Note is issued in global form.

 

Exhibit A-11

 

EXHIBIT B

 

FORM OF NOTATION OF NOTE GUARANTY

 

Subject to the limitations set forth in the Indenture (the “Indenture”) referred to in the Note upon which this notation is endorsed, Cloud Peak Energy Inc., a Delaware corporation (hereinafter referred to as the “Parent Guarantor,” which term includes any successor) and each of the entities listed on Schedule A thereto (hereinafter referred to as the “Subsidiary Guarantors,” which term includes any successor or additional Subsidiary Guarantor under the Indenture) (i) has unconditionally guaranteed:  (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at the Stated Maturity or interest payment or mandatory repurchase date, by acceleration, redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal of, premium, if any, and interest, to the extent lawful, on the Notes, (c) the due and punctual payment or performance of all other Obligations of the Issuers to the Holders or the Trustee, all in accordance with the terms set forth in the Indenture, and (d) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations, the prompt payment in full thereof when due or performance thereof in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise and (ii) have agreed to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under the Note Guaranties.

 

The Note Guaranties are subject to the limitations set forth in the Indenture, including Article XI thereof.

 

No director, officer, employee, incorporator, member or stockholder, as such, past, present or future, of the Parent Guarantor or any of the Subsidiary Guarantors shall have any liability for any Obligations of the Issuers, the Parent Guarantor or the Subsidiary Guarantors under the Notes, any Note Guaranty or the Indenture, or for any claim based on, in respect of, or by reason of, such Obligations.

 

The Note Guaranties shall be binding upon the Parent Guarantor, each Subsidiary Guarantor and their respective successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party under the Indenture shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions thereof.

 

No Note Guaranty shall be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this notation of Note Guaranty is noted shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized officers.

 

The Parent Guarantor and the Subsidiary Guarantors may be released from their respective Note Guaranties upon the terms and subject to the conditions provided in the Indenture.

 

Exhibit B-1

 

	
 
    	
CLOUD PEAK ENERGY INC.,
    
	
 
    	
 
    
	
 
    	
as Parent Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ARROWHEAD I LLC
    
	
 
    	
ARROWHEAD II LLC
    
	
 
    	
ARROWHEAD III LLC
    
	
 
    	
YOUNGS CREEK HOLDINGS I   LLC
    
	
 
    	
YOUNGS CREEK HOLDINGS II   LLC
    
	
 
    	
YOUNGS CREEK MINING   COMPANY, LLC
    
	
 
    	
BIG METAL COAL CO. LLC
    
	
 
    	
CORDERO MINING LLC
    
	
 
    	
CORDERO MINING HOLDINGS   LLC
    
	
 
    	
CORDERO OIL AND GAS LLC
    
	
 
    	
CABALLO   ROJO LLC
    
	
 
    	
CABALLO   ROJO HOLDINGS LLC
    
	
 
    	
NERCO   LLC
    
	
 
    	
NERCO   COAL LLC
    
	
 
    	
ANTELOPE COAL LLC
    
	
 
    	
SPRING CREEK COAL LLC
    
	
 
    	
NERCO COAL SALES LLC
    
	
 
    	
PROSPECT LAND AND   DEVELOPMENT LLC
    
	
 
    	
CLOUD PEAK ENERGY   LOGISTICS LLC
    
	
 
    	
KENNECOTT COAL SALES LLC
    
	
 
    	
RESOURCE DEVELOPMENT LLC
    
	
 
    	
WESTERN MINERALS LLC
    
	
 
    	
SEQUATCHIE VALLEY COAL   CORPORATION
    
	
 
    	
CLOUD PEAK ENERGY   SERVICES COMPANY,
    
	
 
    	
as Subsidiary   Guarantors
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Bryan Pechersky
    
	
 
    	
 
    	
Senior Vice President, General Counsel and Corporate   Secretary
    

 

Exhibit B-2

 

EXHIBIT C

 

FORM OF SUPPLEMENTAL INDENTURE

 

This SUPPLEMENTAL INDENTURE, dated as of                            ,         , is among Cloud Peak Energy Resources LLC, a Delaware limited liability company (the “Company”), Cloud Peak Energy Finance Corp., a Delaware corporation (the “Co-issuer” and, together with the Company, the “Issuers”), each of the parties identified under the caption “Subsidiary Guarantors” on the signature page hereto (the “Subsidiary Guarantors”) and Wells Fargo Bank, National Association, a national banking association, as Trustee.

 

RECITALS

 

WHEREAS, the Issuers, Cloud Peak Energy Inc., the initial Subsidiary Guarantors and the Trustee entered into an Indenture, dated as of March 11, 2014 (as supplemented and amended by the First Supplemental Indenture dated as of March 11, 2014, the “Indenture”), pursuant to which the Issuers have issued $200,000,000 in principal amount of 6.375% Senior Notes due 2024 (the “Notes”);

 

WHEREAS, Section 10.01 of the Indenture provides that the Issuers and the Trustee may amend or supplement the Indenture in order to add one or more Subsidiary Guarantors pursuant to Section 5.13 or 6.01(e) thereof, without the consent of the Holders of the Notes; and

 

WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Issuers, of the Subsidiary Guarantors and of the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Issuers, the Subsidiary Guarantors and the Trustee, in accordance with its terms, have been duly done and performed;

 

NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the Issuers, the Subsidiary Guarantors and the Trustee covenant and agree for the equal and proportionate benefit of the respective Holders of the Notes as follows:

 

ARTICLE 1

 

This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

 

This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Issuers, the Subsidiary Guarantors and the Trustee.

 

ARTICLE II

 

From this date, in accordance with Section 5.13 or 6.01(e) and by executing this Supplemental Indenture, the Subsidiary Guarantors whose signatures appear below are subject to the provisions of the Indenture to the extent provided for in Article XI thereunder.

 

Exhibit C-1

 

ARTICLE III

 

Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms with all capitalized terms used herein without definition having the same respective meanings ascribed to them as in the Indenture.

 

The Trustee accepts the amendments of the Indenture effected by this Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but on the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Issuers and the Subsidiary Guarantors, and the Trustee makes no representation with respect to any such matters.  Additionally, the Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture

 

THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of such executed copies together shall represent the same agreement.

 

[NEXT PAGE IS SIGNATURE PAGE]

 

Exhibit C-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

 

	
 
    	
CLOUD PEAK ENERGY RESOURCES LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CLOUD PEAK ENERGY FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
SUBSIDIARY GUARANTORS
    
	
 
    	
[
    	
]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL
    
	
 
    	
 
    	
ASSOCIATION,   AS TRUSTEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
						

 

Exhibit C-3Exhibit 4.2

 

EXECUTION VERSION

 

 

THIRD SUPPLEMENTAL INDENTURE

 

Dated as of March 11, 2014

 

Among

 

CF INDUSTRIES, INC.,
 As Issuer

 

CF INDUSTRIES HOLDINGS, INC.,

As a Guarantor

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,
 As Trustee

 

 

5.150% SENIOR NOTES DUE 2034

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture
   Act Section
    	
 
    	
Indenture Section
    
	
310(a)(1)
    	
 
    	
7.10
    
	
(a)(2)
    	
 
    	
7.10
    
	
(a)(3)
    	
 
    	
N.A.
    
	
(a)(4)
    	
 
    	
N.A.
    
	
(a)(5)
    	
 
    	
7.10
    
	
(b)
    	
 
    	
7.10
    
	
(c)
    	
 
    	
N.A.
    
	
311(a)
    	
 
    	
7.11
    
	
(b)
    	
 
    	
7.11
    
	
(c)
    	
 
    	
N.A.
    
	
312(a)
    	
 
    	
2.05
    
	
(b)
    	
 
    	
12.03
    
	
(c)
    	
 
    	
12.03
    
	
313(a)
    	
 
    	
7.06
    
	
(b)(1)
    	
 
    	
N.A.
    
	
(b)(2)
    	
 
    	
7.06;   12.02
    
	
(c)
    	
 
    	
7.06
    
	
(d)
    	
 
    	
7.06
    
	
314(a)
    	
 
    	
4.03,   4.04
    
	
(b)
    	
 
    	
N.A.
    
	
(c)(1)
    	
 
    	
12.04
    
	
(c)(2)
    	
 
    	
12.04
    
	
(c)(3)
    	
 
    	
N.A.
    
	
(d)
    	
 
    	
N.A.
    
	
(e)
    	
 
    	
12.05
    
	
(f)
    	
 
    	
N.A.
    
	
315(a)
    	
 
    	
7.01
    
	
(b)
    	
 
    	
7.05
    
	
(c)
    	
 
    	
7.01
    
	
(d)
    	
 
    	
7.01
    
	
(e)
    	
 
    	
6.12
    
	
316(a) (last sentence)
    	
 
    	
2.10
    
	
(a)(1)(A)
    	
 
    	
6.05
    
	
(a)(1)(B)
    	
 
    	
6.04.
    
	
(a)(2)
    	
 
    	
N.A.
    
	
(b)
    	
 
    	
6.07
    
	
(c)
    	
 
    	
N.A.
    
	
317(a)(1)
    	
 
    	
6.08
    
	
(a)(2)
    	
 
    	
6.09
    
	
(b)
    	
 
    	
2.04
    
	
318(a)
    	
 
    	
12.01
    
	
(b)
    	
 
    	
N.A.
    
	
(c)
    	
 
    	
12.01
    

 

N.A.          means not applicable.

*                           This Cross Reference Table is not part of this Supplemental Indenture (as defined below).

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
 
    	
 
    
	
ARTICLE 1 RELATION TO BASE   INDENTURE; DEFINITIONS AND INCORPORATION
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Relation to Base Indenture
    	
1
    
	
Section 1.02
    	
Definitions
    	
2
    
	
Section 1.03
    	
Other Definitions
    	
13
    
	
Section 1.04
    	
Incorporation by Reference of Trust Indenture Act
    	
14
    
	
Section 1.05
    	
Rules of Construction
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 THE NOTES
    	
15
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Form and Dating
    	
15
    
	
Section 2.02
    	
Execution and Authentication
    	
16
    
	
Section 2.03
    	
Registrar and Paying Agent
    	
16
    
	
Section 2.04
    	
Paying Agent to Hold Money in Trust
    	
17
    
	
Section 2.05
    	
Holder Lists
    	
17
    
	
Section 2.06
    	
Transfer and Exchange
    	
17
    
	
Section 2.07
    	
Issuance of Additional Notes
    	
21
    
	
Section 2.08
    	
Replacement Notes
    	
21
    
	
Section 2.09
    	
Outstanding Notes
    	
22
    
	
Section 2.10
    	
Treasury Notes
    	
22
    
	
Section 2.11
    	
Temporary Notes
    	
22
    
	
Section 2.12
    	
Cancellation
    	
22
    
	
Section 2.13
    	
Defaulted Interest
    	
23
    
	
Section 2.14
    	
CUSIP Numbers
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 REDEMPTION
    	
23
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Notices to Trustee
    	
23
    
	
Section 3.02
    	
Selection of Notes to Be Redeemed or Purchased
    	
24
    
	
Section 3.03
    	
Notice of Redemption
    	
24
    
	
Section 3.04
    	
Effect of Notice of Redemption
    	
25
    
	
Section 3.05
    	
Deposit of Redemption or Purchase Price
    	
25
    
	
Section 3.06
    	
Notes Redeemed or Purchased in Part
    	
25
    
	
Section 3.07
    	
Optional Redemption
    	
26
    
	
Section 3.08
    	
Mandatory Redemption
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 COVENANTS
    	
26
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Payment of Notes
    	
26
    
	
Section 4.02
    	
Maintenance of Office or Agency
    	
26
    
	
Section 4.03
    	
SEC Reports
    	
27
    
	
Section 4.04
    	
Compliance Certificate
    	
27
    
	
Section 4.05
    	
[Intentionally Omitted]
    	
27
    
	
Section 4.06
    	
Stay, Extension and Usury Laws
    	
27
    
	
Section 4.07
    	
[Intentionally Omitted]
    	
28
    

 

 

	
Section 4.08
    	
Offer to Repurchase Upon Change of Control Repurchase Event
    	
28
    
	
Section 4.09
    	
Limitation on Liens
    	
29
    
	
Section 4.10
    	
Limitation on Sale and Leaseback Transactions
    	
29
    
	
Section 4.11
    	
Exemption from Limitations on Liens and Sale and Leaseback   Transactions
    	
29
    
	
Section 4.12
    	
Additional Note Guarantees
    	
30
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 CONSOLIDATION,   MERGER OR SALE OF ASSETS
    	
30
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Merger Consolidation or Sale of Assets
    	
30
    
	
Section 5.02
    	
Successor Corporation Substituted
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 DEFAULT AND   REMEDIES
    	
31
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Events of Default
    	
31
    
	
Section 6.02
    	
Acceleration
    	
33
    
	
Section 6.03
    	
Other Remedies
    	
34
    
	
Section 6.04
    	
Waiver of Past Defaults
    	
34
    
	
Section 6.05
    	
Control by Majority
    	
34
    
	
Section 6.06
    	
Limitation on Suits
    	
34
    
	
Section 6.07
    	
Rights of Holders of Notes to Receive Payment
    	
35
    
	
Section 6.08
    	
Collection Suit by Trustee
    	
35
    
	
Section 6.09
    	
Trustee May File Proofs of Claim
    	
35
    
	
Section 6.10
    	
Application of Proceeds
    	
36
    
	
Section 6.11
    	
Restoration of Rights and Remedies
    	
36
    
	
Section 6.12
    	
Undertaking for Costs
    	
36
    
	
Section 6.13
    	
Rights and Remedies Cumulative
    	
36
    
	
Section 6.14
    	
Delay or Omission not Waiver
    	
37
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 TRUSTEE
    	
37
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Duties of Trustee
    	
37
    
	
Section 7.02
    	
Rights of Trustee
    	
38
    
	
Section 7.03
    	
Individual Rights of Trustee
    	
39
    
	
Section 7.04
    	
Trustee’s Disclaimer
    	
39
    
	
Section 7.05
    	
Notice of Defaults
    	
40
    
	
Section 7.06
    	
Reports by Trustee to Holders
    	
40
    
	
Section 7.07
    	
Compensation and Indemnity
    	
40
    
	
Section 7.08
    	
Replacement of Trustee
    	
41
    
	
Section 7.09
    	
Successor Trustee by Merger, etc.
    	
42
    
	
Section 7.10
    	
Eligibility; Disqualification
    	
42
    
	
Section 7.11
    	
Preferential Collection of Claims Against Company
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 LEGAL DEFEASANCE   AND COVENANT DEFEASANCE
    	
42
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Option to Effect Legal Defeasance or Covenant Defeasance
    	
42
    
	
Section 8.02
    	
Legal Defeasance and Discharge
    	
42
    
	
Section 8.03
    	
Covenant Defeasance
    	
43
    
	
Section 8.04
    	
Conditions to Legal or Covenant Defeasance
    	
43
    
	
Section 8.05
    	
Deposited Money and Government Securities to be Held in   Trust; Other Miscellaneous Provisions
    	
44
    

 

ii

 

	
Section 8.06
    	
Repayment to Company
    	
45
    
	
Section 8.07
    	
Reinstatement
    	
45
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 AMENDMENT,   SUPPLEMENT AND WAIVER
    	
46
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Amendments Without Consent of Holders
    	
46
    
	
Section 9.02
    	
With Consent of Holders
    	
47
    
	
Section 9.03
    	
Compliance with Trust Indenture Act
    	
48
    
	
Section 9.04
    	
Revocation and Effect of Consents
    	
48
    
	
Section 9.05
    	
Notation on or Exchange of Notes
    	
48
    
	
Section 9.06
    	
Trustee to Sign Amendments, etc.
    	
48
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 NOTE GUARANTEES
    	
49
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Guarantee
    	
49
    
	
Section 10.02
    	
Limitation on Guarantor Liability
    	
50
    
	
Section 10.03
    	
Execution and Delivery of Note Guarantee
    	
50
    
	
Section 10.04
    	
Guarantors May Consolidate, etc., on Certain   Terms
    	
50
    
	
Section 10.05
    	
Releases
    	
51
    
	
Section 10.06
    	
Limitation of Requirement for Guarantees by Subsidiary   Guarantors
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 SATISFACTION AND   DISCHARGE
    	
52
    
	
 
    	
 
    	
 
    
	
Section 11.01
    	
Satisfaction and Discharge
    	
52
    
	
Section 11.02
    	
Application of Trust Money
    	
53
    
	
 
    	
 
    	
 
    
	
ARTICLE 12 MISCELLANEOUS
    	
53
    
	
 
    	
 
    	
 
    
	
Section 12.01
    	
Trust Indenture Act of 1939
    	
53
    
	
Section 12.02
    	
Notices
    	
53
    
	
Section 12.03
    	
Communications by Holders with Other Holders
    	
55
    
	
Section 12.04
    	
Certificate and Opinion as to Conditions Precedent
    	
55
    
	
Section 12.05
    	
Statements Required in Certificate or Opinion
    	
55
    
	
Section 12.06
    	
Rules by Trustee and Agents
    	
55
    
	
Section 12.07
    	
No Personal Liability of Directors, Officers, Employees and   Shareholders
    	
56
    
	
Section 12.08
    	
Governing Law; Jury Trial Waiver
    	
56
    
	
Section 12.09
    	
No Adverse Interpretation of Other Agreements
    	
56
    
	
Section 12.10
    	
Successors
    	
56
    
	
Section 12.11
    	
Severability
    	
56
    
	
Section 12.12
    	
Counterpart Originals
    	
56
    
	
Section 12.13
    	
Table of Contents, Headings, etc.
    	
57
    
	
Section 12.14
    	
Legal Holidays
    	
57
    
	
Section 12.15
    	
USA PATRIOT ACT
    	
57
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
FORM OF   NOTE
    	
 
    
				

 

iii

 

THIRD SUPPLEMENTAL INDENTURE, dated as of March 11, 2014 (this “Supplemental Indenture”), among CF Industries, Inc., a Delaware corporation, CF Industries Holdings, Inc., a Delaware Corporation, and Well Fargo Bank, National Association, a national banking association duly incorporated and existing under the laws of the United States of America, as trustee.

 

W I T N E S S E T H:

 

WHEREAS, the Company (as defined below), CF Holdings (as defined below), and the Trustee (as defined below) have heretofore executed and delivered an Indenture, dated as of May 23, 2013 (the “Base Indenture”, and, with respect only to the Notes (as defined below) and the Note Guarantees (as defined below), together with this Supplemental Indenture and including the terms of the Notes, the “Indenture”), providing for the issuance from time to time of one or more series of the Company’s Securities (as defined in the Base Indenture);

 

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a series of Securities to be designated as the “5.150% Senior Notes due 2034” (herein referred to as the “Notes”), the form and substance of the Notes and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Supplemental Indenture;

 

WHEREAS, Section 3.01 of the Base Indenture provides that various matters with respect to any series of Securities issued under the Base Indenture may be established in an indenture supplemental to the Base Indenture;

 

WHEREAS, under Section 14.01(p) of the Base Indenture, the Company, CF Holdings and the Trustee may enter into an indenture supplemental to the Base Indenture to establish the form or terms of Securities of any series as permitted by the Base Indenture; and

 

WHEREAS, all acts and things necessary to make this Supplemental Indenture, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done and performed; and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized.

 

NOW, THEREFORE, the Company, CF Holdings and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) of the Notes:

 

ARTICLE 1
 RELATION TO BASE INDENTURE;
 DEFINITIONS AND INCORPORATION

 

Section 1.01.                         Relation to Base Indenture.

 

This Supplemental Indenture constitutes an integral part of the Indenture.  This Supplemental Indenture supplements, and to the extent inconsistent therewith, replaces the terms of the Base Indenture with respect only to the Notes and the Note Guarantees.  Furthermore, any terms of the Base Indenture not expressly repeated herein shall be deemed inapplicable to the Notes and the Note Guarantees, which shall be governed by and the terms of which are set forth in this Supplemental Indenture.

 

 

Section 1.02.                          Definitions.

 

For purposes of this Supplemental Indenture, the following terms shall have the respective meanings set forth in this Section.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Supplemental Indenture in accordance with Section 2.07 hereof, as part of the same series as the Initial Notes.

 

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

 

“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.

 

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

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of the determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

 

“Bank Credit Facilities” means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit.

 

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

 

“Base Indenture” shall have the meaning set forth in the first paragraph of the Recitals hereof.

 

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

 

“Board of Directors” means:

 

(1)                                 with respect to a corporation, the board of directors of the corporation;

 

2

 

(2)                                 with respect to a partnership, the Board of Directors of the general partner of the partnership;

 

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

 

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

 

“Business Day” means any day other than a Legal Holiday.

 

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

 

“Capital Stock” means:

 

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

 

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

 

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

 

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

 

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

 

“CF Holdings” means CF Industries Holdings, Inc., a Delaware corporation, and any and all successors thereto.

 

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

 

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

 

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

 

(3)                                 the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of CF Holdings, measured by voting power rather than number of shares;

 

(4)                                 CF Holdings ceases to Beneficially Own 100% of the outstanding Equity Interests of the Company; or

 

3

 

(5)                                 the first day on which a majority of the members of the Board of Directors of CF Holdings are not Continuing Directors.

 

“Change of Control Repurchase Event” means the occurrence of a Change of Control and a Ratings Downgrade.

 

“Company” means CF Industries, Inc., a Delaware corporation, and any and all successors thereto.

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate notes of comparable maturity to the remaining term of the Notes.

 

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

 

“Consolidated Total Assets” shall mean, on any date of determination, the total assets of CF Holdings and its Subsidiaries as set forth on the consolidated balance sheet of CF Holdings as of the end of its most recently ended fiscal quarter for which internal financial statements prepared in accordance with GAAP are available.

 

“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of CF Holdings who:

 

(1)                                 was a member of such Board of Directors on the Issue Date; or

 

(2)                                 was nominated for election or elected or appointed to such Board of Directors with the approval (including, without limitation, by approval of the proxy statement issued by CF Holdings in which such member was named as a nominee for election as a director of CF Holdings) of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination, election or appointment.

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business in relation to the Indenture shall be administered, which office at the date hereof is located at 10 South Wacker Drive, 13th Floor, Chicago, Illinois 60606, Attention: Corporate Trust Services, except that, with respect to presentation of the Notes for payment or registration of transfers or exchanges and the location of the Registrar, such term means the office or agency of the Trustee in Minneapolis, Minnesota, which on the Issue Date is located at 608 Second Avenue South, N9303-121, Minneapolis, Minnesota 55479, Attention: Corporate Trust Operations, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

 

“Credit Agreement” means the Amended and Restated Revolving Credit Agreement dated as of May 1, 2012 and amended and restated as of April 22, 2013, among CF Holdings, the Company, the lenders from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Bank, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as issuing banks, and any

 

4

 

related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon termination or otherwise) or refinanced in whole or in part from time to time.

 

“Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement), indentures or commercial paper facilities, in each case, with banks or other lenders or holders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or holders or others or to special purpose entities formed to borrow from such lenders or holders or others against such receivables), letters of credit or debt securities, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors), in each case, in whole or in part from time to time.

 

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

 

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

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Supplemental Indenture.

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

 

“Executive Officer” means, when used in reference to a Person, its president, any vice president of such Person in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer of such Person who performs a policy making function, or any other individual who performs similar policy-making functions for such Person.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company or any committee thereof, unless otherwise provided in the this Supplemental Indenture.

 

“Funded Debt” means all Indebtedness, whether or not evidenced by a bond, debenture, note or similar instrument or agreement, of any Person, for the repayment of borrowed money having a maturity of more than 12 months from the date of its creation or having a maturity of less than 12 months from the date of its creation but by its terms being renewable or extendible beyond 12 months from such date at the option of such Person.  For the purpose of determining “Funded Debt” of any Person, there will be

 

5

 

excluded any particular Indebtedness if, on or prior to the maturity thereof, there will have been deposited with the proper depository in trust the necessary funds for the payment, redemption or satisfaction of such Indebtedness.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.

 

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

 

“Global Notes” means, individually and collectively, each of the Global Notes substantially in the form of Exhibit A hereto issued in accordance with Section 2.01 hereof.

 

“Government Securities” means securities that are (1) direct obligations of the United States for the payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the timely of payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, that, in either case under clauses (1) or (2) are not callable or redeemable at the action of the issuer thereof, and shall also include a depositary receipt issued by a bank or trust company as custodian with respect to any such Government Securities or a specific payment of interest on or principal of any such Government Securities held by such custodian for the account of the holder of a depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Securities or the specific payment of interest on or principal of the Government Securities evidenced by such depositary receipt.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

 

“Guarantors” means CF Holdings and each of (1) CF Holdings’ current and future Subsidiaries other than the Company that is a borrower or guarantor under the Credit Agreement and (2) any other Subsidiary of the Company that executes a Note Guarantee in accordance with the provisions of this Supplemental Indenture.

 

“Hedging Agreement” means any:

 

(1)                                 interest rate swap agreement, interest rate cap agreement and interest rate collar agreement;

 

(2)                                 other agreement or arrangement designed to manage interest rates or interest rate risk; and

 

6

 

(3)                                 other agreement or arrangement designed to protect against or manage fluctuations in currency exchange rates or commodity prices.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under any Hedging Agreements.

 

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

 

“Indebtedness” means, with respect to any specified Person, without duplication, any indebtedness of such Person, whether or not contingent:

 

(1)                                 in respect of borrowed money;

 

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

 

(3)                                 in respect of bankers’ acceptances;

 

(4)                                 representing Capital Lease Obligations;

 

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

 

(6)                                 representing any Hedging Obligations,

 

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP.  In addition, the term “Indebtedness” includes, to the extent not otherwise included, all indebtedness of others secured by a Lien on any assets of the specified Person (whether or not such Indebtedness is assumed by the specified Person) to the extent of the lesser of the Fair Market Value of such assets and the amount of the Indebtedness so secured and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

 

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

 

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

 

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

 

“Indenture” has the meaning set forth in the first paragraph of the Recitals hereof.

 

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

 

“Initial Notes” means the $750,000,000 aggregate principal amount of Notes issued under this Supplemental Indenture on the Issue Date.

 

“Issue Date” means March 11, 2014.

 

7

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease in the nature thereof (provided that in no event will an operating lease be deemed to constitute a Lien).

 

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Note Guarantee” means the Guarantee pursuant to this Supplemental Indenture by a Guarantor of the Company’s obligations under the Notes.

 

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

 

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

 

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

 

“Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an assistant treasurer or an assistant secretary of the Company.

 

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or may be other counsel reasonably satisfactory to the Trustee, that meets the requirements of Section 12.05 hereof.

 

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

 

“Permitted Lien” means any of the following Liens:

 

(1)                                 Liens securing up to $2,500.0 million of Indebtedness and other Obligations under the Credit Facilities;

 

(2)                                 Liens securing any Hedging Agreement between CF Holdings and any of its Subsidiaries, on the one hand, and one or more Persons that are, at the time such Hedging Agreement is entered into, lenders under one or more Bank Credit Facilities of CF Holdings or any of its Subsidiaries (or affiliates of such lenders), on the other hand, which Liens encumber assets that are also subject to Liens securing Indebtedness and other Obligations under the Bank Credit Facilities;

 

8

 

(3)                                 Liens in favor of CF Holdings or any of its Subsidiaries, including, without limitation, Liens securing Indebtedness between or among CF Holdings and any of its Subsidiaries;

 

(4)                                 Liens securing (a) Capital Lease Obligations and (b) other Indebtedness of CF Holdings or any of its Subsidiaries incurred to finance all or any part of the acquisition, lease, construction, installation or improvement of any assets; provided in the case of the immediately-preceding subclauses (a) and (b) that at the time of incurrence thereof, the aggregate principal amount of Capital Lease Obligations and other Indebtedness secured by Liens pursuant to this clause (4) (including subclause (c) of this clause (4)) does not exceed 10% of Consolidated Total Assets, and (c) any refinancing, replacement, refunding, renewal or extension of such Indebtedness in an amount not greater than the principal amount of such Indebtedness secured by the Lien that is refinanced, replaced, refunded, renewed or extended, plus accrued interest and any fees and expenses, including, without limitation, premium or defeasance costs payable in connection with any such extension, renewal or replacement;

 

(5)                                 Liens on any Principal Property existing at the time of its acquisition and Liens created prior to, contemporaneously with or within 270 days after (or created pursuant to firm commitment financing arrangements obtained within that period) the completion of the acquisition, improvement, alteration, construction or commencement of full operation of such property (whichever is latest) to secure Indebtedness incurred for the purposes of payment of the purchase price of such property or the cost of such improvement, alteration, construction or commencement of full operation;

 

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

 

(7)                                 Liens on assets of any Person existing at the time such Person becomes a Subsidiary of CF Holdings; provided that such Liens were in existence prior to and not incurred in contemplation of such Person becoming a Subsidiary of CF Holdings and do not extend to any assets other than those of the Person that became a Subsidiary of CF Holdings;

 

(8)                                 Liens to secure the performance of statutory or regulatory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

 

(9)                                 Liens created or assumed in the ordinary course of business in connection with workmen’s compensation, unemployment insurance or other forms of governmental insurance or benefits or to secure the performance of bids, tenders or trade contracts (other than for Indebtedness);

 

(10)                          Liens arising out of litigation or judgments being contested;

 

(11)                          Liens for taxes, assessments or governmental charges or claims that are not yet delinquent by more than 60 days or that are being contested in good faith (and, if necessary, by appropriate proceedings or for commitments that have not been violated);

 

9

 

(12)                          leases or subleases granted to others and any interest or title of a lessor under any lease not prohibited by this Supplemental Indenture;

 

(13)                          Liens (other than Liens securing Credit Facilities) existing on the Issue Date;

 

(14)                          Liens in favor of the United States or any state thereof, or in favor of any other country, or political subdivision thereof, to secure certain payments pursuant to any contract or statute or to secure any Indebtedness incurred for the purpose of financing all or any part of the purchase price, or, in the case of real property, the cost of construction, of the assets subject to such Liens, including, without limitation, Liens incurred in connection with pollution control, industrial revenue or similar financing;

 

(15)                          zoning restrictions, easements, rights-of-way, restrictions on the use of property, other similar encumbrances incurred in the ordinary course of business and minor irregularities of title, which do not materially interfere with the ordinary conduct of the business of CF Holdings and its Subsidiaries taken as a whole;

 

(16)                          Liens in connection with the operation of cash management programs and Liens associated with the discounting or sale of letters of credit and accounts receivable; and

 

(17)                          any extension, renewal or replacement (and successive extensions, renewals and replacements), in whole or in part, of any Lien referred to in clause (5), (6), (7), (13) or (14) above; provided that (A) such extension, renewal or replacement Lien is limited to the same property that secured the original Lien (plus improvements and accessions to such property) and (B) the principal amount of the Indebtedness secured by the new Lien is not greater than the principal amount of any Indebtedness secured by the Lien that is extended, renewed or replaced, plus accrued interest and any fees and expenses, including, without limitation, premium or defeasance costs, payable in connection with any such extension, renewal or replacement.

 

“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, Governmental Authority or other entity of whatever nature.

 

“Principal Property” means any manufacturing facility, warehouse or other similar facility or any parcel of real estate or group of contiguous parcels of real estate owned by CF Holdings or any of its Subsidiaries (whether owned on the Issue Date or thereafter acquired), in each case located within the United States, that has a book value on the date of which the determination is being made, without deduction of any depreciation reserves, exceeding 1% of Consolidated Total Assets, other than any such facility or parcel or group of contiguous parcels that the issuer reasonably determines is not material to the business of CF Holdings and its Subsidiaries taken as a whole.

 

“Quotation Agent” means a Reference Treasury Dealer appointed by the Company or CF Holdings.

 

“Rating Agency” means (1) each of Moody’s and S&P and (2) if Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) under the Exchange Act selected by the Company as a replacement agency for Moody’s or S&P, or both of them, as the case may be.

 

10

 

“Ratings Downgrade” means the occurrence of any of the following:

 

(1)                                 the Notes have an investment grade credit rating (BBB-/Baa3, or equivalent, or better) from both Rating Agencies at the time of a Change of Control, and such rating from both Rating Agencies is within 60 days of the occurrence of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Rating Agency) either downgraded to a non-investment grade credit rating (BB+/Ba1 or equivalent, or worse) or withdrawn and is not within such period subsequently (in the case of a downgrade) upgraded to an investment grade credit rating or (in the case of a withdrawal) replaced by an investment grade credit rating;

 

(2)                                 the Notes have a non-investment grade credit rating (BB+/Ba1, or equivalent, or worse) from both Rating Agencies at the time of a Change of Control, and such rating from both Rating Agencies is within 60 days of the occurrence of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Rating Agency) downgraded by one or more notches (for illustration, Ba1 to Ba2 being one notch) and is not within such period subsequently upgraded to its earlier rating or better by both Rating Agencies;

 

(3)                                 both (A) the Notes have an investment grade credit rating (BBB-/Baa3, or equivalent, or better) from one Rating Agency at the time of a Change of Control, and such rating is within 60 days of the occurrence of such Change of Control (which period shall be extended so long as the rating of the notes is under publicly announced consideration for possible downgrade by either Rating Agency) either downgraded to a non-investment grade credit rating (BB+/Ba1, or equivalent, or worse) or withdrawn and is not within such period subsequently (in the case of a downgrade) upgraded to an investment grade credit rating by such Rating Agency or (in the case of a withdrawal) replaced by an investment grade credit rating from such Rating Agency and (B) the Notes have a non-investment grade credit rating (BB+/Ba1, or equivalent, or worse) from one Rating Agency at the time of such Change of Control, and such rating is within 60 days of the occurrence of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Rating Agency) downgraded by one or more notches (for illustration, Bal to Ba2 being one notch) and is not within such period subsequently upgraded to its earlier rating or better by such Rating Agency;

 

(4)                                 both (A) the Notes have an investment grade credit rating (BBB-/Baa3, or equivalent, or better) from one Rating Agency at the time of a Change of Control, and such rating is within 60 days of the occurrence of such Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Rating Agency) either downgraded to a non-investment grade credit rating (BB+/Ba1, or equivalent, or worse) or withdrawn and is not within such period subsequently (in the case of a downgrade) upgraded to an investment grade credit rating by such Rating Agency or (in the case of a withdrawal) replaced by an investment grade credit rating from such Rating Agency and (B) the Notes have no credit rating from one Rating Agency, and such Rating Agency does not assign within 60 days of the occurrence of such Change of Control an investment grade credit rating to the Notes;

 

(5)                                 both (A) the Notes have a non-investment grade credit rating (BB+/Ba1, or equivalent, or worse) from one Rating Agency at the time of a Change of Control, and such rating is within 60 days of the occurrence of such Change of Control (which period shall be extended so

 

11

 

long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Rating Agency) downgraded by one or more notches (for illustration, Ba1 to Ba2 being one notch) and is not within such period subsequently upgraded to its earlier credit rating or better by such Rating Agency and (B) the Notes have no credit rating from one Rating Agency, and such Rating Agency does not assign within 60 days of the occurrence of the Change of Control an investment grade credit rating to the Notes; or

 

(6)                                 the Notes have no credit rating from either Rating Agency at the time of a Change of Control and both Rating Agencies do not assign within 60 days of the occurrence of such Change of Control an investment grade credit rating to the Notes;

 

in each case if, and only if, in making the relevant decision(s) referred to above to downgrade or withdraw such ratings, as applicable, the relevant Rating Agency announces publicly or confirms in writing to the Company that such decision(s) resulted, in whole or in part, from the occurrence of the applicable Change of Control.

 

“Reference Treasury Dealer” means Morgan Stanley & Co. LLC or Goldman, Sachs & Co. or their respective successors (or an affiliate thereof that is a Primary Treasury Dealer) and two other primary U.S. government securities dealers in New York City (each a “Primary Treasury Dealer”) selected by the Company; provided, however, that if any of the foregoing is not or shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date with respect to the Notes, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue with respect to the Notes (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date.

 

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

 

“S&P” means Standard & Poor’s Ratings Services.

 

“Sale and Leaseback Transaction” means any arrangement with any Person providing for the leasing by CF Holdings or any Subsidiary of CF Holdings of any Principal Property, which has been or is to be sold or transferred by CF Holdings or any such Subsidiary to such Person with the intention of taking back a lease of such Principal Property, except for leases between CF Holdings and a Subsidiary of CF Holdings or between Subsidiaries of CF Holdings.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor statute or statutes thereto.

 

12

 

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

 

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

 

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

 

(1)                                 any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(2)                                 any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

 

“Subsidiary Guarantor” means a Guarantor that is a Subsidiary of CF Holdings.

 

“Supplemental Indenture” has the meaning set forth in the Preamble hereof.

 

“Terra Nitrogen Entities” means each of Terra Nitrogen, Limited Partnership, Terra Nitrogen Company, L.P. and Terra Nitrogen GP Inc. and each of their respective subsidiaries (each of the foregoing a “Terra Nitrogen Entity”).

 

“TIA” means the Trust Indenture Act of 1939, as amended, or any successor statute or statutes thereto.

 

“Treasury Rate” means, with respect to any redemption date with respect to the Notes, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

“Trustee” means Wells Fargo Bank, National Association, a national banking association duly incorporated and existing under the laws of the United States of America, until a successor replaces it in accordance with the applicable provisions of this Supplemental Indenture and thereafter means the successor serving hereunder.

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

Section 1.03.                          Other Definitions.

 

Each of the following terms is defined in the section set forth opposite such term:

 

13

 

	
Term
    	
 
    	
Section
    
	
“Authentication Order”
    	
 
    	
2.02
    
	
“Covenant Defeasance”
    	
 
    	
8.03
    
	
“Change of   Control Payment”
    	
 
    	
4.08(a)
    
	
“Change of   Control Offer”
    	
 
    	
4.08(a)
    
	
“Change of   Control Payment Date”
    	
 
    	
4.08(a)
    
	
“DTC”
    	
 
    	
2.03
    
	
“Event of   Default”
    	
 
    	
6.01(a)
    
	
“incur”
    	
 
    	
4.09
    
	
“Legal   Defeasance”
    	
 
    	
8.02
    
	
“Liquidated   Damages”
    	
 
    	
6.01(b)
    
	
“Paying   Agent”
    	
 
    	
2.03
    
	
“Payment Default”
    	
 
    	
6.01(a)(4)(A)
    
	
“Registrar”
    	
 
    	
2.03
    
	
“Reports Default Notice”
    	
 
    	
6.01(b)
    
	
“satisfaction and discharge of this Supplemental Indenture”
    	
 
    	
11.01
    
	
“Senior   Notes due 2018”
    	
 
    	
10.05
    
	
“Senior   Notes due 2020”
    	
 
    	
10.05
    
	
“USA   PATRIOT ACT”
    	
 
    	
12.15
    

 

Section 1.04.                          Incorporation by Reference of Trust Indenture Act.

 

Whenever this Supplemental Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Supplemental Indenture.  The following terms used in this Supplemental Indenture that are defined by the TIA have the following meanings:

 

“indenture securities” means the Notes and the Note Guarantees; and

 

“obligor” on the indenture securities means the Company, each Guarantor and any other obligor on the Notes.

 

All other terms used in this Supplemental Indenture that are defined by the TIA, defined by reference in the TIA to another statute or defined by a rule of the SEC under the TIA and not otherwise defined herein have the meanings assigned to them therein.

 

Section 1.05.                          Rules of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(3)                                 “or” is not exclusive;

 

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

 

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

 

14

 

(6)                                 provisions apply to successive events and transactions;

 

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

 

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

 

(9)                                 all references to Sections or Articles refer to Sections or Articles of this Supplemental Indenture (and not the Base Indenture or any other document); and

 

(10)                          use of masculine, feminine or neuter pronouns should not be deemed a limitation, and the use of any such pronouns should be construed to include, where appropriate, the other pronouns.

 

ARTICLE 2
 THE NOTES

 

Section 2.01.                          Form and Dating.

 

(a)                                 The Notes shall be issued in registered global form without interest coupons.  The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. The Company shall furnish any such notations, legends or endorsements to the Trustee in writing.  Each Note shall be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000.

 

The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of the Base Indenture, the provisions of the Note shall govern and be controlling, and to the extent any provision of the Note conflicts with the express provisions of this Supplemental Indenture, the provisions of this Supplemental Indenture shall govern and be controlling.

 

(b)                                 Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon).  Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon).  Each Global Note shall represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time as reflected in the records of the Trustee and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, on the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note to reflect exchanges and redemptions.  The Trustee’s records and the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note shall be noted to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

 

15

 

Section 2.02.                          Execution and Authentication.

 

An Officer must sign the Notes for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

 

A Note will not be valid until authenticated by the manual signature of the Trustee.  The signature will be conclusive evidence that the Note has been authenticated under this Supplemental Indenture.

 

The Trustee shall, upon receipt of a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes for original issue under this Supplemental Indenture, including any Additional Notes issued pursuant to Section 2.07 hereof.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company pursuant to one or more Authentication Orders, except as provided in Section 2.08 hereof.

 

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

 

Section 2.03.                          Registrar and Paying Agent.

 

The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar will keep a register of the Notes and of their transfer and exchange.  The Company may appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.  The Company may change any Paying Agent or Registrar without notice to any Holder.  The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Supplemental Indenture.  If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such.  The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

 

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

 

The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.

 

The Company shall be responsible for making calculations called for under the Notes, including but not limited to determination of redemption price, premium, if any, and any additional amounts or other amounts payable on the Notes.  The Company will make the calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders.  The Company will provide a schedule of its calculations to the Trustee when requested by the Trustee, and the Trustee is entitled to rely conclusively on the accuracy of the Company’s calculations without independent verification.

 

16

 

Section 2.04.                          Paying Agent to Hold Money in Trust.

 

The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money.  If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.

 

Section 2.05.                          Holder Lists.

 

The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders and the Company shall otherwise comply with TIA § 312(a).

 

Section 2.06.                          Transfer and Exchange.

 

(a)                                 Transfer and Exchange of Global Notes.  A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  All Global Notes shall be exchanged by the Company for Definitive Notes if:

 

(1)                                 the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary;

 

(2)                                 the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; or

 

(3)                                 there has occurred and is continuing an Event of Default with respect to the Notes and DTC requests the issuance of Definitive Notes.

 

Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names and in any approved denominations as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.11 hereof.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Sections 2.08 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) and (d) hereof.

 

17

 

None of the Company, any of the Guarantors or the Trustee will be liable for any delay by DTC, its nominee or any direct or indirect DTC participant in identifying the beneficial owners of the Notes.  The Company, the Guarantors and the Trustee may conclusively rely on, and will be protected in relying on, instructions from DTC or its nominee for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the certificated Notes to be issued.

 

(b)                                 Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Supplemental Indenture and the Applicable Procedures. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(1)                                 Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in a Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(1).

 

(2)                                 All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar both:

 

(A)                               a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

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

 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Supplemental Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.

 

(c)                                  Transfer or Exchange of Beneficial Interests in Global Notes for Definitive Notes.  If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

 

18

 

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

 

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

 

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to the previous paragraph at a time when a Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

 

A Holder of Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of a Definitive Note.

 

(e)                                  Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, reasonably required by the Registrar.

 

(f)                                   Legends.  A legend in substantially the following form will appear on all Global Notes issued under this Supplemental Indenture unless specifically stated otherwise in the applicable provisions of this Supplemental Indenture.

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE THIRD SUPPLEMENTAL INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE THIRD SUPPLEMENTAL INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE THIRD SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE THIRD SUPPLEMENTAL INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF CF INDUSTRIES, INC.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE

 

19

 

OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

(g)                                  Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.12 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note and a notation will be made in the records maintained by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on the “Schedule of Exchanges of Interests in the Global Note” attached to such Global Note and a notation will be made in the records maintained by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)                                 General Provisions Relating to Transfers and Exchanges.

 

(1)                                 To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order or at the Registrar’s request.

 

(2)                                 No service charge shall be made to a Holder of a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.11, 3.06, 4.08 and 9.05 hereof).

 

(3)                                 The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(4)                                 All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Supplemental Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(5)                                 The Company shall not be required:

 

20

 

(A)                               to issue, to register the transfer of or to exchange any Notes (i) during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection or (ii) that have been tendered and not withdrawn in connection with a Change of Control Offer;

 

(B)                               to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

 

(C)                               to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(6)                                 Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

 

(7)                                 The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.  Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by DTC.

 

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

 

Section 2.07.                          Issuance of Additional Notes.

 

The Company shall be entitled, upon delivery of an Officers’ Certificate, Opinion of Counsel and Authentication Order, to issue Additional Notes under this Supplemental Indenture which shall have identical terms as the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price and, if applicable, the initial interest accrual date and the initial interest payment date.  The Initial Notes and any Additional Notes issued shall be treated as a single class for all purposes under this Supplemental Indenture, provided that if the Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes, the Additional Notes will have a separate CUSIP number.

 

With respect to any Additional Notes, the Company shall set forth in a resolution of its Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the Trustee, the following information: (1) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Supplemental Indenture and (2) the issue price, the date of issuance and the CUSIP number of such Additional Notes.

 

Section 2.08.                          Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of (i) the Trustee to protect the Trustee and (ii) the Company

 

21

 

to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.  The Company may charge for its expenses in replacing a Note.

 

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

 

Section 2.09.                          Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.09 as not outstanding.  Except as set forth in Section 2.10 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07 hereof.

 

If a Note is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

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

 

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

Section 2.10.                          Treasury Notes.

 

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned will be so disregarded.

 

Section 2.11.                          Temporary Notes.

 

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

 

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

 

Section 2.12.                          Cancellation.

 

The Company or one of its Affiliates at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company or one of its Affiliates may

 

22

 

have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold.  The Registrar, any transfer agent and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment.  The Trustee shall promptly cancel and dispose of in accordance with its customary procedures all Notes surrendered for transfer, exchange, payment or cancellation and upon written request shall deliver a certificate of disposition to the Company.  The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation.

 

Section 2.13.                          Defaulted Interest.

 

If the Company defaults in a payment of interest on the Notes, it will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof.  The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment.  The Company will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

Section 2.14.                          CUSIP Numbers.

 

The Company in issuing the Notes may use CUSIP, ISIN or other similar numbers, if then generally in use, and thereafter with respect to such series, the Trustee may use such numbers in any notice (including any notice of redemption or exchange) provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice (including any notice of redemption or exchange) and that reliance may be placed only on the other identification numbers printed on the Notes, and any such notice or notice of redemption shall not be affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee in writing of any change in the CUSIP, ISIN or other similar numbers.

 

ARTICLE 3

REDEMPTION

 

Section 3.01.                          Notices to Trustee.

 

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers’ Certificate setting forth:

 

(1)                                 the clause of this Supplemental Indenture pursuant to which the redemption shall occur;

 

(2)                                 the redemption date;

 

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

 

(4)                                 the redemption price.

 

23

 

If the redemption price is not known at the time such notice is to be given, the actual redemption price shall be set forth in an Officers’ Certificate of the Company delivered to the Trustee no later than two Business Days prior to the redemption date.

 

Section 3.02.                          Selection of Notes to Be Redeemed or Purchased.

 

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time (subject to Applicable Procedures in the case of Global Notes), the Trustee will select Notes for redemption or purchase by a method the Trustee deems to be fair and appropriate, unless otherwise required by law or applicable stock exchange or depositary requirements; provided that the minimum denominations are preserved.

 

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

 

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased.  Notes and portions of Notes selected shall be in minimum amounts of $2,000 or integral multiples of $1,000 in excess thereof; no Notes of $2,000 or less can be redeemed in part, except that if all of the Notes of a Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder, even if not equal to $2,000 or an integral multiple of $1,000 in excess thereof, shall be redeemed or purchased.  Except as provided in the preceding sentence, provisions of this Supplemental Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

 

Section 3.03.                          Notice of Redemption.

 

At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed by first class mail (or with respect to Global Notes, to the extent permitted or required by applicable DTC procedures or regulations, send electronically or cause to be sent electronically) a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed or sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Supplemental Indenture pursuant to Articles 8 or 11 hereof.

 

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

 

(1)                                 the redemption date;

 

(2)                                 the redemption price, or manner of calculation thereof if not then known;

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45 days prior to the redemption date (unless a shorter time is agreed to by the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 3.04.                          Effect of Notice of Redemption.

 

Once notice of redemption is mailed or sent in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price.  A notice of redemption may not be conditional.

 

Section 3.05.                          Deposit of Redemption or Purchase Price.

 

Not later than 10:00 a.m. (Eastern Time) on the redemption or purchase date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on, all Notes to be redeemed or purchased.

 

If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase.  If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date.  If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

 

Section 3.06.                          Notes Redeemed or Purchased in Part.

 

Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

 

25

 

Section 3.07.                          Optional Redemption.

 

The Company may redeem the Notes, in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of:

 

(1)           100% of the principal amount of the Notes to be redeemed; and

 

(2)           as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (excluding any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points;

 

plus, in each case, accrued and unpaid interest, if any, thereon to, but not including, the redemption date.  Notwithstanding the foregoing, installments of interest on Notes that are due and payable on interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the Holders as of the close of business on the relevant record date.

 

Section 3.08.                          Mandatory Redemption.

 

The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

ARTICLE 4
 COVENANTS

 

Section 4.01.                          Payment of Notes.

 

The Company will pay or cause to be paid the principal of, premium, if any, and interest on, the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, and interest due on the Notes will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due on the Notes.

 

The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

 

Section 4.02.                          Maintenance of Office or Agency.

 

The Company will maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Supplemental Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

26

 

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

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

 

Section 4.03.                          SEC Reports.

 

CF Holdings and the Company shall file with the Trustee and the SEC, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the TIA at the times and in the manner provided in the TIA; provided that, unless available on EDGAR (or any successor system for the submission of documents to the SEC in electronic format), any such information, documents or reports required to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 30 days after the same is filed with the SEC.

 

Delivery of reports, information and documents to the Trustee hereunder is for informational purposes only and the Trustee’s receipt of any such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates or statements delivered to the Trustee pursuant to Section 4.04 hereof).

 

Section 4.04.                          Compliance Certificate.

 

(a)           The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 120 days after the end of each fiscal year ended after the Issue Date, a brief certificate (which need not comply with Section 12.05 hereof) from the principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of the Company’s (or such Guarantor’s) compliance with all conditions and covenants under this Indenture (which compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture) and, in the event of any Default, specifying each such Default and the nature and status thereof of which such person may have knowledge.

 

(b)           So long as any of the Notes are outstanding, the Company will deliver to the Trustee, within 15 Business Days after an Executive Officer of CF Holdings or the Company becomes aware of any Default or Event of Default, a statement specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

 

Section 4.05.                          [Intentionally Omitted].

 

Section 4.06.                          Stay, Extension and Usury Laws.

 

The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Supplemental Indenture; and the Company and 

 

27

 

each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.07.                          [Intentionally Omitted].

 

Section 4.08.                          Offer to Repurchase Upon Change of Control Repurchase Event.

 

(a)           If a Change of Control Repurchase Event occurs, unless the Company has exercised its right to redeem the Notes pursuant to Section 3.07 hereof, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or integral multiples of $1,000 in excess of $2,000) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of repurchase (the “Change of Control Payment”).  Notwithstanding the foregoing, installments of interest on Notes that are due and payable on interest payment dates falling on or prior to a Change of Control Payment Date will be payable on the interest payment date to the Holders as of the close of business on the relevant record date.  Within 30 days following any Change of Control Repurchase Event, the Company shall mail (or with respect to Global Notes, to the extent permitted or required by applicable DTC procedures or regulations, send electronically) a notice to each Holder (and shall provide a copy of such notice to the Trustee):

 

(1)           describing the transaction or transactions that constitute the Change of Control Repurchase Event;

 

(2)           offering to repurchase Notes on the date specified in the notice (the “Change of Control Payment Date”), which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent; and

 

(3)           stating the instructions determined by the Company, consistent with this Section 4.08, that a Holder must follow in order to have its Notes purchased.

 

(b)           The Company shall comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Repurchase Event.  To the extent that the provisions of any securities laws or regulations conflict with this Section 4.08, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 or the Notes by virtue of such compliance.

 

(c)           On the Change of Control Payment Date, the Company shall, to the extent lawful:

 

(1)           accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

 

(2)           deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all notes or portions of Notes properly tendered; and

 

28

 

(3)           deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased.

 

(d)           The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

(e)           Notwithstanding anything to the contrary in this Section 4.08, the Company shall not be required to make a Change of Control Offer upon a Change of Control Repurchase Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.08 and purchases all of the Notes properly tendered and not withdrawn under the Change of Control Offer.

 

Section 4.09.                          Limitation on Liens.

 

Except as provided under Section 4.11 hereof, neither CF Holdings nor any of its Subsidiaries shall create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable for, contingently or otherwise (collectively, “incur”), any Indebtedness secured by a Lien, other than a Permitted Lien, upon any Principal Property without equally and ratably securing any Notes then outstanding (for so long as such Indebtedness is so secured).

 

Section 4.10.                          Limitation on Sale and Leaseback Transactions.

 

Except as provided under Section 4.11 hereof, CF Holdings shall not, and shall not permit any of its Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to a Principal Property and with a lease exceeding three years, other than leases between or among CF Holdings and its Subsidiaries, unless:

 

(1)           CF Holdings and/or such Subsidiary or Subsidiaries would be entitled to incur Indebtedness in an amount equal to or greater than the Attributable Debt in respect of such Sale and Leaseback Transaction, secured by a Lien on such Principal Property without being required to secure the Notes in accordance with Section 4.09 hereof; and

 

(2)           within 120 days after such Sale and Leaseback Transaction, CF Holdings or such Subsidiary applies an amount equal to the greater of the net proceeds of such Sale and Leaseback Transaction and the Fair Market Value at the time of such Sale and Leaseback Transaction of the Principal Property so leased to the retirement of Funded Debt of CF Holdings or any of its Subsidiaries or the purchase, acquisition or, in the case of real property, construction of other property that will constitute Principal Property.

 

Section 4.11.                          Exemption from Limitations on Liens and Sale and Leaseback Transactions.

 

CF Holdings and its Subsidiaries may incur Indebtedness secured by Liens or enter into Sale and Leaseback Transactions that would not otherwise be permitted under Sections 4.09 and 4.10 hereof; provided that, immediately after giving effect thereto, the amount of outstanding Indebtedness secured by a Lien (other than a Permitted Lien) upon any Principal Property (now owned or hereafter acquired) incurred without equally and ratably securing the Notes pursuant to Section 4.09 hereof, plus the aggregate amount of all outstanding Attributable Debt with respect to all such Sale and Leaseback Transactions (not including those that are for less than three years or in respect of which Funded Debt is

 

29

 

retired or property that will constitute Principal Property is purchased, as provided under Section 4.10 hereof), does not exceed 15% of Consolidated Total Assets.

 

Liens and Indebtedness incurred and Sale and Leaseback Transactions entered into by any Terra Nitrogen Entity shall be disregarded, including, without limitation, for purposes of Sections 4.09 and 4.10 hereof, until such time, if any, that such Person is required to become a Guarantor pursuant to Section 4.12 hereof; provided that, at the time such Person is required to become a Guarantor pursuant to such provisions, any such Liens, Indebtedness and Sale and Leaseback Transactions existing at such time shall be disregarded, including, without limitation, for purposes of Sections 4.09 and 4.10 hereof, so long as such Liens, Indebtedness or Sale and Leaseback Transactions were in existence prior such time and not incurred in contemplation of such Person becoming a Guarantor.

 

Section 4.12.                          Additional Note Guarantees.

 

If any Subsidiary of CF Holdings other than the Company becomes a borrower or directly or indirectly guarantees any Indebtedness under the Credit Agreement, CF Holdings shall cause such Subsidiary to, at the same time, execute and deliver to the Trustee a supplemental indenture reasonably satisfactory to the Trustee pursuant to which such Subsidiary will guarantee payment of the Notes on the terms and conditions set forth in Article 10 hereof.  Thereafter, such Subsidiary will be a Subsidiary Guarantor with respect to the Notes until such Subsidiary’s Note Guarantee with respect to the Notes is released in accordance with this Supplemental Indenture.

 

ARTICLE 5
 CONSOLIDATION, MERGER OR SALE OF ASSETS

 

Section 5.01.                          Merger Consolidation or Sale of Assets.

 

(a)           Neither CF Holdings nor the Company will, directly or indirectly: (1) consolidate or merge with or into another Person, other than the Company or CF Holdings, respectively (whether or not CF Holdings or the Company, as the case may be, is the surviving corporation), or (2) sell, assign, transfer, convey, lease or otherwise dispose of all or substantially all of the properties or assets of CF Holdings and its Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

 

(1)           either (a) CF Holdings or the Company, as the case may be, is the survivor formed by or resulting from such consolidation or merger or (b) the surviving or successor entity is a corporation or limited liability company organized or existing under the laws of the United States, any State of the United States or the District of Columbia;

 

(2)           the surviving or successor entity (if other than CF Holdings or the Company, as the case may be) or the person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of CF Holdings or the Company, as the case may be, under the Notes and this Supplemental Indenture pursuant to a supplemental indenture reasonably satisfactory to the Trustee;

 

(3)           immediately after completion of the transaction, no Default or Event of Default has occurred and is continuing; and

 

(4)           the surviving or successor entity shall have delivered to the Trustee an Officers’ Certificate and Opinion of Counsel, each stating that such transaction and any supplemental

 

30

 

indenture entered into in connection with such transaction comply with this Section 5.01 and that all conditions precedent in this Supplemental Indenture relating to such transaction have been complied with.

 

Section 5.02.                          Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of CF Holdings or the Company in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such consolidation or into or with which CF Holdings or the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, in the case of CF Holdings the provisions of this Supplemental Indenture referring to the “CF Holdings” shall refer instead to the surviving or successor Person and not to CF Holdings and in the case of the Company the provisions of this Supplemental Indenture referring to the “Company” shall instead refer to such surviving or successor Person and not the Company), and may exercise every right and power of CF Holdings or the Company, as the case may be, under this Supplemental Indenture with the same effect as if such successor Person had been named as CF Holdings or the Company, as applicable, herein (except that the Company or its successor pursuant to this Section 5.02 shall not be required to be a Guarantor), and thereafter the predecessor Person shall be relieved of all obligations and covenants under this Supplemental Indenture and the Notes or the Note Guarantees, as applicable; provided, however, that (1) the predecessor CF Holdings shall not be relieved from its obligations with respect to its Note Guarantee and (2) the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes, except, in each case, upon a sale of all of CF Holdings’ or the Company’s assets in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof.

 

ARTICLE 6
 DEFAULT AND REMEDIES

 

Section 6.01.                          Events of Default.

 

(a)                                 Each of the following is an “Event of Default”:

 

(1)           default for 30 days in the payment when due of interest on the Notes;

 

(2)           default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;

 

(3)           subject to clause (b) of this Section 6.01, failure by CF Holdings or any of its Subsidiaries to comply with any other covenant or other agreement in this Supplemental Indenture with respect to the Notes or any term in the Notes for 60 days after notice to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

 

(4)           default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by CF Holdings or any of its Subsidiaries (or the payment of which is guaranteed by CF Holdings or any of its Subsidiaries), whether such Indebtedness exists on or prior to or is created after the Issue Date, if that default:

 

31

 

(A) is caused by a failure to pay principal when due at final (and not any interim) maturity of such Indebtedness on or prior to the expiration of the grace period provided in such Indebtedness (a “Payment Default”); or

 

(B) results in the acceleration of such Indebtedness prior to its stated maturity (without such acceleration having been rescinded, annulled or otherwise cured);

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated (without such acceleration having been rescinded, annulled or otherwise cured), aggregates $150.0 million or more;

 

(5)           any Note Guarantee of CF Holdings or a Significant Subsidiary of CF Holdings is held in any judicial proceeding to be unenforceable or invalid or, except as permitted by this Supplemental Indenture, ceases for any reason to be in full force and effect, or CF Holdings or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, that is a Significant Subsidiary of CF Holdings denies or disaffirms its obligations under its Note Guarantee;

 

(6)           CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holdings, pursuant to or within the meaning of Bankruptcy Law:

 

(A)          commences a voluntary case,

 

(B)          consents to the entry of an order for relief against it in an involuntary case,

 

(C)          consents to the appointment of a custodian of it or for all or substantially all of its property,

 

(D)          makes a general assignment for the benefit of its creditors, or

 

(E)           generally is not paying its debts as they become due; or

 

(7)           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)          is for relief against CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holdings in an involuntary case;

 

(B)          appoints a custodian of CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holding; or

 

(C)          orders the liquidation of CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holding;

 

32

 

and the order or decree remains unstayed and in effect for 60 consecutive days.

 

(b)           Notwithstanding clause (3) of Section 6.01(a) hereof or any other provision of this Supplemental Indenture, except as described in the final sentence of this clause (b), the sole remedy for any failure by CF Holdings or the Company to comply with Section 4.03 hereof will be the payment of Liquidated Damages as described in the following sentence, such failure to comply shall not constitute a Default or Event of Default, and Holders will not have any right to accelerate the maturity of the Notes as a result of any such failure to comply.  If a failure by CF Holdings or the Company to comply with Section 4.03 hereof continues for 180 consecutive days after the Company receives from the Trustee, or the Company and the Trustee receive from the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, notice of such failure to comply (such notice, a “Reports Default Notice”), the Company will pay liquidated damages (“Liquidated Damages”) to all Holders at a rate per annum equal to 0.25% of the principal amount of the Notes from the 180th day following the Company’s receipt of such Reports Default Notice to but not including the date on which such failure to comply shall have been cured or waived (and, on such date, Liquidated Damages will cease to accrue).  A failure to comply with Section 4.03 hereof automatically will cease to be continuing and will be deemed cured at such time as CF Holdings or the Company, as applicable, files with the SEC (or, if the SEC will not accept such filing, delivers to Holders or otherwise makes publicly available) the applicable annual report, information, document or other report.  In no event will the Company be required to pay Liquidated Damages at a rate in excess of 0.25% of the principal amount of the Notes per annum, irrespective of the number of Reports Default Notices that may have been received and irrespective of the number of failures to comply with Section 4.03 hereof that may be continuing.  All accrued and unpaid Liquidated Damages, if any, shall be paid by the Company on the next scheduled interest payment date in the same manner as interest on the Notes is payable on such date.  In the case of any Reports Default Notice given by Holders, such Holders shall provide a copy of such Reports Default Notice to the Trustee.  If Liquidated Damages are payable on the Notes, the Company shall provide an Officers’ Certificate to the Trustee on or before the record date for each Interest Payment Date such Liquidated Damages are payable setting forth the accrual period and the amount of such Liquidated Damages in reasonable detail, provided that the failure to deliver such Officers’ Certificate shall not constitute a Default or Event of Default. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Liquidated Damages are payable. If the Company has paid Liquidated Damages directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officers’ Certificate setting forth the particulars of such payment, provided that the failure to deliver such Officers’ Certificate shall not constitute a Default or Event of Default.

 

(c)           For purposes of clauses (a)(4), (a)(6) and (a)(7) of this Section 6.01, each Terra Nitrogen Entity will be deemed not to be a Subsidiary of CF Holdings until such time as it is required to become (and during any period in which it is not (and is not required to be)) a Guarantor pursuant to Section 4.12 hereof.

 

Section 6.02.                          Acceleration.

 

In the case of an Event of Default specified in clause (6) or (7) of Section 6.01(a) hereof, with respect to CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holdings, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately by written notice to the Company (and to the Trustee if given by Holders) specifying such Event of Default.  Upon any such declaration, the Notes shall become due and payable immediately.

 

33

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration and its consequences, if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.

 

Section 6.03.                          Other Remedies.

 

If an Event of Default with respect to the Notes occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Supplemental Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.

 

Section 6.04.                          Waiver of Past Defaults.

 

Subject to Sections 6.02, 6.07 and Section 9.02 hereof, the Holders of a majority in aggregate principal amount of the outstanding Notes (voting as a single class), by notice to the Trustee, may, on behalf of the Holders of all of the Notes, waive an existing Default or Event of Default with respect to the Notes and its consequences, except a Default or Event of Default in the payment of principal of, premium or interest, if any, on any Notes as specified in clause (1) or (2) of Section 6.01(a) hereof.  Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to the Notes arising therefrom shall be deemed to have been cured for every purpose of this Supplemental Indenture and the Company, Trustee and Holders restored to their former position and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Section 6.05.                          Control by Majority.

 

Subject to Sections 7.01 and 7.02(f), the Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes by this Supplemental Indenture.  However, the Trustee may refuse to follow any direction that conflicts with law or this Supplemental Indenture, that the Trustee determines may be unduly prejudicial to the rights of Holders not joining in the giving of such direction or that may involve the Trustee in personal liability.  The Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

 

Section 6.06.                          Limitation on Suits.

 

Except to enforce the right to receive payment of principal, premium, if any, or interest, if any, when due, no Holder of any Note may pursue any remedy with respect to this Supplemental Indenture with respect to the Notes unless:

 

(1)           such Holder has previously given the Trustee notice that an Event of Default is continuing;

 

34

 

(2)           the Holders of at least 25% in aggregate principal amount of the then outstanding Notes have requested the Trustee to pursue the remedy;

 

(3)           such Holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense;

 

(4)           the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

 

(5)           the Holders of a majority in aggregate principal amount of the then outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

 

A Holder may not use this Supplemental Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder.

 

Section 6.07.                          Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this Supplemental Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on such Note, on or after the respective due dates expressed in such Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 6.08.                          Collection Suit by Trustee.

 

If an Event of Default specified in Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as Trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09.                          Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under

 

35

 

any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.  The Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

Section 6.10.                          Application of Proceeds.

 

If the Trustee collects any money or property pursuant to this Article 6, or after an Event of Default any moneys or properties distributable in respect of the Company’s or any Guarantor’s obligations under this Supplemental Indenture, it shall pay out the money or property in the following order:

 

First:                          to the Trustee, its agents and attorneys and any predecessor Trustee for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second:            to Holders for amounts due and unpaid on such Notes for principal, premium, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

 

Third:                      to the Company or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

 

Section 6.11.                          Restoration of Rights and Remedies.

 

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Supplemental Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored to their former positions hereunder and thereafter all rights and remedies of the Company, Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 6.12.                          Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Supplemental Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.12 does not apply to a suit by a Holder pursuant to Section 6.07 hereof, a suit instituted by the Trustee or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

 

Section 6.13.                          Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Notes in Section 2.08 hereof, no right or remedy herein conferred upon or

 

36

 

reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 6.14.                          Delay or Omission not Waiver.

 

No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Subject to Section 6.06 hereof, every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

ARTICLE 7

TRUSTEE

 

Section 7.01.                          Duties of Trustee.

 

(a)                                 If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Supplemental Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(1)                                 the duties of the Trustee will be determined solely by the express provisions of this Supplemental Indenture and the Trustee need perform only those duties that are specifically set forth in this Supplemental Indenture and no others, and no implied covenants or obligations shall be read into this Supplemental Indenture against the Trustee; and

 

(2)                                 in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Supplemental Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein).  However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Supplemental Indenture.

 

(c)                                  The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1)                                 this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

 

(2)                                 the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(3)                                 the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

 

37

 

(d)                                 Whether or not therein expressly so provided, every provision of this Supplemental Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

 

(e)                                  No provision of this Supplemental Indenture will require the Trustee to expend or risk its own funds or incur any liability.  The Trustee will be under no obligation to exercise any of its rights and powers under this Supplemental Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.  The Trustee shall not be required to give any bond or surety in respect of the performance of its powers or duties hereunder. The permissive right of the Trustee to do things enumerated in this Supplemental Indenture shall not be construed as a duty of the Trustee.

 

(f)                                   The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

Section 7.02.                          Rights of Trustee.

 

(a)                                 The Trustee may conclusively rely upon any document (whether in original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on any Officers’ Certificate, Opinion of Counsel, resolution of the Board of Directors, or other request, notice or direction delivered to it pursuant to the terms of this Supplemental Indenture.  The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(c)                                  The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)                                 The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Supplemental Indenture.

 

(e)                                  Unless otherwise specifically provided in this Supplemental Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

 

(f)                                   The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Supplemental Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee an indemnity or security satisfactory to it against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

 

(g)                                  Subject to Section 7.01 hereof, the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and each Agent and Custodian.

 

(h)                                 Subject to Section 7.01 hereof, the Trustee shall not be deemed to have knowledge or notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual

 

38

 

knowledge thereof or unless the Company or Holders of not less than 25% in aggregate principal amount of the Notes then outstanding notify the Trustee thereof by written notice of such event sent to the Trustee in accordance with Section 12.02, and such notice references the Notes and this Supplemental Indenture.

 

(i)                                     Subject to Section 7.01(a) hereof, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of Indebtedness or other paper or document, but the Trustee, may, but shall not be required to, make further inquiry or investigation into such facts or matters as it may see fit.

 

(j)                                    In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

(k)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

 

(l)                                     The Trustee may request that the Company and any Guarantor deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to furnish the Trustee with Officers’ Certificates, directions, requests, and any other matters or directions pursuant to this Supplemental Indenture.

 

(m)                             In no event shall the Trustee be responsible or liable for any special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

Section 7.03.                          Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee or resign as provided in the TIA.  Any Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 7.10 and 7.11 hereof.

 

Section 7.04.                          Trustee’s Disclaimer.

 

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Supplemental Indenture or the Notes or the Note Guarantees, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Supplemental Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Supplemental Indenture other than its certificate of authentication.

 

39

 

Section 7.05.                          Notice of Defaults.

 

If a Default or Event of Default occurs and is continuing and if it is known to a Responsible Officer of the Trustee, the Trustee will mail to Holders a notice of the Default or Event of Default within 90 days after it occurs or, if discovered after 90 days, promptly thereafter.  Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on, any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders.

 

Section 7.06.                          Reports by Trustee to Holders.

 

(a)                                 Within 60 days after each January 15 beginning with January 15, 2015, and for so long as Notes remain outstanding, the Trustee will mail to the Holders a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the 12 months preceding the reporting date, no report need be transmitted).  The Trustee also will comply with TIA § 313(b)(2).  The Trustee will also transmit by mail all reports as required by TIA § 313(c).

 

(b)                                 A copy of each report at the time of its mailing to the Holders will be mailed by the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d).  The Company will promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 7.07.                          Compensation and Indemnity.

 

(a)                                 The Company will pay to the Trustee from time to time reasonable compensation for its acceptance of this Supplemental Indenture and services hereunder.  The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.  The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services.  All amounts set forth in the separate fee letter entered into prior to the date hereof are deemed reasonable.  Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)                                 The Company and the Guarantors will, jointly and severally, indemnify the Trustee against any and all losses, damages, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Supplemental Indenture, including the costs and expenses of enforcing this Supplemental Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its rights, powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith.  The Trustee will notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder.  The Company or such Guarantor will defend the claim and the Trustee will cooperate in the defense.  The Trustee may have separate counsel and the Company will pay the reasonable fees and expenses of such counsel.  Neither the Company nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

 

(c)                                  The obligations of the Company and the Guarantors under this Section 7.07 will survive the satisfaction and discharge of this Supplemental Indenture and the earlier resignation or removal of the Trustee.

 

40

 

(d)                                 To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes.  Such Lien will survive the satisfaction and discharge of this Supplemental Indenture.

 

(e)                                  When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(6) or (7) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)                                   The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.

 

Section 7.08.                          Replacement of Trustee.

 

(a)                                 A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

(b)                                 The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company.  The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing.  The Company may remove the Trustee if:

 

(1)                                 the Trustee fails to comply with Section 7.10 hereof;

 

(2)                                 the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3)                                 a custodian or public officer takes charge of the Trustee or its property; or

 

(4)                                 the Trustee becomes incapable of acting.

 

(c)                                  If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

(d)                                 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)                                  If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)                                   A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Supplemental Indenture.  The successor Trustee will mail a notice of its succession to Holders.  The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided

 

41

 

all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof.  Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 hereof will continue for the benefit of the retiring Trustee.

 

Section 7.09.                          Successor Trustee by Merger, etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

 

Section 7.10.                          Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Supplemental Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5).  The Trustee is subject to TIA § 310(b).  There shall be excluded from the operation of TIA § 310(b)(1) any other series of Securities (as defined in the Base Indenture) under the Base Indenture or any other indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company or any of the Guarantors are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

 

Section 7.11.                          Preferential Collection of Claims Against Company.

 

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

 

ARTICLE 8
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01.                          Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Company may at any time elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and the Note Guarantees upon compliance with the conditions set forth below in this Article 8.

 

Section 8.02.                          Legal Defeasance and Discharge.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by such outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Supplemental Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under

 

42

 

such Notes, the Note Guarantees and this Supplemental Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

 

(1)                                 the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 8.04 hereof;

 

(2)                                 the Company’s obligations with respect to the Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.08, 2.09, 2.10, 2.11 and  4.02 hereof;

 

(3)                                 the rights, powers, trusts, duties and immunities of the Trustee hereunder and the obligations of the Company and each of the Guarantors in connection therewith; and

 

(4)                                 this Article 8.

 

Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.

 

Section 8.03.                          Covenant Defeasance.

 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.03, 4.08, 4.09, 4.10, 4.11, 4.12 and Article 5 hereof with respect to the outstanding Notes on the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and such Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01(a) hereof, but, except as specified above, the remainder of this Supplemental Indenture and such Notes and Note Guarantees will be unaffected thereby.  In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(a)(3), (4) and (5) hereof will not constitute Events of Default.

 

Section 8.04.                          Conditions to Legal or Covenant Defeasance.

 

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02 or 8.03 hereof:

 

(1)                                 the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, Government Securities, or a combination of cash in U.S. dollars and Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the

 

43

 

principal of, or interest and premium, if any, on, the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;

 

(2)                                 in the case of Legal Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the beneficial owners of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(3)                                 in the case of Covenant Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the beneficial owners of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(4)                                 no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

 

(5)                                 such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Supplemental Indenture) to which CF Holdings or any of its Subsidiaries is a party or by which CF Holdings or any of its Subsidiaries is bound;

 

(6)                                 the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

 

(7)                                 the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 8.05.                          Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 8.06 hereof, all money and Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of any Notes to be defeased will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Supplemental Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need

 

44

 

not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of such Notes.

 

Notwithstanding anything in this Article 8 to the contrary, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06.                          Repayment to Company.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on, any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 8.07.                          Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any cash in U.S. dollars or Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under this Supplemental Indenture, the Notes and the Note Guarantees affected thereby will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on, any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

 

45

 

ARTICLE 9
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.                          Amendments Without Consent of Holders.

 

Notwithstanding Section 9.02 of this Supplemental Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Supplemental Indenture, the Notes or the Note Guarantees without the consent of any Holder of any Note:

 

(1)                                 to cure any ambiguity, defect or inconsistency;

 

(2)                                 to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(3)                                 to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, as applicable;

 

(4)                                 to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture of any Holder;

 

(5)                                 to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA;

 

(6)                                 to conform the text of the Indenture, the Note Guarantees or the Notes to any provision of the “Description of the Notes” section of the Company’s prospectus supplement, dated March 6, 2014, relating to the offering of the Initial Notes, to the extent that such provision was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees or the Notes;

 

(7)                                 to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Supplemental Indenture as of the Issue Date;

 

(8)                                 to establish the forms or terms of debt securities of any series;

 

(9)                                 to evidence and provide for the acceptance of appointment by a successor trustee; or

 

(10)                          to allow any Guarantor to execute a supplemental indenture (including without limitation to evidence its Note Guarantee) and/or a Note Guarantee with respect to the Notes.

 

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Supplemental Indenture  and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that adversely affects its own rights, duties or immunities under this Supplemental Indenture or otherwise.

 

46

 

Section 9.02.                          With Consent of Holders.

 

Except as provided in this Section 9.02, the Notes or the Note Guarantees may be amended with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes), the Indenture may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture, the Notes or the Note Guarantees may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes).  Section 2.09 hereof shall determine which Notes are to be considered “outstanding” for purposes of this Section 9.02.

 

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly adversely affects the Trustee’s own rights, duties or immunities under this Supplemental Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental indenture.  It is not necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.  Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of the Indenture or such Notes or Note Guarantees.

 

However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(1)                                 reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(2)                                 reduce the principal of or change the fixed maturity of any Note, alter the provisions with respect to the redemption of the Notes or waive any redemption payment with respect to any Note;

 

(3)                                 reduce the rate of or change the time for payment of interest, including default interest, on any Note;

 

47

 

(4)                                 waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(5)                                 make any Note payable in money other than that stated in the Notes;

 

(6)                                 make any change in the provisions of this Supplemental Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, or interest or premium, if any, on, the Notes;

 

(7)                                 release any Guarantor that is a Significant Subsidiary of CF Holdings from any of its obligations under its Note Guarantee or the Indenture, except in accordance with the terms of the Indenture; or

 

(8)                                 make any change in the preceding amendment and waiver provisions set forth in this paragraph.

 

Section 9.03.                          Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Supplemental Indenture or the Notes will be set forth in a amended or supplemental indenture that complies with the TIA as then in effect.

 

Section 9.04.                          Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective with respect to any Note, a consent to it by a Holder of such Note is a continuing consent by the Holder of such Note and every subsequent Holder of such Note or portion of such Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any such Note.  However, any such Holder or subsequent Holder of such Note may revoke the consent as to such Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

Section 9.05.                          Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The Company in exchange for the affected Note may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate a new Note that reflects the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue new Note will not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06.                          Trustee to Sign Amendments, etc.

 

The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers’ Certificate and an Opinion of Counsel 

 

48

 

stating that the execution of such amended or supplemental indenture is authorized or permitted by this Supplemental Indenture, and an Opinion of Counsel stating, as and if applicable, that that it will constitute the valid and binding obligation of the Company and the Guarantors party thereto, enforceable against the Company and such Guarantors in accordance with its terms, subject to customary exceptions.

 

ARTICLE 10
 NOTE GUARANTEES

 

Section 10.01.                   Guarantee.

 

(a)                                 Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Supplemental Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

 

(1)                                 the principal of, premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

 

(2)                                 in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

 

Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately.  Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

 

(b)                                 Subject to this Article 10, the Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Supplemental Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.  Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Supplemental Indenture.

 

(c)                                  If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

 

(d)                                 Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.  Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Note Guarantee, notwithstanding 

 

49

 

any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee.  The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

 

Section 10.02.                   Limitation on Guarantor Liability.

 

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee.  To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

Section 10.03.                   Execution and Delivery of Note Guarantee.

 

To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that its execution and delivery of this Supplemental Indenture or, if applicable, any supplemental indenture pursuant to Section 4.12 hereof and this Section 10.03 shall evidence its Note Guarantee set forth in Section 10.01 hereof without the need for notation on the Notes.

 

If, after the date of this Supplemental Indenture, any Subsidiary of CF Holdings other than the Company becomes a borrower under the Credit Agreement or directly or indirectly guarantees any Indebtedness under the Credit Agreement, if required by Section 4.12 hereof, the Company will cause such Subsidiary to comply with the provisions of Section 4.12 hereof and this Article 10, to the extent applicable.

 

Section 10.04.                   Guarantors May Consolidate, etc., on Certain Terms.

 

No Subsidiary Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless immediately after giving effect to such transaction, no Default or Event of Default exists.

 

In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee and the due and punctual performance of all of the covenants and conditions of this Supplemental Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor.  All the Note Guarantees so issued will in all respects have the same legal rank and benefit under this Supplemental Indenture as the Note Guarantees theretofore and thereafter evidenced in accordance with the terms of this Supplemental Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.

 

50

 

Except as set forth in Articles 4 and 5 hereof, and notwithstanding the first paragraph of this Section 10.04, nothing contained in this Supplemental Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.

 

Section 10.05.                   Releases.

 

Each Subsidiary Guarantor shall be automatically released and relieved of any obligations under its Note Guarantee:

 

(1)                                 upon the release, discharge or termination of such Subsidiary Guarantor’s Guarantee of the Credit Agreement; or

 

(2)                                 upon the later to occur of (a) the discharge, termination or release of, or the release of such Subsidiary Guarantor from its obligations under, such Subsidiary Guarantor’s Guarantee of the Company’s 6.875% Senior Notes due 2018 (the “Senior Notes due 2018”), including, without limitation, any such discharge, termination or release as a result of retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Senior Notes due 2018, and (b) the discharge, termination or release of, or the release of such Subsidiary Guarantor from its obligations under, such Subsidiary Guarantor’s Guarantee of the Company’s 7.125% Senior Notes due 2020 (the “Senior Notes due 2020”), including, without limitation, any such discharge, termination or release as a result of retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Senior Notes due 2020; or

 

(3)                                 upon Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Supplemental Indenture in accordance with Article 11 hereof.

 

CF Holdings shall be automatically released and relieved of any obligations under its Note Guarantee upon Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of this Supplemental Indenture in accordance with Article 11 hereof.

 

Any Guarantor not released from its obligations under its Note Guarantee as provided in this Section 10.05 will remain liable for the full amount of principal of and interest and premium, if any, on the Notes and for the other obligations of any Guarantor under this Supplemental Indenture as provided in this Article 10.

 

The Company shall notify the Trustee of any Note Guarantee of a Subsidiary Guarantor that is released.  The Trustee shall execute and deliver an appropriate instrument confirming the release of any such Subsidiary Guarantor upon the Company’s request and upon being provided an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent under this Supplemental Indenture to the execution and delivery of such instrument have been complied with as provided herein.

 

Section 10.06.                   Limitation of Requirement for Guarantees by Subsidiary Guarantors.

 

Notwithstanding anything to the contrary, the first sentence of Section 4.12 hereof shall no longer apply and shall have no further force and effect upon the earlier to occur of (a) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Senior Notes due 2018 or the Subsidiaries of CF Holdings other than the Company otherwise 

 

51

 

becoming no longer subject to such a requirement to guarantee the Senior Notes due 2018 and (b) the retirement, discharge or legal or covenant defeasance of, or satisfaction and discharge of the supplemental indenture governing, the Senior Notes due 2020 or the Subsidiaries of CF Holdings other than the Company otherwise becoming no longer subject to such a requirement to guarantee the Senior Notes due 2020.

 

ARTICLE 11
 SATISFACTION AND DISCHARGE

 

Section 11.01.                   Satisfaction and Discharge.

 

This Supplemental Indenture will be discharged, and will cease to be of further effect as to the Notes (this being referred to herein as “satisfaction and discharge of this Supplemental Indenture”), when:

 

(a)                                 either:

 

(1)                                 all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation; or

 

(2)                                 all Notes that have not been delivered to the Trustee for cancellation (A) have become due and payable, (B) will become due and payable at their Stated Maturity within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption and, in the case of the provisions described in (A), (B) or (C), as applicable, of this clause (2), the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, Government Securities, or a combination of cash in U.S. dollars and Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

 

(b)                                 no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit), and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

 

(c)                                  the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Supplemental Indenture with respect to the Notes; and

 

(d)                                 the Company has delivered irrevocable instructions to the Trustee under this Supplemental Indenture with respect to the Notes to apply the deposited money toward the payment of the Notes at maturity or on the applicable redemption date, as the case may be.

 

In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent relating to satisfaction and discharge of this Supplemental Indenture have been complied with.

 

52

 

Upon the satisfaction and discharge of this Supplemental Indenture, the Base Indenture shall be deemed to be automatically discharged and shall be deemed to have ceased to be of further effect as to the Notes to the same extent as the Supplemental Indenture.  Notwithstanding the satisfaction and discharge of this Supplemental Indenture, if money has been deposited with the Trustee pursuant to subclause (2) of clause (a) of this Section 11.01, the provisions of this Section 11.01 and of Sections 11.02 and 8.06 hereof will survive.  In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the satisfaction and discharge of this Supplemental Indenture.

 

Section 11.02.                   Application of Trust Money.

 

Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Supplemental Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Guarantor’s obligations under this Supplemental Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Securities in accordance with Section 11.01 hereof; provided that if the Company has made any payment of principal of, premium, if any, or interest on, any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

ARTICLE 12
 MISCELLANEOUS

 

Section 12.01.                   Trust Indenture Act of 1939.

 

This Supplemental Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA.

 

Section 12.02.                   Notices.

 

Any notice or communication to the Company, any Guarantor or the Trustee shall be sufficiently given if written and (a) delivered in person or (b) mailed by first class mail (certified or registered, return receipt requested) or (c) sent by facsimile transmission or (d) sent by overnight air courier guaranteeing next-day delivery, in each case addressed as follows:

 

53

 

if to the Company and/or any Guarantor:

 

CF Industries, Inc.

4 Parkway North, Suite 400

Deerfield, Illinois  60015

Attention: CFO and General Counsel

Facsimile No.: (847) 405-2711

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

155 North Wacker Drive

Chicago, Illinois 60606-1720

Attention: Richard C. Witzel, Jr.

Facsimile No.: (312) 407-0411

 

if to the Trustee:

 

Wells Fargo Bank, National Association

10 South Wacker Drive, 13th Floor

Chicago, Illinois 60606

Attention: Corporate Trust Services

Facsimile No.: (312) 726-2158

 

The Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses and/or facsimile numbers for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; three Business Days after being deposited in the mail, postage prepaid, if mailed by first class mail (certified or registered, return receipt requested); upon acknowledgment of receipt, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next-day delivery.

 

Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or sent by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar or, with respect to Global Notes, to the extent permitted or required by applicable DTC procedures or regulations, sent electronically.  Any notice or communication will also be so mailed or sent to any Person described in TIA § 313(c), to the extent required by the TIA.  Failure to deliver, mail, transmit or send a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

 

If a notice or communication is delivered, mailed, transmitted or sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

If the Company mails or sends a notice or communication to Holders, it will mail or send a copy to the Trustee and each Agent at the same time.

 

Where this Supplemental Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, 

 

54

 

but such filing shall not be a condition precedent to the validity of any action taken in reliance on such waiver.

 

In case it shall be impracticable to give notice in the manner provided above, including by reason of a suspension of regular mail service, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 12.03.                   Communications by Holders with Other Holders.

 

Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Supplemental Indenture or the Notes.  The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

 

Section 12.04.                   Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to take any action under this Supplemental Indenture, the Company shall furnish to the Trustee:

 

(1)                                 an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Supplemental Indenture relating to the proposed action have been satisfied; and

 

(2)                                 an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 12.05.                   Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Supplemental Indenture (other than the certificate required by Section 4.04(a)) shall include:

 

(1)                                 a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

(2)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;

 

(3)                                 a statement that, in the opinion of each such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)                                 a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with.

 

Section 12.06.                   Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make reasonable rule and set reasonable requirements for its functions.

 

55

 

Section 12.07.                   No Personal Liability of Directors, Officers, Employees and Shareholders.

 

No director, officer, employee, incorporator or stockholder of CF Holdings, and no director, officer, employee, incorporator, member or stockholder of any Subsidiary of CF Holdings, as such, will have any liability for any obligations of the Company or any Guarantor under the Notes, any Note Guarantee or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation.  Each Holder of the Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.  Such waiver and release may not be effective to waive liabilities under the U.S. federal securities laws.

 

Section 12.08.                   Governing Law; Jury Trial Waiver.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

EACH PARTY HERETO, AND EACH HOLDER OF A NOTE BY ACCEPTANCE THEREOF, HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS SUPPLEMENTAL INDENTURE.

 

Section 12.09.                   No Adverse Interpretation of Other Agreements.

 

This Supplemental Indenture may not be used to interpret any other indenture, loan or debt agreement of CF Holdings, the Company or its Subsidiaries or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Supplemental Indenture.

 

Section 12.10.                   Successors.

 

All agreements of the Company in this Supplemental Indenture and the Notes will bind its successors.  All agreements of the Trustee in this Supplemental Indenture will bind its successors.  All agreements of each Guarantor in this Supplemental Indenture will bind its successors, except as otherwise provided in Section 10.05 hereof.

 

Section 12.11.                   Severability.

 

In case any provision in this Supplemental Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby, and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

 

Section 12.12.                   Counterpart Originals.

 

The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy will be an original, but all of them together represent the same agreement.  The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of 

 

56

 

the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 12.13.                   Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Supplemental Indenture and will in no way modify or restrict any of the terms or provisions of the Indenture.

 

Section 12.14.                   Legal Holidays.

 

If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period on any amount that would otherwise have been payable on such payment date if it were not a Legal Holiday. If a regular record date is a Legal Holiday, the record date shall not be affected.

 

Section 12.15.                   USA PATRIOT ACT

 

The Company and Guarantors acknowledge that, in accordance with Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (the “USA PATRIOT ACT”), the Trustee, like all other financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA PATRIOT ACT.

 

[Remainder of page intentionally left blank.]

 

57

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.

 

	
 
    	
CF   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shawn C. Munsell
    
	
 
    	
 
    	
Shawn   C. Munsell
    
	
 
    	
 
    	
Corporate   Treasurer and Assistant Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CF   INDUSTRIES HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shawn C. Munsell
    
	
 
    	
 
    	
Shawn   C. Munsell
    
	
 
    	
 
    	
Corporate   Treasurer and Assistant Secretary
    

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory S. Clarke
    
	
 
    	
 
    	
Gregory   S. Clarke
    
	
 
    	
 
    	
Vice   President
    

 

 

EXHIBIT A

 

FORM OF NOTE

 

[Face of Note]

 

CUSIP/CINS No.                   
 ISIN                   

 

5.150% Senior Notes due 2034

 

	
No.       
    	
$                      
    

 

CF INDUSTRIES, INC.

 

promises to pay to                 , or registered assigns,

 

the principal sum of                                                                  DOLLARS [(or, in the event of adjustment in accordance with the within-mentioned Supplemental Indenture, such other amount as may be stated from time to time on the “Schedule of Exchanges of Interests in the Global Note” attached hereto)]* on March 15, 2034.

 

Interest Payment Dates:  March 15 and September 15

 

Record Dates:  March 1 and September 1

 

Dated:                                , 20

 

*                 The bracketed language should be included only if the Note is issued in global form.

 

 

	
 
    	
CF   INDUSTRIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

A-2

 

	
This   is one of the Notes referred to 
   in the within-mentioned Supplemental Indenture:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
WELLS FARGO BANK, NATIONAL ASSOCIATION, 
   as Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Dated:
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    	
 
    

 

A-3

 

[Back of Note]

 

5.150% Senior Notes due 2034

 

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Supplemental Indenture.]

 

Capitalized terms used herein have the meanings assigned to them in the Supplemental Indenture referred to below unless otherwise indicated.

 

(1)                                 INTEREST. CF Industries, Inc., a corporation organized under the laws of Delaware (the “Company”), promises to pay interest on the principal amount of this Note at 5.150% per annum from                                   , 20    .  The Company will pay interest, if any, semi-annually in arrears on March 15 and September 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be                                   , 20    .  The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, if any (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

(2)                                 METHOD OF PAYMENT.  The Company will pay interest on the Notes (except defaulted interest), to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Supplemental Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose or, at the option of the Company, payment of interest, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent.  Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period on any amount that would otherwise have been payable on such payment date if it were not a Legal Holiday.  If a regular record date is a Legal Holiday, the record date shall not be affected.

 

(3)                                 PAYING AGENT AND REGISTRAR.  Initially, Wells Fargo Bank, National Association, the Trustee, will act as Paying Agent and Registrar.  The Company may change any Paying Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may act in any such capacity.

 

A-4

 

(4)                                 INDENTURE.  The Company issued the Notes under an indenture, dated as of May 23, 2013 (the “Base Indenture”), among the Company, CF Holdings and the Trustee, as supplemented by the Third Supplemental Indenture, dated as of March 11, 2014 (the “Supplemental Indenture” and, together with the Base Indenture as so supplemented, the “Indenture”), among the Company, CF Holdings and the Trustee. The terms of the Notes include those stated in the Supplemental Indenture and those made part of the Supplemental Indenture by reference to the TIA.  The Notes are subject to all such terms, and Holders are referred to the Supplemental Indenture and the TIA for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Base Indenture, the provisions of this Note shall govern and be controlling, and to the extent any provision of this Note conflicts with the express provisions of the Supplemental Indenture, the provisions of the Supplemental Indenture shall govern and be controlling.  The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

 

(5)                                 OPTIONAL REDEMPTION. The Company may redeem the Notes, in whole at any time or in part from time to time, at its option, at a redemption price equal to the greater of:

 

(a)                                 100% of the principal amount of the Notes to be redeemed; and

 

(b)                                 as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (excluding any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points;

 

plus, in each case, accrued and unpaid interest, if any, thereon to, but not including, the redemption date.  Notwithstanding the foregoing, installments of interest on Notes that are due and payable on interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the Holders as of the close of business on the relevant record date.

 

(6)                                 MANDATORY REDEMPTION. The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

(7)                                 OFFER TO REPURCHASE UPON CHANGE OF CONTROL REPURCHASE EVENT.  If a Change of Control Repurchase Event occurs, unless the Company has exercised its right to redeem the Notes pursuant to Section 3.07 of the Supplemental Indenture, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or integral multiples of $1,000 in excess of $2,000) of that Holder’s Notes  at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of repurchase.  Notwithstanding the foregoing, installments of interest on Notes that are due and payable on interest payment dates falling on or prior to a Change of Control Payment Date will be payable on the interest payment date to the Holders as of the close of business on the relevant record date.  Within 30 days following any Change of Control Repurchase Event, the Company shall mail (or with respect to Global Notes, to the extent permitted or required by applicable DTC procedures or regulations, send electronically) a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Supplemental Indenture.

 

A-5

 

(8)                                 NOTICE OF REDEMPTION.  Notice of redemption will be mailed (or with respect to Global Notes, to the extent permitted or required by applicable DTC procedures or regulations, sent electronically) at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed or sent more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Supplemental Indenture.  Subject to the Company’s compliance with the first paragraph of Section 3.05 of the Supplemental Indenture, interest on the Notes or the portions of Notes called for redemption ceases to accrue on and after the redemption date.

 

(9)                                 PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as its owner for all purposes.

 

(10)                          AMENDMENT, SUPPLEMENT AND WAIVER.  Subject to certain exceptions, the Notes or the Note Guarantees may be amended with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation,  Additional Notes, if any) voting as a single class, including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes, the Indenture may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes, (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes), and any existing Default or Event of Default or compliance with any provision of the Indenture, the Notes or the Note Guarantees may be waived with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes).  The Company, the Guarantors and the Trustee may amend or supplement the Supplemental Indenture or the Notes or the Note Guarantees without the consent of any Holder of any Notes: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Notes in addition to or in place of certificated Notes; (iii) to provide for the assumption of the Company’s or a Guarantor’s obligations to Holders and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets, as applicable; (iv) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under the Indenture of any Holder; (v) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (vi) to conform the text of the Indenture, the Note Guarantees or the Notes to any provision of the “Description of the Notes” section of the Company’s prospectus supplement, dated March 6, 2014, relating to the offering of the Initial Notes, to the extent that such provision was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees or the Notes; (viii) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Supplemental Indenture as of the Issue Date; (ix) to establish forms or terms of debt securities of any series; (x) to evidence and provide for the acceptance of appointment by a successor trustee; or (xi) to allow any Guarantor to execute a supplemental indenture (including without limitation to evidence its Note Guarantee) and/or a Note Guarantee with respect to the Notes.

 

(11)                          DEFAULTS AND REMEDIES.  Events of Default include: (i) default for 30 days in the payment when due of interest; (ii) default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes; (iii) subject to Section 6.01(b) of the Supplemental Indenture (as described in the following paragraph), failure 

 

A-6

 

by CF Holdings or any of its Subsidiaries to comply with any other covenant or other agreement in the Supplemental Indenture with respect to the Notes or any term in the Notes for 60 days after notice to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then outstanding; (iv) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by CF Holdings or any of its Subsidiaries (or the payment of which is guaranteed by CF Holdings or any of its Subsidiaries), whether such Indebtedness exists on or prior to or is created after the Issue Date, if that default: (A) is caused by a failure to pay principal when due at final (and not any interim) maturity of such Indebtedness on or prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or (B) results in the acceleration of such Indebtedness prior to its stated maturity (without such acceleration having been rescinded, annulled or otherwise cured), and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated (without such acceleration having been rescinded, annulled or otherwise cured), aggregates $150.0 million or more; (vi) any Note Guarantee of CF Holdings or a Significant Subsidiary of CF Holdings is held in any judicial proceeding to be unenforceable or invalid or, except as permitted by the Supplemental Indenture, ceases for any reason to be in full force and effect, or CF Holdings or any Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, that is a Significant Subsidiary of CF Holdings denies or disaffirms its obligations under its Note Guarantee; and (vii) certain events of bankruptcy or insolvency with respect to CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holdings pursuant to or within the meaning of Bankruptcy Law.

 

Notwithstanding Section 6.01(a)(3) of the Supplemental Indenture (described in clause (iii) of the preceding paragraph) or any other provision of the Supplemental Indenture, except as described in the final sentence of this paragraph, the sole remedy for any failure by CF Holdings or the Company to comply with Section 4.03 of the Supplemental Indenture (relating to specified reporting requirements) will be the payment of Liquidated Damages as described in the following sentence, such failure to comply shall not constitute a Default or Event of Default, and Holders will not have any right to accelerate the maturity of the Notes as a result of any such failure to comply.  If a failure by CF Holdings or the Company to comply with Section 4.03 of the Supplemental Indenture continues for 180 consecutive days after the Company receives from the Trustee, or the Company and the Trustee receive from the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, notice of such failure to comply (such notice, a “Reports Default Notice”), the Company will pay liquidated damages (“Liquidated Damages”) to all Holders at a rate per annum equal to 0.25% of the principal amount of the Notes from the 180th day following the Company’s receipt of such Reports Default Notice to but not including the date on which such failure to comply shall have been cured or waived (and, on such date, Liquidated Damages will cease to accrue).  Liquidated Damages, if any, will be paid on each Interest Payment Date to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date.  A failure to comply with Section 4.03 of the Supplemental Indenture automatically will cease to be continuing and will be deemed cured at such time as CF Holdings or the Company, as applicable, files with the SEC (or, if the SEC will not accept such filing, delivers to Holders or otherwise makes publicly available) the applicable annual report, information, document or other report.  In no event will the Company be required to pay Liquidated Damages at a rate in excess of 0.25% of the principal amount of the Notes per annum, irrespective of the number of Reports Default 

 

A-7

 

Notices that may have been received and irrespective of the number of failures to comply with Section 4.03 of the Supplemental Indenture that may be continuing.  All accrued and unpaid Liquidated Damages, if any, shall be paid by the Company on the next scheduled interest payment date in the same manner as interest on the Notes is payable on such date.  In the case of any Reports Default Notice given by Holders, such Holders shall provide a copy of such Reports Default Notice to the Trustee.

 

In the case of an Event of Default arising from certain events of bankruptcy or insolvency with respect to CF Holdings or any of its Subsidiaries that is a Significant Subsidiary of CF Holdings or any group of Subsidiaries of CF Holdings that, taken together, would constitute a Significant Subsidiary of CF Holdings, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Holders may not enforce the Supplemental Indenture or the Notes except as provided in the Supplemental Indenture.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes by the Supplemental Indenture.  The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal of, premium, if any, or interest on, any Note) if and so long as a committee of its Responsible Officers in good faith determines that withholding notice is in the interests of the Holders.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration and its consequences, if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium, if any, that has become due solely because of the acceleration) have been cured or waived (or waive any existing Default or Event of Default with respect to the Notes and its consequences except a continuing Default or Event of Default in the payment of principal of, premium or interest, if any, on any notes as specified in clause (1) or (2) of Section 6.01(a) of the Supplemental Indenture).  The Company is required to deliver to the Trustee annually a statement regarding compliance with the Supplemental Indenture.  Within 15 Business Days after an Executive Officer of CF Holdings or the Company becomes aware of any Default or Event of Default, the Company will be required to deliver to the Trustee a statement specifying such Default or Event of Default.

 

(12)                          TRUSTEE DEALINGS WITH COMPANY.  The Trustee, in its individual capacity or any other capacity, may make loans to, accept deposits from, and perform service for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.  However, in the event that the Trustee acquires any conflicting interest, as defined under the TIA, it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign as provided in the TIA.  Any Agent may do the same with like rights and duties.  The Trustee is also subject to and entitled to the benefits of Article 7 of the Supplemental Indenture with respect to the Notes.

 

(13)                          NO RECOURSE AGAINST OTHERS.  No director, officer, employee, incorporator or stockholder of CF Holdings, and no director, officer, employee, incorporator, member or stockholder of any Subsidiary of CF Holdings, as such, will have any liability for any obligations of the Company or any Guarantor under the Notes, any Note Guarantee or the Indenture or for any claim based on, in respect of, or by reason of such obligations or their creation.  Each Holder 

 

A-8

 

of the Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes.  Such waiver and release may not be effective to waive liabilities under the U.S. federal securities laws.

 

(14)                          AUTHENTICATION.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(15)                          CUSIP/CINS NUMBERS.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP/CINS numbers to be printed on the Notes, and the Trustee may use CUSIP/CINS numbers in notices (including any notice of redemption or exchange) as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice, and reliance may be placed only on the other identification numbers placed thereon.

 

(16)                          GOVERNING LAW.  THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE SUPPLEMENTAL INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

The Company will furnish to any Holder upon written request and without charge a copy of the Base Indenture and the Supplemental Indenture.  Requests may be made to:

 

CF Industries, Inc.

4 Parkway North, Suite 400

Deerfield, IL  60015

Attention: CFO and General Counsel

Facsimile No.: (847) 405-2711

 

A-9

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or   (we) assign and transfer this Note to:
    	
 
    
	
 
    	
(Insert assignee’s legal name)
    

 

	
 
    
	
(Insert assignee’s soc. sec. or tax I.D. no.)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print or type assignee’s name, address and zip code)
    

 

and irrevocably appoint                                                                                                                                                          to transfer this Note on the books of the Company.  The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    	
 
    
	
Signature   Guarantee*:
    	
 
    	
 
    	
 
    
						

 

*                                         Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-10

 

Option of Holder to Elect Purchase

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.08 of the Supplemental Indenture, check the box below:

 

o Section 4.08

 

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.08 of the Supplemental Indenture, state the amount you elect to have purchased:

 

$                 

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Tax   Identification No.:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signature   Guarantee*:
    	
 
    	
 
    	
 
    
							

 

*                                         Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-11

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   decrease in
   Principal Amount
   of this Global Note
    	
 
    	
Amount of
   increase in
   Principal Amount
   of
   this Global Note
    	
 
    	
Principal Amount
   of this Global Note
   following such
   decrease
   (or increase)
    	
 
    	
Signature of
   authorized officer
   of Trustee or
   Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*                This schedule should be included only if the Note is issued in global form.

 

A-12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}]]