EXHIBIT 4.2
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NATIONAL COAL CORP.
AND EACH OF THE GUARANTORS NAMED HEREIN
10.5% SENIOR SECURED NOTES DUE 2010
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INDENTURE
DATED AS OF DECEMBER 29, 2005
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▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
TRUSTEE
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE....................1
Section 1.01 Definitions.............................................1
Section 1.02 Other Definitions......................................25
Section 1.03 Incorporation by Reference of Trust Indenture Act......25
Section 1.04 Rules of Construction..................................26
ARTICLE 2. THE NOTES....................................................27
Section 2.01 Form and Dating........................................27
Section 2.02 Execution and Authentication...........................28
Section 2.03 Registrar and Paying Agent.............................28
Section 2.04 Paying Agent to Hold Money in Trust....................29
Section 2.05 Holder Lists...........................................29
Section 2.06 Transfer and Exchange..................................29
Section 2.07 Replacement Notes......................................45
Section 2.08 Outstanding Notes......................................45
Section 2.09 Treasury Notes.........................................46
Section 2.10 Temporary Notes........................................46
Section 2.11 Cancellation...........................................46
Section 2.12 Defaulted Interest.....................................46
ARTICLE 3. REDEMPTION AND PREPAYMENT....................................47
Section 3.01 Notices to Trustee.....................................47
Section 3.02 Selection and Notice...................................47
Section 3.03 Notice of Redemption...................................48
Section 3.04 Effect of Notice of Redemption.........................48
Section 3.05 Deposit of Redemption or Purchase Price................49
Section 3.06 Notes Redeemed or Purchased in Part....................49
Section 3.07 Optional Redemption....................................49
Section 3.08 Mandatory Redemption...................................50
Section 3.09 Offer to Purchase by Application of Excess Proceeds....50
ARTICLE 4. COVENANTS....................................................52
Section 4.01 Payment of Notes.......................................52
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TABLE OF CONTENTS
(continued)
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Section 4.02 Maintenance of Office or Agency........................52
Section 4.03 Reports................................................53
Section 4.04 Compliance Certificate.................................54
Section 4.05 Taxes..................................................54
Section 4.06 Stay, Extension and Usury Laws.........................55
Section 4.07 Restricted Payments....................................55
Section 4.08 Dividend and Other Payment Restrictions
Affecting Subsidiaries.................................58
Section 4.09 Incurrence of Indebtedness and Issuance of
Preferred Stock........................................59
Section 4.10 Asset Sales............................................63
Section 4.11 Transactions with Affiliates...........................65
Section 4.12 Liens..................................................66
Section 4.13 Business Activities....................................67
Section 4.14 Corporate Existence....................................67
Section 4.15 Offer to Repurchase Upon Change of Control.............67
Section 4.16 Payments for Consent...................................69
Section 4.17 Additional Note Guarantees and Security................69
Section 4.18 Designation of Restricted and Unrestricted
Subsidiaries...........................................70
Section 4.19 Issuances and Sales of Capital Stock of
Restricted Subsidiaries................................71
Section 4.20 Impairment of Security Interest........................71
Section 4.21 Real Estate Mortgages and Filings......................71
Section 4.22 Landlord, Bailee and Consignee Waivers.................75
Section 4.23 Title Insurance........................................76
Section 4.24 Memoranda of Leases....................................76
ARTICLE 5. SUCCESSORS...................................................76
Section 5.01 Merger, Consolidation, or Sale of Assets...............76
Section 5.02 Successor Corporation Substituted......................77
ARTICLE 6. DEFAULTS AND REMEDIES........................................77
Section 6.01 Events of Default......................................77
Section 6.02 Acceleration...........................................79
Section 6.03 Other Remedies.........................................80
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TABLE OF CONTENTS
(continued)
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Section 6.04 Waiver of Past Defaults................................80
Section 6.05 Control by Majority....................................81
Section 6.06 Limitation on Suits....................................81
Section 6.07 Rights of Holders of Notes to Receive Payment..........81
Section 6.08 Collection Suit by Trustee.............................81
Section 6.09 Trustee May File Proofs of Claim.......................82
Section 6.10 Priorities.............................................82
Section 6.11 Undertaking for Costs..................................83
ARTICLE 7. TRUSTEE......................................................83
Section 7.01 Duties of Trustee......................................83
Section 7.02 Rights of Trustee......................................84
Section 7.03 Individual Rights of Trustee...........................85
Section 7.04 Trustee's Disclaimer...................................85
Section 7.05 Notice of Defaults.....................................86
Section 7.06 Reports by Trustee to Holders of the Notes.............86
Section 7.07 Compensation and Indemnity.............................86
Section 7.08 Replacement of Trustee.................................87
Section 7.09 Successor Trustee by Merger, etc.......................88
Section 7.10 Eligibility; Disqualification..........................88
Section 7.11 Preferential Collection of Claims Against Company......88
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.....................89
Section 8.01 Option to Effect Legal Defeasance or Covenant
Defeasance.............................................89
Section 8.02 Legal Defeasance and Discharge.........................89
Section 8.03 Covenant Defeasance....................................89
Section 8.04 Conditions to Legal or Covenant Defeasance.............90
Section 8.05 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions..........91
Section 8.06 Repayment to Company...................................92
Section 8.07 Reinstatement..........................................92
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.............................93
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TABLE OF CONTENTS
(continued)
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Section 9.01 Without Consent of Holders of Notes....................93
Section 9.02 With Consent of Holders of Notes.......................94
Section 9.03 Compliance with Trust Indenture Act....................95
Section 9.04 Revocation and Effect of Consents......................95
Section 9.05 Notation on or Exchange of Notes.......................96
Section 9.06 Trustee to Sign Amendments, etc........................96
ARTICLE 10. COLLATERAL AND SECURITY......................................96
Section 10.01 Security Documents.....................................96
Section 10.02 Recording and Opinions.................................97
Section 10.03 Release of Collateral/Additional Liens.................97
Section 10.04 Certificates and Opinions of Counsel...................99
Section 10.05 Certificates of the Trustee............................99
Section 10.06 Authorization of Actions to be Taken by the
Trustee Under the Security Documents..................100
Section 10.07 Authorization of Receipt of Funds by the
Trustee Under the Security Documents..................100
Section 10.08 Termination of Security Interest......................100
Section 10.09 Collateral Agent......................................101
Section 10.10 Designations..........................................101
ARTICLE 11. NOTE GUARANTEES.............................................102
Section 11.01 Guarantee.............................................102
Section 11.02 Limitation on Guarantor Liability.....................103
Section 11.03 Execution and Delivery of Subsidiary Guarantee........103
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms....104
Section 11.05 Releases Following Sale of Assets.....................105
Section 11.06 Release Following Designation as an Unrestricted
Subsidiary............................................105
ARTICLE 12. SATISFACTION AND DISCHARGE..................................105
Section 12.01 Satisfaction and Discharge............................105
Section 12.02 Application of Trust Money............................106
ARTICLE 13. MISCELLANEOUS...............................................107
Section 13.01 Trust Indenture Act Controls..........................107
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TABLE OF CONTENTS
(continued)
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Section 13.02 Notices...............................................107
Section 13.03 Communication by Holders of Notes with Other
Holders of Notes........................108
Section 13.04 Certificate and Opinion as to Conditions Precedent....108
Section 13.05 Statements Required in Certificate or Opinion.........108
Section 13.06 Rules by Trustee and Agents...........................109
Section 13.07 No Personal Liability of Directors, Officers,
Employees and Stockholders............................109
Section 13.08 Governing Law.........................................109
Section 13.09 No Adverse Interpretation of Other Agreements.........109
Section 13.10 Successors............................................109
Section 13.11 Severability..........................................110
Section 13.12 Counterpart Originals.................................110
Section 13.13 Table of Contents, Headings, etc......................110
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EXHIBITS
Exhibit A - [Face of Note]
Exhibit B - Form of Certificate of Transfer
Exhibit C - Form of Certificate of Exchange
Exhibit D - Form of Certificate from Acquiring Institutional Accredited
Investor
Exhibit E - Form of Notation of Guarantee
Exhibit F - Form of Supplemental Indenture to be Delivered by Subsequent
Guarantors
Exhibit G - Landlord's Waiver and Consent
Exhibit H - Intercreditor Agreement
Exhibit I - Security Agreement
Exhibit J - Form of Notice and Consent
SCHEDULES
Schedule I
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INDENTURE dated as of December 29, 2005 among National Coal Corp., a
Florida corporation (the "Company"), the Guarantors (as defined) and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association, as trustee (the
"Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 10.5% Senior Secured Notes due 2010 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 DEFINITIONS.
"144A GLOBAL NOTE" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend, and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of
such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Restricted
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"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 the purposes of this definition,
"control" when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED that beneficial ownership of 10% or more of the
Voting Stock of a Person will be presumed to be control. 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 transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any
property or assets or rights; PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially
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all of the assets owned by the Company and its Restricted
Subsidiaries taken as a whole will be governed by Section 4.15
and/or Section 5.01 hereof and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests by any Restricted Subsidiary
or the sale of Equity Interests in any Restricted Subsidiary.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions that
involves property or assets or rights having a Fair Market
Value of less than $1.0 million;
(2) a transfer of property or assets or rights between or among
the Company and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary of
the Company to the Company or to a Restricted Subsidiary of
the Company;
(4) the sale or lease of products, services or accounts receivable
in the ordinary course of business and any sale or other
disposition of damaged, worn-out, surplus or obsolete property
or assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents or
the sale, factoring or discount of accounts receivable or the
accounts receivable determined by the Company to be
uncollectible in whole or in part; or
(6) a Restricted Payment that does not violate Section 4.07 or a
Permitted Investment.
"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 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 or any committee thereof duly authorized to act on
behalf of such board;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership;
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(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.
"BROKER-DEALER" has the meaning set forth in the Registration Rights
Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any day
on which banks in New York are closed.
"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, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
"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 property and 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) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or
instrumentality of the United States government (PROVIDED that
the full faith and credit of the United States is pledged in
support of those securities) having maturities of not more
than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any lender
party to
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a First Lien Credit Facility or with any domestic commercial
bank having capital and surplus in excess of $500.0 million
and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from Moody's or S&P and, in each case, maturing
within six months after the date of acquisition; and
(6) money market funds at least 95% of the property and assets of
which constitute Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of
all or substantially all of the properties or assets of the
Company 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 a Permitted Holder;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) (A) the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which
is that any "person" (as defined above), other than the
Permitted Holder, becomes the Beneficial Owner, directly or
indirectly, of more than 35% of the Voting Stock of the
Company, measured by voting power rather than number of
shares, and (B) the Permitted Holder Beneficially Owns,
directly or indirectly, in the aggregate a lesser percentage
of the total voting power of the Voting Stock of the Company
than such person and does not have the right or ability by
voting power, contract or otherwise, to elect or designate for
election a majority of the Board of Directors; or
(4) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of
Directors (together with any new directors whose election by
such Board of Directors or whose nomination for election by
the shareholders of the Company was approved by a vote of a
majority of the directors of the Company then still in office
who were either directors at the beginning of such period or
whose election or nomination for election was previously so
approved), cease for any reason to constitute a majority of
the Board of Directors then in office.
"CLEARSTREAM" means Clearstream Banking, S.A.
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"COLLATERAL" means all property and assets of the Company or any
Guarantor with respect to which from time to time a Lien is granted as security
for the Notes pursuant to the applicable Security Documents.
"COLLATERAL AGENT" means the Trustee in its capacity as the "Collateral
Agent" under and as defined in the Security Documents and any successor thereto
in such capacity.
"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" means National Coal Corp., a Florida corporation, and any and
all successors thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries
in connection with an Asset Sale, to the extent such losses
were deducted in computing such Consolidated Net Income; plus
(2) provision for income taxes of such Person and its Restricted
Subsidiaries for such period, to the extent that such
provision for income taxes was deducted in computing such
Consolidated Net Income; plus
(3) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed
Charges were deducted in computing such Consolidated Net
Income; plus
(4) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses
in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary
course of business, in each case, on a consolidated basis and
determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company will be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders,
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statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of
the amount of dividends or similar distributions paid in cash
to the specified Person or a Restricted Subsidiary of the
Person;
(2) the Net Income of any Restricted Subsidiary will be excluded
to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that
Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles
will be excluded; and
(4) notwithstanding clause (1) above, the Net Income of any
Unrestricted Subsidiary will be excluded, whether or not
distributed to the specified Person or one of its
Subsidiaries.
"CONSOLIDATED NET TANGIBLE ASSETS" of any Person means, as of the date,
the amount which, in accordance with GAAP, would be set forth under the caption
"total assets" (or any like caption) on a consolidated balance sheet of such
Person and its Restricted Subsidiaries as of the end of the most recently ended
fiscal quarter of such Person for which internal financial statements are
available, giving effect to purchase accounting, less the following to the
extent they would be included in such Person's consolidated balance sheet as of
such date: (1) all intangible assets, including, without limitation, unamortized
debt discount and expenses and other unamortized deferred charges, goodwill,
organization or developmental costs, patents, trademarks, service marks, trade
names, copyrights, licenses, franchises, and research and development costs; (2)
minority interests in consolidated Subsidiaries held by Persons other than the
Company or a Restricted Subsidiary; (3) any revaluation or other write-up in
book value of property or assets subsequent to the last day of the fiscal
quarter of the Company immediately preceding the date of original issuance of
the Notes as a result of a change in the method of valuation in accordance with
GAAP; (4) certificates of deposits and similar instruments used to purchase or
post reclamation surety or similar bonds that do not constitute Collateral and
cash set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Equity Interests (in each case to
the extent such obligation is not reflected in consolidated current liabilities
pursuant to clause (5)); and (5) the amount which, in accordance with GAAP,
would be set forth under the caption "current liabilities" (or any like caption)
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on a consolidated balance sheet of such Person and its Restricted Subsidiaries,
as of the end of such period.
"CONSOLIDATED SUBSIDIARIES" means the Restricted Subsidiaries;
PROVIDED, HOWEVER, that the interest of the Company or any Restricted Subsidiary
in an Unrestricted Subsidiary will be accounted for as an Investment.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT AGENT" means, at any time, the Person serving at such time as
the sole lender or as the "Agent," "Administrative Agent" or in some other
similar capacity under a First Lien Credit Facility.
"CREDIT FACILITY LIENS" means the Liens permitted pursuant to clause
(1) of the definition of "Permitted Liens."
"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 Indenture.
"DISCHARGE OF FIRST LIEN OBLIGATIONS" means payment in full in cash of
the principal of and interest and premium, if any, on all Indebtedness
outstanding under a First Lien Credit Facility incurred pursuant to clause (1)
of Section 4.09 or, with respect to Hedging Obligations or letters of credit
outstanding thereunder, delivery of cash collateral or backstop letters of
credit in respect thereof in compliance with such First Lien Credit Facility, in
each case after or concurrently with termination of all commitments to extend
credit thereunder, and payment in full in cash of any other First Lien
Obligations that are due and payable or otherwise accrued and owing at or prior
to the time such principal, interest and premium, if any, are paid.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of such Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of such Capital Stock, in whole or in part, on or prior to the
date that is 91 days after
7
the date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of such Capital Stock have the right to require the Company to
repurchase such Capital Stock upon the occurrence of a Change of Control or an
Asset Sale will not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.07 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Indenture will be the maximum
amount that the Company and its Restricted Subsidiaries may become obligated to
pay upon the maturity of, or pursuant to any mandatory redemption provisions of,
such Disqualified Stock, exclusive of accrued dividends.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the 10.5% Senior Secured Notes due 2010, of the
same series under this Indenture as the Notes, to be issued to Holders in
exchange for Transfer Restricted Securities pursuant to the Registration Rights
Agreement.
"EXCHANGE OFFER" means the registration by the Company and the
Guarantors under the Securities Act of the Exchange Notes pursuant to a
Registration Statement pursuant to which the Company and the Guarantors offer
the Holders of all outstanding Transfer Restricted Securities the opportunity to
exchange all such outstanding Transfer Restricted Securities held by such
Holders for Exchange Notes and Exchange Guarantees in an aggregate principal
amount equal to the aggregate principal amount of the Transfer Restricted
Securities tendered in such exchange offer by such Holders.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the Registration
Statement relating to the Exchange Offer, including the related Prospectus.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement, dated
as of November 26, 2004, among the Company, ▇.▇. ▇▇▇▇▇ Special Opportunities
Fund, L.P., as administrative agent, and the lenders party thereto, as amended
effective December 31, 2004 and January 11, 2005.
"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 (unless otherwise provided in this Indenture). For avoidance of
doubt, in determining Fair Market Value, the Board of
8
Directors of the Company may take into account the cost of removing the
applicable equipment or other property and assets from their then-current
locations and transporting such equipment or other property and assets, PROVIDED
that such cost may not exceed 10.0% of the Fair Market Value (without giving
effect to such costs).
"FIRST LIEN CREDIT FACILITY" means one or more debt facilities or other
agreements with banks or other lenders providing for up to $10.0 million in
aggregate principal amount outstanding at any time (including, in the case of
any such indebtedness issued at a discount, at maturity of such indebtedness) or
revolving credit or other borrowings or terms loans of the Company and its
Subsidiaries, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case,
as amended, restated, modified, renewed, refunded, replaced (whether upon or
after termination or otherwise) or refinanced (including by means of sales of
debt securities to institutional investors) in whole or in part from time to
time.
"FIRST LIEN OBLIGATIONS" means (i) any and all amounts payable under or
in respect of a First Lien Credit Facility incurred pursuant to clause (1) of
Section 4.09, as amended from time to time, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Guarantor whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof, (ii) all other
obligations (not constituting Indebtedness) of the Company or any Guarantor
under the such First Lien Credit Facility and (iii) all other obligations of the
Company or any Guarantor in respect of Hedging Obligations under such First Lien
Credit Facility.
"FIXED CHARGE COVERAGE RATIO" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, guarantees, repays, repurchases, redeems, defeases or otherwise
discharges any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems Preferred Stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (as used in this definition, the "Calculation
Date"), then the Fixed Charge Coverage Ratio will be calculated giving pro forma
effect to such incurrence, assumption, Guarantee, repayment, repurchase,
redemption, defeasance or other discharge of Indebtedness, or such issuance,
repurchase or redemption of Preferred Stock, and the use of the proceeds
therefrom, as if the same had occurred at the beginning of the applicable
four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers
or consolidations, or any Person or any of its Restricted
Subsidiaries acquired by the specified Person or any of its
Restricted Subsidiaries, and including any related financing
transactions and including increases in ownership of
Restricted Subsidiaries, during the four-quarter reference
period or
9
subsequent to such reference period and on or prior to the
Calculation Date will be given pro forma effect (in accordance
with Regulation S-X under the Securities Act) as if they had
occurred on the first day of the four-quarter reference
period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses (and ownership interests therein)
disposed of prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior
to the Calculation Date, will be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation
Date will be deemed to have been a Restricted Subsidiary at
all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the
Calculation Date will be deemed not to have been a Restricted
Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if
the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any
Hedging Obligation applicable to such Indebtedness if such
Hedging Obligation has a remaining term as at the Calculation
Date in excess of 12 months).
"FIXED CHARGES" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, but excluding amortization of debt issuance costs and
original issue discount, non-cash interest payments (but
including, without limitation, the interest component of any
deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance
financings), and net of the effect of all payments made or
received pursuant to Hedging Obligations in respect of
interest rates; plus
(2) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such
period; plus
(3) any interest on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on property and assets of
such Person or one of its Restricted Subsidiaries, whether or
not such Guarantee or Lien is called upon; plus
10
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Preferred Stock of
such Person or any of its Restricted Subsidiaries, other than
dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, determined on a
consolidated basis in accordance with GAAP; plus
(5) cash income taxes paid or payable; plus
(6) scheduled amortization of Indebtedness; plus
(7) 25% of capital expenditures made by the Company or its
Subsidiaries.
"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 on the date of this Indenture.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"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
property or assets or through letters of credit or reimbursement agreements in
respect thereof, of all or any part of any Indebtedness (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to purchase
property, assets, goods, securities or services, to take or pay or to maintain
financial statement conditions or otherwise).
"GUARANTORS" means all Domestic Subsidiaries of the Company as of the
date of this Indenture and any Subsidiary of the Company that executes a Note
Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns, in each case, until the Note Guarantee of
such Person has been released in accordance with the provisions of this
Indenture.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:
11
(1) interest rate swap agreements (whether from fixed to floating
or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or
commodity prices,
in each case, entered into in the ordinary course of business and not for
speculative purposes.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and Trade Payables),
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 banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months
after such property is acquired or such services are
completed; 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 all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
"INDENTURE" means this indenture, as amended or supplemented from time
to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a Participant.
12
"INITIAL PURCHASER" means ▇▇▇▇▇▇▇▇▇ & Company, Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(l), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INDIRECT PARTICIPANT" means the period from (and including) the date
of issuance of the Notes to but excluding the first Interest Payment Date after
issuance, and each successive six-month period from and including each Interest
Payment Date to but excluding the following Interest Payment Date.
"INTERCREDITOR AGREEMENT" means an agreement, substantially in the form
attached hereto as Exhibit H, setting forth the relative rights of the Holders,
on the one hand, and the Credit Agent and one or more Lenders under a First Lien
Credit Facility, on the other hand, with respect to the security interests in
the Collateral, which agreement shall provide, among other things, that, prior
to the Discharge of First Lien Obligations, and subject to certain exceptions,
(i) the Credit Agent will determine the time and method by which the security
interests in the Collateral will be enforced, (ii) the Trustee will not be
permitted to enforce the security interests securing the Notes even if an Event
of Default has occurred and the Notes have been accelerated except (x) in an
insolvency or liquidation proceeding, as necessary to file a claim or statement
of interest with respect to the Notes or (y) as necessary to take any action not
adverse to the first-priority liens in order to preserve or protect its rights
in the second-priority liens, (iii) no cash proceeds of the Collateral shall be
paid to the Holders.
"INTEREST PAYMENT DATE" means June 15 and December 15 of each year, or
if any such day is not a Business Day, the next succeeding Business Day.
"INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the Fair Market Value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined as provided in the final paragraph of Section 4.07
hereof. The acquisition by the Company or any Subsidiary of the Company of a
Person that holds an Investment in a third Person will be deemed to be an
Investment by the Company or such Subsidiary in such third Person in an amount
equal to the Fair Market Value of the Investments held by the acquired Person in
such third Person in an amount determined as provided in the final paragraph of
Section 4.07 hereof. Except as otherwise provided in this Indenture, the amount
of an Investment will be determined at the time the Investment is made and
without giving effect to subsequent changes in value.
"ISSUE DATE" means December 29, 2005.
13
"KENTUCKY CORE PROPERTIES" means the Premises represented by (i) the
▇▇▇▇▇▇ Tracts -- coal mineral and some surface rights leased by the Company,
which includes the sites of ▇▇▇▇▇ Preparation Plant and load-out tipple, mines
#1,#2, #3, & #4, and future mine #5 (9,300 acres of reserves), (ii) the ▇▇▇▇▇▇▇
▇▇▇▇▇ heirs Tract -- coal mineral rights leased by the Company (120 acres),
(iii) the ▇▇▇▇▇▇ ▇▇▇▇▇▇ heirs Tract -- coal mineral rights leased by the Company
(204 acres), and (iv) the NRP (WPP) Tracts -- coal mineral rights leased by the
Company (279 acres).
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any Mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"LIQUIDATED DAMAGES" means the liquidated damages to be paid by the
Company and the Guarantors in the event of a Registration Default (as defined in
the Registration Rights Agreement).
"MAJORITY NOTEHOLDERS" means Holders constituting a majority of the
then outstanding aggregate principal amount of Notes, excluding any Notes held
by the Company or any of its Subsidiaries or Affiliates.
"MORTGAGE" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a Lien on any
parcel of real property to secure the Obligations under the Notes.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NET INCOME" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any
securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but
not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal,
14
accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Indebtedness under a First Lien Credit Facility, secured by a Lien on the asset
or assets that were the subject of such Asset Sale, and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company, nor any of its Restricted
Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon
notice, lapse of time or both any holder of any other
Indebtedness of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness
or cause the payment the Indebtedness to be accelerated or
payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or property or
assets of the Company or any of its Restricted Subsidiaries.
"NON-US. PERSON" means a Person who is not a U.S. Person.
"NOTE GUARANTEE" means the Guarantee by each Guarantor of the Company's
obligations under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture.
"OBLIGATIONS" means all 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, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary, any Assistant Secretary, any Senior Vice President, or any Vice
President of such Person.
"OFFICER'S CERTIFICATE" means a certificate signed on behalf of the
Company by an Officer of the Company, who must be the Chairman of the Board, the
President, the Chief Executive Officer, the Chief Financial Officer, the
Treasurer or the principal accounting officer or a Senior Vice President or Vice
President of the Company, that meets the requirements of Section 13.05 hereof.
15
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"PERMITTED BUSINESS" means businesses engaged in by the Company and its
Subsidiaries on the date of this Indenture and businesses that are reasonably
related, complementary or incidental thereto and reasonable extensions thereof
including, without limitation, the acquisition and operation of railroad
facilities primarily to support other businesses engaged in by the Company on
the date of this Indenture.
"PERMITTED HOLDERS" means (i) ▇▇▇ ▇. ▇▇▇, (ii) the spouse, parents,
siblings, descendants (including children or grandchildren by adoption) of ▇▇▇
▇. ▇▇▇ or such spouse or siblings, (iii) in the event of the incompetence or
death of any of the Persons referred to in clauses (i) or (ii), such Person's
estate, executor, administrator, committee or other personal representative, in
each case who at any particular date shall "beneficially own" (as defined in
Rules 13d-s and 13d-5 of the Exchange Act) or have the right to acquire directly
or indirectly, Voting Stock of the Company, (iv) any trusts or foundations
created for the sole benefit of any of the Persons referred to in clauses (i)
through (iii) above or any rust or foundation for the benefit of such trust or
foundation, (v) any Person of which one or more of the Persons referred to in
clauses (i) through (iv) above "beneficially owns" (as defined in Rules 13d-3
and 13-d5 of the Exchange Act) on a fully diluted basis all of the Voting Stock
of such Person or is the sole trustee or general partner, or otherwise has the
sole power to manage the business and affairs of such Person or (vi) any
Affiliate of any of the Persons referred to in clauses (i) through (v) above,
provided that in the cause of this clause (vi), ▇▇▇ ▇. ▇▇▇ shall, in the
aggregate with any such Affiliate, continue to "beneficially own" (as defined in
Rules 13d-3 and 13d-5 of the Exchange Act) on a fully diluted basis at leas the
same percentage of the Voting Stock of the Company as are owned by him on the
date of this Indenture.
"PERMITTED INVESTMENTS" means
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company that is a Guarantor;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if as a result of such Investment:
(A) such Person becomes a Restricted Subsidiary of the
Company and a Guarantor; or
(B) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially
all of its property and assets
16
to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company that is a
Guarantor;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and
in compliance with the Section 4.10 hereto;
(5) any Investments received in compromise or resolution of (A)
obligations of trade creditors or customers that were incurred
in the ordinary course of business of the Company or any of
its Restricted Subsidiaries, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer; or (B)
litigation, arbitration or other disputes with Persons who are
not Affiliates;
(6) Investments represented by Hedging Obligations;
(7) loans or advances to employees made in the ordinary course of
business of the Company or any Restricted Subsidiary of the
Company in an aggregate principal amount not to exceed $1.0
million at any one time outstanding;
(8) certificates of deposit and similar instruments of ▇▇▇▇▇▇
County Bank held on the date of this Indenture, or acquired
after the date of this Indenture with the net proceeds from
the sale of the Notes in an amount not to exceed $7.8 million,
and used, in each case, by the Company or any of its
Subsidiaries for the sole purpose of enabling the Company or
any of its Subsidiaries to purchase or post reclamation,
surety, or similar bonds, and any extensions or renewals
thereof, provided that the aggregate amount of all such
certificates of deposit or similar instruments shall not
exceed the aggregate amount outstanding on the date of this
Indenture or so acquired with the net proceeds from the sale
of the Notes;
(9) certificates of deposit and similar instruments with
maturities of thirty-six months or less from the date of
acquisition with any lender party to a First Lien Credit
Facility or with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank
Watch Rating of "B" or better which are used, in each case, by
the Company or any of its Subsidiaries for the sole purpose of
enabling the Company or any of its Subsidiaries to purchase or
post reclamation, surety, or similar bonds, and any extensions
or renewals thereof; and
(10) other Investments in any Person other than an Affiliate of the
Company having an aggregate Fair Market Value (measured on the
date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (10) that are
at the time outstanding, not to exceed $2.5 million.
"PERMITTED LIENS" means:
(1) Liens on property or assets of the Company or any Guarantor
securing Indebtedness and other Obligations under a First Lien
Credit Facility that was incurred
17
pursuant to clause (1) of the definition of Permitted Debt
and/or securing Hedging Obligations related thereto;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property or assets of a Person existing at the time
such Person (x) is merged with or into or consolidated with
the Company or any Subsidiary of the Company or (y) becomes a
Subsidiary of the Company; PROVIDED that such Liens do not
extend to any property or assets other than those of the
Person that is merged into or consolidated with the Company or
the Subsidiary or which becomes a Subsidiary of the Company;
(4) Liens on property or assets (including Capital Stock),
existing at the time of acquisition of the property by the
Company or any Subsidiary of the Company; PROVIDED that (i)
such Liens were in existence prior to, such acquisition, and
not incurred in contemplation of, such acquisition and (ii)
the Fair Market Value of such property or assets that are
subject to such Liens does not to exceed $5.0 million in the
aggregate.
(5) Liens to secure the performance of tenders, bids, leases,
statutory or regulatory obligations, reclamation, surety,
appeal or similar bonds, government contracts, performance and
return of money bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the second paragraph
of Section 4.09 covering only the property or assets acquired
with or financed by such Indebtedness;
(7) Liens existing on the date of this Indenture (other than any
Liens (i) the Indebtedness with respect to which will be
repaid with the net proceeds from the sale of the Notes,
including Liens pursuant to the Existing Credit Agreement, or
(ii) expressly required to be waived, released or subordinated
pursuant to the Security Documents) which Liens do not
materially affect the Fair Market Value of the property or
assets that are subject to such Liens and do not materially
interfere with the intended use to be made of such property or
assets by the Company or any of its Subsidiaries, in the
reasonable determination of the Majority Noteholders;
(8) Liens for taxes, assessments or other governmental charges or
claims that are not yet delinquent or that are being contested
in good faith by appropriate proceedings promptly instituted
and diligently concluded; PROVIDED that any reserve or other
appropriate provision as is required in conformity with GAAP
has been made therefor;
(9) Liens imposed by statute, regulation or common law, such as
carriers', warehousemen's, landlord's, mechanics', suppliers',
materialmens' and repairmens' Liens, in each case, incurred in
the ordinary course of business;
(10) survey exceptions, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property
that were
18
not incurred in connection with Indebtedness and that do not
in the aggregate materially adversely affect the value of said
real property or materially impair its use in the operation of
the business of such Person;
(11) Liens created for the benefit of (or to secure) the Notes (or
the Note Guarantees); and
(12) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture; PROVIDED,
HOWEVER, that:
(A) the new Lien shall be limited to all or part of the
same property and assets that secured or, under the
written agreements pursuant to which the original
Lien arose, could secure the original Lien (plus
improvements and accessions to, such property and
assets thereof or proceeds or distributions in
respect thereof);
(B) the Indebtedness secured by the new Lien is not
increased to any amount greater than the sum of (x)
the outstanding principal amount, or, if greater,
committed amount, of the Permitted Refinancing
Indebtedness and (y) an amount necessary to pay any
fees and expenses, including premiums, related to
such renewal, refunding, refinancing, replacement,
defeasance or discharge;
(13) Liens incurred in the ordinary course of business in
connection with workers' compensation, unemployment insurance
and other types of social security;
(14) Liens arising out of judgments or awards not resulting in an
Event of Default and in respect to which the Company or a
Restricted Subsidiary shall in good faith be prosecuting an
appeal or proceedings for review and in respect of which there
shall be secured a subsisting stay of execution pending such
appeal or proceedings; provided, that the aggregate amount of
all such judgments or awards (and any cash and the Fair Market
Value of any property encumbered by such Liens) does not
exceed $5.0 million at any time outstanding;
(15) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents or other property
relating to such letters of credit (and the products and
proceeds thereof;
(16) Liens encumbering customary initial deposits and margin
deposits, and other Liens that are within general parameters
customary in the industry and incurred in the ordinary course
of business, in each case relating to Hedging Obligations with
respect to coal inventory and interest rates;
(17) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods; and
(18) Liens on Capital Stock of any Unrestricted Subsidiary.
19
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries incurred or issued in exchange
for, or the net proceeds of which are used to renew, refund, refinance, replace,
defease or discharge other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness renewed, refunded, refinanced, replaced, defeased
or discharged (plus all accrued interest on the Indebtedness
and the amount of all fees and expenses, including premiums
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being renewed,
refunded, refinanced, replaced, defeased or discharged;
(3) if the Indebtedness being renewed, refunded refinanced,
replaced, defeased or discharged is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date
of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or
discharged; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or
discharged.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"PREFERRED STOCK" as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of property or assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(l) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PROSPECTUS" means the prospectus included in a Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
20
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Indenture, among the Company, the
Guarantors and the Initial Purchaser, relating to registration of the Notes and
the Note Guarantees under the Securities Act, as such agreement may be amended,
modified or supplemented from time to time.
"REGISTRATION STATEMENT" means any registration statement of the
Company relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to the
provisions of the Registration Rights Agreement, in each case, including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"REGULATION S PERMANENT GLOBAL NOTE" means a permanent Global Note in
the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL NOTE" means a temporary Global Note in
the form of Exhibit A hereto bearing the Private Placement Legend and the
Regulation S Temporary Global Note Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"REGULATION S TEMPORARY GLOBAL NOTE LEGEND" means the legend set forth
in Section 2.06(g)(3), which is required to be placed on all Regulation S
Temporary Global Notes issued under this Indenture.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
officer within the Corporate Trust Office 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.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.
21
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Group.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means the Security Agreement, dated as of the
Issue Date, made by the Company and the Guarantors in favor of the Collateral
Agent, as amended or supplemented from time to time in accordance with its
terms.
"SECURITY DOCUMENTS" means the Security Agreement, the Intercreditor
Agreement and such other security agreements, pledges, mortgages, deeds of trust
and other instruments or documents pursuant to which a Lien is granted by the
Company or any Guarantor to secure any Obligations under the Notes and this
Indenture, or under which rights or remedies with respect to such Liens are
governed, as such agreements may be amended, modified or supplemented from time
to time in accordance with the terms of the Indenture, the Notes, a First Lien
Credit Facility and the Intercreditor Agreement.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"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 documentation governing
such Indebtedness as of the date of this Indenture, 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
22
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 GUARANTEE" means, the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and the Notes, executed
pursuant to the terms of this Indenture.
"SUPERMAJORITY NOTEHOLDERS" means holders of Notes constituting 66 2/3
% of the then outstanding aggregate principal amount of Notes, excluding any
Notes held by National Coal or any of its Subsidiaries or Affiliates.
"TENNESSEE CORE PROPERTIES" means the Premises represented by (i) the
New River Tract -- coal mineral rights owned by the Company (65,000 acres with
reserves of 17.1 million tons) and certain surface rights where the ▇▇▇▇▇▇▇
Preparation Plant and load-out facilities are located, (ii) the ▇▇▇▇▇▇▇ Tract --
coal mineral and surface rights leased by the Company (7,000 acres with reserves
of 4.5 million tons), (iii) the TVA Tract -- coal mineral rights leased by the
Company (4,400 acres with reserves of 3.4 million tons), (iv) the ▇▇▇▇▇▇▇▇ Tract
-- surface leased by the Company for Smoky Junction Preparation Plant (11.6
acres), and (v) the ▇▇▇▇▇▇ Tract -- surface rights owned by the Company for the
▇▇▇▇▇▇ load-out facilities (265 acres).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRADE PAYABLES" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"TRANSFER RESTRICTED SECURITIES" means the Transfer Restricted
Securities as defined in the Registration Rights Agreement.
"TRUSTEE" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
23
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 is not party to any
agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of
operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced by filing with the Trustee a certified copy of the
resolution of the Board of Directors giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements to be
an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such covenant. The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period; and (2) no Default or Event of Default would be in existence following
such designation.
"U.S. PERSON" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"VOTING STOCK" of any 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 or comparable governing body of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
24
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including
payment at final maturity, in respect of the Indebtedness, by
(b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making
of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means a Restricted Subsidiary of
the Company all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) will at the time be owned by
such Person or by one or more Wholly-Owned Restricted Subsidiaries of such
Person.
Section 1.02 OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- -------
"AFFILIATE TRANSACTION"................................... 4.11
"ASSET SALE OFFER"........................................ 3.09
"AUTHENTICATION ORDER".................................... 2.02
"CHANGE OF CONTROL OFFER"................................. 4.15
"CHANGE OF CONTROL PAYMENT"............................... 4.15
"CHANGE OF CONTROL PAYMENT DATE".......................... 4.15
"COVENANT DEFEASANCE"..................................... 8.03
"DTC"..................................................... 2.03
"EVENT OF DEFAULT"........................................ 6.01
"EXCESS PROCEEDS"......................................... 4.10
"FOREIGN PLEDGE AGREEMENT"................................ 10.06
"INCUR"................................................... 4.09
"LEGAL DEFEASANCE"........................................ 8.02
"OFFER AMOUNT"............................................ 3.09
"OFFER PERIOD"............................................ 3.09
"PARALLEL DEBT"........................................... 10.07
"PAYING AGENT"............................................ 2.03
"PERMITTED DEBT".......................................... 4.09
"PURCHASE DATE"........................................... 3.09
"REGISTRAR"............................................... 2.03
"RELEVANT LIABILITIES".................................... 10.07
"RESTRICTED PAYMENTS"..................................... 4.07
"TENNESSEE REQUIRED INSURANCE"............................ 4.21
"TRIGGER DATE"............................................ 4.21
Section 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
25
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
Section 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) the words "property" and "asset" shall be construed to have
the same meaning and may be used interchangeably or together
with no difference in meaning.
(7) provisions apply to successive events and transactions; and
(8) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor
sections or rules adopted by the Commission from time to time.
26
ARTICLE 2.
THE NOTES
Section 2.01 FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication will 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. Each Note will be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this 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
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) GLOBAL NOTES. Notes issued in global form will be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form will be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note will 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 endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby will be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) TEMPORARY GLOBAL NOTES. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of the Depositary or the nominee of the Depositary for
the accounts of designated agents holding on behalf of Euroclear or Clearstream,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The Restricted Period will be terminated upon the receipt by the
Trustee of:
(1) an Officer's Certificate from the Company specifying
that the Restricted Period has terminated.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee will cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by
27
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
(d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream will be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02 EXECUTION AND AUTHENTICATION.
An Officer must sign the Notes for the Company and an Officer or
director of each Guarantor must sign such Guarantor's Guarantee, in each case,
by manual or facsimile signature.
If an Officer or director whose signature is on a Note or Guarantee no
longer holds that office at the time a Note or Guarantee is authenticated, the
Note or Guarantee 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 Indenture.
On the date of this Indenture, the Trustee will, upon receipt of a
written order of the Company signed by two Officers (an "AUTHENTICATION ORDER"),
authenticate the Notes for $55.0 million in aggregate principal amount. The
Company may issue additional Notes under the Indenture from time to time after
such offering; PROVIDED, HOWEVER, such Notes are assigned a rating of at least
B3 from Moody's and at least B- from Standard & Poor's at the time of issuance.
The Authentication Order or the Officer's Certificate delivered in connection
with any such issuance of additional Notes shall state that such Notes have been
assigned a rating that satisfies this requirement. Any issuance of additional
Notes is subject to all of the terms and provisions set forth in this Indenture.
All Notes issued under the Indenture will be treated as a single class for all
purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate the Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders 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
28
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
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.
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 or Liquidated Damages, 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 ss. 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 of
Notes and the Company shall otherwise comply with TIA ss. 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. Global Notes
will be exchanged by the Company for Definitive Notes only 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
29
not appointed by the Company within 120 days after the date of such notice from
the Depositary; or
(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; PROVIDED that in no event shall the Regulation S Temporary
Global Note be exchanged by the Company for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act.
Upon the occurrence of either of the preceding events in (1) or (2)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 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 Section 2.07 or 2.10 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) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
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 Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend; PROVIDED, HOWEVER, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation
S Temporary Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person (other than the Initial Purchaser).
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted 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)(l).
(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)(l) above, the transferor of such beneficial interest must
deliver to the Registrar either:
(A) both:
30
(i) 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
(ii) instructions given in accordance
with the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
(B) both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive
Note in an amount equal to the beneficial interest to
be transferred or exchanged; and
(ii) instructions given by the
Depositary to the Registrar containing information
regarding the Person in whose name such Definitive
Note shall be registered to effect the transfer or
exchange referred to in (1) above;
PROVIDED that in no event shall Definitive Notes be issued upon the transfer or
exchange of beneficial interests in the Regulation S Temporary Global Note prior
to (x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule 903 under the Securities
Act.
Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2) shall
be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder of
such beneficial interests in the Restricted Global Notes. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this 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(h) hereof.
(3) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL
NOTE. A beneficial interest in any Restricted Global Note may be transferred to
a Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(2) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary
Global Note or the
31
Regulation S Permanent Global Note, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE. A
beneficial interest in any Restricted Global Note may be exchanged by any holder
thereof for a beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note if the exchange or transfer complies with the
requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration
Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an
exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that (i) any Exchange Notes received by
such Holder will be acquired in the ordinary course
of business, (ii) such Holder will have no
arrangements or understanding with any Person to
participate in the distribution of the Notes within
the meaning of the Securities Act, (iii) such Holder
is not an "affiliate," as defined in Rule 405 of the
Securities Act of the Company or if it is an
affiliate, such Holder will comply with the
registration and prospectus delivery requirements of
the Securities Act to the extent applicable, (iv) it
is not engaged in, and does not intend to engage in,
the distribution of the Exchange Notes, (v) if such
Holder is a Broker-Dealer, that it will receive
Exchange Notes for its own account in exchange for
Notes that were acquired as a result of market-making
activities or other trading activities and that it
will be required to acknowledge that it will deliver
a prospectus in connection with any resale of such
Exchange Notes and (vi) such Holder has full power
and authority to transfer the Notes in exchange for
the Exchange Notes, free and clear of any and all
Liens.
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
32
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (l)(a) thereof; or
(ii) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted 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
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(1) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, if any
holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or
to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to
exchange such beneficial interest for a
Restricted Definitive Note, a certificate
from such holder in the form of Exhibit C
hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A, a certificate to the effect set forth
in Exhibit B hereto, including the
certifications in item (1) thereof;
33
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from
the registration requirements of the
Securities Act in accordance with Rule 144,
a certificate to the effect set forth in
Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited
Investor in reliance on an exemption from
the registration requirements of the
Securities Act other than those listed in
subparagraphs (B) and (C) above, a
certificate to the effect set forth in
Exhibit B hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective
registration statement under the Securities
Act, a certificate to the effect set forth
in Exhibit B hereto, including the
certifications in item (3)(c) thereof.
The Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) 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 Restricted
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(l) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Restricted Definitive Notes to the Persons in whose names such Notes
are so registered. Any Restricted Definitive Note issued in exchange
for a beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c)(l) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) BENEFICIAL INTERESTS IN REGULATION S TEMPORARY GLOBAL
NOTE TO DEFINITIVE NOTES. Notwithstanding Sections 2.06(c)(i)(A) and
(C) hereof, a beneficial interest in the Regulation S Temporary Global
Note may not be exchanged for a Definitive Note or transferred to a
Person who takes delivery thereof in the form of a Definitive Note
prior to (x) the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, except in
34
the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(3) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, a
holder of a beneficial interest in a Restricted Global Note may
exchange such beneficial interest for an Unrestricted Definitive Note
or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and
the holder of such beneficial interest, in
the case of an exchange, or the transferee,
in the case of a transfer, certifies in the
applicable Letter of Transmittal that (i)
any Exchange Notes received by such Holder
will be acquired in the ordinary course of
business, (ii) such Holder will have no
arrangements or understanding with any
Person to participate in the distribution of
the Notes within the meaning of the
Securities Act, (iii) such Holder is not an
"affiliate," as defined in Rule 405 of the
Securities Act of the Company or if it is an
affiliate, such Holder will comply with the
registration and prospectus delivery
requirements of the Securities Act to the
extent applicable, (iv) it is not engaged
in, and does not intend to engage in, the
distribution of the Exchange Notes, (v) if
such Holder is a Broker-Dealer, that it will
receive Exchange Notes for its own account
in exchange for Notes that were acquired as
a result of market-making activities or
other trading activities and that it will be
required to acknowledge that it will deliver
a prospectus in connection with any resale
of such Exchange Notes and (vi) such Holder
has full power and authority to transfer the
Notes in exchange for the Exchange Notes,
free and clear of any and all Liens.
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration
Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (l)(b)
thereof; or
35
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(4) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, if
any holder of a beneficial interest in an Unrestricted 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 will
cause the aggregate principal amount of the applicable Global Note to
be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company will execute and the Trustee will 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)(4) will 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 will deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will not bear the Private
Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(1) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a
beneficial interest in a Restricted Global
Note, a certificate from such Holder in the
form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule
144A, a certificate to the effect set forth
in Exhibit B hereto, including the
certifications in item (1) thereof;
36
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from
the registration requirements of the
Securities Act in accordance with Rule 144,
a certificate to the effect set forth in
Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited
Investor in reliance on an exemption from
the registration requirements of the
Securities Act other than those listed in
subparagraphs (B) and (C) above, a
certificate to the effect set forth in
Exhibit B hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective
registration statement under the Securities
Act, a certificate to the effect set forth
in Exhibit B hereto, including the
certifications in item (3)(c) thereof.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(1), the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the case of
clause (B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(2) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and
the Holder, in the case of an exchange, or
the transferee, in the case of a transfer,
certifies in the applicable Letter of
Transmittal that (i) any Exchange Notes
received by such Holder will be acquired in
the ordinary course of business, (ii) such
Holder will have no
37
arrangements or understanding with any
Person to participate in the distribution of
the Notes within the meaning of the
Securities Act, (iii) such Holder is not an
"affiliate," as defined in Rule 405 of the
Securities Act of the Company or if it is an
affiliate, such Holder will comply with the
registration and prospectus delivery
requirements of the Securities Act to the
extent applicable, (iv) it is not engaged
in, and does not intend to engage in, the
distribution of the Exchange Notes, (v) if
such Holder is a Broker-Dealer, that it will
receive Exchange Notes for its own account
in exchange for Notes that were acquired as
a result of market-making activities or
other trading activities and that it will be
required to acknowledge that it will deliver
a prospectus in connection with any resale
of such Exchange Notes and (vi) such Holder
has full power and authority to transfer the
Notes in exchange for the Exchange Notes,
free and clear of any and all Liens;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration
Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (l)(c)
thereof; or
(ii) if the Holder of such Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or
cause to be increased the aggregate principal amount of the Unrestricted Global
Note.
38
(3) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(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 will 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, required pursuant to the following provisions of this Section
2.06(e).
(1) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule
144A under the Securities Act, then the
transferor must deliver a certificate in the
form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor
must deliver a certificate in the form of
Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if such Restricted Definitive Note is being
transferred pursuant to an exemption from
the registration requirements of the
Securities Act in accordance with Rule 144,
a certificate to the effect set forth in
Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(D) if such Restricted Definitive Note is being
transferred to an Institutional Accredited
Investor in reliance on an exemption from
39
the registration requirements of the
Securities Act other than those listed in
subparagraphs (A) and (B) above, a
certificate to the effect set forth in
Exhibit B hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable; or
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its
Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof.
(2) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and
the Holder, in the case of an exchange, or
the transferee, in the case of a transfer,
certifies in the applicable Letter of
Transmittal that (i) any Exchange Notes
received by such Holder will be acquired in
the ordinary course of business, (ii) such
Holder will have no arrangements or
understanding with any Person to participate
in the distribution of the Notes within the
meaning of the Securities Act, (iii) such
Holder is not an "affiliate," as defined in
Rule 405 of the Securities Act of the
Company or if it is an affiliate, such
Holder will comply with the registration and
prospectus delivery requirements of the
Securities Act to the extent applicable,
(iv) it is not engaged in, and does not
intend to engage in, the distribution of the
Exchange Notes, (v) if such Holder is a
Broker-Dealer, that it will receive Exchange
Notes for its own account in exchange for
Notes that were acquired as a result of
market-making activities or other trading
activities and that it will be required to
acknowledge that it will deliver a
prospectus in connection with any resale of
such Exchange Notes and (vi) such Holder has
full power and authority to transfer the
Notes in exchange for the Exchange Notes,
free and clear of any and all Liens;
(B) any such transfer is effected pursuant to
the Shelf Registration Statement in
accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
40
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (l)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED
DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal
that (i) any Exchange Notes received by such Holder will be acquired in
the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any Person to participate in the
distribution of the Notes within the meaning of the Securities Act,
(iii) such Holder is not an "affiliate," as defined in Rule 405 of the
Securities Act of the Company or if it is an affiliate, such Holder
will comply with the registration and prospectus delivery requirements
of the Securities Act to the extent applicable, (iv) it is not engaged
in, and does not intend to engage in, the distribution of the Exchange
Notes, (v) if such Holder is a Broker-Dealer, that it will receive
Exchange Notes for its own account in exchange for Notes that were
acquired as a result of market-making activities or other trading
activities and that it will be required to acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange
Notes and (vi) such Holder has full power and authority to transfer the
Notes in exchange for the Exchange Notes, free and clear of any and all
Liens; and
41
(2) Subject to Section 2.06(a) hereof, Unrestricted
Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) LEGENDS. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive
Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear
the legend in substantially the following
form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904
UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO THE ISSUER,
ITS SUBSIDIARIES OR ITS DIRECT OR INDIRECT PARENT, IN EACH OF CASES (I) THROUGH
(V)IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE."
42
(B) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to
subparagraphs (b)(4), (c)(3), (c)(4),
(d)(2), (d)(3), (e)(2), (e)(3) or (f) of
this Section 2.06 (and all Notes issued in
exchange therefor or substitution thereof)
will not bear the Private Placement Legend.
(2) GLOBAL NOTE LEGEND. Each Global Note will bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE 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 INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
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 OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), 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 SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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."
(3) REGULATION S TEMPORARY GLOBAL NOTE LEGEND. The
Regulation S Temporary Global Note will bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
43
(h) 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 will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 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 such Global Note 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 such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(1) To permit registrations of transfers and exchanges,
at the Registrar's request the Company will execute Global Notes and
Definitive Notes, and the Trustee will, upon receipt of an
Authentication Order in accordance with Section 2.02, authenticate such
Notes.
(2) No service charge will 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 Holder to pay a sum
sufficient to pay all transfer tax or similar governmental charges
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). The
Registrar will 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.
(3) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(4) The Company will not be required:
(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) during a period
beginning at the opening of business 15 days
before any Interest Payment Date and ending
at the closing of business on such Interest
Payment Date;
44
(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.
(5) 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.
(6) The Trustee will authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(7) All 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, so long as an executed original will be
delivered if requested by the Trustee.
Section 2.07 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 the
Trustee and the Company 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 Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 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 as not outstanding. Except as set forth in Section 2.09 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 by an Affiliate of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) or Article 9 hereof or for purposes of the definition of Majority
Noteholders and Supermajority Noteholders (provided, that for purposes of
determining whether the Trustee will be protected in relying on any direction,
45
waiver, determination or consent, only Notes that the Trustee knows are so owned
will be disregarded).
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide 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 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, and for purposes of
Section 3.07(a), Notes owned by the Company, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, 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 the Trustee
knows are so owned will be so disregarded.
Section 2.10 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 Indenture.
Section 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
46
Section 2.12 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.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
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 Officer's
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, the
Trustee will select Notes for redemption on a pro rata basis, by lot or such
other methods as the Trustee shall deem fair and appropriate, unless otherwise
required by law or applicable stock exchange or depository requirements.
No Notes of $1,000 or less can be redeemed in part. Notices of
redemption will be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each Holder of Notes to be redeemed at its
registered address, except that redemption notices may be mailed 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 Indenture.
Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of redemption
that relates to that Note will state the portion of the principal amount of that
Note that is to be redeemed. A new Note in principal amount equal to the
unredeemed portion of the original Note will be issued in
47
the name of the Holder upon cancellation of the original Note. Notes called for
redemption become due on the date fixed for redemption. On and after the
redemption date, interest ceases to accrue on Notes or portions of Notes called
for redemption.
Section 3.03 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed 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 Indenture pursuant to Articles 8 or 12 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(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;
(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
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 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, an Officer's 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 in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption
48
price. A notice of redemption may not be conditional. If the Company complies
with the provisions of this paragraph, on and after the redemption or purchase
date, interest will cease to accrue on the Notes or the portions of Notes called
for redemption or purchase.
Section 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
One Business Day prior to the redemption or purchase price date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company, upon the
Company's written request, 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 and Liquidated Damages, if any, on all
Notes to be redeemed or purchased.
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.
Section 3.07 OPTIONAL REDEMPTION.
At any time prior to December 15, 2008, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 110.500% of the principal
amount, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of a sale of Equity Interests (other
than Disqualified Stock) of the Company or a cash contribution to the common
equity capital of the Company; PROVIDED that:
(1) at least 65% of the aggregate principal amount of
Notes originally issued under this Indenture (excluding Notes held by
the Company and its Subsidiaries) remains outstanding immediately after
the occurrence of such redemption; and
(2) the redemption occurs within 90 days of the date of
the closing of such sale of Equity Interests or contribution.
49
On the dates specified below, the Company, at its option, may redeem
all or a part of the Notes upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any, on
the Notes redeemed, to the applicable redemption date, if redeemed during the
applicable period set forth below, subject to the rights of holders of Notes on
the relevant record date to receive interest on the relevant interest payment
date:
PERIOD PERCENTAGE
------ ----------
December 15, 2008 to December 14, 2009 105.250%
December 15, 2009 to June 14, 2010 102.625%
June 15, 2010 and thereafter 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
Section 3.08 MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "ASSET SALE
OFFER"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is PARI PASSU with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales and assets. The Asset Sale Offer will
remain open for a period of at least 20 Business Days following its commencement
and not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "OFFER PERIOD"). No later than three Business
Days after the termination of the Offer Period (the "PURCHASE DATE"), the
Company will apply all Excess Proceeds (the "OFFER AMOUNT") to the purchase of
Notes and such other PARI PASSU Indebtedness containing provisions similar to
this Section 3.09 (on a PRO RATA basis, if applicable, with such adjustments as
may be deemed appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, will be purchased) or, if less than the
Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related Interest Payment Date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record
50
date, and no additional interest will be payable to Holders who tender Notes
pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail or electronic notice, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice will contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The notice, which will govern the terms of the Asset Sale
Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment
will continue to accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
will cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer will 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;
(7) that Holders will 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, telex, 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;
(8) that, if the aggregate principal amount of Notes and
other PARI PASSU Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other PARI PASSU
Indebtedness to be purchased on a PRO RATA basis based on the principal
amount of Notes and such other PARI PASSU Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
51
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a PRO rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon receipt of an Authentication Order from the Company will
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 will publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, if any 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. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
Section 4.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall 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
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the 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.
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
52
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as an agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 REPORTS.
Whether or not required by the rules and regulations of the Commission,
so long as any Notes are outstanding, the Company will furnish to the Trustee,
within the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual reports that would be
required to be filed with the Commission on Forms 10-Q and 10-K in the Company
were required to file such reports; and
(2) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file such
reports.
All such reports will be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K will include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants. In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, the Company will file a copy
of each of the reports referred to in clauses (1) and (2) above with the
Commission for public availability within the time periods specified in the
rules and regulations applicable to such reports (unless the Commission will not
accept such a filing).
If, at any time after consummation of the exchange offer contemplated
by the Registration Rights Agreement, the Company is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Company
will nevertheless continue filing the reports specified in the preceding
paragraphs of this covenant with the Commission within the time periods
specified above unless the Commission will not accept such a filing. The Company
will not take any action for the purpose of causing the Commission not to accept
any such filings. If, notwithstanding the foregoing, the Commission will not
accept the Company's filings for any reason, the Company will post the reports
referred to in the preceding paragraphs on its website within the time periods
that would apply if the Company were required to file those reports with the
Commission.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding paragraphs will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
53
In addition, the Company and the Guarantors agree that, for so long as
any Notes remain outstanding, if at any time they are not required to file with
the Commission the reports required by the preceding paragraphs, they will
furnish to the holders of Notes and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
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 90
days after the end of each fiscal year, an Officer's Certificate stating that,
in the course of performing their duties as Officers of the Company or the
Guarantors, as applicable, a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default has occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Company is taking or proposes
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.04(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
registered and in good standing with the Public Company Accounting Oversight
Board) that in making the examination necessary for certification of such
financial statements, nothing has come to their attention that would lead them
to believe that the Company has violated any provisions of Article 4 or Article
5 hereof or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company shall
deliver to the Trustee, promptly upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
54
Section 4.06 STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenant (to the extent that it
may lawfully do so) that they shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture or the
Security Documents; and the Company and 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 covenant that they shall 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 RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company and other than dividends or
distributions payable to the Company or a Restricted Subsidiary of the
Company);
(2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or any Guarantor that is contractually
subordinated to the Notes or to any Note Guarantee (excluding any
intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries), except (y) the purchase, repurchase or other
acquisition of any subordinated Indebtedness in anticipation of
satisfying a scheduled maturity, sinking fund or amortization or other
installment obligation, in each case within one year of the date of
acquisition, and (z) a payment of interest or principal at the Stated
Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) being
collectively referred to as "RESTRICTED PAYMENTS"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing;
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(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in the first paragraph of Section 4.09 hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (4), (6), and (7) of
the next succeeding paragraph), is less than the sum, without
duplication, of:
(A) 100% of the aggregate net cash proceeds,
including cash and Cash Equivalents,
received by the Company since the date of
this Indenture as a contribution to its
common equity capital or from the issue or
sale of Equity Interests of the Company
(other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable
Disqualified Stock or convertible or
exchangeable debt securities of the Company
that have been converted into or exchanged
for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the
Company); PLUS
(B) to the extent that any Restricted Investment
that was made after the date of this
Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of
(i) the cash return of capital with respect
to such Restricted Investment (less the cost
of disposition, if any) and (ii) the initial
amount of such Restricted Investment; PLUS
(C) to the extent that any Unrestricted
Subsidiary of the Company designated as such
after the date of this Indenture is
redesignated as a Restricted Subsidiary
after the date of this Indenture or has been
merged into, consolidated with or transfers
or otherwise conveys its assets to the
Company or any of its Restricted
Subsidiaries, the lesser of (i) the Fair
Market Value of the Company's Investment in
such Subsidiary as of the date of such
redesignation, merger, consolidation,
transfer or conveyance or (ii) such Fair
Market Value as of the date on which such
Subsidiary was originally designated as an
Unrestricted Subsidiary after the date of
this Indenture; PLUS
(D) 50% of any dividends received by the Company
or a Restricted Subsidiary of the Company
after the date of this Indenture from an
Unrestricted Subsidiary of the Company, to
the extent that such dividends were not
otherwise included in the Consolidated Net
Income of the Company for such period.
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In addition, the preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the
consummation of any redemption within 60 days after the date of
declaration of the dividend or distribution or giving of the redemption
notice, as the case may be, if at the date of declaration or notice,
the dividend, distribution or redemption payment would have complied
with the provisions of this Indenture;
(2) the making of any Restricted Payment in exchange for,
or out of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, Equity Interests of the
Company (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to the Company;
PROVIDED that the amount of any such net cash proceeds that are
utilized for any such Restricted Payment will be excluded from clause
(3)(A) of the preceding paragraph;
(3) the repurchase, redemption, defeasance or other
acquisition or retirement for value of Indebtedness of the Company or
any Guarantor that is contractually subordinated to the Notes or to any
Note Guarantee, as applicable, with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing
Indebtedness;
(4) so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, the payment of
any dividend or distribution (or, in the case of any partnership or
limited liability company, any similar distribution) by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a
pro rata basis;
(5) the repurchase of Equity Interests deemed to occur
upon the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options; and
(6) so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, the payment of
regularly scheduled dividends with respect to the Series A Cumulative
Convertible Series A Preferred Stock of the Company in accordance with
the terms thereof in effect on the date of this Indenture;
(7) so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, payments or
distributions to dissenting shareholders in connection with a
consolidation, merger or transfer of assets that complies with the
provisions described under Section 5.01;
(8) so long as no Default or Event of Default has
occurred and is continuing or would be caused thereby, other Restricted
Payments not to exceed $2.0 million since the date of this Indenture;
and
(9) payments of $16.4 million to repay obligations
outstanding under the Existing Credit Agreement; payments of $6.4
million to repay other short term notes outstanding as of the date of
this Indenture; payments of $7.8 million to collateralize letters of
credit with respect to obligations to reclaim lands used for mining, to
pay
57
federal and state workers' compensation, to secure coal lease
obligations and to satisfy other miscellaneous obligations; payments of
$4.0 million to purchase and upgrade existing railroad facilities; and
payments of $3.0 million to open an existing preparation plant and
loadout facility.
For purposes of determining compliance with this covenant, (i) the
amount of all Restricted Payments (other than cash) will be the Fair Market
Value on the date of the Restricted Payment of the asset(s), property or
securities proposed to be transferred or issued by the Company or any Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment, and (ii) in
the event that a Restricted Payment meets the criteria of more than one of the
types of Restricted Payments described in the above clauses, including the first
paragraph of this Section 4.07, the Company may, in its sole discretion, order
and classify, and from time to time may reclassify, such Restricted Payment if
it would have been permitted at the time such Restricted Payment was made and at
the time of such reclassification. The Fair Market Value of any property or
assets or securities that are required to be valued by this covenant will be
determined by the Board of Directors. The Board of Directors' determination must
be based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the Fair Market Value exceeds
$5.0 million.
Section 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) sell, lease or transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) the Existing Credit Agreement (until obligations
owing under such agreement are repaid);
(2) a First Lien Credit Facility or and any agreement or
instrument in effect on the date of this Indenture;
(3) this Indenture, the Notes and the Note Guarantees;
(4) any applicable law, rule, regulation or order;
58
(5) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; PROVIDED that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(6) encumbrances or restrictions (A) that restrict in a
customary manner the subletting, assignment or transfer of any property
or asset that is a lease, license, conveyance or contract or similar
property or asset, or (B) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or asset of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture;
(7) purchase money obligations for property acquired in
the ordinary course of business and Capital Lease Obligations that
impose restrictions on the property purchased or leased of the nature
described in clause (3) of the preceding paragraph;
(8) any agreement for the sale or other disposition of
all or substantially all of the Capital Stock of, or property or assets
of, a Restricted Subsidiary that restricts distributions by that
Restricted Subsidiary pending the sale or other disposition;
(9) Permitted Refinancing Indebtedness and any amendment,
extension, refinancing or renewal of any instrument or agreement
permitted by this covenant; PROVIDED that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness or any
such amendment, extension, refinancing or renewal are not materially
more restrictive, taken as a whole, than those contained in the
agreements governing the Indebtedness being refinanced or the
instrument or agreement being amended, extended, refinanced or renewed;
(10) Liens permitted to be incurred under Section 4.12
hereof that limit the right of the debtor to dispose of the properties
or assets subject to such Liens; and
(11) provisions limiting the disposition or distribution
of assets or property in joint venture agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other
similar agreements entered into with the approval of the Company's
Board of Directors, which limitation is applicable only to the
properties or assets that are the subject of such agreements.
Section 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock; PROVIDED, HOWEVER,
that the Company may incur Indebtedness (including Acquired Debt) or issue
59
Disqualified Stock, and a Guarantor may incur Indebtedness (including Acquired
Debt) if the Fixed Charge Coverage Ratio for the Company's most recently ended
four full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or such Preferred Stock is issued, as the case may
be, would have been at least 2.0 to 1 on or prior to the first anniversary of
the date hereof, 2.25 to 1 after the first anniversary of the date hereof but
before the second anniversary of the date hereof, and 2.50 to 1 after the second
anniversary of the date hereof, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock
had been issued, as the case may be, at the beginning of such four-quarter
period.
The first paragraph of this covenant will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "PERMITTED DEBT"):
(1) the incurrence by the Company and any Guarantor of
Indebtedness and letters of credit under a First Lien Credit Facility
in an aggregate principal amount at any one time outstanding under this
clause (1) (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) not to exceed $10.0 million, less
the aggregate amount of all repayments of term Indebtedness under such
First Lien Credit Facility and all repayments of revolving credit
Indebtedness under such First Lien Credit Facility effected with a
corresponding commitment reduction under such First Lien Credit
Facility pursuant to clause (1) of the second paragraph under Section
4.10;
(2) Indebtedness existing on the date of this Indenture
(other than any Indebtedness repaid on the date of this Indenture with
the net proceeds from the sale of the Notes, including Indebtedness
under the Existing Credit Agreement);
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
to be issued on the date of this Indenture and the exchange Notes and
the related Note Guarantees to be issued pursuant to the Registration
Rights Agreement;
(4) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings, industrial revenue bonds, purchase
money obligations or other Indebtedness, in each case, incurred for the
purpose of financing all or any part of the purchase price or cost of
design, construction, installation or improvement of property (real or
personal), plant or equipment used in the Permitted Business of the
Company or any of its Restricted Subsidiaries, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness
incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (4), not to exceed $8.0
million at any time outstanding, provided that in no event shall the
Indebtedness incurred pursuant to clause (2) and this clause (4) exceed
an aggregate of $14.0 million;
60
(5) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness or
issuance by the Company of Disqualified Stock in exchange for, or the
net proceeds of which are used to renew, refund, refinance, replace,
defease or discharge any Indebtedness (other than intercompany
Indebtedness) or Disqualified Stock issued by the Company that was
permitted by this Indenture to be incurred under the first paragraph of
this covenant or clauses (2) (other than any Indebtedness under clause
(2) repaid after the date of this Indenture with the net proceeds from
the sale of the Notes), (3) or (5) of this paragraph;
(6) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries; PROVIDED, HOWEVER,
that:
(A) if the Company or any Guarantor is the
obligor on such Indebtedness and the payee
is not the Company or a Guarantor, such
Indebtedness must be expressly subordinated
to the prior payment in full in cash of all
Obligations then due with respect to the
Notes, in the case of the Company, or the
Note Guarantee, in the case of a Guarantor;
and
(B) (i) any subsequent issuance or transfer of
Equity Interests that results in any such
Indebtedness being held by a Person other
than the Company or a Restricted Subsidiary
of the Company and (ii) any sale or other
transfer of any such Indebtedness to a
Person that is not either the Company or a
Restricted Subsidiary of the Company,
will be deemed, in each case, to constitute an incurrence of
such Indebtedness, in an amount equal to the portion of such
Indebtedness held by such Person, by the Company or such
Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the issuance by any of the Company's Restricted
Subsidiaries to the Company or to any of its Restricted Subsidiaries of
shares of Preferred Stock; PROVIDED, HOWEVER, that:
(A) any subsequent issuance or transfer of
Equity Interests that results in any such
Preferred Stock being held by a Person other
than the Company or a Restricted Subsidiary
of the Company; and
(B) any sale or other transfer of any such
Preferred Stock to a Person that is not
either the Company or a Restricted
Subsidiary of the Company,
will be deemed, in each case, to constitute an issuance of
such Preferred Stock by such Restricted Subsidiary that was
not permitted by this clause (7);
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(8) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging Obligations in the ordinary course
of business;
(9) the guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
covenant; PROVIDED that if the Indebtedness being guaranteed is
subordinated to or PARI PASSU with the Notes, then the Guarantee shall
be subordinated or PARI PASSU, as applicable, to the same extent as the
Indebtedness guaranteed;
(10) the incurrence by the Company or any of the
Guarantors of Indebtedness in respect of workers' compensation claims,
payment obligations in connection with health or other types of social
security benefits, unemployment or other insurance or self-insurance
obligations, statutory obligations, bankers' acceptances, performance,
reclamation, surety or similar bonds and letters of credit and
completion or performance guarantees (including, without limitation,
performance guarantees pursuant to coal supply agreements or equipment
leases) in the ordinary course of business, including any such
Indebtedness incurred in connection with the acquisition of additional
mining assets;
(11) the incurrence by the Company or any of its
Restricted Subsidiaries the Guarantors of Indebtedness arising from the
honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so
long as such Indebtedness is covered within five Business Days;
(12) the incurrence of Indebtedness arising from
agreements of the Company or any of its Restricted Subsidiaries
providing for indemnification, adjustment of purchase price or similar
obligations, in each case incurred in connection with the disposition
of any business, assets or Subsidiary, other than guarantees of
Indebtedness incurred by an Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition; or
(13) the incurrence by the Company or any of the
Guarantors of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (13), not to exceed $5.0 million.
The Company will not incur, and will not permit any Guarantor to incur,
any Indebtedness (including Permitted Debt) that is contractually subordinated
in right of payment to any other Indebtedness of the Company or such Guarantor
unless such Indebtedness is also contractually subordinated in right of payment
to the Notes and the applicable Note Guarantee on substantially identical terms;
PROVIDED, HOWEVER, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of being unsecured or by virtue of being secured on a first or junior
Lien basis.
For purposes of determining compliance with this Section 4.09(a), in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted
62
Debt described in clauses (1) through (13) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company will be permitted
to classify such item of Indebtedness on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this covenant. Indebtedness under a First Lien Credit Facility
will be deemed to have been incurred on such date in reliance on the exception
provided by clause (1) of the definition of Permitted Debt. The accrual of
interest, the accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, the reclassification of Preferred Stock as Indebtedness due to a
change in accounting principles, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this covenant; provided, in each such case,
that the amount of any such accrual, accretion or payment is included in Fixed
Charges of the Company as accrued. Notwithstanding any other provision of this
covenant, the maximum amount of Indebtedness that the Company 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.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case
of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case
of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured
by a Lien on the property and assets of the specified Person, the
lesser of:
(A) the Fair Market Value of such property and
assets at the date of determination; and
(B) the amount of the Indebtedness of the other
Person.
Section 4.10 ASSET SALES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of the Asset Sale at
least equal to the Fair Market Value of the property and assets or
Equity Interests issued or sold or otherwise disposed of;
(2) at least 75% of the consideration received in the
Asset Sale by the Company or such Restricted Subsidiary is in the form
of cash or Cash Equivalents. For purposes of this provision, each of
the following will be deemed to be cash:
(A) any liabilities, as shown on the Company's
most recent consolidated balance sheet, of
the Company or any Restricted
63
Subsidiary (other than contingent
liabilities and liabilities that are by
their terms subordinated to the Notes or any
Subsidiary Guarantee) that are assumed by
the transferee of any such assets and as a
result of which the Company or such
Restricted Subsidiary is released from
further liability;
(B) any securities, notes, other obligations or
assets received by the Company or any such
Restricted Subsidiary from such transferee
converted by the Company or such Restricted
Subsidiary within 15 days of receipt thereof
into cash or Cash Equivalents, to the extent
of the cash or Cash Equivalents received in
that conversion; and
(C) property or assets that are used or useful
in a Permitted Business.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or the applicable Restricted Subsidiary, as the case may be)
may apply such Net Proceeds:
(1) to repay Indebtedness and other First Lien
Obligations and, if the Indebtedness repaid is revolving credit
Indebtedness, to correspondingly permanently reduce commitments with
respect thereto;
(2) to acquire all or substantially all of the assets of,
or any Capital Stock of, another Permitted Business (or enter into a
definitive agreement committing to make such an acquisition within 60
days after the later of (i) the date of such agreement and (ii) 360
days after the receipt of the Net Proceeds to be used for such
purpose), if, after giving effect to any such acquisition of Capital
Stock, the Permitted Business is or becomes a Restricted Subsidiary of
the Company or another Restricted Subsidiary;
(3) to make a capital expenditure (or enter into a
definitive agreement committing to make such a capital expenditure
within 60 days after the later of (i) the date of such agreement and
(ii) 360 days after the receipt of the Net Proceeds to be used for such
purpose);
(4) to acquire other assets that are not classified as
current assets under GAAP and that are used or useful in a Permitted
Business; or
(5) a combination of the foregoing clauses (1), (2), (3)
and (4).
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5.0 million, within ten Business
Days thereof, the Company will make an Asset Sale Offer to all Holders of Notes,
and to all holders of other Indebtedness that is PARI PASSU with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or
64
redeem with the proceeds of sales of assets, to purchase or redeem the maximum
principal amount of Notes and such other PARI PASSU Indebtedness that may be
purchased or redeemed out of the Excess Proceeds. The offer price in any Asset
Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase, and will be
payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other PARI PASSU Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee will select the Notes and
such other PARI PASSU Indebtedness to be purchased on a PRO RATA basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
The Company will 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 each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.10, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 4.10 by virtue of such compliance.
Section 4.11 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each, an "AFFILIATE TRANSACTION"), unless:
(1) the Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by
the Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions
involving aggregate consideration in excess
of $2.5 million, a resolution of the Board
of Directors set forth in an Officer's
Certificate certifying that such Affiliate
Transaction complies with this covenant and
that such Affiliate Transaction has been
approved by a majority of the disinterested
members of the Board of Directors of the
Company; and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions
involving aggregate consideration in excess
of $5.0 million, an opinion as to the
fairness to the Company or such Subsidiary
of such Affiliate Transaction from a
financial point of view issued by an
accounting, appraisal or investment banking
firm of national standing.
65
The following transactions will not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(1) any compensation arrangement, employment agreement,
employee benefit plan, equity-based incentive plan, bonus plan, expense
reimbursement plan, severance arrangement, officer or director
indemnification agreement or any similar arrangement entered into by
the Company or any of its Restricted Subsidiaries in the ordinary
course of business and payments pursuant thereto;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) payment of reasonable directors' fees;
(4) Restricted Payments that do not violate the
provisions of this Indenture described above under Section 4.07;
(5) payments and transactions pursuant to any agreement
or arrangement in effect on the date of this Indenture and any
amendment thereto or renewal thereof to the extent that any such
amendment or renewal is not more disadvantageous to the Holders of the
Notes than the original agreement or arrangement in effect on the date
of this Indenture;
(6) any payments or other transactions pursuant to any
tax-sharing agreement between the Company and any other Person with
which the Company files a consolidated tax return or with which the
Company is part of a consolidated group for tax purposes;
(7) any issuance or sale of shares of Capital Stock
(other than Disqualified Stock) for cash at Fair Market Value; and
(8) transactions with customers, suppliers or purchasers
or sellers of goods or services, in each case in the ordinary course of
business and otherwise in compliance with the terms of this Indenture
and which are fair to the Company in the reasonable determination of
the Board of Directors or are on terms no less favorable than would be
available in a comparable transaction with an unrelated third party.
Section 4.12 LIENS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind on any property or asset now owned or hereafter
acquired, except Permitted Liens.
If the Company or any Guarantor creates any additional Lien upon any
property or asset not then part of the Collateral to secure any First Lien
Obligations (other than security interests granted solely to secure Hedging
Obligations), it must concurrently grant a second-priority Lien (subject only to
Permitted Liens) upon such property as security for the Notes as set forth in
Article 10.
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Section 4.13 BUSINESS ACTIVITIES.
The Company will not, and the Company will not permit any of its
Restricted Subsidiaries to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Restricted Subsidiaries taken as a whole.
Section 4.14 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in
accordance with the respective or organizational documents (as the same
may be amended from time to time) of the Company or any such
Subsidiary; and
(2) the rights (charter and statutory), license and
franchises of the Company and its Subsidiaries; PROVIDED, HOWEVER, that
the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes or such action as otherwise permitted by this
Indenture.
Section 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company will
make an offer (a "CHANGE OF CONTROL OFFER") to each Holder to repurchase all or
any part (in a minimum aggregate principal amount of $1,000 or an integral
multiple of $1,000) of each Holder's Notes at a purchase price in cash equal to
101% of the aggregate principal amount of the Notes repurchased plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes repurchased to the
date of purchase subject to the rights of holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date (the
"CHANGE OF CONTROL PAYMENT"). Within 15 days following any Change of Control,
the Company will mail a notice to each Holder, with a copy to the Trustee,
describing the transaction or transactions that constitute the Change of Control
and stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which date
shall be no earlier than 30 days and no later than 60 days from the
date such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE");
(3) that any Note not tendered will continue to accrue
interest;
67
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder; the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company will 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 in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.15 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 3.09 or this Section 4.15 by virtue
of such conflict.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful:
(1) accept for payment all Notes or portions thereof
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
(3) deliver or cause to be delivered to the Trustee the
Notes properly accepted together with an Officer's Certificate stating
the aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each new Note will be in a minimum
aggregate principal amount of $1,000 or an integral multiple thereof. If the
Change of Control Payment Date is on or after an interest record date and on or
before the
68
related Interest Payment Date, accrued and unpaid interest, if any, will be paid
to the Holder in whose name a note is registered at the close of business on
such record date, and no additional interest will be payable to the holders who
tender pursuant to the Change of Control Offer. 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.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if (1) 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 4.15 and purchases all Notes validly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 3.07, unless and until there is a default in payment of the
applicable redemption price.
Section 4.16 PAYMENTS FOR CONSENT.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture the Notes unless such consideration is offered to be paid and
is paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.17 ADDITIONAL NOTE GUARANTEES AND SECURITY.
If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary after the date of this Indenture, then the
Company shall cause such Restricted Subsidiary to:
(1) execute and deliver to the Trustee a supplemental
indenture in a form reasonably satisfactory to the Trustee pursuant to
which such Domestic Subsidiary shall unconditionally guarantee on a
senior secured basis all of the Company's obligations under the Notes
and this Indenture on the terms set forth in this Indenture;
(2) execute and deliver to the Trustee such amendments or
additions to the Security Documents and other documents as the Trustee
deems necessary or advisable in order to grant to the Trustee, for the
benefit of the holders of Notes, a perfected security interest (which
will be a second priority security interest (subject only to Permitted
Liens) if a First Lien Credit Facility is in place) in (i) the Capital
Stock of such new Domestic Subsidiary and (ii) substantially all of the
property and assets of such new Domestic Subsidiary, all of which will
constitute Collateral in accordance with the terms of this Indenture
and the Security Documents, and if so required by the terms of any
First Lien Credit Facility execute and deliver to the Credit Agent such
amendments or additions to the security documents securing the First
Lien Obligations as the Credit Agent deems necessary or advisable in
order to grant to the Credit Agent, for the benefit of the lenders
under such First Lien Credit Facility, a perfected first priority
security interest in the assets referred to in clauses (i) and (ii)
above;
69
(3) take such further action and execute and deliver such
other documents specified in this Indenture or otherwise reasonably
requested by the Trustee to effectuate the foregoing; and
(4) deliver to the Trustee an Opinion of Counsel that
such supplemental indenture and any other documents required to be
delivered have been duly authorized, executed and delivered by such
Domestic Subsidiary and constitutes a valid, binding and enforceable
obligation of such Domestic Subsidiary and such other opinions as the
Trustee may request regarding the grant and perfection of such Liens in
the property and assets of such Domestic Subsidiary as provided for in
this Indenture.
Thereafter, such Domestic Subsidiary shall be a Guarantor for all
purposes of this Indenture.
Section 4.18 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary designated as
Unrestricted will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
the first paragraph of Section 4.07 hereof or under one or more clauses of the
definition of Permitted Investments, as determined by the Company. The
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the preceding conditions and was permitted by the covenant
described above under Section 4.07. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under the covenant
described under Section 4.09, the Company will be in default of such covenant.
The Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Company; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary, and such designation will only be permitted if (1) such Indebtedness
is permitted under the covenant described under Section 4.09, calculated on a
pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be
in existence following such designation. Upon the designation of an Unrestricted
Subsidiary of the Company as a Restricted Subsidiary, the Company will provide
written notice of such designation to the Trustee.
70
Section 4.19 ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Company will not permit or cause any of its Restricted Subsidiaries
to issue or sell any Capital Stock (other than to the Company or to a
Wholly-Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly-Owned Restricted Subsidiary of the Company) to own
or hold any Capital Stock of any Restricted Subsidiary of the Company or any
Lien or security interest therein (other than as required by applicable law or
any Permitted Lien); PROVIDED, HOWEVER, that this provision shall not prohibit
(1) any issuance or sale if, immediately after giving effect thereto, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and any
Investment in such Person remaining after giving effect to such issuance or sale
would have been permitted to be made under Section 4.07 if made on the date of
such issuance or sale or (2) the sale of all of the Capital Stock of a
Restricted Subsidiary in compliance with the provisions of Section 4.10.
Section 4.20 IMPAIRMENT OF SECURITY INTEREST.
Subject to the Security Documents, neither the Company nor any of its
Restricted Subsidiaries will take any action, or omit to take any action the
omission to take which would, adversely affect or impair in any material respect
the Liens in favor of the Trustee with respect to the Collateral. Neither the
Company nor any of its Domestic Subsidiaries shall grant to any Person (other
than the Credit Agent or the Trustee or the Holders), or permit any Person
(other than the Credit Agent or the Trustee or the Holders) to retain, any Lien
on the Collateral other than Permitted Liens. Neither the Company nor any of its
Restricted Subsidiaries will enter into any agreement that requires the proceeds
received from any sale of Collateral to be applied to repay, redeem, defease or
otherwise acquire or retire any Indebtedness of any Person, other than as
expressly permitted by this Indenture, the Notes, and the Security Documents.
The Company shall, and shall cause each Guarantor to, at their sole cost and
expense, execute and deliver all such agreements and instruments as the Trustee
shall reasonably request to more fully or accurately describe the property and
assets intended to be Collateral or the obligations intended to be secured by
the Security Documents or to effect or preserve the grant of the Liens intended
to be created by the Security Documents. The Company shall, and shall cause each
Guarantor to, at their sole cost and expense, file any such notice filings or
other agreements or instruments, and take all such other actions, as may be
reasonably necessary or desirable under applicable law, or as the Trustee may
request, to perfect the Liens created by the Security Documents at such times
and at such places as the Trustee may reasonably request.
Section 4.21 REAL ESTATE MORTGAGES AND FILINGS.
With respect to any interest in any real property (individually and
collectively, the "Premises") (a) owned by the Company or a Domestic Subsidiary
on the Issue Date or (b) acquired by the Company or a Domestic Subsidiary:
(1) The Company will use its best efforts to obtain, by
June 30, 2006 (the "TRIGGER DATE"), fee and/or leasehold title
insurance policies (written by a nationally recognized insurer
reasonably acceptable to the Majority Noteholders) covering
substantially all of the Tennessee Core Properties (the "TENNESSEE
REQUIRED INSURANCE"), subject only to Permitted Liens and such other
exceptions thereto as shall not materially
71
affect the Fair Market Value of the Tennessee Core Properties, and as
shall not materially interfere with the intended use to be made of the
Tennessee Core Properties by the Company, as reasonably determined by
the Majority Noteholders; provided that in the case of leasehold title
insurance, such leasehold title insurance shall be required only if the
lessor is not a governmental entity. For purposes of the covenants
described in this clause (1) and clauses (2), (3) and (5), "best
efforts" shall not require the Company or any Subsidiary to commence
litigation or conduct new surveys or expend cash to remove any
exceptions and encumbrances on the Premises. All such title insurance
policies shall be in an amount equal to 100% of the Fair Market Value
of the Premises purported to be covered by the related Mortgage,
insuring that the interest created by the Mortgage thereon constitutes
a valid Lien thereon, and such policies shall also include, to the
extent available at commercially reasonable rates, such endorsements as
the Majority Noteholders reasonably request and shall be accompanied by
evidence of the payment in full of all premiums thereon;
(2) The Company will use its best efforts to obtain, by
the Trigger Date, fee and/or leasehold title insurance policies
(written by a nationally recognized insurer reasonably acceptable to
the Majority Noteholders covering substantially all of the Kentucky
Core Properties (the "Kentucky Required Insurance"), subject only to
Permitted Liens and such other exceptions thereto as shall not
materially affect the Fair Market Value of the Kentucky Core Properties
(which shall not include any exceptions with respect to the terms of
the lease that require the consent of the landlord to the execution,
delivery and recording of the insured mortgage), and as shall not
materially interfere with the intended use to be made of the Kentucky
Core Properties by the Company, as reasonably determined by the
Majority Noteholders. All such title insurance policies shall be in an
amount equal to 100% of the Fair Market Value of the Premises purported
to be covered by the related Mortgage insuring that the interest
created by the Mortgage thereon constitutes a valid Lien thereon, and
such policies shall also include, to the extent available at
commercially reasonable rates, such endorsements as the Majority
Noteholders shall reasonably request and shall be accompanied by
evidence of the payment in full of all premiums thereon;
(3) Within 90 days after the acquisition by the Company
or any of its Subsidiaries of any interest in real property if such
acquisition occurs after the Trigger Date and if in the case of real
property purchased by the Company or any of its Subsidiaries, the
purchase price for such real property exceeds two million dollars
($2,000,000) and if in the case of real property leased by the Company
or any of its Subsidiaries, (x) the recoverable coal reserves on such
leased property exceed five hundred thousand (500,000) tons and (y) the
lessor of such real property is not a governmental entity (any such
owned or leased after acquired real property, "Later Properties"), then
the Company will use its best efforts to similarly obtain fee and/or
leasehold title insurance policies (written by a nationally recognized
insurer reasonably acceptable to the Majority Noteholders) covering
such additional properties (the "Later Required Insurance" and,
together with the Tennessee Required Insurance and the Kentucky
Required Insurance, the "Required Insurance") subject to the same
conditions as are applicable to the Tennessee Required Insurance or
Kentucky Required Insurance, as applicable;
72
(4) Notwithstanding anything to the contrary herein,
neither the Company nor any of its Subsidiaries shall be required to
obtain title insurance on any applicable owned or leased property, if
the Fair Market Value of, and aggregate amount of title insurance then
outstanding with respect to, properties pledged to the collateral agent
is equal to or greater than ninety million dollars ($90,000,000), and
the delivery to the collateral agent of title insurance in such amount,
and such insurance shall not be cancelled thereafter by the Company or
any of its Subsidiaries, shall satisfy the requirement to deliver
Required Insurance under clause (6) hereof;
(5) The Company will use its best efforts to obtain, by
the Trigger Date or in the case of any leasehold interest in real
property obtained after the date of this Indenture, by such
acquisition, for substantially all of the real property leased by the
Company or its Subsidiaries that is included in the Tennessee Core
Properties, the Kentucky Core Properties or the Later Properties,
consents from the lessors of such properties with respect to the
execution, delivery and recording of a leasehold mortgage or deed of
trust (the "Landlord Consents"), but only if such consents are required
by the terms of such leases, such consents to be in form and substance
reasonably acceptable to the Majority Noteholders;
(6) If either the Required Insurance or the Landlord
Consents (the "Collateral Items") are not delivered to the collateral
agent by the Trigger Date (regardless whether best efforts have been
employed by the Company) (including if the exceptions taken with
respect to the Required Insurance are not acceptable to the Majority
Noteholders (acting reasonably) unless (a) such exceptions are
Permitted Liens or such exceptions do not materially affect the Fair
Market Value of the applicable property or do not materially interfere
with the intended use to be made of the applicable property by the
Company and its Subsidiaries as reasonably determined by the Majority
Noteholders or (b) the applicable insurance company has issued an
endorsement to the applicable policy in customary form to insure
against loss in respect of such exception) or if, subsequent to the
Trigger Date, the Company cancels the Required Insurance or Landlord
Consents (the date of any such occurrence, a "Later Trigger Date"): (x)
a one time fee (the "Collateral Fee") shall be payable on the Trigger
Date (or, solely if the Collateral Fee was not paid on the Trigger
Date, on a Later Trigger Date) to the Holders in an amount equal to
1.00% of the then outstanding principal amount of the Notes, and (y)
the interest rate on the Notes will increase by 0.50% per annum on the
Trigger Date (or any Later Trigger Date) until the Collateral Items
have been delivered in accordance with the foregoing requirements;
provided that on each three month anniversary of the Trigger Date (or
Later Trigger Date, as applicable) the interest rate on the Notes will
increase by an additional 0.50% per annum until the Collateral Items
have been delivered and the Company will notify the Trustee of such
increase in interest rate; provided further that the aggregate interest
rate increase under this subparagraph (6) shall not exceed 2.50%. The
Collateral Fee shall be fully earned and nonrefundable if the
Collateral Items are not delivered prior to the Trigger Date (or fail
to be in effect on any Later Trigger Date to the extent no Collateral
Fee was previously payable). To the extent the Collateral Fee is not
timely paid when due, in addition to such failure constituting a
Default, the Collateral Fee shall bear interest at the rate accruing on
the Notes; and
73
(7) Notwithstanding the foregoing clause (6), if all of
the Required Insurance and the Landlord Consents are delivered to the
Collateral Agent by the Trigger Date (or are in effect on any Later
Trigger Date) except for the Kentucky Required Insurance, then (a) no
Collateral Fee shall be due, and (b) during any period where the
Required Insurance and the Landlord Consents have been delivered other
than the Kentucky Required Insurance, the interest rate on the Notes
shall not increase.
In addition, with respect to any interest in any Premises (a) owned by
National Coal or a Domestic Subsidiary on the date of the indenture or (b)
acquired by National Coal or a Domestic Subsidiary, within 90 days of the
acquisition thereof:
(1) the Company shall use its commercially reasonable
efforts to deliver, as soon as reasonably practicable after the date of
this Indenture, to the Trustee, as mortgagee, fully executed
counterparts of one or more Mortgages, in form and substance reasonably
acceptable to the Trustee, dated as of the date of this Indenture or
the date of acquisition of such property, as the case may be, duly
executed by the Company or the applicable Domestic Subsidiary, together
with evidence of the completion (or reasonably satisfactory
arrangements for the completion), of all recordings and filings of each
such Mortgage as may be necessary to create a valid, perfected Lien,
subject to Permitted Liens in favor of the Trustee for the benefit of
the holders of Notes, against the properties purported to be covered
thereby; and
(2) the Company shall deliver to the Trustee with respect
to each of the covered Premises, the most recent survey, if any, of
such Premises, together with either (i) an updated survey certification
in favor of the Trustee from the applicable surveyor stating that,
based on a visual inspection of the property, there has been no change
in the facts depicted in the survey or (ii) an affidavit and/or
indemnity from the Company stating that to its knowledge there has been
no change in facts depicted in the survey, other than, in each case,
changes that do not materially adversely affect the use by the Company
or Guarantor, as applicable, of such Premises for the Company or such
Guarantor's business as so conducted, or intended to be conducted, at
such Premises.
In the event any determination or consent is required of the Majority
Noteholders pursuant to this Section 4.21, the Company shall send, by first
class mail, a notice to the Trustee and each of the Holders, with a copy to the
Trustee (with the record date for Holders entitled to such notice being the date
that is two days prior to the date of such notice), substantially in the form of
EXHIBIT J. The notice will contain all instructions and materials necessary to
enable such Holders to make such determination or give informed consent and to
provide notice to the Trustee of such Holder's decision with respect thereto.
The notice will state:
(a) the record date;
(b) the mechanism for providing the required consent or
determination, and will further provide that failure to respond within
45 days will be deemed as affirmative consent to the request;
74
(c) the subject matter of the notice, with specific
reference to the provision of Section 4.21 for which such Holder's
determination or consent is sought;
(d) the period during which such Holder shall have to
respond, which may be extended by the Company (provided that notice of
any extension is given to the Holders and the Trustee) and a statement
that failure to respond within the period will be deemed as affirmative
consent to the request;
(e) any information necessary or desirable for the Holder
to make a decision with respect to the requested action; and
(f) that Holders will be entitled to change their
decision with respect to the requested action only until the end of the
period during which Holders may respond.
The Trustee shall, at the end of the period during which Holders may
respond to the notice, send notice to the Company stating the aggregate
principal amount of Notes as to which the Trustee has received determinations or
consents. Within 30 days of the end of the period during which Holders may
respond to the notice, the Company shall (so long as the Trustee has sent the
notice required by the preceding sentence) provide the Trustee with an Officers'
Certificate specifying the determination or consent to which it relates and
certifying whether or not such determination or consent has become effective
Section 4.22 LANDLORD, BAILEE AND CONSIGNEE WAIVERS.
Each of the Company and each of its Domestic Subsidiaries that is a
lessee of, or becomes a lessee of, real property on or in which it will
maintain, store, hold or locate property and assets having an aggregate fair
market value of at least $500,000, is, and will be, required to use commercially
reasonable efforts (which shall not require the expenditure of cash with respect
to obtaining a landlord waiver from the lessor of any real property) to deliver
to the Trustee a landlord waiver, substantially in the form of EXHIBIT G,
executed by the lessor of such real property; PROVIDED that in the case where
such lease is a lease in existence on the date of this Indenture or the lessee
thereof that is a Domestic Subsidiary of the Company was not a Domestic
Subsidiary of the Company on the date of this Indenture, the Company or such
Domestic Subsidiary that is the lessee thereunder (i) shall have 90 days from
the date of this Indenture or the later date it became a Domestic Subsidiary, as
the case may be, to satisfy such requirement or, in the event there exist
waivers with respect to leases on the date of this Indenture obtained for the
benefit of other current or former lenders, to deliver such waivers amended to
add the Trustee as a party thereto and (ii) shall be relieved of such obligation
with respect to any landlord waiver to the extent the related lessor has refused
to deliver such a landlord waiver following such Person's use of such
commercially reasonable efforts. Each of the Company and each of its Domestic
Subsidiaries that provides any of its property or assets having an aggregate
Fair Market Value of at least $500,000 to a bailee or consignee agrees to be
bound by the terms of the immediately preceding sentence (other than the proviso
thereto), in respect to such bailee or consignor, MUTATIS MUTANDIS, and to cause
to be filed all financing statements and other documents as shall be required
under applicable law to protect its interest in such assets from the claims of
creditors or such bailee or consignee; PROVIDED, that (x) the terms "landlord",
"lessee" and "lease" shall be replaced, respectively, with the terms "bailee" or
"consignee", as applicable,
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"▇▇▇▇▇▇" or "consignor", as applicable, and the "applicable agreement" and (y)
the condition that the lessee maintain, store, hold or locate all or any of its
assets having an aggregate fair market value of at least $500,000 shall instead
be replaced with the condition that the Fair Market Value of the assets subject
to the applicable bailment or consignment have a fair market value of at least
$500,000.
Section 4.23 TITLE INSURANCE.
The Company shall use commercially reasonable efforts to obtain no
later than March 31, 2006, and maintain at all times thereafter during which the
Notes are outstanding, a lender's policy of title insurance with respect to the
Company's executive offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 4.24 MEMORANDA OF LEASES.
No later than March 31, 2006, the Company, at its sole cost and
expense, shall record or cause to be recorded a Memorandum of Lease or the
assignment of leasehold to the Company with respect each leasehold currently
being mined by the Company or on which surface improvements are located or which
the Company has a permit to mine or intends to apply for a permit within five
years.
ARTICLE 5.
SUCCESSORS
Section 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation;
or (b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a
corporation organized or existing under the laws of the United States,
any state of the United States or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
has been made assumes all the obligations of the Company under the
Notes, this Indenture and the Security Documents and the Registration
Rights Agreement pursuant to agreements reasonably satisfactory to the
Trustee;
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(3) immediately after such transaction no Default or
Event of Default exists; and
(4) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition has
been made would, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09(a).
In addition, the Company shall not, directly or indirectly, lease all
or substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person.
This Section 5.01 will not apply to:
(1) a merger of the Company with an Affiliate solely for
the purpose of reincorporating the Company in another jurisdiction; or
(2) any consolidation or merger, or any sale, assignment,
transfer, conveyance, lease or other disposition of property or assets
between or among the Company and the Guarantors.
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
property and assets of the Company in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which 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, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; PROVIDED, HOWEVER, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's property and assets in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 EVENTS OF DEFAULT.
Each of the following is an "Event of Default":
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(1) default in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes and such default
continues for 30 days;
(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) failure by the Company or any of its Restricted
Subsidiaries to comply with the provisions described under Sections
4.10, 4.15 or 5.01;
(4) failure by the Company or any of its Restricted
Subsidiaries to comply with any of the provisions described under
Sections 4.07 and 4.09 and such failure continues for 30 days;
(5) failure by the Company or any of its Restricted
Subsidiaries for 60 days after notice to the Company from the Trustee
or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class to comply with any of
the other agreements in this Indenture or the Security Documents and
such failure continues for 60 days;
(6) 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 the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the date of
this Indenture, if that default:
(A) is caused by a failure to pay principal of,
or interest or premium, if any, on, such
Indebtedness, after expiration of any grace
period provided in such Indebtedness (a
"Payment Default"); or
(B) results in the acceleration of such
Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of
any other such Indebtedness under which there has
been a Payment Default or the maturity of which has
been so accelerated, aggregates $5.0 million or more;
(7) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments (to the extent not fully covered by
insurance) or the payment of money entered by a court or courts of
competent jurisdiction aggregating in excess of $5.0 million, which
judgments are not paid, discharged or stayed within 60 days;
(8) except as permitted by this Indenture, any Note
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases for any reason to be in full force and effect, or any
Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Note Guarantee;
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(9) the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary 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; and
(10) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of
its Restricted Subsidiaries that is a
Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that,
taken together, would constitute a
Significant Subsidiary in an involuntary
case;
(B) appoints a custodian of the Company or any
of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that,
taken together, would constitute a
Significant Subsidiary or for all or
substantially all of the property of the
Company or any of its Restricted
Subsidiaries that is a Significant
Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken
together, would constitute a Significant
Subsidiary; or
(C) orders the liquidation of the Company or any
of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that,
taken together, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02 ACCELERATION.
In the case of an Event of Default specified in clause (9) or (10) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of
the Company that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
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continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
payable immediately. In the event that a declaration of acceleration because of
an Event of Default set forth in clause (6) of Section 6.01 above has occurred
and is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if the default triggering such Event of Default shall be
remedied or cured by the Company or any of its Restricted Subsidiaries or waived
by the applicable holder or holders of Indebtedness (or an agent on behalf
thereof) within 60 days after such declaration of acceleration.
Upon any such declaration, the Notes shall become due and payable
immediately.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07 hereof, then an equivalent premium shall also become and be immediately due
and payable upon acceleration of the Notes, to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding.
Section 6.03 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 and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this 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 6.04 WAIVER OF PAST DEFAULTS.
Holders of not less than 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 a continuing Default or Event of Default in
the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase);
PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. 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 this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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Section 6.05 CONTROL BY MAJORITY.
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 this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06 LIMITATION ON SUITS.
Except to enforce the right to receive payment of principal, premium,
if any, or interest or Liquidated Damages, if any, when due, a Holder of a Note
may pursue a remedy with respect to this Indenture or the Notes only if:
(1) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this 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 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the 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(1) or (2) 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 and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the
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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 of the Notes 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 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 6.10 PRIORITIES.
If the Trustee collects any money or property pursuant to this Article
6, it shall pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys (including any
Collateral Agent) for amounts due under Section 7.07 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 Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, 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, upon prior written notice to the Company, fix a record
date and payment date for any payment to Holders of Notes pursuant to this
Section 6.10.
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Section 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee or any Collateral Agent for any
action taken or omitted by it as Trustee or as Collateral Agent, 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, 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 6.11 does not apply
to a suit by the Trustee or by any Collateral Agent, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 25% in
principal amount of the then outstanding Notes.
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
Indenture, and use the same degree of care and skill in its 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 Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this 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 Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this 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.
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(d) Whether or not therein expressly so provided, every provision
of this Indenture and the Security Documents 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 Indenture or any of the Security
Documents 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 Indenture or any of the Security Documents at the request
of any Holder, unless such Holder has offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
(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 reasonably
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; PROVIDED HOWEVER, 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 shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Company, to
examine the books, records, and premises of the Company, personally or by agent
or attorney.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's 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 such Officer's Certificate or Opinion of Counsel. 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 reasonably believes to be authorized or
within the rights or powers conferred upon it by this Indenture, provided,
however, that the Trustee's conduct does not constitute willful misconduct or
negligence.
(e) Unless otherwise specifically provided in this 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 Indenture or the Security Documents at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
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(g) The Trustee shall not be required to give any bond or surety
in respect to the performance of its powers and duties hereunder.
(h) The permissive rights of the Trustee to do things enumerated
in this Indenture and the Security Documents shall not be construed as duties.
(i) The Trustee shall not be charged with knowledge of any Default
or event of Default, of the identity of any Restricted Subsidiary or the
existence of any Change of Control, Asset Sale or other fact or event unless
either (i) a Responsible Officer shall have actual knowledge thereof or (ii) the
Trustee shall have received written notice thereof from either of the Company or
any Holder.
(j) Delivery of reports, information and documents to the Trustee
under Section 4.03 is for information purposes only and the Trustee's receipt of
the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of the covenants hereunder.
(k) The Trustee shall not be responsible for the computation of
any interest payments, redemption amounts or other sums payable with respect to
the Notes.
(l) The Trustee shall not be responsible for the filing of
original or continuation financing statements or the recordation, amendment, or
other filing of any security interests, liens, financing statements, or other
similar documents, nor of the contents thereof.
(m) In no event shall the Trustee be liable for any failure or
delay in the performance of its obligations hereunder because of circumstances
beyond the Trustee's control, including, but not limited to, acts of God, flood,
war (whether declared or undeclared), terrorism, fire, riot, embargo or
government action, including any laws, ordinances, regulations or the like which
delay, restrict or prohibit the providing of the services contemplated by this
Indenture.
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 it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign. 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 Indenture or the Notes, 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
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
Indenture other than its certificate of authentication.
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Section 7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs or as soon as
practical after it becomes known to the Trustee. Except in the case of a Default
or Event of Default in payment of principal of, premium or Liquidated Damages,
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 of the Notes.
Section 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
(a) Within 60 days after each July 1, beginning with July 1, 2006,
and for so long as Notes remain outstanding, the Trustee will mail to the
Holders of the Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also will comply with TIA ss. 313(b)(2). The
Trustee will also transmit by mail all reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the
Holders of Notes will be mailed by the Trustee to the Company and filed by the
Trustee with the Commission and each stock exchange on which the Notes are
listed in accordance with TIA ss. 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 such compensation for its
acceptance of this Indenture and services hereunder as agreed from time to time
by the Company and the Trustee. 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. Such expenses will include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantor will indemnify the Trustee and
any Collateral Agent against any and all losses, liabilities or expenses
incurred by them arising out of or in connection with the acceptance or
administration of their duties under this Indenture, including the reasonable
costs and expenses of enforcing this Indenture against the Company and the
Guarantors (including this Section 7.07) and defending themselves against any
claim (whether asserted by the Company, the Guarantors or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of their powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to their negligence or bad faith. The
Trustee (or, if the claim is against a Collateral Agent, the applicable
Collateral Agent) will notify the Company promptly of any claim for which it may
seek indemnity. Failure by the Trustee or a Collateral Agent 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 (or the Collateral Agent, as applicable) will cooperate in the
defense. The
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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, delayed or conditioned.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's 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 Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) 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 ss.
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, upon 30 days written notice to the
Company, in writing at any time and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in 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 principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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(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 25% in 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, 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 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 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 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(l), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 31 l(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may at any time, at the option of its Board of Directors
evidenced by a resolution set forth in an Officer's Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes 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 Subsidiary 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 the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in clauses (1) and (2) below,
and to have satisfied all their other obligations under such Notes, the
Subsidiary Guarantees and this 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 and
Liquidated Damages, 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 such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors' obligations
in connection therewith; and
(4) the provisions of this Article 8 relating to Legal
Defeasance.
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 the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.18, and 4.19 hereof and clause (4)
of the first paragraph of Section 5.01 hereof on and after the date the
conditions set
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forth in Section 8.04 hereof are satisfied (hereinafter, "COVENANT Defeasance"),
and the 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 Subsidiary 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 hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Subsidiary Guarantees will be
unaffected thereby, and in addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3) through 6.01(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 United
States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium and Liquidated Damages, if any, and interest
on the outstanding Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be, the Company must
provide the Trustee with a copy of such opinion, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of an election under Section 8.02 hereof,
the Company has delivered to the Trustee an Opinion of Counsel in the
United States 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 date of this Indenture, 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
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and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(3) in the case of an election under Section 8.03 hereof,
the Company must deliver to the Trustee an Opinion of Counsel in the
United States 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;
(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) 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;
(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 Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officer's
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.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (7) above need not be delivered if all Notes not therefore delivered to
the Trustee for cancellation (i) have become due and payable or (ii) will become
due and payable on their maturity date 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 Company.
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 noncallable 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 the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this 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
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principal, premium and Liquidated Damages, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable 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 the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the written request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 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 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 or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its written
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 United States
dollars or non-callable 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 Guarantor's obligations under this
Indenture and the Notes and the Subsidiary Guarantees 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 or Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company will be subrogated to the rights
of
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the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes,
the Note Guarantees, the Security Documents, or release any Collateral held as
security without the consent of any Holder of a 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 of Notes 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 property and assets, as
applicable;
(4) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that would not adversely
affect the legal rights under this Indenture of any such Holder;
(5) to comply with requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the TIA;
(6) to allow any Guarantor to execute a supplemental
indenture and/or a Note Guarantee with respect to the Notes; or
(7) if necessary, in connection with any addition or
release of Collateral permitted under the terms of this Indenture or
Security Documents.
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 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 affects its
own rights, duties or immunities under this Indenture or otherwise.
The Company shall be entitled to releases of the Collateral or the
Guarantees as described in Sections 10.03, 11.05 and 11.06 hereof. If the
Company wishes under other circumstances to obtain an amendment or waiver or
seek a consent under any Security Document or Guarantee,
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the Company may mail written notice of its request to the Trustee and the
Holders, specifying the amendment, waiver or consent and the reason it is being
sought and noting the provisions contained in the following sentence. If the
Company does not receive written objections from Holders of at least 25% in
aggregate principal amount of the Notes within 20 Business Days after such
mailing, such amendment, waiver or consent shall be deemed granted. If the
Company receives such objections, then it shall not be entitled to effect such
amendment or waiver, and such consent shall not be effective, unless the Company
obtains the consent of the Holders of a majority in outstanding principal amount
of the Notes then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes).
Section 9.02 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees, the Notes or the
Security Documents with the consent of the Majority Noteholders (including,
without limitation, consents obtained in connection with a purchase of or a
tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or compliance with any provision of this
Indenture, the Notes or the Security Documents may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes
voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes); PROVIDED,
HOWEVER, that any amendments to or releases of the Security Documents,
Collateral or the Note Guarantees will require the consent of the Supermajority
Noteholders. Section 2.08 hereof shall determine which Notes are considered to
be "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 or other amendment, 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 in the execution of such amended
or supplemental Indenture or other amendment unless such amended or supplemental
Indenture or other amendment directly affects the Trustee's own rights, duties
or immunities under this 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 or other amendment.
It is not necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment 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 of Notes affected
thereby 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 this
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Indenture, the Notes or the Security Documents. However, without the consent of
each Holder affected, an amendment 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 stated maturity
of any Note or alter or waive any of the provisions with respect to the
stated redemption of the Notes;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest on
the Notes (except a rescission of acceleration of the Notes by the
Majority Noteholders 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 Indenture;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or
Liquidated Damages, if any, on the Notes;
(7) waive a redemption payment with respect to any Note
other than a payment required by Sections 3.09, 4.10 and 4.15 hereof;
(8) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture, except in accordance with
the terms of this Indenture; or
(9) make any change in the preceding amendment and waiver
provisions;
Section 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this 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, 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.
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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 all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a 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 will sign any amended or supplemental Indenture or other
amendment authorized pursuant to this Article 9 if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amended or supplemental Indenture or other
amendment until the Board of Directors approves it. In executing any amended or
supplemental indenture or other amendment, the Trustee will be entitled to
receive and (subject to Section 7.01 hereof) will be fully protected in relying
upon, in addition to the documents required by Section 13.04 hereof, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental Indenture or other amendment is authorized or
permitted by this Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 SECURITY DOCUMENTS.
The due and punctual payment of the principal of and interest and
Liquidated Damages, if any, on the Notes when and as the same shall be due and
payable, whether on an Interest Payment Date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest and Liquidated Damages, if any, on the Notes and performance of all
other obligations of the Company to the Holders or the Trustee under this
Indenture and the Notes, according to the terms hereunder or thereunder, are
secured as provided in the Security Documents which the Company and the
Guarantors have entered into simultaneously with the execution of this
Indenture, subject to the terms of any Intercreditor Agreement. Each Holder, by
its acceptance thereof, consents and agrees to the terms of the Security
Documents (including the provisions of an Intercreditor Agreement entered into
with respect to a First Lien Credit Facility, including provisions providing for
foreclosure and release of Collateral) as the same may be in effect or may be
amended from time to time in accordance with its terms or the terms hereof and
authorizes and directs the Collateral Agent to enter into the Security Documents
and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Company shall deliver to the Trustee (if it is not itself then
the Collateral Agent) copies of all documents delivered to the Collateral Agent
pursuant to the Security Documents, and will do or cause to be done all such
acts and things as may be required by the next sentence of this Section 10.01,
to assure and confirm to the Trustee and the Collateral Agent the security
interest in the Collateral contemplated hereby, by the Security Documents or any
part thereof, as from time to time constituted, so as to render the same
available for the
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security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein expressed. The Company shall take,
and shall cause its Restricted Subsidiaries to take, any and all actions
reasonably required to cause the Security Documents to create and maintain, as
security for the Obligations of the Company and the Guarantors hereunder, a
valid and enforceable perfected Lien and security interest in substantially all
of the property and assets of the Company and the Guarantors, including a pledge
of Capital Stock of each Subsidiary owned directly by the Company or any
Guarantor, in favor of the Collateral Agent for the benefit of the Holders,
second in priority (subject to Permitted Liens) to Credit Facility Liens.
Section 10.02 RECORDING AND OPINIONS.
(a) The Company will furnish to the Collateral Agent and the
Trustee on March 1st in each year beginning with the March 1st following the
date of this Indenture, an Opinion of Counsel, which may be rendered by internal
counsel to the Company, dated as of such date, either:
(1) (A) stating that, in the opinion of such counsel,
action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of all supplemental
indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain and
perfect the Lien of the Security Documents and reciting with respect to
the security interests in the Collateral the details of such action or
referring to prior Opinions of Counsel in which such details are given,
and (B) stating that, in the opinion of such counsel, based on relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements and continuation statements have been executed and filed
that are necessary as of such date and during the succeeding 12 months
fully to preserve, perfect and protect, to the extent such protection
and preservation are possible by filing, the rights of the Holders and
the Collateral Agent and the Trustee hereunder and under the Security
Documents with respect to the security interests in the Collateral; or
(2) stating that, in the opinion of such counsel, no such
action is necessary to maintain and perfect such Lien and assignment.
(b) The Company will otherwise comply with the provisions of TIA
Section 314(b).
Section 10.03 RELEASE OF COLLATERAL/ADDITIONAL LIENS.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Security Documents at any time or from time to time in accordance with the
provisions of the Security Documents, an Intercreditor Agreement, or as provided
hereby. Whether prior to or after the Discharge of First Lien Obligations, upon
the request of the Company pursuant to an Officer's Certificate certifying that
all conditions precedent hereunder have been met and without the consent of any
Holder, the Company and the Guarantors will be entitled to a release (or in the
case of clause (2) below, a subordination) of the security interests on property
and assets included in the Collateral from the Liens securing the Notes under
any one or more of the following circumstances:
97
(1) to enable the Company or any Guarantor to consummate
any sale, lease, conveyance or other disposition of any property or
assets or rights permitted or not prohibited under Section 4.10 hereof;
(2) in respect of property and assets subject to a
permitted purchase money lien;
(3) if any Subsidiary that is a Guarantor is released
from its Guarantee, such Subsidiary's property and assets will also be
released;
(4) cash designated for the purchase of certificates of
deposits and similar instruments used by the Company or any of its
Subsidiaries for the sole purpose of enabling the Company or any of its
Subsidiaries to purchase or post reclamation, surety, or similar bonds,
which shall be deposited in a specially designated account and shall
constitute Collateral while it is held in such an account, shall be
released from the Collateral automatically upon its withdrawal from
such account for the purpose of the purchase of such certificates of
deposits and similar instruments for so long as such certificates of
deposits and similar instruments are issued in the name of National
Coal or such Subsidiary; PROVIDED that upon the termination or
expiration, and release of such certificates of deposits and similar
instruments, such cash shall once again constitute Collateral;
(5) if the Company exercises its legal defeasance option
or covenant defeasance option as described under Sections 8.02 and
8.03;
(6) upon satisfaction and discharge of this Indenture or
payment in full in cash of the principal of, accrued and unpaid
interest and Liquidated Damages, if any on the Notes and all other
obligations under this Indenture, the Note Guarantees and the Security
Documents that are due and payable at or prior to the time such
principal accrued and unpaid interest, including Liquidated Damages, if
any, are paid; or
(7) pursuant to an amendment, waiver or supplement in
accordance with Article 9 hereof;
PROVIDED that, in the case of a release requested under clauses (1), (3) or (4),
above, or a subordination under clause (2) above, the Credit Agent concurrently
releases (or in the case of a requested subordination under clause (2) above,
subordinates) the Credit Facility Liens with respect to the affected property
and assets and, provided further, that if there are any subordinated Liens on
such property and assets, such subordinated Liens are similarly released or
subordinated.
Upon receipt of such Officer's Certificate, the Collateral Agent shall
execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release (or in the case of
clause (2) above, the subordination) of any Collateral permitted to be released
(or in the case of clause (2) above, subordinated) pursuant to this Indenture or
the Security Documents as the Company requests in writing.
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(b) Except as may be otherwise provided in the Security Documents,
no Collateral may be released from the Lien and security interest created by the
Security Documents pursuant to the provisions of the Security Documents unless
the Officer's Certificate required by this Section 10.03 has been delivered to
the Collateral Agent.
(c) At any time when a Default or Event of Default has occurred
and is continuing and the maturity of the Notes has been accelerated (whether by
declaration or otherwise) and the Trustee has delivered a notice of acceleration
to the Collateral Agent, no release of Collateral pursuant to the provisions of
the Security Documents will be effective as against the Holders, except as
otherwise provided in the Security Documents.
(d) The release of any Collateral from the terms of this Indenture
and the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Documents and this
Indenture. To the extent applicable, the Company will cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Lien and security interest of the Security Documents and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Security Documents, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person will be an independent engineer, appraiser or other expert selected
or approved by the Trustee and the Collateral Agent in the exercise of
reasonable care, and in accordance with TIA.
Section 10.04 CERTIFICATES AND OPINIONS OF COUNSEL.
To the extent applicable, the Company will furnish to the Trustee and
the Collateral Agent, prior to each proposed release of Collateral pursuant to
the Security Documents:
(a) all documents required by TIA Section 314(d); and
(b) an Opinion of Counsel, which may be rendered by internal
counsel to the Company, to the effect that such accompanying documents
constitute all documents required by TIA Section 314(d).
The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and such
Opinion of Counsel.
Section 10.05 CERTIFICATES OF THE TRUSTEE.
In the event that the Company wishes to release Collateral in
accordance with the Security Documents at a time when the Trustee is not itself
also the Collateral Agent and has delivered the certificates and documents
required by the Security Documents and Sections 10.03 and 10.04 hereof, the
Trustee will determine whether it has received all documentation required by TIA
Section 314(d) in connection with such release and, based on such determination
and the Opinion of Counsel delivered pursuant to Section 10.04(b), will deliver
a certificate to the Collateral Agent setting forth such determination.
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Section 10.06 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
SECURITY DOCUMENTS.
Subject to the provisions of Section 7.01 and 7.02 hereof and an
Intercreditor Agreement, the Trustee may, in its sole discretion and without the
consent of the Holders, direct, on behalf of the Holders, the Collateral Agent
to, take all actions it deems necessary or appropriate in order to:
(1) enforce any of the terms of the Security Documents;
and
(2) collect and receive any and all amounts payable in
respect of the Obligations of the Company hereunder.
Subject to the terms of an Intercreditor Agreement, the Trustee will
have power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Holders or of the
Trustee).
Section 10.07 AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.
Section 10.08 TERMINATION OF SECURITY INTEREST.
The Trustee will, at the written request of the Company, deliver a
certificate to the Collateral Agent stating that all Obligations under the
Notes, the Guarantees, this Indenture and the Security Documents have been paid
in full, and instruct the Collateral Agent to take the actions set forth in the
next sentence pursuant to this Indenture and the Security Documents upon (1)
payment in full of the principal of, and accrued and unpaid interest, including
Liquidated Damages, if any, on the Notes and all other Obligations under this
Indenture, the Note Guarantees and the Security Documents that are due and
payable at or prior to the time such principal, accrued and unpaid interest and
Liquidated Damages, if any, are paid, (2) a satisfaction and discharge of this
Indenture as described in Article 12 or (3) a legal defeasance or covenant
defeasance as described in Article 8. Upon receipt of such instruction, the
Collateral Agent shall execute, deliver or acknowledge any necessary or proper
instruments of termination, satisfaction or release to evidence the release of
all such Liens.
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Section 10.09 COLLATERAL AGENT.
(a) The Trustee shall act as Collateral Agent and shall be
authorized to appoint co-Collateral Agents as necessary in its sole discretion.
Except as otherwise explicitly provided herein or in the Security Documents,
neither the Collateral Agent nor any of its respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The Collateral Agent shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither the Collateral Agent nor any of its officers, directors,
employees or agents shall be responsible for any act or failure to act
hereunder, except for its own willful misconduct, negligence or bad faith.
(b) The Trustee, as Collateral Agent, is authorized and directed
to (i) enter into the Security Documents, (ii) bind the Holders on the terms as
set forth in the Security Documents and (iii) perform and observe its
obligations under the Security Documents.
(c) If the Company (i) incurs Indebtedness constituting First Lien
Obligations at any time when no Intercreditor Agreement is in effect or at any
time when Indebtedness constituting First Lien Obligations entitled to the
benefit of an existing Intercreditor Agreement is concurrently retired, and (ii)
delivers to the Collateral Agent an Officer's Certificate so stating and
requesting the Collateral Agent to enter into an intercreditor agreement in
favor of a designated agent or representative for the holders of the
Indebtedness so incurred, the Collateral Agent shall (and is hereby authorized
and directed to) (A) enter into such documents and agreements (including
amendments or supplements to the Intercreditor Agreement) as the Company or the
new Credit Agent shall request in order to provide to the new Credit Agent the
rights of the Credit Agent contemplated by the Intercreditor Agreement and (ii)
deliver to the Credit Agent the Collateral perfected by possession together with
any necessary endorsements (or otherwise allow such Credit Agent to obtain
control of such Collateral).
Section 10.10 DESIGNATIONS.
For purposes of the provisions hereof and the Intercreditor Agreement
requiring the Company to designate Indebtedness for the purposes of the term
"Credit Agreement," "First Lien Obligations" or any other such designations
hereunder or under the Intercreditor Agreement, any such designation shall be
sufficient if the relevant designation is set forth in writing, signed on behalf
of the Company by an Officer and delivered to the Trustee, the Collateral Agent
and the Credit Agent. For all purposes hereof and the Intercreditor Agreement,
the Company hereby designates the Credit Facilities provided pursuant to the
Credit Agreement as the "First-Lien Credit Facility" and any Obligations in
respect of the Credit Agreement as "First Lien Obligations".
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ARTICLE 11.
NOTE GUARANTEES
Section 11.01 GUARANTEE.
(a) Subject to this Article 11, 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 Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, 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 Section 11.02, the Guarantors hereby agree that
their obligations hereunder are full and unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this 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
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Notes and this 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
Subsidiary 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,
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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 Subsidiary Guarantee, notwithstanding
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 Subsidiary 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 or the Trustee under this Subsidiary Guarantee.
Section 11.02 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 Subsidiary
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 Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor 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 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.03 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto will be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic
Subsidiary after the date of this Indenture, if required by Section 4.17 hereof,
the Company will cause such Domestic
103
Subsidiary to comply with the provisions of Section 4.17 hereof and this Article
11, to the extent applicable.
Section 11.04 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its property and assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(1) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(2) either:
(A) the Person acquiring the property in any
such sale or disposition or the Person
formed by or surviving any such
consolidation or merger is a Restricted
Subsidiary immediately following such
transaction, such Person assumes all the
obligations of such Guarantor under this
Indenture, its Note Guarantee, the Security
Documents and the Registration Rights
Agreement pursuant to a supplemental
indenture satisfactory to the Trustee; or
(B) the Net Proceeds of such sale or other
disposition are applied in accordance with
the applicable provisions of this Indenture.
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
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this 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. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this 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; provided that the Company provides notice to the
Trustee of such consolidation or merger of a Guarantor with or into the Company
or another Guarantor or sale or conveyance of property of a Guarantor as an
entirety or substantially as an entirety to the Company or another Guarantor.
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Section 11.05 RELEASES FOLLOWING SALE OF ASSETS.
In the event of any sale, disposition, or other transfer of all or
substantially all of the property and assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale, disposition, or other transfer of all of
the Capital Stock of any Guarantor, in each case to a Person that is not (either
before or after giving effect to such transactions) the Company or a Restricted
Subsidiary of the Company, then such Guarantor (in the event of a sale,
disposition, or other transfer, by way of merger, consolidation or otherwise, of
all of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale, disposition or other transfer of all or
substantially all of the property and assets of such Guarantor) will be released
and relieved of any obligations under its Subsidiary Guarantee; PROVIDED that
the Net Proceeds of such sale, disposition or other transfer are applied in
accordance with the applicable provisions of this Indenture, including without
limitation Section 4.10 hereof. Upon delivery by the Company to the Trustee of
an Officer's Certificate and an Opinion of Counsel to the effect that such sale
or other disposition, merger or consolidation was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee will execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
Section 11.06 RELEASE FOLLOWING DESIGNATION AS AN UNRESTRICTED SUBSIDIARY.
In the event the Company designates any Guarantor as an Unrestricted
Subsidiary in accordance with Section 4.18, the Obligations of such Guarantor
under its Subsidiary Guarantee pursuant to this Article 11 shall be released.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 SATISFACTION AND DISCHARGE.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(A) 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 been deposited in
trust and thereafter repaid to the Company,
have been delivered to the Trustee for
cancellation; or
(B) all Notes that have not been delivered to
the Trustee for cancellation have become due
and payable by reason of the mailing of a
notice of redemption or otherwise or will
become due
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and payable within one year and 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 of Notes, cash in
U.S. dollars, non-callable Government
Securities, or a combination of cash in U.S.
dollars and non-callable 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,
Liquidated Damages, if any, and accrued
interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is 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 such 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;
(3) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or on the redemption date, as the case may be.
In addition, the Company must deliver an Officer's Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this 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 whose payment 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 12.01 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 Indenture and the
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Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 12.01; 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 13.
MISCELLANEOUS
Section 13.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties will control.
Section 13.02 NOTICES.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
Mayer, Brown, ▇▇▇▇ & Maw LLP
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Trustee:
▇▇▇▇▇ Fargo Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
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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; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; 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 will 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 will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail 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 mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officer's Certificate in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this 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 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
Section 13.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
108
(2) 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;
(3) 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
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied; PROVIDED
that an Opinion of Counsel can rely as to matters of fact on an
Officer's Certificate or a certificate of a public official.
Section 13.06 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 rules and set
reasonable requirements for its functions.
Section 13.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture or the Note
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. 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.
Section 13.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY 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.
Section 13.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.05.
109
Section 13.11 SEVERABILITY.
In case any provision in this 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.
Section 13.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart will be an original, but all of them
together represent the same agreement.
Section 13.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
110
SIGNATURES
Dated as of December 29, 2005
NATIONAL COAL CORP., a Florida Corporation
By: /s/ ▇▇▇ ▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇
Title: CEO
NATIONAL COAL CORPORATION, a Tennessee Corporation
By: /s/ ▇▇▇ ▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇
Title: CEO
NC TRANSPORTATION INC., a Tennessee corporation
By: /s/ ▇▇▇ ▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇▇▇
Title: CEO
NC RAILROAD, INC., a Tennessee corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇ Fargo Bank, National Association,
as Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
S-1
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under this Indenture as of
the date of this Indenture:
(1) National Coal Corporation
(2) NC Transportation Inc.
(3) NC Railroad, Inc.
I-1
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
CUSIP/CINS ___________
10.5% Senior Secured Notes due 2010
No. _______________ $__________
NATIONAL COAL CORP.
promises to pay to _____________________________________________
or registered assigns,
the principal sum of ________________________________________________
Dollars on December 15, 2010.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated:
NATIONAL COAL CORP.
By:.____________________________________
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
▇▇▇▇▇ Fargo Bank, National Association, as Trustee
By:___________________________
Authorized Signatory
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[Back of Note]
10.5% Senior Secured Notes due 2010
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS OF THE
INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE INDENTURE]
[INSERT THE REGULATION S TEMPORARY GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO
THE PROVISIONS OF THE INDENTURE]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. National Coal Corp., a Florida corporation (the
"COMPANY"), promises to pay interest on the principal amount of this
Note at a rate of 10.5 % per annum and will be payable semi-annually in
arrears on June 15 and December 15, commencing on June 15, 2006.
Interest on overdue principal and interest and Liquidated Damages, if
any, will accrue at a rate that is 1% higher than the then applicable
interest rate on the Notes. The Company will make each interest payment
to the Holders of record at the close of business on the immediately
preceding June 1 and December 1. Interest on the Notes will accrue from
the date of original issuance or, if interest has already been paid,
from the date it was most recently paid. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months. On any
Interest Payment Date, the Company shall also pay in cash such amount
of accrued original issue discount on the Notes (as determined by the
Company), if any, as shall be necessary to ensure that the Notes shall
not be considered an "applicable high yield discount obligation" within
the meaning of Section 163(i) of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision. If the Company must
make a payment in accordance with the preceding sentence, the Company
shall notify the Trustee in writing of the amount of such payment at
least five Business Days before the applicable Interest Payment Date.
The preceding two sentences shall apply only to the extent necessary to
achieve the objective therein described and shall apply only to amounts
treated as original issue discount under the Code.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages, if any, to
the Persons who are registered Holders of Notes at the close of
business on the June 1 and December 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 2.12 of the Indenture with respect to defaulted interest. The
Notes will be payable as to principal, premium and Liquidated Damages,
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
and Liquidated Damages, 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, premium and
Liquidated Damages, if any, on, all Global Notes and all other Notes
the Holders of which will have provided wire transfer instructions to
the Company
A-2
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 debt.
(3) PAYING AGENT AND REGISTRAR. Initially, ▇▇▇▇▇ Fargo Bank,
National Association, the Trustee under the Indenture, 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.
(4) INDENTURE. The Company issued the Notes under an Indenture
dated as of December 29, 2005 (the "INDENTURE") among the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated
in this Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
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. The Notes are secured on a second-priority
basis by the Lien created by the Security Documents pursuant to, and
subject to the terms of, the Indenture and the Intercreditor Agreement.
(5) OPTIONAL REDEMPTION.
(a) At any time prior to December 15, 2008, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under the Indenture at a redemption price of 110.500% of the
principal amount, plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date, with the net cash proceeds of a sale of Equity
Interests (other than Disqualified Stock) of the Company; PROVIDED that:
(1) at least 65% of the aggregate principal amount of Notes
originally issued under the Indenture (excluding Notes held by the
Company and its Subsidiaries) remains outstanding immediately after the
occurrence of such redemption; and
(2) the redemption occurs within 90 days of the date of the
closing of such sale of Equity Interests or contribution.
On the dates specified below, the Company, at its
option, may redeem all or a part of the Notes upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes redeemed,
to the applicable redemption date, if redeemed during the applicable
period set forth below, subject to the rights of holders of Notes on
the relevant record date to receive interest on the relevant interest
payment date:
PERIOD PERCENTAGE
------ ----------
December 15, 2008 to December 14, 2009..................... 105.250%
December 15, 2009 to June 14, 2010......................... 102.625%
June 15, 2010 and thereafter............................... 100.000%
A-3
(b) Unless the Company defaults in the payment of the redemption
price, interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(c) Any redemption pursuant to Section 3.07 of the Indenture shall
be made in accordance with the provisions of Sections 3.01 through 3.06 of the
Indenture.
(6) MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company will
be required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or
any part (in a minimum aggregate principal amount of $1,000 or an integral
multiple thereof) of each Holder's Notes at a purchase price in cash equal to
101% of the aggregate principal amount of the Notes repurchased plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes repurchased to the
date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 15 days following any
Change of Control, the Company will mail a notice to each Holder and the Trustee
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sale,
promptly following the date on which the aggregate amount of Excess Proceeds
exceeds $5.0 million, within five days thereof, the Company will commence an
offer to all Holders of Notes and all holders of other Indebtedness that is PARI
PASSU 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 property or assets (an "ASSET SALE OFFER") pursuant to Section 3.09 of
the Indenture to purchase or redeem the maximum principal amount of Notes and
such other PARI PASSU Indebtedness that may be purchased out of the Excess
Proceeds at an offer price payable in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date fixed for the closing of such offer in accordance
with the procedures set forth in the Indenture. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Company may use those Excess
Proceeds for any purpose not otherwise prohibited by this Indenture. If the
aggregate principal amount of Notes and other PARI PASSU Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and other PARI PASSU Indebtedness to be purchased on a
pro rata basis. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company 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 mailed
at least 30 days but not more than 60 days before the redemption date
and each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the
A-4
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.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. 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 Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes (i) during a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date, or (ii) during a period beginning
at the opening of business 15 days before any Interest Payment Date and
ending at the closing of business on such 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, the Note Guarantees, the Notes or the
Security Documents 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 voting as a single class, and any existing
default or compliance with any provision of the Indenture, the
Subsidiary Guarantees, the Notes or the Security Documents may be
waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes, voting as a single class. Without
the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees, the Notes or the Security Documents may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide
for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to
Holders of the Notes in case of a merger or consolidation or sale of
all or substantially all of the Company's property and assets, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that would not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to allow
any Guarantor to execute a supplemental indenture to the Indenture
and/or a Subsidiary Guarantee with respect to the Notes, or if
necessary, in connection with any addition or release of Collateral
permitted under the terms of this Indenture or Security Documents.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) the
Company defaults for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes; (ii) the Company
defaults in payment when due of the principal of, or premium, if any,
on the Notes; (iii) failure by the Company or any of its Restricted
Subsidiaries to comply with the provisions of Sections 4.07, 4.09,
4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or any
of its Restricted
A-5
Subsidiaries for 60 days after notice from the Trustee or Holders of at
least 25% in aggregate principal amount of the outstanding Notes voting
as a single class to comply with the provisions of the Security
Documents or the Indenture; (v) default under any Mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness of the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
the Indenture, if that default (A) is caused by a failure to pay
principal of, or interest or premium, if any, on such Indebtedness
prior to the expiration of the grace period provided in such
indebtedness on the date of such default (a "PAYMENT DEFAULT") or (B)
results in the acceleration of such Indebtedness prior to its express
maturity, and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or
more; (vi) failure by the Company or any of its Restricted Subsidiaries
to pay final judgments entered by a court or courts of competent
jurisdiction aggregating in excess of $5.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days; and (vii)
except as permitted by the Indenture, an Note Guarantee is held in any
judicial proceeding to by unenforceable or invalid or ceases for any
reason to be in full force and effect, or any Guarantor, or any Person
acting on behalf of any Guarantor, denies or disaffirms its obligations
under its Note Guarantee; and (viii) certain events of bankruptcy or
insolvency described in the Indenture with respect to the Company or
any of its Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary. If any 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. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or a Significant
Subsidiary, all outstanding Notes will become due and payable without
further action or notice. In the case of any Event of Default occurring
by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding payment of
the premium that the Company would have had to pay if the Company then
had elected to redeem the Notes pursuant to Section 3.07 of the
Indenture, then an equivalent premium shall also become and be
immediately due and payable upon acceleration of the Notes, to the
extent permitted by law, anything in this Indenture or in the Notes to
the contrary notwithstanding. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. 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 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 of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture,
and the Company is required upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
A-6
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, will not have any liability for any obligations of
the Company or such Guarantor under the Notes, the Subsidiary
Guarantees, the Indenture or the Security Documents or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
(15) AUTHENTICATION. This Note will 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) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set
forth in the Registration Rights Agreement dated as of December 29,
2005, among the Company, the Guarantors and the other parties named on
the signature pages thereof (the "REGISTRATION RIGHTS AGREEMENT").
(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the
Company has 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.
A-7
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
A-8
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).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
_________ |_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the 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).
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:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Amount Principal Amount Note following officer of
Date of of this of this such decrease Trustee or
Exchange Global Note Global Note (or increase) Custodian
-------- ---------------- --------------- ---------------- -------------
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 10.5% Senior Secured Notes due 2010
Reference is hereby made to the Indenture, dated as of December 29,
2005 (the "INDENTURE"), among National Coal Corp., as issuer (the "COMPANY"),
the Guarantors named on the signature pages thereto and ▇▇▇▇▇ Fargo Bank,
National Association, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________ (the "TRANSFEROR") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $______ in such Note[s] or interests (the "TRANSFER"), to
___________________________________ (the "TRANSFEREE"), as further specified in
Annex A hereto, in connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a Person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a
B-1
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903 (b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act and (iv) if the
proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than the Initial Purchaser). Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. |_| CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) |_| such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) |_| such Transfer is being effected to the Company or a
subsidiary thereof; or
or
(c) |_| such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) |_| such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed
B-2
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. |_| CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) |_| CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(b) |_| CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------------
[Insert Name of Transferor]
By:_________________________________________
Name:
Title:
Dated: ___________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP [_______________]), or
(ii) |_| Regulation S Global Note (CUSIP [_________]), or
(iii) |_| IAI Global Note (CUSIP [_______________]); or
(b) |_| a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP [_______________]), or
(ii) |_| Regulation S Global Note (CUSIP [_________]), or
(iii) |_| IAI Global Note (CUSIP [_______________]), or
(iv) |_| Unrestricted Global Note (CUSIP [_________]); or
(b) |_| a Restricted Definitive Note; or
(c) |_| an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 10.5% Senior Secured Notes due 2010
(CUSIP__________)
Reference is hereby made to the Indenture, dated as of December 29,
2005 (the "INDENTURE"), among National Coal Corp., as issuer (the "COMPANY"),
the Guarantors named on the signature pages thereto and ▇▇▇▇▇ Fargo Bank,
National Association, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
___________________ (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$__________in such Note[s] or interests (the "EXCHANGE"). In connection with the
Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "SECURITIES ACT"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive
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Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(c) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) |_| CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) |_| CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] |_| 144A Global Note, |_| Regulation S Global Note, |_| IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated
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in the Private Placement Legend printed on the relevant Restricted Global Note
and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
--------------------------------------------
[Insert Name of Transferor]
By:_________________________________________
Name:
Title:
Dated: ___________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 10.5% Senior Secured Notes due 2010
Reference is hereby made to the Indenture, dated as of December 29,
2005 (the "INDENTURE"), among National Coal Corp., as issuer (the "COMPANY"),
the guarantors named on the signature pages thereto and ▇▇▇▇▇ Fargo Bank,
National Association, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $_____________ aggregate
principal amount of:
(a) |_| a beneficial interest in a Global Note, or
(b) |_| a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global
D-1
Note from us in a transaction meeting the requirements of clauses (A) through
(E) of this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
--------------------------------------------
[Insert Name of Accredited Investor)
By:_________________________________________
Name:
Title:
Dated: ___________________
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of December 29, 2005 (the "INDENTURE")
among National Coal Corp., (the "COMPANY", the Guarantors listed on Schedule I
thereto and ▇▇▇▇▇ Fargo Bank, National Association, as trustee (the "TRUSTEE"),
(a) the due and punctual payment of the principal of, premium and Liquidated
Damages, if any, and interest on the Notes (as defined in the Indenture),
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the Notes,
if any, if lawful, and the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the 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. The
obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; PROVIDED, HOWEVER, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
NATIONAL COAL CORPORATION
By:____________________________________________
Name:
Title:
NC TRANSPORTATION INC.
By:____________________________________________
Name:
Title:
NC RAILROAD, INC.
By:____________________________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
___________, 200_, among ___________________________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of National Coal Corp. (or its permitted successor),
a Florida corporation (the "COMPANY"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and ▇▇▇▇▇ Fargo Bank, National
Association, as trustee under the indenture referred to below (the "TRUSTEE").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 29, 2005 providing
for the issuance of an aggregate principal amount of up to $55.0 million of
10.5% Senior Secured Notes due 2010 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "SUBSIDIARY GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and
assigns, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, and premium and Liquidated
Damages, 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
F-1
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
(ii) 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
shall be jointly and severally obligated to pay the same
immediately.
(b) The 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 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.
(c) The following is hereby waived: 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.
(d) This Subsidiary Guarantee shall not be discharged
except by complete performance of the obligations contained in the
Notes and the Indenture, and the Guaranteeing Subsidiary accepts all
obligations of a Guarantor under the Indenture.
(e) 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 Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect.
(f) The Guaranteeing Subsidiary 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.
(g) As between the 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
6 of the Indenture for the purposes of this Subsidiary Guarantee,
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 6 of the Indenture, such obligations (whether or
not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.
F-2
(h) The Guarantors shall have the right to seek
contribution from any nonpaying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the
Subsidiary Guarantee.
(i) Pursuant to Section 11.02 of the Indenture, after
giving effect to any maximum amount and all other contingent and fixed
liabilities that are relevant under any applicable Bankruptcy or
fraudulent conveyance 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 Article 11 of the Indenture, this new Subsidiary
Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guarantor under this Subsidiary Guarantee will
not constitute a fraudulent transfer or conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) The Guaranteeing Subsidiary may not sell or otherwise
dispose of all or substantially all of its property and assets to, or
consolidate with or merge with or into (whether or not such Guarantor
is the surviving Person) another Person, other than the Company or
another Guarantor unless:
(i) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(ii) if the Person acquiring the property in any
such sale or disposition or the Person formed by or surviving
any such consolidation or merger is a Restricted Subsidiary
immediately following such transaction, such Person assumes
all the obligations of that Guaranteeing Subsidiary under this
Supplemental Indenture, its Subsidiary Guarantee and the
Registration Rights Agreement pursuant to a supplemental
indenture satisfactory to the Trustee.
(b) 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 Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of the Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted
for the Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable under the Indenture, which theretofore shall not have
been signed by the Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects have the same
legal rank and benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of the
F-3
Indenture as though all of such Subsidiary Guarantees had been issued
at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the
Indenture, and notwithstanding clauses (a) and (b) above, nothing
contained in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or
another Guarantor, or shall 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.
5. RELEASES.
(a) In the event of any sale or other disposition of all
or substantially all of the property and assets of any Guarantor, by
way of merger, consolidation or otherwise, or a sale or other
disposition of all of the capital stock of any Guarantor, in each case
to a Person that is not (either before or after giving effect to such
transaction) a Restricted Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the property
and assets of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; PROVIDED that the Net
Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of the Indenture, including without
limitation Section 4.10 of the Indenture. Upon delivery by the Company
to the Trustee of an Officer's Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company
in accordance with the provisions of the Indenture, including without
limitation Section 4.10 of the Indenture, the Trustee shall execute any
documents reasonably required in order to evidence the release of any
Guarantor from its obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under
its Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of
any Guarantor under the Indenture as provided in Article 11 of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such,
shall have any liability for any obligations of the Company or any Guaranteeing
Subsidiary under the Notes, any Subsidiary Guarantees, the Indenture or this
Supplemental 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 may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
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INDENTURE BUT 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.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _________________, 20_
[GUARANTEEING SUBSIDIARY]
By:______________________________________
Name:
Title:
NATIONAL COAL CORP.
By:______________________________________
Name:
Title:
NATIONAL COAL CORPORATION
By:______________________________________
Name:
Title:
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NC TRANSPORTATION INC.
By:______________________________________
Name:
Title:
NC RAILROAD, INC.
By:______________________________________
Name:
Title:
▇▇▇▇▇ Fargo Bank, National Association,
as Trustee
By:______________________________________
Authorized Signatory
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EXHIBIT G
LANDLORD'S WAIVER AND CONSENT
AGREEMENT, dated as of the ____ day of _________, 20__, among
_______________________________________, a ________________ corporation (the
"LANDLORD"), and ▇▇▇▇▇ Fargo Bank, National Association, in its capacity as
trustee and collateral agent (including any successor or replacement trustee
agent or similar contractual representative for the holders of the Notes (as
defined below) issued under the Indenture (as defined below) from time to time
(the "COLLATERAL AGENT")).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, National Coal Corp., a Florida corporation (the "COMPANY"),
National Coal Corporation, a Tennessee corporation and a subsidiary of the
Company (the "TENANT"), and the other subsidiaries of the Company have entered
into an Indenture (as amended, restated, replaced, refinanced, substituted,
refunded, supplemented renewed or otherwise modified from time to time, the
"INDENTURE") pursuant to which the Tenant has guaranteed the obligations of the
Company under certain notes (the "NOTES") issued by the Company under the
Indenture; and
WHEREAS, to secure payment and performance of all of Tenant's
obligations and liabilities to the Collateral Agent and the holders of the Notes
(the "NOTEHOLDERS") under the Notes and the Indenture, the Tenant has pledged
and granted to Collateral Agent (i) a continuing second priority deed of trust
lien encumbering Tenant's leasehold interest in that certain real property
located at ___________________, __________, ______________, which premises are
owned by the Landlord (hereinafter the "PREMISES") and leased or subleased by
the Landlord to the Tenant by the ________ Lease, dated as of __________ __,
20__ (such Lease, together with any and all supplements, renewals, extensions,
amendments, modifications, substitutions, and replacements thereof, being
hereinafter referred to collectively as the "LEASE"), and (ii) a continuing
second priority security interest in all personal property of the Tenant,
wherever located and whether now or hereafter existing and whether now owned or
hereafter acquired, of every kind and description, tangible or intangible,
including, without limitation, all of the Tenant's accounts, books and records,
inventory, machinery, equipment, furniture, as-extracted minerals, fixtures and
all proceeds thereof (collectively, the "COLLATERAL"), which security interest
covers the Collateral now or hereafter located on the Premises (such deed of
trust, together with all supplements, renewals, extensions, amendments,
modifications, substitutions, and replacements thereof, being hereinafter
referred to collectively as the "DEED OF TRUST");
NOW, THEREFORE, it is hereby agreed between the Collateral Agent, on
behalf of the Noteholders, on the one hand, and the Landlord, on the other hand,
as follows:
ARTICLE 1. The Landlord consents to Tenant's grant of the Deed of Trust lien
encumbering Tenant's leasehold interest in the Premises (including
Tenant's grant of a security interest in fixtures affixed to and
minerals extracted from the Premises), and waives any prohibitions
against encumbrances contained in the Leases. The parties hereto
understand and agree that the consent granted by Landlord in this
Article 1 is specifically limited to the Deed of Trust lien granted to
Collateral Agent, and shall not be deemed a blanket waiver or
termination of any anti-encumbrance provisions contained in the Lease.
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ARTICLE 2. The Landlord consents to the presence of the Collateral in or on the
Premises, and subject to the terms of this Agreement, (a) agrees that
the Collateral shall be and remain personal property, (b) waives each
and every right that Landlord now has or hereafter may have, under the
laws of the State or Commonwealth in which the Premises are located, or
by virtue of the Lease, or by virtue of Tenant's occupation of the
Premises, to levy against or distrain upon for rent (whether in
arrears, in advance or both) or for any monetary obligation arising by
reason of default under the Lease, or to claim or assert any lien
(including, without limitation, any statutory landlord's lien), right,
claim, interest or title to, or to take any action or institute any
proceedings with respect to, any of the Collateral, which now or
hereafter may be on the Premises, excluding any non-movable fixtures
which have been permanently affixed to the Premises and are part
thereof, and (c) will not hinder or delay the Collateral Agent or the
Noteholders in enforcing their rights under the Indenture or any other
document or instrument executed in connection therewith. The Collateral
Agent and the Landlord hereby agree that the provisions of this Article
2 are made in favor, and shall inure to the benefit, of only the
Collateral Agent and the Noteholders and their respective successors
and assigns, and to no other persons.
ARTICLE 3. The Landlord hereby grants the Noteholders and the Collateral Agent,
and their employees, agents and representatives the right, upon five
(5) business days' prior written notice to the Landlord, to (a) enter
the Premises to inspect or remove or take possession of the Collateral
and, (b) provided it is permitted under the Lease, and any restriction
or agreement affecting the Premises, to conduct a public or private
sale of the Collateral from the Premises at any time, in accordance
with this Agreement so long as the Collateral Agent and the Noteholders
and their employees, agents and representatives do not damage the
Premises or materially disrupt or interfere with any other Tenant's
business. The Collateral Agent and the Noteholders shall promptly
repair, without any cost to the Landlord, any physical damage to the
Premises that is caused by the Collateral Agent or the Noteholders. The
Landlord further agrees that, during the foregoing period, Landlord
will not (i) remove or consent to the removal of any of the Collateral
from the Premises or (ii) hinder the Collateral Agent's actions in
removing Collateral from the Premises or the Collateral Agent's actions
in otherwise enforcing its security interest in the Collateral. Subject
to the provisions of this Article 3, the Collateral Agent shall not be
liable for any diminution in value of the Premises caused by the
absence of Collateral actually removed or by the need to replace the
Collateral after such removal. The Landlord acknowledges that the
Collateral Agent shall have no obligation to remove the Collateral from
the Premises.
ARTICLE 4. Landlord acknowledges and agrees that neither Tenant's granting of a
security interest in the Collateral in favor of the Collateral Agent
for its benefit and the benefit of the Noteholders, nor the exercise by
Collateral Agent of its rights and remedies hereunder or under the Deed
of Trust, shall constitute a default under the Lease nor permit
Landlord to terminate the Lease or re-enter or repossesses the Premises
or otherwise be the basis for the exercise of any remedy by Landlord.
ARTICLE 5. The Landlord hereby represents to the Noteholders and the Collateral
Agent that (i) Landlord is the landlord under the Lease, (ii) the Lease
is in full force and effect and has not been amended, modified or
supplemented except [ ], (iii) to the best
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of Landlord's knowledge, there is no defense, offset, claim or
counterclaim by or in favor of Landlord against Tenant under the Lease
or against the obligations of Landlord under the Lease, (iv) Landlord
has not given Tenant a notice of default under the Lease that remains
uncured and, to the best knowledge of the Landlord, there are no
existing defaults under the Lease on the part of the Tenant.
ARTICLE 6. Landlord agrees that it shall not cancel or terminate the Lease by
reason of Tenant's default thereunder unless and until (i) notice shall
first have been given to the Collateral Agent as provided herein and
(ii) the Collateral Agent shall have failed to remedy such default with
thirty (30) days after its receipt of said notice, provided that in the
event the Collateral Agent cannot commence or complete such cure
without possession of the Premises, no cancellation or termination of
the Lease shall be effective if the Collateral Agent commences judicial
or non-judicial proceedings to obtain possession within such period and
thereafter diligently prosecutes such efforts and cure to completion.
Landlord further agrees that within a thirty (30) day period after the
Collateral Agent's receipt of such notice, the Collateral Agent shall
have the right to enter the Premises to inspect, remove and exercise
the rights granted to the Collateral Agent under Article 2 hereof,
provided the Landlord is paid for use and occupancy, and not as rent,
an amount equal to the regular installments of rent due under the Lease
for the Premises (on a per diem basis based upon a thirty (30) day
month)) for the number of days the Collateral Agent actually occupies
the Premises. The Collateral Agent's payment of rent to Landlord shall
not result in the Collateral Agent incurring any other obligations of
Tenant under the Lease, nor shall the Collateral Agent be obligated to
cure any Tenant default or, except as expressly stated herein, assume
the obligations for any remaining term of the Lease. Notwithstanding
the foregoing, in the event of a default under the Lease which is not
capable of or susceptible to cure, or in the event of termination of
the Lease for any reason except the failure of the Collateral Agent to
cure such defaults which the Collateral Agent is capable of curing, the
Collateral Agent shall have the option to enter into a new Lease with
Landlord upon termination of the Lease (whether by rejection in
bankruptcy proceedings or otherwise), which new Lease shall be directly
between Landlord and the Collateral Agent, shall be for a term equal to
the term of the Lease which would have remained absent such termination
or rejection, and shall otherwise be on terms substantially identical
to the terms of the Lease.
ARTICLE 7. In the event Collateral Agent shall ever become the owner of the
rights and interests of Tenant in and to the Premises and Lease for any
reason in connection with the Obligations, Landlord agrees that
Collateral Agent shall be deemed to be Tenant's successor and assignee
under the Lease and shall be entitled to all rights, benefits and
privileges of the Tenant under the Lease for the balance of the term
and any renewal or extension period thereof duly exercised as required
by the Lease, all without the need to execute any further instruments
to make such succession and assignment effective. In furtherance of the
foregoing, Landlord agrees that Collateral Agent shall have the right
to assign its interest in and to the Lease without the consent of (but
with notice to) Landlord, to any person which assumes the obligations
of the lessee under the Lease (an "Assignee") and that neither
Collateral Agent, Assignee, nor any subsequent owner of the lessee's
interest under the Lease shall be bound by any provisions of the Lease
which are inconsistent with the provisions of this Article 7, and this
Agreement, for such purposes,
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shall run with the land and survive foreclosure or exercise of power of
sale under the security instrument encumbering the leasehold interest
and repayment or discharge of the obligations in full.
ARTICLE 8. The provisions hereof shall remain in full force and effect until
the earlier of: (i) Tenant's full payment and performance of all of its
present and future obligations to the Collateral Agent and the
Noteholders, or (ii) the expiration or sooner termination of the Lease.
The Collateral Agent and the Noteholders (as applicable) may, without
affecting the validity of this Agreement, extend, amend or in any way
modify the terms of the Notes, the Indenture or Deed of Trust.
ARTICLE 9. This Agreement shall be governed and controlled by and interpreted
under the laws of the State of New York and shall be binding upon and
inure to the benefit of the parties herein named and their respective
assigns and successors in interest. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute
but one and the same instrument. All notices to any party hereto under
this Agreement shall be in writing and sent to such party at its
respective address set forth below (or at such other address as shall
be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Article) by overnight
delivery service for next business day delivery.
ARTICLE 10. Each of the Landlord and the Collateral Agent represents that it
has reviewed this Agreement and each knowingly and voluntarily waives
its respective rights to a jury trial of any claim or cause of action
based upon or arising out of this Agreement following consultation with
legal counsel. In the event of litigation, a copy of this Agreement may
be filed as a written consent to a trial by the court.
ARTICLE 11. Landlord acknowledges and agrees that the Collateral Agent shall
not be personally liable for debts or other obligations, liability or
damages.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
-----------------------------------------
By: ____________________________________
Name:
Title:
ADDRESS FOR NOTICES:
-------------------
c/o
and
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[TRUSTEE], as Collateral Agent
By: ____________________________________
Name:
Title:
ADDRESS FOR NOTICES:
-------------------
Phone:
Fax:
ACKNOWLEDGED AND AGREED:
[SUBSIDIARY]
By: __________________________________
Name:
Title:
Address for Notices:
If to Tenant, to: National Coal Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With copies to: Mayer, Brown, ▇▇▇▇ & Maw
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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EXHIBIT H
INTERCREDITOR AGREEMENT
H-1
EXHIBIT I
SECURITY AGREEMENT
I-1
EXHIBIT J
NOTICE AND CONSENT
TO THE HOLDERS OF NATIONAL COAL CORP.
10.5% SENIOR SECURED NOTES DUE 2010
AS OF THE RECORD DATE OF [_____], 200[_]
This Notice and Consent is being delivered by National Coal Corp. (the
"Company") to the holders of its 10.5% Senior Secured Notes due 2010 (the
"Notes") pursuant to Section 4.21 of the Indenture (the "Indenture"), dated as
of December 29, 2005, among the Company, the Subsidiary Guarantors party thereto
and ▇▇▇▇▇ Fargo Bank, National Association, as trustee (the "Trustee"). All
capitalized terms used but not defined herein shall have the meanings given to
such terms set forth in the Indenture.
The Company hereby gives you notice [that it has obtained a [fee][leasehold]
title insurance policy in the form of ANNEX A attached hereto, covering the real
property described therein.] [Or describe other action requested under Section
4.21.]
[DESCRIBE MATERIAL TERMS OR OTHER PROPOSED ACTION.]
You must return this Notice and Consent to the Trustee [describe mechanism for
giving consent] by [____], 200[_] [45 days] indicating your action as a Holder
of Notes with respect to the actions identified herein. If you do not respond to
this request within the specified time period, you will lose your right to
object to the requested action and will be deemed to have consented.
Additionally, pursuant to the Indenture, failure to act, constituting deemed
consent, could limit the applicability of certain penalty interest provisions
that would otherwise apply and increase the aggregate interest rate applicable
to the Notes up to an additional 2.5% if the Company does not receive the
requisite number of consents from Holders.
The consent of the Holders (as of the close of business on the record date
specified above) of a majority of the aggregate principal amount of Notes then
outstanding, excluding any Notes held by the Company or any of its Subsidiaries
or Affiliates, is required for this action to be effective.
Holders will be entitled to change their decision with respect to the requested
action only until the date specified.
NOTICE: FAILURE TO RESPOND TO OR RETURN THIS NOTICE AND CONSENT BY THE DATE
SPECIFIED WILL BE DEEMED TO BE AN AFFIRMATIVE CONSENT TO THIS REQUEST.
-------------------------------------------------- -----------------------------
Name of Holder Consent
-------------------------------------------------- -----------------------------
Yes No
-------------------------------------------------- -------------- --------------
Signature: _________________________
Date: _________________________
NATIONAL COAL CORP.
By: ___________________________________
Name:
Title:
Dated: [_____________], 200[_]
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