Document:

First Supplemental Trust Indenture, dated June 1, 2010

 Exhibit 4.2 

TIM HORTONS INC. 

and 
 BNY
TRUST COMPANY OF CANADA 
  
  

FIRST SUPPLEMENTAL TRUST INDENTURE 

Dated as of June 1, 2010 

Supplementing the Trust Indenture dated as of June 1, 2010 

between Tim Hortons Inc. and BNY Trust Company of Canada 

and 
 providing
for the issue of 
 4.20% Senior Unsecured Notes, Series 1, due June 1, 2017 

in the aggregate principal amount of Cdn.$200,000,000 
  

 

 TABLE OF CONTENTS 

 

					
		 	 ARTICLE 1

INTERPRETATION
	  	
			
	 Section 1.1
	 	To Be Read With Trust Indenture	  	1
	 Section 1.2
	 	First Supplemental Indenture	  	1
	 Section 1.3
	 	Definitions	  	2
			
		 	 ARTICLE 2

THE SERIES 1 NOTES
	  	
			
	 Section 2.1
	 	Creation and Designation	  	3
	 Section 2.2
	 	Limitation on Aggregate Principal Amount	  	4
	 Section 2.3
	 	Attributes of Series 1 Notes	  	4
	 Section 2.4
	 	Form of Series 1 Notes	  	4
	 Section 2.5
	 	Location of Registers	  	4
	 Section 2.6
	 	Additional Amounts	  	4
	 Section 2.7
	 	Trustee, etc.	  	4
	 Section 2.8
	 	Redemption and Repurchase	  	4
			
		 	 ARTICLE 3

OFFER TO REPURCHASE SERIES 1 NOTES
	  	
			
	 Section 3.1
	 	Offer to Repurchase Series 1 Notes on Change of Control Triggering Event	  	5
			
		 	 ARTICLE 4

MISCELLANEOUS
	  	
			
	 Section 4.1
	 	Acceptance of Trust	  	7
	 Section 4.2
	 	Confirmation of Trust Indenture	  	7
	 Section 4.3
	 	Counterparts	  	7
			
		 	ADDENDA	  	
		
	 SCHEDULE “A”         ATTRIBUTES OF THE SERIES 1 NOTES

	  	
	 SCHEDULE “B”         FORM OF SERIES 1
NOTE
	  	

  

 (i) 

 THIS FIRST SUPPLEMENTAL TRUST INDENTURE dated as of June 1, 2010 

BETWEEN: 
 TIM
HORTONS INC., a corporation incorporated under the laws of Canada (the “Issuer”) 
 - and - 

BNY TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada (the “Trustee”) 

RECITALS: 
  

	A.	The Issuer and the Trustee have entered into a trust indenture dated as of June 1, 2010 (the “Trust Indenture”). 

 

	B.	Pursuant to Section 2.2 and Section 14.1 of the Trust Indenture, the Issuer may issue one or more series of senior unsecured notes containing such terms,
provisions and conditions as may be set forth in a Supplemental Indenture pertaining to the notes of such series. 

  

	C.	This First Supplemental Indenture is entered into for the purpose of providing for the issue of 4.20% Senior Unsecured Notes, Series 1, due June 1, 2017 in the
aggregate principal amount of Cdn.$200,000,000 pursuant to the Trust Indenture and establishing the terms, provisions and conditions of the Series 1 Notes. 

NOW THEREFORE THIS FIRST SUPPLEMENTAL INDENTURE WITNESSES and it is hereby covenanted, agreed and declared as follows: 

ARTICLE 1 

INTERPRETATION 

Section 1.1 To Be Read With Trust Indenture 

This First Supplemental Indenture is a Supplemental Indenture within the meaning of the Trust Indenture. The Trust Indenture and this
First Supplemental Indenture shall be read together and shall have effect so far as practicable as though all the provisions of both indentures were contained in one instrument. 

Section 1.2 First Supplemental Indenture 

The terms “this First Supplemental Indenture”, “this indenture”, “herein”,
“hereof”, “hereby”, “hereunder”, and similar expressions, unless the context otherwise specifies or requires, refer to the Trust Indenture as amended and supplemented by this First Supplemental
Indenture and not to any particular Article, section, subsection or clause or other portion thereof, and include every instrument supplemental or ancillary to this First 

 
Supplemental Indenture. For clarity and avoidance of doubt, the provisions of this First Supplemental Indenture shall only be applicable to the Series 1 Notes issued hereunder and shall not be
applicable to any other series of Notes hereafter issued. 
 Section 1.3 Definitions 

All terms which are defined in the Trust Indenture and used but not defined in this First Supplemental Indenture shall have the meanings
ascribed to them in the Trust Indenture, as such meanings may be amended by this First Supplemental Indenture. In the event of any inconsistency between the terms in the Trust Indenture and this First Supplemental Indenture, the terms in this First
Supplemental Indenture shall prevail. Subject to the foregoing, in this First Supplemental Indenture and in the Series 1 Notes the following terms have the following meanings: 

“Canada Yield Price” means a price equal to the price of the Series 1 Notes calculated to provide a yield to maturity
(calculated from the redemption date), compounded semi-annually and calculated in accordance with generally accepted Canadian financial practice, equal to the Government of Canada Yield calculated at 10:00 a.m. (Toronto time) on the Business Day
preceding the day on which the Issuer gives notice of redemption pursuant to Section 5.4 of the Trust Indenture, plus 0.30%; 

“Change of Control” shall mean the occurrence of any one of the following: (a) the direct or indirect sale,
transfer, conveyance, lease or other disposition (other than by way of consolidation, amalgamation or merger), in one or a series of related transactions, of all or substantially all of the property and assets of the Issuer and its Subsidiaries,
taken as a whole, to any Person or group of Persons acting jointly or in concert for purposes of such transaction (other than to the Issuer or its Subsidiaries or other related entity (not involving a Third Party) formed for the purpose of
completing a corporate reorganization); or (b) the consummation of any transaction including any consolidation, amalgamation, merger or issue of voting shares the result of which is that any Person or group of Persons acting jointly or in
concert for purposes of such transaction (other than the Issuer and its Subsidiaries) becomes the beneficial owner, directly or indirectly, of more than 50% of the voting shares of the Issuer, measured by voting power rather than number of shares
(but shall not include the creation of a holding company or similar transaction that does not involve a change in the beneficial ownership of the Issuer); 

“Change of Control Offer” has the meaning set out in Section 3.1(a); 

“Change of Control Payment” has the meaning set out in Section 3.1(a); 

“Change of Control Payment Date” has the meaning set out in Section 3.1(b); 

“Change of Control Triggering Event” shall mean the occurrence of both a Change of Control and a Rating Event;

 “Government of Canada Yield” on any date means the yield to maturity on such date, compounded semi-annually
and calculated in accordance with generally 
  

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accepted Canadian financial practice, which a non-callable Government of Canada bond would carry if issued in dollars in Canada, at 100% of its principal amount on such date with a term to
maturity equal to, or if no Government of Canada bond having an equal term to maturity exists, as close as possible to, the remaining term to maturity of, in the case of the Series 1 Notes, the Series 1 Notes, such yield to maturity being the
average of the yields provided by two Canadian investment dealers specified by the Issuer; 
 “Investment Grade
Rating” shall mean a rating equal to or higher than BBB (low) (or the equivalent of any successor rating category of DBRS) by DBRS, or the equivalent investment grade credit rating from any other Specified Rating Agency; 

“Rating Event” shall mean the rating on the Series 1 Notes is lowered to below an Investment Grade Rating by the
Specified Rating Agency on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Series 1 Notes is under publicly announced consideration for a possible downgrade by the Specified Rating Agency, but only
to the extent that, and for so long as, a Change of Control Triggering Event would result if such downgrade were to occur) after the earlier of (a) the occurrence of a Change of Control and (b) public notice of the occurrence of a Change
of Control or of the Issuer’s intention or agreement to effect a Change of Control; 
 “Redemption Price”
has the meaning set out in Section 2.8(a); 
 “Series 1 Notes” means the notes referred to in
Section 2.1 hereof; 
 “Specified Rating Agency” shall mean DBRS, as long as such entity has not ceased to
rate the Series 1 Notes or failed to make a rating of the Series 1 Notes publicly available for reasons outside of the Issuer’s control; provided that if DBRS ceases to rate the Series 1 Notes or fails to make a rating of the Series 1 Notes
publicly available for reasons outside of the Issuer’s control, the Issuer may select any other “approved rating organization” within the meaning of National Instrument 41-101 of the Canadian Securities Administrators as a replacement
agency; and 
 “Trust Indenture” has the meaning set out in the Recital A. 

ARTICLE 2 

THE SERIES 1 NOTES 

Section 2.1 Creation and Designation 

The Issuer is authorized in accordance with the Trust Indenture to issue under this First Supplemental Indenture a series of notes
designated as “Senior Unsecured Notes, Series 1”. 
  

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 Section 2.2 Limitation on Aggregate Principal Amount 

The aggregate principal amount of Series 1 Notes which may be issued under this First Supplemental Indenture is unlimited provided that
the initial issuance hereunder shall be in the aggregate principal amount of Cdn.$200,000,000. 
 Section 2.3 Attributes of Series 1
Notes 
 The Series 1 Notes shall have the attributes as set out in Schedule “A” attached hereto. 

Section 2.4 Form of Series 1 Notes 

The Series 1 Notes shall be issuable initially as one Global Note held by, or on behalf of, CDS Clearing and Depository Services Inc., as
depository, for its participants and registered in the name of the Depository or its Nominee. The Global Note will be substantially in the form set out in Schedule “B” hereto with such appropriate additions, deletions, substitutions and
variations as the Trustee and the Issuer may approve and shall bear such distinguishing letters and numbers as the Trustee may approve, with such approval in each case to be conclusively deemed to have been given by the Trustee certifying such
Series 1 Notes. 
 Section 2.5 Location of Registers 

With respect to the Series 1 Notes, the Registers referred to in Section 3.1 of the Trust Indenture shall be kept by and at the
principal offices of the Trustee and may be kept in such other place or places, if any, by the Trustee or by such other Registrar or Registrars (if any) as the Issuer, with the approval of the Trustee, may designate. 

Section 2.6 Additional Amounts 

The Issuer will not be required to pay any additional amounts on the Series 1 Notes in respect of any tax, assessment or government charge
withheld or deducted, or any other cost, charge or payment of any nature or type other than as expressly contemplated by the Trust Indenture or this Supplemental Indenture. 

Section 2.7 Trustee, etc. 

The Trustee will be the trustee, authenticating agent, Paying Agent, transfer agent and Registrar for the Series 1 Notes. 

Section 2.8 Redemption and Repurchase 
  

	 	(a)	At its option, the Issuer may redeem the Series 1 Notes at any time and from time to time, in whole or in part, on payment of a redemption price (the
“Redemption Price”) equal to the greater of (i) the Canada Yield Price and (ii) par, together, in each case, with accrued and unpaid interest, if any, to the date fixed for redemption. The Issuer will give notice of
redemption not more than 60 days and not less than 30 days before the date fixed for redemption and will otherwise carry out the redemption of the Series 1 Notes in accordance with Article 5 of the Trust Indenture. Less than all of the Series 1
Notes may be redeemed, and if so redeemed, shall be redeemed in accordance with Section 5.3 of the Trust Indenture. 

  

 - 4 - 

	 	(b)	The Issuer shall be entitled at any time and from time to time to purchase for cancellation Series 1 Notes (which may include purchases from or through an investment
dealer or a firm holding membership on a recognized stock exchange or by tender or by private contract at any price). Series 1 Notes that are so purchased will be cancelled and will not be re-issued in accordance with Section 5.6 of the Trust
Indenture. Less than all of the Series 1 Notes may be purchased, and if so purchased, shall be purchased for cancellation in accordance with Section 5.1 of the Trust Indenture. 

ARTICLE 3 

OFFER TO REPURCHASE SERIES 1 NOTES 

Section 3.1 Offer to Repurchase Series 1 Notes on Change of Control Triggering Event 

 

	 	(a)	If a Change of Control Triggering Event occurs, unless the Issuer has exercised its right to redeem all of the Series 1 Notes pursuant to Section 2.8 of this First
Supplemental Indenture, the Issuer will be required to make an offer to repurchase all or, at the Holder’s option, any part (equal to Cdn.$1,000 or an integral multiple thereof) of each Holder’s Series 1 Notes on the terms set forth in
this Section 3.1 (the “Change of Control Offer”). In the Change of Control Offer, the Issuer shall be required to offer payment in cash equal to 101% of the outstanding principal amount of Series 1 Notes together with accrued
and unpaid interest thereon, if any, to the date of purchase (the “Change of Control Payment”). 

  

	 	(b)	 Within 30 days following any Change of Control Triggering Event, the Issuer shall give written notice to each Holder, with a copy to the Trustee,
describing the transaction or transactions which constitute the Change of Control Triggering Event and offering to repurchase the Series 1 Notes on the payment date set out in the notice, which date shall be no earlier than 30 days and no later than
60 days from the date such notice is given (the “Change of Control Payment Date”), pursuant to the procedures required by this Section 3.1 and described in such notice. The Issuer (or, as applicable, the Third Party referred to
in Section 3.1(e)) shall comply with the requirements of applicable securities laws and regulations in connection with the repurchase of the Series 1 Notes as a result of a Change of Control Triggering Event. To the extent that the provisions
of any such applicable securities laws or regulations conflict with the provisions of this Section 3.1, the Issuer (or, as applicable, the Third Party) shall comply with such laws and regulations and shall not be deemed to have breached any of
its obligations under this Section 3.1 to 

  

 - 5 - 

	 	
repurchase the Series 1 Notes by virtue of such compliance to the extent of any such conflict. The Trustee shall (at the Issuer’s option) act as depository in respect of the Change of
Control Offer on behalf of the Issuer. 

  

	 	(c)	On the Change of Control Payment Date, the Issuer or Third Party, if applicable, shall, to the extent lawful: 

 

	 	(i)	accept or direct the Trustee to accept for payment all Series 1 Notes or portions of Series 1 Notes properly tendered pursuant to the Change of Control Offer;

  

	 	(ii)	deposit with the Trustee an amount of money equal to the Change of Control Payment in respect of all Series 1 Notes or portions of Series 1 Notes properly tendered
pursuant to the Change of Control Offer; and 

  

	 	(iii)	deliver or cause to be delivered to the Trustee (to the extent that the Trustee has not taken delivery in its capacity as depository under the Change of Control Offer)
the Series 1 Notes properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of the Series 1 Notes or portions of Series 1 Notes being purchased by the Issuer. 

 

	 	(d)	The Trustee will as soon as practicable pay to each Holder of properly tendered Series 1 Notes an amount equal to the Change of Control Payment in respect of such
Series 1 Notes, or portion thereof, as applicable, either, at the Trustee’s option, by mailing (first class mail, postage prepaid) a cheque to such Holder or by means of a wire transfer in accordance with the applicable payment procedures of
the Depository, and the Trustee will as soon as practicable certify and mail (first class mail, postage prepaid) (or cause to be transferred by book-entry) to each such Holder a new Series 1 Note equal in principal amount to any unpurchased portion
of any Series 1 Notes surrendered; provided that each new Series 1 Note will be in a principal amount of Cdn.$1,000 and integral multiples of Cdn.$1,000 in excess thereof. 

 

	 	(e)	Notwithstanding anything set forth herein that may be construed to the contrary, the Issuer will not be required to make a Change of Control Offer upon a Change of
Control Triggering Event if a Third Party makes such an offer substantially in the manner, at the times and in compliance with the requirements for a Change of Control Offer made by the Issuer pursuant to the provisions of this Section 3.1 (and
for at least the same purchase price payable in cash) and such Third Party purchases all Series 1 Notes properly tendered and not withdrawn under its offer. 

  

 - 6 - 

	 	(f)	All Series 1 Notes purchased by the Issuer under the provisions of this Article 3 shall be forthwith delivered to and cancelled by the Trustee at the principal
office of the Trustee in Toronto, Ontario, and no Series 1 Notes shall be issued in substitution thereof except in respect of any unpurchased portion of any Series 1 Notes surrendered. 

ARTICLE 4 

MISCELLANEOUS 

Section 4.1 Acceptance of Trust 

The Trustee accepts the trusts in this First Supplemental Indenture and agrees to carry out and discharge the same upon the terms and
conditions set out in this First Supplemental Indenture and in accordance with the Trust Indenture. 
 Section 4.2 Confirmation of Trust
Indenture 
 The Trust Indenture as amended and supplemented by this First Supplemental Indenture is in all respects
confirmed. 
 Section 4.3 Counterparts 

This First Supplemental Indenture may be executed in several counterparts and delivered by facsimile, each of which so executed shall be
deemed to be original and such counterparts together shall constitute one and the same instrument. 
 [The remainder of
this page intentionally left blank.] 
  

 - 7 - 

 IN WITNESS WHEREOF the parties hereto have executed this First Supplemental Indenture under
the hands of their proper officers in that behalf. 
  

			
	TIM HORTONS INC.
		
	By:	 	 /s/    CYNTHIA J.
DEVINE        

		 	Name: Cynthia J. Devine
		 	Title: Chief Financial Officer
		
	By:	 	 /s/    DIANA
FIFE        

		 	Name: Diana Fife
		 	Title: Treasurer
	
	 BNY TRUST COMPANY OF CANADA,

as Trustee

		
	By:	 	 /s/    MARCIA
REDWAY        

		 	Name: Marcia Redway
		 	Title: Authorized Officer

 SCHEDULE “A” 

ATTRIBUTES OF THE SERIES 1 NOTES 
  

			
	Designation:	  	4.20% Senior Unsecured Notes, Series 1
		
	Principal Amount:	  	CDN $200,000,000
		
	Denomination:	  	Minimum denominations of $1,000 and $1,000 increments thereafter.
		
	Form of Note:	  	Fully registered Global Note, registered in the name of CDS & Co.
		
	Interest Rate:	  	4.20%
		
	Original Date of Issue:	  	June 1, 2010
		
	Stated Maturity:	  	June 1, 2017
		
	Interest Payment Date(s)	  	 Each June
1st and December
1st in each year, commencing on December 1, 2010. Interest
payments will be payable in cash in equal semi-annual instalments, in arrears, in the amount of $21.00 per $1,000 principal amount of the Notes.

Interest on each Global Note shall be paid to the Depository or the Nominee, as the case may be, as the registered holder of the Global
Note.

		
	Record Date(s):	  	Ten Business Days prior to the applicable Interest Payment Date.
		
	 Payment Currency of Principal,

Interest and Premium (if any):
	  	Canadian Dollars
		
	Day Count Convention:	  	Actual/365 for periods less than six months.
		
	Redemption and Repurchase:	  	Redeemable and can be repurchased prior to the Stated Maturity as specified in Section 2.8 of the First Supplemental Indenture.
		
	 Offer to Repurchase upon Change of

Control Triggering Event:
	  	The Issuer or Third Party is required, upon the occurrence of a Change of Control Triggering Event (as defined in the First Supplemental Indenture) and subject to and in
accordance with the provisions of Article 3 of the First Supplemental Indenture, to make an offer to repurchase the Series 1 Notes at a price equal to 101% of the outstanding principal amount of the Series 1 Notes together with accrued but unpaid
interest thereon, if any, to the date of purchase.

 SCHEDULE “B” 

FORM OF SERIES 1 NOTE 

SERIES 1 GLOBAL NOTE 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE TRUST INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO TIM HORTONS INC. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE. 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE OCTOBER 2, 2010. 

REGISTERED 
 TIM HORTONS INC.

 4.20% SENIOR UNSECURED NOTES, SERIES 1 

 

			
	Note No. 1	 	ISIN No. CA88706MAA14
		 	CUSIP No. 88706MAA1
	 Principal Amount: $200,000,000

($200 million dollars)
	 	
		
	Currency: Canadian Dollars	 	Denominations (if other than Cdn. Dollars or Cdn. Dollar denominations of a minimum denomination of Cdn$1,000 and thereafter in integral multiples of $1,000): N/A
		
	Interest Rate: 4.20% per annum	 	Original Date of Issue: June 1, 2010
		
	Stated Maturity: June 1, 2017	 	Interest Payment Date(s): Each June 1 and December 1 in each year, commencing on December 1, 2010 (the “Initial Interest Payment Date”).
		
	Record Date(s): The tenth Business Day prior to such Interest Payment Date	 	Payment Currency of Principal, Interest and Premium (if any):
		 	 x   Canadian Dollars

		 	  ̈   Specified Currency

	Day Count Convention: Actual/365 for periods less than six months	 	
		
	Other Provisions: See “Redemption” below	 	Addendum Attached
		 	  ̈  Yes

		 	 x   No

			
	Redemption:	  	Under the Trust Indenture (as defined below), the Series 1 Notes may be redeemed in whole or in part, at any time upon not less than 30 days and not more than 60 days notice to
the holders of the Series 1 Notes to be redeemed, and upon deposit with the Trustee, on the date fixed for redemption, of the Redemption Price.
		  	  
 “Canada Yield Price” means a price equal to
the price of the Series 1 Notes calculated to provide a yield to maturity (calculated from the redemption date), compounded semi-annually and calculated in accordance with generally accepted Canadian financial practice, equal to the Government of
Canada Yield calculated at 10:00 a.m. (Toronto time) on the Business Day preceding the day on which the Issuer gives notice of redemption pursuant to Section 5.4 of the Trust Indenture, plus 0.30%;

 
 “Government of Canada Yield” on any date means the yield to
maturity on such date, compounded semi-annually and calculated in accordance with generally accepted Canadian financial practice, which a non-callable Government of Canada bond would carry if issued in dollars in Canada, at 100% of its principal
amount on such date with a term to maturity equal to, or if no Government of Canada bond having an equal term to maturity exists, as close as possible to, the remaining term to maturity of, in the case of the Series 1 Notes, the Series 1 Notes, such
yield to maturity being the average of the yields provided by two Canadian investment dealers specified by the Issuer;
  

“Redemption Price” means, with respect to a Series 1 Note to be redeemed, the greater of (i) the Canada Yield Price and (ii) par,
together in each case, with accrued and unpaid interest, if any, to the date fixed for redemption.

  

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 TIM HORTONS INC. (the “Issuer”) for value received hereby promises
to pay to the registered holder hereof on the Stated Maturity, or on such earlier date as the Principal Amount may become due in accordance with the provisions of the Trust Indenture (as defined below), on presentation and surrender of this 4.20%
Senior Unsecured Note, Series 1 due June 1, 2017 (the “Series 1 Note”) at the principal office of the Trustee (as defined below), the Principal Amount in lawful money of Canada, and to pay interest on the Principal Amount, from
time to time outstanding, at the Interest Rate per annum, in like money, semi-annually, in arrears, in equal instalments on the Interest Payment Dates in each year, the first such payment to be payable on the Initial Interest Payment Date and the
last such payment to be payable on the date of the Stated Maturity, in an amount equal to $21.00 per $1,000 principal amount, and if the Issuer at any time defaults in the payment of any principal or interest, to pay interest on the amount in
default at the same rate, in like money, at the principal office of the Trustee and semi-annually on the same dates. 
 This
Series 1 Note is a single registered Note representing Cdn.$200,000,000 of the 4.20% Senior Unsecured Notes, Series 1 due June 1, 2017 of the Issuer issued under a trust indenture (the “Master Indenture”) dated June 1,
2010 made between the Issuer and BNY Trust Company of Canada (the “Trustee”), as supplemented by a First Supplemental Indenture dated June 1, 2010 made between the Issuer and the Trustee (the “First Supplemental
Indenture” and together with the Master Indenture, the “Trust Indenture”). 
 Reference is hereby
expressly made to the Trust Indenture and all instruments supplemental thereto for a description of the terms and conditions upon which this Series 1 Note is issued and held and the rights and remedies of the holder of this Series 1 Note and of the
Issuer and of the Trustee, all of which are incorporated by reference in this Series 1 Note and to all of which the holder of this Series 1 Note, by acceptance hereof, agrees. The provisions of this Series 1 Note are qualified in their entirety by
the provisions of the Trust Indenture. A Noteholder may obtain from the Trustee a copy of the Trust Indenture on written request and upon payment of a reasonable copying charge. 

Interest payments will be made by the Issuer by electronic funds transfer or wire transfer (or other payment method as agreed by the
Issuer and the Trustee) to the Depository or the Nominee on each Interest Payment Date, (except in case of payment at maturity, on redemption, repurchase or pursuant to a Change of Control Offer at which time payment of interest will be made only
upon surrender of this Series 1 Note). The forwarding of such payments to the Depository or the Nominee shall satisfy and discharge the liability for interest upon this Series 1 Note to the extent of the sum represented thereby (plus the amount of
any tax, assessment or other government charge required by law to be deducted or withheld). 
 The Series 1 Notes are direct
senior unsecured obligations of the Issuer. The Series 1 Notes rank equally and pari passu with each other and with the Notes of every other Series (regardless of 

 

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their actual dates or terms of issue) and, subject to statutory preferred exceptions, with all other senior unsubordinated and unsecured indebtedness of the Issuer for Borrowed Money, except as
to any sinking fund which pertains exclusively to any particular indebtedness of the Issuer. 
 This Series 1 Note has been
unconditionally (except to the extent otherwise provided in the Trust Indenture) and irrevocably guaranteed as to the payment of principal, interest, Premium, if any, in accordance with the terms of the Trust Indenture by certain Guarantor(s). Any
guarantee of the Series 1 Note is subject to the provisions of the Trust Indenture, including Article 6 thereof. 
 At any time
and from time to time, the Issuer may purchase all or any of Series 1 Notes (which shall include purchase from or through an investment dealer or other market intermediary or by tender or by private contract), provided that no Event of Default would
result from such purchase. 
 The Issuer is required, subject to the occurrence of a Change of Control Triggering Event and
subject to and in accordance with the provisions of the Trust Indenture, unless the Issuer has exercised its optional right to redeem all of the Series 1 Notes, to make an offer to repurchase all or, at the option of the holder of Series 1 Notes,
any part (equal to Cdn.$1,000 or an integral multiple thereof) of such holder’s Series 1 Notes, at a purchase price payable in cash equal to 101% of the outstanding principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase. 
 The Principal Amount may become or be declared due before the Stated Maturity on the conditions, in the manner,
with the effect and at the times set forth in the Trust Indenture. 
 The Master Indenture contains provisions for the holding
of meetings of holders of Notes and making resolutions passed at such meetings and instruments in writing signed by the holders of a specified percentage of the notes outstanding binding on all holders of Notes issued by the Issuer pursuant to the
Master Indenture, subject to the provisions of the First Supplemental Indenture. 
 This Series 1 Note may be transferred only
upon compliance with the conditions prescribed in the Trust Indenture on one of the Registers kept at the principal offices of the Trustee in Toronto and at such other place or places, if any, and by such other Registrar or Registrars, if any, as
the Issuer may designate, by the registered holder hereof or the holder’s legal representative or attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee, and upon compliance with such reasonable
requirements as the Trustee or other registrar may prescribe, and such transfer shall be duly noted hereon by the Trustee or other registrar. 

This Series 1 Note shall not become obligatory for any purpose until it shall have been certified by the manual signature of the Trustee
under the Trust Indenture. 
  

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 This Series 1 Note and the Trust Indenture are governed by, and are to be construed and
enforced with, the laws of the Province of Ontario. 
 The parties hereto have declared that they have required that this Series
1 Note and all other documents related hereto be in the English language. 
 Les parties aux présentes ont declaré
qu’elles ont exigé que le présent certificat, de meme que tous les documents s’y rapportant, soient redigés en anglais. 

All capitalized terms used in this Series 1 Note which are not otherwise defined shall have the meanings ascribed to such terms in the
Trust Indenture. 
  

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 IN WITNESS WHEREOF the Issuer has caused this Series 1 Note to be
signed by its Authorized Officers as of the 1st day of
June, 2010. 
  

	
	TIM HORTONS INC.
	
	  

	Authorized Signatory
	
	  

	Authorized Signatory

  

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 TRUSTEE’S CERTIFICATE 

This Series 1 Note is a single registered Note representing Cdn.$200,000,000 of the 4.20% Senior Unsecured Notes, Series 1 due
June 1, 2017 of the Issuer issued under the Trust Indenture. 
  

			
	 BNY TRUST COMPANY OF CANADA,

as Trustee

		
	By:	 	  

		 	Certifying Officer

 (NO WRITING
HEREON EXCEPT BY THE TRUSTEE OR OTHER REGISTRAR) 
  

					
	 DATE OF REGISTRY
	  	 IN WHOSE NAME

REGISTERED
	  	 SIGNATURE OF TRUSTEE

OR OTHER REGISTRAR

			
		  		  	
			
		  		  	
			
		  		  	
			
		  		  	

  

 - 7 - 

 ASSIGNMENT/TRANSFER FORM 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

 
  
  

 
  

 
 (Please print or typewrite
assignee’s name and address including postal code) 
 the within Note and all rights thereunder, hereby irrevocably constituting and
appointing                                       
                                  attorney to transfer said Note on the books of
the Issuer with full power of substitution in the premises. 
  

					
	 Dated:
	 		 	  

		 		 	Signature of transferring registered holder*

Signature of transferring registered holder guaranteed by:** 
  

					
		 		 	  

		 		 	Signature of Guarantor

  

	*	NOTICE: The signature of the registered Holder to this assignment must correspond with the name as written upon the face of the within instrument in every
particular, without alteration or enlargement or any change whatsoever. 

  

	**	Signature must be guaranteed by an authorized officer of a Canadian chartered bank or a major Canadian trust company or by a medallion signature guarantee from a
member of a recognized Medallion Signature Guarantee Program.Approval Letter

 Exhibit 10.1 

 

			
	
 

  
 1.1(a)FV/AL/SS

 
	  	  
 UNITED STATES DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

NATIONAL MARINE FISHERIES SERVICE
 Silver Spring,
MD 20910

	  	 
	  	November 5, 2009

 Omega Protein, Inc. 

Attn: Robert W. Stockton 
 2105 City West Blvd.

 Suite 500 
 Houston, TX 77042

  

			
		 	 Reference Case No. FF-G-017B

		 	 Omega Protein, Inc.

Dear Mr. Stockton: 
 This letter amends an
approval and agreement letter executed by the Fisheries Finance Program on December 1, 2005, and amended on September 14, 2006, approving in principle a $16,442,000 loan to Omega Protein, Inc. (the “Company”). This letter
approves the second portion of the loan (the “Second Tranche”). Under the Agreement each disbursement will require the Company’s issuance of a separate promissory note to the United States of America. The Company now requests a
disbursement in the amount of $10,000,000 (the “Second Tranche”). 
 Upon full compliance with this approval and agreement letter (the
“Approval Letter”), and otherwise in accordance with the Approval Letter, Subtitle V of Title 46 of the U.S. Code, formerly known as “Title XI of the Merchant Marine Act of 1936,” 46 U.S.C. 53701, et seq., and the
Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. Section 1801 et seq., as amended, and the outstanding guidance and instructions of the Financial Services Division, we will issue a United States Promissory Note (the
“Second Tranche Note”) and do all things necessary to effect the Second Tranche. 
  

	(1)	PURPOSE: 

 The purpose of the
Second Tranche is to finance or refinance 79.60% of the combined $12,562,298 depreciated actual cost of the Company’s reconstruction of a menhaden fishing vessel and the addition of a new dryer at the Reedville, Virginia facility (the
“Project”). 

 

 

	(2)	NOTE: 

 (2.1) The
Second Tranche Note shall, in form and substance, be similar to our customary form of United States Promissory Note and shall involve the following amount and other basic terms: 

 

					
	(2.1.1)	  	Amount:	  	$10,000,000.00
			
	(2.1.2)	  	Maturity:	  	15 years from inception.
			
	(2.1.3)	  	Amortization1:
	  	Level debt.
			
	(2.1.4)	  	Payments:	  	Quarterly.
			
	(2.1.5)	  	Interest Rate:	  	 To be determined by the U.S.

Treasury rate for. Agency borrowing.

(2.2) We shall direct that the proceeds of the Second Tranche Note be paid, first, directly to the parties to whom the Company is
indebted for the Project’s eligible cost and, second to the Company (as reimbursement of the Company’s funds previously expended for the Project’s eligible cost) to the extent that the amount of the Second Tranche Note exceeds the
amount of the Company’s outstanding indebtedness for the Project’s eligible cost. 
  

	(3)	SECURITY FOR THE SECOND TRANCHE NOTE: 

(3.1) Security for the Second Tranche Note shall be such security agreements, undertakings, and other documents of whatsoever nature
deemed by us, in our sole discretion, necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest (collectively, the “Security Documents”). The Security Documents shall, in form and substance,
be similar to our customary form of security documents insofar as such customary form of Security Documents is, in our sole discretion, consistent with and appropriate for the Second Tranche. 

(3.2) The Company and the other parties specified below shall, as additional security for the Second Tranche Note, be bound by and subject
to the following special requirements, special covenants, and all provisions pertaining to them. 
  

	1
	 A amortization schedule that will estimate the application of payments will be provided at The Second Tranche closing. 

 

 2 

 (3.2.1) Special Requirements: 

(3.2.1.1) The Project shall be free and clear of all liens, except such liens as may otherwise be specifically permitted herein, and the
Company shall, before the Second Tranche closing, provide us whatever evidence thereof we may, in our sole discretion, require. 

(3.2.1.2) The Company shall own, free and clear of all claims of whatsoever nature, except such claims as may otherwise be specifically
permitted herein, the Project, and the Company shall, before the Second Tranche closing, provide us whatever evidence thereof we may, in our sole discretion, require. 

(3.2.1.3) All pledges of all property shall also include such appropriate security agreements and U.C.C. filings on all associated
appurtenances and rights associated with such pledged property as are, in our sole discretion, necessary to fully realize the pledges intended and protect our interest. 

(3.2.1.4) If, after application of the proceeds of the Second Tranche Note, there remains any claim of whatsoever nature, except such
claims as may otherwise be specifically permitted herein, against the Project, the Company shall immediately take whatever action is required to satisfy and discharge such claims. Any failure of the Company to do so shall be an event of default,
causing us to declare a security default, under all default rights specified in the Security Documents. 
 (3.2.1.5) The Company
shall, regarding the ownership and operation of all Company property of whatsoever nature, cause the appropriate authorities to provide us, before the Second Tranche closing, with all evidence of proper title recordation and governmental permits,
approvals, licenses, consents, permissions, clearances, or other evidence of compliance with governmental requirements of whatsoever nature as we, in our sole discretion, may require to accomplish the intent and purpose of the Approval Letter and
otherwise protect our interest. 
 (3.2.1.6) There shall, before the Second Tranche closing, be no change in the Company’s
financial position, performance, or prospects deemed by us, in our sole discretion, to be materially adverse to our interest. 
  

 3 

 (3.2.1.7) The Company shall, before the Second Tranche closing, provide us such evidence of
its authority to enter into the Second Tranche as we, in our sole discretion, shall require. 
 (3.2.1.8) The Company shall,
before the Second Tranche closing, cause the appropriate parties to provide us with such evidence of all other parties’ authority to enter into any portion of the Second Tranche as we, in our sole discretion, shall require. 

(3.2.1.9) The Company shall, at the Second Tranche closing and at the Company’s sole expense, cause private counsel acceptable to us,
in our sole discretion, a legal opinion acceptable to us, in our sole discretion, that such documents executed in connection with the Second Tranche as we may, in our sole discretion, specify constitute legal and valid obligations fully binding and
enforceable against the Company or, as the case may be, against such other parties to whom they might apply. 
 (3.2.1.10) The
Second Tranche Note shall, in accordance with the Agreement, be secured by all the Security Documents executed in the Second Tranche, and all assignments of collateral and guarantees of any type required in connection with the Second Tranche are
effective pledges and guarantees as to the Second Tranche and any subsequent Tranches. 
 (3.2.1.11) The Company shall, at the
Second Tranche closing, provide to us a first preferred ship mortgage and appropriate first position U.C.C. filings on the F/V GRAND CHENIERE, Official Number 590692. 

(3.2.1.12) The Company shall provide to us a verification and certification that the reconstruction of the F/V GRAND CHENIERE did not
increase the harvesting capacity of the vessel. 
 (3.2.1.13) The Company shall, at the Second Tranche closing, provide to us an
eighth deed of trust, behind only seven deeds of trust to us, on the Company’s shoreside storage facility located in Reedville, VA. 

(3.2.1.14) The Company shall, at the Second Tranche closing, provide to us U.C.C. filings on the equipment located in Reedville, VA.

  

 4 

 (3.2.1.15) The Company shall, at the Second Tranche closing, cause Omega Protein Corporation
to provide us with its unconditional corporate guarantee of the Company’s repayment of the full unpaid principal and interest amount of the Second Tranche Note. 

(3.2.2) Special Covenants: 

(3.2.2.1) In addition to all covenants of whatsoever nature in our customary form of Security
Documents2, the Company shall be bound by and subject to
the following special covenants and all provisions pertaining to them: 
 (3.2.2.1.1) The Company shall not without the prior
written consent of the Chief, Financial Services Division, National Marine Fisheries Service, which consent shall not unreasonably be withheld, take any of the following actions: 

(3.2.2.1.1.1) Pay to any officer, partner, or other party any salary, commission, bonus, management fee, dividend, or other consideration
(however characterized) in excess of either reasonable industry standards or ordinary financial prudence for a company of the Company’s size and financial condition when such consideration is paid (and the burden of proving reasonability shall
be on the Company). 
 (3.2.2.1.1.2) Purchase or redeem any shares of its own stock. 

(3.2.2.1.1.3) Make any additional investment (excluding purchases regarding the routine and continuing maintenance and preservation of
the Company’s present property [including the Project] and its productivity) in, or incur any additional liability for, the purchase, acquisition, lease, or other use (however characterized) of any fixed property in connection with the
Company’s present level of operations in any one fiscal year in excess of an aggregate of 5% of the Company’s total assets. 

 

	2
	 The Security Documents shall include the Second Tranche Note together with such security agreements, undertakings, and other documents of whatsoever
nature deemed by us, in our sole discretion, necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest (collectively, the “Security Documents”). 

 

 5 

 (3.2.2.1.1.4) Start any new business or acquire any other business, or the assets of any
other business, whether by purchase, merger, consolidation, affiliation, or any other means (however characterized) except as may otherwise be permitted herein, or sell, liquidate, dissolve, spin-off, split-up or in any other way (however
characterized) dispose of its own assets except as may be required in the normal course of operations reasonably necessary to carry on its day-to-day operation. 

(3.2.2.1.1.5) Guarantee or become contingently liable in any way as surety, endorser, creditor, co-maker, accommodation maker, or in any
other way (however characterized) for the debt or obligation of any other party, except as may otherwise be permitted herein or required in the normal course of operations reasonably necessary to carry on its day-to-day business. 

(3.2.2.1.1.6) By any means whatsoever, allow itself to be acquired by, or otherwise reorganized into (however characterized), any other
company, unless the acquiring company or reorganized entity is acceptable to us and agrees to: (a) provide to us a 100% unconditional guarantee of the repayment of all debt actually or contingently owed us, (b) be bound by these covenants,
(c) be bound by such other covenants as we shall reasonably require to protect our interest, and (d) provide such other assurances and security as we, in our sole discretion, may require. 

(3.2.2.1.1.7) Establish any trust, retirement fund, or any other fund (however characterized) for the benefit of any
principal or any party related to any principal, or transfer any funds, property, or other assets of any kind (however characterized) into any such fund whether now or hereafter existing (and any such action shall be void and without effect insofar
as our interests are concerned)3. 

 

	3
	 This provision excludes contributions, not exceeding the maximum allowed by current IRS regulations, to any such party’s IRA, Keogh, or 401K
account. Any contributions in excess of the maximum allowable under current IRS regulations per year per person to any other retirement account, and any contributions in any amount to any trust or other fund of whatsoever kind, must be approved in
advance and in writing by us. 

  

 6 

 (3.2.2.1.1.8) Transfer any funds, property, or other assets (however characterized) to any
party by way of gift or by any other means (however characterized) for any consideration less than payment by such party of the full and fair market value thereof (and any such action shall be void and without effect insofar as our interests are
concerned) : provided, however, that reasonable transfers not significantly affecting the Company’s net worth, and not inconsistent with the Company’s obligation to protect us from loss by preserving its net worth, shall be exempted.

 (3.2.2.1.2) The Company shall (within 10 days of its first knowledge thereof but in no event more than 30 days from the
occurrence) give us notice of any pending litigation, business reverse, casualty, loss, or any other matter (however characterized) that materially diminishes: (a) its ability to service any debt actually or contingently owed us, (b) its
ability to perform any other duty or obligation owed us, (c) its ability to fully and faithfully perform any covenant with us, (d) the value of any property or other assets pledged to us, or (e) the net worth of the parties against
whom we have recourse. 
 (3.2.2.1.3) The Company shall give us annually, at the end of each of its accounting or tax years:
(a) the Company’s balance sheet at the end of each such year, (b) the Company’s income and expense statement for the preceding twelve months of each of such years, (c) the Company’s Federal Income Tax Return for each of
such years (all together with all supporting schedules). Independent certified public accountants acceptable, in our sole discretion to us, shall, according to generally accepted accounting principles, compile the annual financial reports required
under (a) through (c) hereof, and certify the accuracy of same. 
 (3.2.2.1.4) All annual financial reports required
hereunder shall include a certification from the Company’s chief executive officer that either (a) there has been no default under the Security Documents during the reporting period or (b) there has been a default or defaults under
the Security Documents during the reporting period, in which latter case the nature, extent, prospective consequences, and all other relevant details of such default or defaults shall be fully set forth in such certification. 

 

 7 

 (3.2.2.1.5) The Company shall deliver all required financial statements, notices, and
returns or reports to our Southeast Regional Financial Services Branch. The Company shall deliver all financial statements to us as soon as possible, but in no event later than 90 days after the close of the accounting period to which they relate.
The Company shall deliver all tax returns to us within 15 days of their timely filing with the Internal Revenue Service. 

(3.2.2.1.6) The Company shall permit us, or any representative selected by us, in such manner and at such times as we may, in our sole
discretion, reasonably require, to: (a) make inspections and audits of any books, records, papers, or other documents of whatsoever nature in the Company’s custody and control (or in any other entity’s custody or control) relating in
any way to the Company’s financial or business condition, (b) make extracts therefrom, and (c) make inspections and appraisals of any of the Company’s physical assets. The Company shall, within thirty days of our demand, pay us
for the cost of all such inspections, audits, or appraisals, and all such amounts disbursed by us for such purpose shall, until fully repaid by the Company, be: (a) added, payable upon our demand, to the Second Tranche Note, (b) earn
interest at the same rate as the other principal of the Second Tranche Note, and (c) be secured by the Security Documents. 

(3.2.2.1.7) Should a limited fisheries access system be initiated at some future date, under which the Company is granted a transferable
fishery conservation and management allocation (including, but not limited to, allocations, permits, quotas, licenses, cage tags, or any other fisheries access restriction or right [however characterized] of whatsoever nature) affecting, necessary
for, or in any other way (however characterized) associated with any of the property included in or subject to the Security Documents, the Company agrees that it shall grant to us a full senior security interest in such allocation by whatsoever
means deemed by us (in our sole discretion) to be appropriate (including, but not limited to, the Company’s execution of security agreements and the 

 

 8 

 
filing of financing statements under the U.C.C.). Further, if the Company fails to do so, the Company agrees that we may (in our sole discretion) use the attorney-in-fact provisions conferred
upon us by the Security Documents to execute, deliver, and otherwise perfect whatever documents may be required to accomplish the grant to us of such a full security interest in such fisheries conservation and management allocation. 

(3.2.2.2) In addition to all existing covenants of whatsoever nature in any way associated with the Security Documents, Omega Protein
Corporation (the “Guaranteeing Company”), as additional security for the Second Tranche Note, hereby agrees to, and shall henceforth be bound by and subject to, the following special covenants and all provisions pertaining to them:

 (3.2.2.2.1) The Guaranteeing Company shall not without the prior written consent of the Chief, Financial Services Division,
National Marine Fisheries Service, which consent shall not unreasonably be withheld, take any of the following actions: 

(3.2.2.2.1.1) Pay to any officer, partner, or other party any salary, commission, bonus, management fee, dividend, or other consideration
(however characterized) in excess of either reasonable industry standards or ordinary financial prudence for a company of the Guaranteeing Company’s size and financial condition at the time that such consideration is paid (and the burden of
proving reasonability shall be on the Guaranteeing Company). 
 (3.2.2.2.1.2) Purchase or redeem any shares of its own stock.

 (3.2.2.2.1.3) Make any additional investment (excluding purchases in connection with the routine and continuing maintenance
and preservation of the Guaranteeing Company’s present property and its productivity) in, or incur any additional liability for, the purchase, acquisition, lease, or other use (however characterized) of any fixed property: provided; however,
that reasonable new investment activity or additional liability not significantly affecting the Guaranteeing Company’s net worth, and not inconsistent with the Guaranteeing Company’s obligation to protect us from loss by preserving its net
worth, shall be exempted. 
  

 9 

 (3.2.2.2.1.4) Start any new business or acquire any other business, or the assets of any
other business, whether by purchase, merger, consolidation, affiliation, or any other means (however characterized) except as may otherwise be permitted herein, or sell, liquidate, dissolve, spin-off, split-up or in any other way (however
characterized) dispose of its own assets except as may be required in the normal course of operations reasonably necessary to carry on its day-to-day operation. 

(3.2.2.2.1.5) Guarantee or become contingently liable in any way as surety, endorser, creditor, co-maker, accommodation maker, or in any
other way (however characterized) for the debt or obligation of any other party, except as may otherwise be permitted herein or required in the normal course of operations reasonably necessary to carry on its day-to-day business. 

(3.2.2.2.1.6) By any means whatsoever, allow itself to be acquired by, or otherwise reorganized into (however characterized), any other
company, unless the acquiring company or reorganized entity is acceptable to us and agrees to: (a) provide to us an absolute, unconditional guarantee of 100% of all debt actually or contingently owed us, (b) be bound by these covenants,
(c) be bound by such other covenants as we shall reasonably require to protect our interest, and (d) provide such other assurances and security as we (in our sole discretion) may require. 

(3.2.2.2.1.7) Establish any trust, retirement fund, or any other fund (however characterized) for the benefit of any
principal or any party related to any principal, or transfer any monies, property, or other assets of any kind (however characterized) into any such fund whether now or hereafter existing (and any such action shall be void and without effect insofar
as our interests are concerned)4. 

 

	4
	 This provision excludes contributions, not exceeding the maximum allowed by current IRS regulations, to any such party’s IRA, Keough, or 401K
account. Any contributions in excess of the maximum allowable under current IRS regulations per year per person to any other retirement account, and any contributions in any amount to any trust or other fund of whatsoever kind, must be approved in
advance and in writing by us. 

  

 10 

 This provision excludes contributions not to exceed the amount set by current IRS
regulations, to any parties IRA, Keogh, or 401K account. 
 (3.2.2.2.1.8) Transfer any monies, property, or other assets
(however characterized) to any party by way of gift or by any other means (however characterized) for any consideration less than payment by such party of the full and fair market value thereof (and any such action shall be void and without effect
insofar as our interests are concerned) : provided, however, that reasonable transfers not significantly affecting the Guaranteeing Company’s net worth, and not inconsistent with the Guaranteeing Company’s obligation to protect us from
loss by preserving its net worth, shall be exempted. 
 (3.2.2.3.2) The Guaranteeing Company shall give us immediate notice of
any pending litigation, business reverse, casualty, loss, or any other matter (however characterized) that diminishes: (a) its ability to service any debt actually or contingently owed us, (b) its ability to perform any other duty or
obligation owed us, (c) its ability to fully and faithfully perform any covenant with us, (d) the value of any property or other assets pledged to us, or (e) the net worth of the parties against whom we have recourse. 

(3.2.2.3.3) The Guaranteeing Company shall give us annually, at the end of each of its accounting or tax years, a certified correct copy
of: (a) the Guaranteeing Company’s balance sheet at the end of each such year, (b) the Guaranteeing Company’s income and expense statement for the preceding twelve months of each of such years, and (c) the Guaranteeing
Company’s Federal Income Tax Return for each of such years (all together with all supporting schedules). The Guaranteeing Company shall also give us at any reasonable time any and all other financial statements, books, records, schedules, or
reports we may reasonably require from time-to-time. 
 (3.2.2.3.4) All annual financial reports required hereunder shall
include a certification from the Company’s chief executive officer that either (a) there has been no default under the Security Documents during the reporting period or (b) there has been a default or

  

 11 

 
defaults under the Security Documents during the reporting period, in which latter case the nature, extent, prospective consequences, and all other relevant details of such default or defaults
shall be fully set forth in such certification. 
 (3.2.2.3.5) all required financial statements, notices, and returns or
reports shall be delivered to our Southeast Regional Financial Services Branch. All financial statements shall be delivered to us as soon as possible, but in no event later than 90 days after the close of the accounting period to which they relate.
All tax returns shall be delivered to us within 15 days of their timely filing with the U.S. Internal Revenue Service. 

(3.2.2.3.6) The Guaranteeing Company shall permit us, or any representative selected by us, in such manner and at such times as we may
(in our sole discretion) reasonably require, to: (a) make inspections and audits of any books, records, papers, or other documents of whatsoever nature in the Guaranteeing Company’s custody and control (or in any other entity’s
custody or control) relating in any way to the Guaranteeing Company’s financial or business condition, (b) make extracts therefrom, and (c) make inspections and appraisals of any of the Guaranteeing Company’s physical assets. The
Guaranteeing Company shall, within thirty days of our demand, pay us for the cost of all such inspections, audits, or appraisals, and all such amounts disbursed by us for such purpose shall, until fully repaid by the Guaranteeing Company, be:
(a) added, payable upon our demand, to the Second Tranche Note, (b) earn interest at the same rate as the other principal of the Second Tranche Note, and (c) be secured by the Security Documents. 

(3.2.2.4) Any violation of any of these special covenants shall be an event of default, causing our declaration of a security default,
under all default rights specified in the Security Documents and cause, in our sole discretion, for immediate acceleration of the full unpaid amount of the Note, foreclosure under the Security Documents, and full pursuance under all default rights
specified in the Security Documents of all other remedies of every sort whatsoever for collecting the Note. 
  

 12 

 (3.2.2.5) Where these special covenants, or any portion of them, are specifically
inconsistent with covenants in our customary form of Security Documents, these special covenants shall to that extent (but to that extent only) supersede covenants in our customary form of Security Documents. Where these special covenants, or any
portion of them, are not specifically inconsistent with covenants in our customary form of Security Documents, the covenants in our customary form of Security Documents shall not be superseded by these special covenants and these special covenants
shall be in addition to the covenants in our customary form of Security Documents. 
  

	(4)	INSURANCE REQUIREMENTS: 

(4.1) Property insurance. 

(4.1.1) Hull and machinery insurance for the full value ($2,748,000 minimum) on the F/V GRAND CHENIERE, O.N. 590692. 

(4.1.2) For the Project Property and Equipment located at Reedville, VA: all risk building, structure, and contents insurance for the full
replacement value of the buildings, structures, and all contents including all the Equipment, all inventory, and all work in progress. 

(4.1.3) For the Project Property: full explosion coverage for steam boilers in the amount not less than $20,000,000. 

(4.1.4) If the Project Property is in a designated flood plain, then the Project Property must have flood insurance on the buildings and
contents for the replacement cost. 
 (4.2) Liability Insurance. 

(4.2.1) Protection and indemnity insurance for a minimum of $100,000 per crewmember on the F/V GRAND CHENIERE, O.N. 590692. 

(4.2.2) For the Project Property: full primary commercial general liability insurance with liability limits of at least $1,000,000 per
occurrence and $2,000,000 general aggregate. 
 (4.2.3) For the Project Property: The facility must have umbrella liability for a
total of $15,000,000 minimum. 
 (4.2.4) Business vehicle insurance for all land motor

  

 13 

 
vehicles, trailers, or semi-trailers designed for travel on public roads and owned, leased, or otherwise controlled by you, with liability limits of at least $1,000,000. 

(4.2.5) For the Project Property: The facility must have statutory state limits of workmen’s compensation, including proper
classifications for all workers. U.S. Longshoremen’s and Harbor Worker’s endorsement must be included. The workmen’s compensation coverage must include employer’s liability with a minimum of $1,000,000 per employee. 

(4.3) BREACH OF WARRANTY: 

(4.3.1) Breach of warranty insurance for the hull and machinery coverage on the F/V GRAND CHENIERE, O.N. 590692 for the insured value.
Once this loan has been paid down below the insured value, for no less than 110% of the outstanding balance of this financing. 

(4.4) ADDITIONAL REQUIREMENTS: 

(4.3.1) All U.S. vessels of 300 gross tons or greater must have Certificates of Financial Responsibility (COFR’s) on board the
vessels. For the F/V GRAND CHENIERE, O.N. 590692 we must be provided a current copy of the COFR. 
 (4.5) GENERAL REQUIREMENTS:

 (4.5.1) You must provide us in a timely manner with original policies, binders, and endorsements on the F/V GRAND CHENIERE,
O.N. 590692, and the Project Property located at Reedville, VA. Such policies must list the NMFS headquarters address as follows for the additional insured or mortgagee as indicated: 

National Marine Fisheries Service 

Financial Services Division 

1315 East-West Highway 

Silver Spring, MD 20910 

(4.5.2) We must be an additional insured on the hull and machinery and the protection and indemnity policies and on all liability
insurance. 
 (4.5.3) We must be the sole loss payee to the full extent of our interest on the hull and machinery policies.

 (4.5.4) We must be listed as first mortgagee and loss payee on all property coverage. 

 

 14 

 (4.5.5) We must be the sole assured and the sole loss payee on the breach of warranty
policies. 
 (4.5.6) We must have thirty (30) days notice of cancellation on all shoreside coverage and twenty
(20) days notice of cancellation on all vessel coverage. 
 (4.5.7) We must be provided with our standard hull and machinery
endorsement (NMFS 2-267(a)) and our standard protection and indemnity endorsement (NMFS 2-267(b)) must be on their respective policies, and our standard NMFS Form 2- 267(a) shoreside endorsement for property and NMFS Form 2- 267(b) shoreside
endorsement for liability. 
 (4.6) Such other usual and customary insurances as we may require. We attach our standard
requirements for insurance. 
  

	(5)	INSPECTIONS: 

 We may, in our sole
discretion, cause inspectors (appraisers, surveyors, engineers, or architects) of our choice to inspect, before the Second Tranche closing, all Project and Equipment. 

Although we shall choose these inspectors, they shall work for us, and we shall initially pay them, you shall be responsible to reimburse us for their
cost and hereby unconditionally promise to, within 30 days of our demand, pay for the cost of all such inspections. All amounts disbursed by us for this purpose shall, if not fully repaid to us by the date the Second Tranche is closed, be:
(a) added, payable upon our demand, to the Second Tranche Note, (b) earn interest at the same rate as the other principal of the Second Tranche Note, and (c) be secured by the Security Documents. 

We will consult with you about the kind and cost of inspection services required. We shall endeavor to keep all inspections, and all costs for them, as
reasonable as possible. Nevertheless, the choice of inspectors and services shall be ours, and failure of the inspection results to meet, for our sole purposes, our approval or the your failure to reimburse us for all inspection costs shall
constitute, in our sole discretion, either, as the case may be, cause for withdrawal of the Approval Letter or a security default under the Security Documents. 
  

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	(6)	PRE-CLOSING: 

(6.1) Please let our Regional Financial Services Branch at the address specified in (9) below know, at least 45 days in advance, the
date you need the Second Tranche closed. We will need to verify or arrange many things, for example: 
 (6.1.1) The depreciated
actual costs eligible for the Second Tranche. 
 (6.1.2) The adequacy of all required insurance’s (communicate about
insurance matters directly with our Central Insurance Servicing Unit at the address specified in [9] below rather than our Regional Financial Services Branch). 

(6.1.3) The absence of liens on property involved in the Second Tranche (other than those permitted herein). 

(6.1.4) All closing documentation factors including the availability of your private counsel (acceptable to us) where the Second Tranche
involves real property, U.C.C. filings, or other unusually complicated factors. Where the Second Tranche involves real property mortgages or U.C.C. filings, your attorney will have to prepare, and submit to us, before the Second Tranche closing,
for our approval, all closing documents involving the real estate or U.C.C. filings. 
 (6.1.5) Your possession of all
necessary permits, licenses, approvals, and other clearances of whatsoever nature required to do business and protect us against risk. 

(6.1.6) No change in any party’s financial or economic circumstances or prospects deemed by us, in our sole discretion, to be
materially adverse to our interest. 
 (6.1.7) The availability of all parties at the Second Tranche closing. 

(6.1.8) The availability of all required documentation of good standing, authority to enter into the Second Tranche, etc. 

(6.1.9) The accomplishment of all other matters of whatsoever nature that constitutes, in our sole discretion, conditions precedent to our
willingness to close the Second Tranche. 
  

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 (6.1.10) The time, date, and place of the Second Tranche closing. 

(6.2) Our attorney’s will (with the assistance of your private counsel where the Second Tranche closing involves real estate
mortgages or U.C.C. filings) prepare the documents to close the Second Tranche. 
  

	(7)	CLOSING: 

 Our
Regional Financial Services Branch will close the Second Tranche. 
 We will not close the Second Tranche unless all parties
hereto have fully complied with all requirements of the Approval Letter and all subsequent the Second Tranche closing instructions. 

We will not close the Second Tranche if there has been any change in the financial or economic position, performance, prospects, or other
circumstances of any party to the Approval Letter deemed by us, in our sole discretion, to be materially adverse to our interest. 

You must, at the Second Tranche closing, provide funds for all required document filing, mortgage recordation, title transfer, or other
fees of whatsoever nature that may be required to perfect the closing documents and complete the closing. You must, at the Second Tranche closing, to provide funds for any fees owed us. You must, at the Second Tranche closing, provide funds to
reimburse us for any inspection or other expenses we may have incurred in your behalf. 
  

	(8)	POST-CLOSING: 

Those proceeds of the Second Tranche Note will be transferred, by electronic wire transfer if possible, to the parties indicated by the
intent and purpose of the Approval Letter. Disbursement will, at our sole discretion, occur after all the Second Tranche closing documents required by the Approval Letter have been fully perfected (including transfer, recording, and filing where
required) and all other the Second Tranche closing requirements have been completed and approved by us. 
  

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	(9)	CONTACT WITH US: 

Our Regional Financial Services Branch that will close the Second Tranche, and with which you shall communicate during the rest of the
financing’s life, is: 
 Financial Services Branch, F/MB52 

National Marine Fisheries Service 

263
13th Avenue South 

St. Petersburg, Florida 33701 

Vox:    (727)-824-5377 

Fax:     (727)-824-5380 

You shall communicate with our Regional Financial Services Branch on all matters except insurance. You shall communicate on all insurance
matters directly with our Central Insurance Servicing Unit: 
 Insurance Servicing Unit 

Financial Services Division, F/MB5 

National Marine Fisheries Service 

1315 East West Highway 

Silver Spring, Maryland 20910 

Vox:    (301) 713-2387 

Fax:     (301) 713-1306 

You should contact both our Branch and our Central Insurance Unit as soon as all parties required to do so have signed the Approval Letter
and you have returned the Approval Letter to our Branch. We will all benefit by having as much time as possible to prepare for closing the Second Tranche. 

Your case number is FF-G-017B. It is important that you include this case number on all correspondence you send to us about the Second
Tranche. It is very important that you include this case number on all checks you send us for any reason, now or in the future, relating to the Second Tranche, or any other aspect of this loan. 

 

	(10)	SIGNING THE APPROVAL LETTER: 

All parties listed in the signature section of the Approval Letter must sign the Approval Letter in the appropriate spaces provided and
return it (with original signatures) to our Branch. This evidences the acceptance of all such parties of the terms and conditions of the Approval Letter. Nothing can 

 

 18 

 
go forward until all such parties have signed the Approval Letter and their original signatures thereon are in our possession. 

 

	(11)	GENERAL: 

 All
parties signing the Approval Letter, and any other parties who might rely on it, recognize, understand, and hereby agree that: 

(11.1) The Chief, Financial Services Division, or his designee, may negotiate with any party to the Approval Letter, any creditor, or any
other party whatsoever about: the Approval Letter, the liability of any party, the collateral securing the Second Tranche, the Security Documents, or any other matter whatsoever affecting the Second Tranche. Any resulting amendment of the Approval
Letter shall require the written agreement of the parties. Any resulting change in the Approval Letter shall not be cause for damage, counterclaim, or set off by any of party hereto whatsoever. It is the sole responsibility of all parties to verify
for themselves the final conditions under which the Second Tranche is being closed. 
 (11.2) All parties must meet such other
conditions as we may, in our sole discretion, reasonably deem necessary to accomplish the intent and purpose of the Approval Letter and otherwise protect our interest. 

(11.3) The Approval Letter is the entire and exclusive agreement between the parties hereto. This agreement may be amended only in writing
signed by the parties. All parties hereto forever waive all right to sue, or otherwise counterclaim against, the United States Government based on any claim of past, present, or future oral agreement between the parties. 

(11.4) The provisions of the Approval Letter are separable and, in the event any portion thereof is held to be void, invalid, non-binding,
or otherwise unenforceable, the remaining portion thereof shall remain fully valid, binding, and enforceable against all parties hereto. 

(11.5) The exercise of any of our rights shall be at our sole discretion. Our failure at any time to exercise any or all of our rights
shall not constitute a waiver of any of those rights. 
  

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	(12)	SIGNATURES: 

(12.1) The parties required to do so may sign the Approval Letter in any number of counterparts, and all such signed counterparts shall
constitute one and the same Approval Letter. 
 (12.2) The undersigned hereby agree to, and shall henceforth be bound by and
subject to, all provisions set forth in the Approval Letter. 
 (12.3) FIRST PARTY: United States of America, Acting by
and through the Secretary of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service: 
  

											
		 	By:	 	 /s/ Brian Summers
	 		 		 	
		 		 	Brian Summers	 		 		 	
		 		 	Financial Assistance Specialist	 		 		 	
						
		 	For:	 	 /s/ Leo C. Erwin
	 		 		 	
		 		 	 Leo C. Erwin, Chief
	 		 		 	
		 		 	Financial Services Division	 		 		 	

 (12.4) SECOND PARTY: Omega Protein, Inc. 

 

											
		 	By:	 	 /s/ Robert Stockton
	 		 	Date:	 	 11/10/2009

						
		 	Title:	 	 Vice President
	 		 		 	
						
		 	Attest:	 	 /s/ Gregory Toups
	 		 	Date:	 	 11/10/09

						
		 	Title:	 	 VP Controller
	 		 		 	

 (12.5) THIRD PARTY: Omega Protein Corporation: 

 

											
		 	By:	 	 /s/ Robert Stockton
	 		 	Date:	 	 11/10/2009

						
		 	Title:	 	 Exec. Vice President
	 		 		 	
						
		 	Attest:	 	 /s/ Gregory Toups
	 		 	Date:	 	 11/10/09

						
		 	Title:	 	 VP Controller
	 		 		 	

  

 20

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