DESCRIPTION OF THE NOTES
In this "Description of the Notes," the "Company" refers only to Cloud Peak Energy Resources LLC and any successor obligor, and not to
any of its subsidiaries, "Co-issuer" refers to Cloud Peak Energy Finance Corp. and not to any of its subsidiaries, and "Issuers" refers to both of the Company and the Co-issuer. The term "New Notes"
refers to the Issuers' notes being offered hereby. You can find the definitions of certain other terms used in this description under "Certain Definitions."
On
October 17, 2016, the Issuers completed their offers to exchange for $290,366,000 aggregate principal amount of 12.00% Second Lien Senior Secured Notes due 2021 (the "Existing
2021 Notes" and, together with the New Notes, the "notes") under the indenture dated as of October 17, 2016 (the "indenture") among the Issuers, the Guarantors, and Wilmington Trust, National
Association, as trustee and collateral agent.
The
Issuers will issue the New Notes as additional notes having the same terms in all respects as the Existing 2021 Notes (except that no interest shall accrue on the New Notes prior to
the Issue Date) under the indenture. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939 (the "Trust
Indenture Act"). Only registered holders of notes will have rights under the indenture, and all references to "holders" or "noteholders" in the following description are to registered holders of
notes.
The
Issuers will be jointly and severally liable for all obligations under the notes. The Co-issuer is a Wholly Owned Subsidiary of the Company that was incorporated in Delaware in 2009
as a special purpose finance subsidiary to facilitate the offering of the Existing 2021 Notes and certain other debt securities of the Company. The Company believes that some prospective purchasers of
the notes may be restricted in their ability to purchase debt securities of partnerships or LLCs such as the Company unless the securities are jointly issued by a corporation. The Co-issuer
will not have any substantial operations or assets and will not have any revenues. Accordingly, you should not expect the Co-issuer to participate in servicing the principal and interest obligations
on the notes.
The
following description is a summary of the material provisions of the indenture, the notes, the First Lien/Second Lien Intercreditor Agreement, the Pari Passu Second Lien
Intercreditor Agreement and the Security Agreement. Because this is a summary, it may not contain all the information that is important to you. You should read each of these documents in its entirety
because it, and not this description, will define the Issuers' obligations and your rights as holders of the New Notes.
Basic Terms of the New Notes
The New Notes will be issued in an aggregate principal amount to be determined and will mature on November 1, 2021 and will be the senior
secured obligations of the Issuers.
Like
the Existing 2021 Notes, the New Notes will:
-
(1)
-
be
secured by second-priority Liens on the Collateral described below under "Security for the Notes", subject to Permitted Liens and the terms of the
First Lien/Second Lien Intercreditor Agreement and, if any of the Issuers and the Guarantors incurs any Pari Passu Secured Debt, the Pari Passu Second Lien Intercreditor Agreement described herein;
-
(2)
-
be
equal in right of payment with all existing and future senior Debt of the Issuers, including the Existing 2021 Notes and the Existing Unsecured Notes;
-
(3)
-
be
effectively junior, pursuant to the terms of the First Lien/Second Lien Intercreditor Agreement, to the extent of the value of the Collateral, to the Company's
obligations under the Credit Agreement and any other First Lien Obligations, which will be secured on a first-priority basis by Liens on the Collateral;
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-
(4)
-
be
effectively junior to any secured Debt of the Company, Co-Issuer or its Subsidiaries that is secured by Liens on assets other than the Collateral, to the extent
of the value of such assets;
-
(5)
-
be
senior in right of payment to all subordinated Debt of the Issuers;
-
(6)
-
be
effectively senior to all existing and future unsecured senior Debt of the Issuers, including the Existing 2021 Notes and the Existing Unsecured Notes, to the
extent of the value of the Collateral (after giving effect to any senior Lien on the Collateral);
-
(7)
-
be
structurally subordinated to the Debt and other liabilities of Subsidiaries of the Company that do not guarantee the notes.
The
New Notes will bear interest commencing the date of issue at the rate of 12.00% per annum, payable semiannually on each May 1 and November 1, commencing on a date to be
determined, to holders of record on the April 15 or October 15 immediately preceding the interest payment date. The New Notes will bear interest on overdue principal, and, to the extent
lawful, pay interest on overdue interest, at 1% per annum higher than the rate otherwise applicable to the New Notes.
Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
Additional Notes
Subject to the covenants described below, the Issuers may issue additional notes in an unlimited amount from time to time under the indenture
having the same terms in all respects as the notes except that interest may not accrue on the additional notes from the Original Issue Date. Any additional notes will be secured, equally and ratably,
with the New Notes, the Existing 2021 Notes and any other Second Lien Obligations. The New Notes offered hereby, the Existing 2021 Notes and any additional notes subsequently issued would be treated
as a single class for all purposes under the indenture and will vote together as one class on all matters,
provided
that if the Existing 2021 Notes or
additional notes are not fungible with the New Notes for United States federal income tax purposes, the Existing 2021 Notes and additional notes will have a separate CUSIP number and ISIN from the New
Notes.
Guaranties
On the Issue Date, the obligations of the Issuers pursuant to the New Notes, including any repurchase obligation resulting from a Change of
Control, will be unconditionally guaranteed, jointly and severally, on a second lien, secured basis, by the Parent Guarantor and each Domestic Restricted Subsidiary of the Company (other than the
Co-issuer) that guarantees Debt of the Company under the Credit Agreement. If any Domestic Restricted Subsidiary of the Parent Guarantor (other than an Issuer) guarantees the Debt of an Issuer or a
Guarantor under the Credit Agreement (including any newly acquired or created Restricted Subsidiary) after the Original Issue Date, the Domestic Restricted Subsidiary must provide a guarantee of the
notes (each such guarantee, a "Note Guaranty"). See "Certain CovenantsNote Guaranties by Restricted Subsidiaries."
Each
guarantee of the New Notes, like each guarantee of the Existing 2021 Notes, will be:
-
(1)
-
a
senior secured obligation of the Guarantor;
-
(2)
-
equal
in right of payment with all existing and future senior Debt of that Guarantor, including the guarantees of the Existing 2021 Notes and the Existing Unsecured
Notes, without giving effect to any collateral arrangements;
-
(3)
-
secured
by second-priority Liens on the Collateral owned or held by such Guarantor, subject to Permitted Liens and the terms of the First Lien/Second Lien
Intercreditor Agreement and,
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Each
Note Guaranty will be limited to the maximum amount that would not render the Guarantor's obligations subject to avoidance under applicable fraudulent conveyance provisions of the
United States Bankruptcy Code or any comparable provision of state law. By virtue of this limitation, a Guarantor's obligation under its Note Guaranty could be significantly less than amounts payable
with respect to the notes, or a Guarantor may have effectively no obligation under its Note Guaranty. See "Risk FactorsRisks Related to the NotesFederal and state statutes
allow courts, under specific circumstances, to void guarantees and require debtholders to return payments received or prevent debtholders from receiving payments."
The
Note Guaranty of the Parent Guarantor will terminate upon (i) a liquidation or dissolution of the Parent Guarantor so long as no Default occurs as a result thereof,
(ii) the merger or consolidation of the Parent Guarantor into another Person in accordance with the covenant described below under "Consolidation, Merger or Sale of Assets",
(iii) defeasance or discharge of the notes, as provided in "Defeasance and Discharge" or (iv) as set forth in the First Lien/Second Lien Intercreditor Agreement.
The
Note Guaranty of a Subsidiary Guarantor will terminate upon
-
(1)
-
a
sale or other disposition (including by way of consolidation or merger or otherwise) of the Subsidiary Guarantor or the sale or other disposition of all or
substantially all the assets of the Subsidiary Guarantor (other than to the Parent Guarantor or a Restricted Subsidiary) in connection with a transaction or circumstance that does not violate the
indenture,
-
(2)
-
a
disposition of the majority of the Capital Stock of the Subsidiary Guarantor to a third Person in connection with a transaction or circumstance that does not
violate the indenture, after which the Subsidiary Guarantor is no longer a Restricted Subsidiary,
-
(3)
-
upon
a liquidation or dissolution of the Subsidiary Guarantor so long as no Default occurs as a result thereof,
-
(4)
-
the
designation by the Parent Guarantor in accordance with the indenture of the Guarantor as an Unrestricted Subsidiary or the Guarantor otherwise ceases to be a
Restricted Subsidiary in accordance with the indenture,
-
(5)
-
defeasance
or discharge of the notes, as provided in "Defeasance and Discharge,"
-
(6)
-
the
release, other than the discharge through payment by the Subsidiary Guarantor, of all other Guarantees by such Restricted Subsidiary of Debt of either Issuer or
another Guarantor under the Credit Agreement, or
-
(7)
-
as
set forth in the First Lien/Second Lien Intercreditor Agreement.
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Security
The Obligations of the Issuers with respect to the notes, the obligations of Guarantors under the Note Guarantees and the performance of all
other Obligations of the Issuers and the Guarantors under the Note Documents will be secured by second-priority Liens on the Collateral granted to the Collateral Agent for the benefit of the holders
of the notes. For all purposes of this Description of the Notes and the indenture, all references to "second-priority" Liens means Liens that may be junior in priority to the Liens securing First Lien
Obligations, to the extent permitted to be incurred or to exist under the First Lien/Second Lien Intercreditor Agreement, and to Permitted Liens.
The
Collateral will include substantially all of the assets of the Issuers and the Guarantors (including certain real property that is owned or leased by any Issuer or Guarantor), that
secures Obligations arising under the Credit Agreement, but in any event not including Excluded Collateral. "Excluded Collateral" means (A) motor vehicles or any other property that is covered
by a certificate of title, the perfection of a security interest in which is excluded from the Uniform Commercial Code in the relevant jurisdiction, (B) Equity Interests in any Immaterial
Subsidiary or Unrestricted Subsidiary and Wyoming Quality Healthcare Coalition, (C) capital credits relating to the membership interests of Cordero Mining LLC in the Tri-County Electric
Association, Inc, a Wyoming power cooperative; and Powder River Energy Corporation, a Wyoming power cooperative, (D) interests in partnerships, joint ventures and non-Wholly Owned Subsidiaries
which cannot be pledged without the consent of one or more third parties (other than any Issuer or Guarantor), after giving effect to the Uniform Commercial Code of any applicable jurisdiction and
other applicable law, (E) Equity Interests in Foreign Restricted Subsidiaries (including any Domestic Subsidiary of a Foreign Subsidiary that is a "controlled foreign corporation" within the
meaning of Section 957 of the Code) or Disregarded Domestic Persons other than 66% of each class of the voting Equity Interests and 100% of the non-voting Equity Interests of such first-tier
Foreign Restricted Subsidiaries and Disregarded Domestic Persons, (F) margin stock, (G) all foreign intellectual property, (H) any "intent-to-use" trademark applications prior to
the filing of a "Statement of Use" or "Amendment to Allege Use" with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest
therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law, (I) properties that are subject to Liens that are referred to in
clauses (3) of "Permitted Liens" so long as the beneficiary of such Lien prohibits the Lien created by the Security Documents, (J) any Letter -of -Credit Rights (as such
term is defined in the New York Uniform Commercial Code) to the extent any Issuer or Guarantor is required by applicable law to apply the proceeds of a drawing of such
letter of credit for a specified purpose, (K) properties to the extent that (but only to the extent that, and only for so long as) the grant of a security interest therein is prohibited by any
applicable law or regulation, requires a consent, approval, license or authorization not obtained of any governmental authority pursuant to any applicable law or regulation, or is prohibited by, or
constitutes a change in control, breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, agreement, permit, instrument or other
document evidencing or giving rise to such property or, in the case of any Investment Property (as defined in the New York Uniform Commercial Code), any applicable shareholder or similar agreement,
except to the extent that such law or regulation or the term in such contract, license, permit, agreement, instrument or other document or shareholder or similar agreement providing for such
prohibition, change of control, breach, default or termination or requiring such consent is ineffective under applicable law (including without limitation Sections 9-406, 9-407, 9-408 and 9-409
of the Uniform Commercial Code in any applicable jurisdiction, the Bankruptcy Code and any similar state insolvency laws, or general principles of equity) to prevent the creation or attachment of the
security interests granted hereunder, (L) Real Properties other than Material Real Properties and (M) any Capital Stock and other securities of a Subsidiary of the Parent Guarantor to
the extent that the pledge of or grant of any other Lien on such Capital Stock and other securities results in the Parent Guarantor being required to file separate financial statements of such
Subsidiary with the Securities and Exchange Commission (or any other governmental authority)
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pursuant
to either Rule 3-10 or 3-16 of Regulation S-X under the Securities Act, or any other law, rule or regulation as in effect from time to time, but only to the extent necessary to
not be subject to such requirement.
The
Collateral will not include any property or assets that is or may be provided to certain issuers of letters of credit pursuant to the First Lien Documents (as defined under
"Certain DefinitionsCertain Definitions Relating to the Intercreditor Agreements") rather than generally to the holders of First Lien Obligations or to the First Lien Agent
(as defined under "Certain DefinitionsCertain Definitions Relating to the Intercreditor Agreements") for the benefit of the holders of the First Lien Obligations as a whole.
The creation or perfection of pledges of or security interests in particular assets will not be required if, and for so long as, the creation or perfection of such security interests would require a
foreign law governed security or pledge agreement. In addition, the Collateral shall not include other property or assets of any Issuer or Guarantor (including any Excluded Subsidiary (as defined in
the Credit Agreement)) that is not required to be subject to a Lien securing the Obligations under the Credit Agreement except to the extent that such property or assets are subject to a First
Priority Lien generally in favor of all holders of First Lien Obligations.
The
Security Documents do not require that security interests be perfected in certain instances. In particular, no Issuer or Guarantor shall be required (A) to take steps to
perfect the security interest in Excluded Accounts, (B) to take steps to perfect the security interests in property and assets (other than deposit, securities and commodities accounts)
requiring perfection through control agreements to the extent a security interest therein cannot be perfected by the filing of a financing statement under the
Uniform Commercial Code of any applicable jurisdiction, (C) to take steps to perfect the security interests granted under the Security Documents by indicating such security interest on the
certificate of title for any motor vehicle asset or other asset that is covered by a certificate of title, (D) to take steps to perfect the security interest in Letter-of-Credit Rights (other
than the filing a financing statement under the Uniform Commercial Code of any applicable jurisdiction to the extent such security interest can be perfected by such filing), (E) to seek any
third party consent or (F) to perfect the security interests granted under the Security Documents in any commercial tort claims. In addition, the Lien on certain items of Collateral will not be
required to be perfected (or perfected by a particular method) to the extent that the collateral agent for the Credit Agreement does not require such Lien to be perfected (or perfected by a particular
method) under the Credit Agreement.
The
Security Documents and Mortgages providing for the Second Priority Liens will be substantially in the form of the corresponding instruments providing for the First Priority Liens,
with such changes as are reasonably necessary to reflect the terms of the First Lien/Second Lien Intercreditor Agreement and with such deletions or modifications of representations, warranties and
covenants as are customary with respect to security documents establishing Liens securing publicly traded debt securities.
Certain Intercreditor Provisions
On October 17, 2016, the Collateral Agent entered into the first lien/second lien intercreditor agreement (the "First Lien/Second Lien
Intercreditor Agreement") with the First Lien Agent, to provide for, among other things, the junior nature of the Second Priority Liens with respect to First Priority Liens. Although the holders of
the notes will not be parties to the First Lien/Second Lien Intercreditor Agreement, by their acceptance of the notes they will agree to be bound thereby and to have directed the Collateral Agent to
enter into and perform its obligations thereunder as Second Lien Representative. The First Lien/Second Lien Intercreditor Agreement permits the First Lien Obligations and the Second Lien Obligations
to be refunded, refinanced or replaced by certain permitted refinancing Debt without affecting the lien priorities set forth in the First Lien/Second Lien Intercreditor Agreement, in each case without
the consent of any holder of First Lien Obligations and Second Lien Obligations (including holders). For purposes of this "Certain Intercreditor Provisions," capitalized terms defined in
"Certain DefinitionsCertain Definitions Related to the Intercreditor Agreements" are used as so defined.
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The First Lien/Second Lien Intercreditor Agreement provides that, notwithstanding:
-
(1)
-
the
date, time, manner, method or order of filing or recordation of any document or instrument or of grant, attachment or perfection of any Liens granted to any
Second Lien Representative or any Second Lien Secured Parties on the Shared Collateral or of any Liens granted to any First Lien Representative or any other First Lien Secured Party on the Shared
Collateral (or any actual or alleged defect in any of the foregoing);
-
(2)
-
any
provision of the applicable Uniform Commercial Code or any applicable law;
-
(3)
-
any
First Lien Document or any Second Lien Document;
-
(4)
-
whether
a Lien was acquired by grant, statute, operation of law, subrogation or otherwise;
-
(5)
-
any
amendment, supplement or other modification, or any Refinancing, of either the First Lien Debt Obligations or the Second Lien Obligations;
-
(6)
-
any
increase of the aggregate amount of the First Lien Debt Obligations, including such increase without notice to or consent by the Second Lien Representatives or
the Second Lien Secured Parties; or
-
(7)
-
any
other circumstance whatsoever, (i) any Lien on the Shared Collateral securing any First Lien Obligations now or hereafter held by or on behalf of any
First Lien Representative or any other First Lien Secured Party or other agent or trustee therefor shall have priority over and be senior in all respects and prior to any Lien on the Shared Collateral
securing any Second Lien Obligations and (ii) any Lien on the Shared Collateral securing any Second Lien Obligations now or hereafter held by or on behalf of any Second Lien Representative or
any Second Lien Secured Parties or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate
in all respects to all Liens on the Shared Collateral securing any First Lien Obligations.
In
the event any Second Lien Representative or any Second Lien Secured Party becomes a judgment lien creditor in respect of Shared Collateral as a result of its enforcement of its rights
as an unsecured creditor in respect of Second Lien Obligations, such judgment lien shall be subordinated to the Liens securing First Lien Obligations on the same basis as the other Liens securing the
Second Lien Obligations are so subordinated to such Liens securing First Lien Obligations under the First Lien/Second Lien Intercreditor Agreement.
The
provisions under the caption "Lien Priorities" are intended solely to set forth the relative ranking, as Liens, of the Second Priority Liens securing the Obligations
under the indenture
and other Pari Passu Secured Debt as against the First Priority Liens, and the Liens securing First Priority Secured Debt as against the Second Priority Liens.
The First Lien/Second Lien Intercreditor Agreement provides that, except as provided below, so long as the Discharge of First Lien Obligations
has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Issuer or any other Guarantor, (i) neither any Second Lien Representative nor any
Second Lien Secured Party will (1) exercise or seek to exercise any rights or remedies (including setoff) with respect to any Shared Collateral in respect of any Second Lien Obligations, or
institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), (2) contest, protest or object to any foreclosure proceeding or action brought
with respect to the Shared Collateral or any other First Lien Collateral by
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any
First Lien Representative or any First Lien Secured Party in respect of the First Lien Debt Obligations, the exercise of any right by any First Lien Representative or any First Lien Secured Party
(or any agent or sub-agent on their behalf) in respect of the First Lien Debt Obligations under any lockbox agreement, control agreement, landlord waiver or bailee's letter or similar agreement or
arrangement to which any First Lien Representative or any First Lien Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party of any
rights and remedies relating to the Shared Collateral under the First Lien Documents or otherwise in respect of the First Lien Collateral or the First Lien Debt Obligations, or (3) object to
the forbearance by the First Lien Secured Parties from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Shared Collateral in
respect of First Lien Debt Obligations and (ii) the First Lien Representatives and the First Lien Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including
setoff and the right to credit bid their debt) and make determinations regarding the care or preservation of the Shared Collateral, or the release, disposition or restrictions with respect to the
Shared Collateral without any consultation with or the consent of any Second Lien Representative or any Second Lien Secured Party and to incur expenses in connection with the foregoing, and shall have
the exclusive right to determine and direct the time, method and place for exercising such right or remedy or conducting any proceeding with respect thereto;
provided
,
however
, that:
(a) in
any Insolvency or Liquidation Proceeding commenced by or against any Issuer or any Guarantor, any Second Lien Representative may file a claim or statement of
interest with respect to the Second Lien Obligations under its Second Lien Debt Facility;
(b) any
Second Lien Representative may take any action (not adverse to the prior Liens on the Shared Collateral securing the First Lien Debt Obligations or the rights of the
First Lien Representatives or the First Lien Secured Parties to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and
perfection and priority of its Lien on, the Shared Collateral;
(c) any
Second Lien Representative and other Second Lien Secured Parties may exercise rights and remedies as unsecured creditors against any Issuer and any other Guarantor
in accordance with the terms of the Second Lien Documents and applicable law so long as such rights and remedies do not violate any express provision of the First Lien/Second Lien Intercreditor
Agreement, which is binding on the Second Lien Secured Parties (including provisions under the captions
"First Lien Agent; No
Interference
",
"No New Liens; Similar Documents
" and
"Agreements With Respect
to Insolvency or Liquidation Proceedings
";
(d) any
Second Lien Secured Party may file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any
person objecting to or otherwise seeking the disallowance of the claims of the Second Lien Secured Parties or the avoidance of any Second Priority Lien to the extent not inconsistent with the terms of
the First Lien/Second Lien Intercreditor Agreement; and
(e) from
and after the Second Lien Enforcement Date, the Designated Second Lien Representative may exercise or seek to exercise any rights or remedies (including setoff)
with respect to any Shared Collateral in respect of any Second Lien Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure).
Nothing
in the First Lien/Second Lien Intercreditor Agreement shall prohibit the receipt by any Second Lien Representative or any Second Lien Secured Party of the required payments of
principal, premium, if any, interest, fees and other amounts due under the notes and the other Second Lien Documents so long as such receipt (i) is not the direct or indirect result of the
exercise in contravention of the First Lien/Second Lien Intercreditor Agreement by a Second Lien Representative or any Second Lien Secured Party of rights or remedies as a secured creditor in respect
of Shared
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Collateral
or (ii) whether in contravention of the First Lien/Second Lien Intercreditor Agreement or not, does not have the effect of discharging the Lien of any First Lien Representative or
First Lien Agent on such Shared Collateral.
The First Lien/Second Lien Intercreditor Agreement provides that in exercising rights and remedies with respect to the First Lien Collateral,
the First Lien Representatives and the First Lien Secured Parties may enforce the provisions of the First Lien Documents and exercise remedies thereunder, all in such order and in such manner as they
may determine in the exercise of their sole discretion and without consultation with any Second Lien Representative or any other Second Lien Secured Party and regardless of whether any such exercise
is adverse to the interest of any Second Lien Secured Party. Such exercise and enforcement shall include the rights of an agent appointed by the First Lien Representatives and/or the First Lien
Secured Parties to sell or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a
secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
The
First Lien/Second Lien Intercreditor Agreement provides that, subject to the provisions of items (a) through (e) of the first paragraph under the caption
"Limitation on Enforcement of Remedies", (i) neither a Second Lien Representative nor any Second Lien Secured Party will take any action that would hinder any exercise of remedies
undertaken by any First Lien Representative or any First Lien Secured Party with respect to the Shared Collateral under the First Lien Documents, including any sale, lease, exchange, transfer or other
disposition of the Shared Collateral, whether by foreclosure or otherwise, and (ii) each Second Lien Representative and each Second Lien Secured Party will waive any and all rights it or any
such Second Lien Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the First Lien Representatives or the First Lien Secured Parties seek to enforce or
collect the First Lien Debt Obligations or the Liens granted on any of the First Lien Collateral, regardless of whether any action or failure to act by or on behalf of any First Lien Representative or
any other First Lien Secured Party is adverse to the interests of the Second Lien Secured Parties.
The
First Lien/Second Lien Intercreditor Agreement provides that each First Lien Representative and each Second Lien Secured Party shall agree that:
-
(1)
-
it
shall not (and will waive any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding),
the validity, extent, perfection, priority or enforceability of any Lien securing any First Lien Debt Obligations held (or purported to be held) by or on behalf of any First Lien Representative or any
of the other First Lien Secured Parties or other agent or trustee therefor in any First Lien Collateral;
-
(2)
-
except
as expressly provided in items (a) through (e) of the first paragraph under the caption "Limitation on Enforcement of Remedies", it
shall not, in the context of its role as secured creditor, take or receive any Shared Collateral or any Proceeds of Shared Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to any Shared Collateral in respect of Second Lien Obligations;
-
(3)
-
except
as expressly provided in items (a) through (e) of the first paragraph under the caption "Limitation on Enforcement of Remedies", it
shall not commence, or join with any Person (other than the First Lien Secured Parties and the First Lien Representatives upon the request of the Designated First Lien Representative) in commencing,
any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Shared Collateral under any of the Second Lien Documents or otherwise in
respect of the Second Lien Obligations; and
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-
(4)
-
none
of the First Lien Representatives nor any of the other First Lien Secured Parties shall be required to marshal any present or future collateral security for any
obligations of any Issuer or any Subsidiary to any First Lien Representative or any First Lien Secured Party under the First Lien Documents or any assurance of payment in respect thereof, or to resort
to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall
be cumulative and in addition to all other rights, however existing or arising.
The
First Lien/Second Lien Intercreditor Agreement further provides that each First Lien Representative and each First Lien Secured Party shall not (and shall waive any right to) contest
or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, priority or enforceability of any Lien securing any
Second Lien Obligations held (or purported to be held) by or on behalf of any Second Lien Representative or any of the Second Lien Secured Parties in the Second Lien Collateral.
The
First Lien Secured Parties and the First Lien Representatives have no duty to any Second Lien Representative or any Second Lien Secured Party in respect of the maintenance or
preservation of the Shared Collateral, the First Lien Obligations or otherwise, other than, upon the Discharge of First Lien Obligations, (i) to deliver to the Designated Second Lien
Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all Proceeds, held or controlled by such First Lien Representative or any of its agents or
bailees, together with any necessary endorsements and notices to
depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee's letter or any similar agreement or arrangement granting it
rights or access to Shared Collateral, (ii) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of any
Issuer or Guarantor issued by such insurance carrier and (iii) notify any governmental authority involved in any condemnation or similar proceeding involving any Issuer or Guarantor that the
Designated Second Lien Representative is entitled to approve any awards granted in such proceeding.
The First Lien/Second Lien Intercreditor Agreement provides that, unless and until the Discharge of First Lien Obligations, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any Issuer or Guarantor, any Shared Collateral or Proceeds upon the exercise of remedies received by any Second Lien
Representative or any Second Lien Secured Party in connection with the exercise of any right or remedy (including setoff) relating to the Shared Collateral, in contravention of the First Lien/Second
Lien Intercreditor Agreement or otherwise, shall be segregated and held in trust for the benefit of and forthwith paid over to the Designated First Lien Representative for the benefit of the First
Lien Secured Parties in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. Any Shared Collateral or Proceeds received by any
Second Lien Representative or any Second Lien Secured Party on account of its secured claim in connection with any Insolvency or Liquidation Proceeding shall be deemed to be the result of an exercise
of remedies.
The
First Lien/Second Lien Intercreditor Agreement provides that in case any First Lien Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to disgorge,
turn over or otherwise pay any amount to the estate of the respective Issuer or any Guarantor (or any trustee, receiver or similar Person therefor), because the payment of such amount was declared to
be fraudulent or preferential in any respect or for any other reason, any amount (a "Recovery"), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then the
First Lien Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the First Lien Secured Parties shall be entitled to the
benefits of the First Lien/Second Lien Intercreditor Agreement with respect to all such recovered amounts. If the First
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Lien/Second
Lien Intercreditor Agreement shall have been terminated prior to such Recovery, the First Lien/Second Lien Intercreditor Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties thereto. None of the Second Lien Representatives and Second Lien Secured Parties
shall be
entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with the First Lien/Second Lien Intercreditor Agreement, whether by
preference or otherwise, and the benefit of such avoidance action otherwise allocable to them shall instead be treated as Proceeds and allocated and turned over for application in accordance with the
priorities set forth in the First Lien/Second Lien Intercreditor Agreement.
The
grants of Liens by the Issuers and the Guarantors pursuant to the First Lien Collateral Documents and the Second Lien Collateral Documents constitute separate and distinct grants of
Liens and because of, among other things, their differing rights in the Shared Collateral, the Second Lien Obligations are fundamentally different from the First Lien Obligations and must be
separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding. If it is held that any claims of the First Lien Secured Parties and the Second Lien
Secured Parties in respect of the Shared Collateral constitute a single class of claims (rather than separate classes of senior and junior secured claims), then all distributions shall be made as if
there were separate classes of senior and junior secured claims against the Issuers or Guarantors in respect of the Shared Collateral, with the effect being that, to the extent that the aggregate
value of the Shared Collateral is sufficient (for this purpose ignoring all claims held by the Second Lien Secured Parties), the First Lien Secured Parties shall be entitled to receive, in addition to
amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing (or that would be owing if there were such separate classes of senior and junior secured
claims) in respect of Post-Petition Interest, and any Default Interest, before any distribution is made in respect of the Second Lien Obligations, and each Second Lien Representative and each Second
Lien Secured Party shall turn over to the Designated First Lien Representative amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even
if such turnover has the effect of reducing the claim or recovery of the Second Lien Secured Parties.
The
First Lien/Second Lien Intercreditor Agreement provides that in case an Issuer or any Subsidiary consummates any Refinancing of any First Lien Obligations at any time substantially
concurrently with or after the occurrence of the Discharge of First Lien Debt Obligations, then such Discharge of First Lien Debt Obligations shall automatically be deemed not to have occurred for all
purposes of the First Lien/Second Lien Intercreditor Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge
of First Lien Debt Obligations) and the applicable agreement governing such First Lien Obligations shall automatically be treated as a First Lien Document for all purposes of the First Lien/Second
Lien Intercreditor Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein and the agent, representative or trustee for the holders of such
First Lien Obligations shall be the First Lien Representative for all purposes of the First Lien/Second Lien Intercreditor Agreement. Upon receipt of notice of such incurrence (including the identity
of the new First Lien Representative), each Second Lien Representative (including the Designated Second Lien Representative) shall promptly (i) enter into such documents and agreements,
including amendments or supplements to the First Lien/Second Lien Intercreditor Agreement, as an Issuer or such new First Lien Representative shall reasonably request in writing in order to provide
the new First Lien Representative the rights of a First Lien Representative contemplated by the First Lien/Second Lien Intercreditor Agreement, (ii) deliver to such First Lien Representative,
to the extent that it is legally permitted to do so, all Shared Collateral, including all proceeds thereof, held or controlled by such Second Lien Representative or any of its agents or bailees,
together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee's letter
or any similar agreement or arrangement granting
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it
rights or access to Shared Collateral, (iii) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of
any Issuer or Guarantor issued by such insurance carrier and (iv) notify any governmental authority involved in any condemnation or similar proceeding involving an Issuer or Guarantor that the
new First Lien Representative is entitled to approve any awards granted in such proceeding.
The First Lien/Second Lien Intercreditor Agreement provides that: (i) in connection with any exercise of any First Lien Representatives'
rights or remedies in respect of the Shared Collateral, in each case prior to the Discharge of First Lien Obligations, such First Lien Representative, for itself or on behalf of any of the First Lien
Secured Parties, releases any of its Liens on any part of the Shared Collateral or such First Lien Representative, for itself or on behalf of any of the First Lien Secured Parties, releases any
Guarantor from its obligations under its guaranty of the First Lien Debt Obligations, then the Liens, if any, of each Second Lien Representative, for itself or for the benefit of the Second Lien
Secured Parties, on such Shared Collateral, and the obligations of such Guarantor under its guarantee of the Second Lien Obligations shall be automatically, unconditionally and simultaneously
released, (ii) if in connection with any exercise of any First Lien Representatives' remedies, in each case prior to the Discharge of First Lien Obligations, the equity interests of any Person
are foreclosed upon or otherwise disposed of and such First Lien Representative releases its Lien on the property or assets of such Person then the Liens of each Second Lien Representative with
respect to the property or assets of such Person will be automatically released to the same extent as the Liens of such First Lien Representative and (iii) in the event of a sale, transfer or
other disposition of any specified item of Shared Collateral (including all or substantially all of the equity interests of any Subsidiary of an Issuer) other than a release granted upon or following
the Discharge of First Lien Obligations, the Liens granted to the Second Lien Representatives and the Second Lien Secured Parties upon such Shared Collateral to secure Second Lien Obligations shall
terminate and be released and any Issuer or Guarantor released from its obligations under its Guarantee of First Lien Obligations released by a First Lien Representative shall be released under its
Guarantee of Second Lien Obligations, automatically and without any further action, concurrently with the termination and release of all Liens granted upon such Shared Collateral to secure First Lien
Obligations; provided that, in the case of clause (iii), the Liens granted to the Second Lien Representatives and the Second Lien Secured Parties shall not be so released if an Event of Default
(as defined under any Second Lien Document) has occurred and is continuing; and provided that, in the case of each of clauses (i), (ii) and (iii), the Second Priority Liens on such
Shared Collateral shall attach to (and shall remain subject and subordinate to all First Priority Liens securing First Lien Obligations) any Proceeds of a sale, transfer or other disposition of Shared
Collateral or equity interests of any Person not paid to the First Lien Secured Parties or that remain after the Discharge of First Lien Obligations.
The First Lien/Second Lien Intercreditor Agreement is a "subordination agreement" under Section 510(a) of the Bankruptcy Code and shall
be effective before, during and after the commencement of any Insolvency or Liquidation Proceeding. The relative rights as to the Shared Collateral and Proceeds shall continue after the commencement
of any Insolvency or Liquidation Proceeding on the same basis as prior to the date of the petition therefor, subject to any court order approving the financing of, or use of cash collateral by, any
Issuer or Guarantor.
The
First Lien/Second Lien Intercreditor Agreement provides that, until the Discharge of First Lien Obligations has occurred, if any Issuer or Guarantor shall be subject to any
Insolvency or Liquidation Proceeding and any First Lien Representative or any First Lien Secured Party shall desire to consent (or not object) to the sale, use or lease of cash or other collateral or
to consent (or not
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object)
to the Issuer's or any Guarantor's obtaining financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law ("DIP
Financing"), then each Second Lien Representative and each Second Lien Secured Party will raise no objection to and will not otherwise contest:
-
(1)
-
such
sale, use or lease of such cash or other collateral, unless a First Lien Representative or any other First Lien Secured Party shall oppose or object to such use
of cash collateral (in which case, no Second Lien Representative nor any other Second Lien Secured Party shall seek any relief in connection therewith that is inconsistent with the relief being sought
by the First Lien Secured Parties);
-
(2)
-
such
DIP Financing, unless (x) a First Lien Representative or any other First Lien Secured Party shall oppose or object to such DIP Financing or
(y) the terms of such DIP Financing provide for the sale of a substantial part of the First Lien Collateral and/or the Second Lien Collateral or require the confirmation of a plan of
reorganization containing specific terms or provisions (other than repayment in cash of such DIP Financing on the effective date thereof) and, except as specified in the sixth paragraph under this
caption "Agreements With Respect to Insolvency or Liquidation Proceedings", will not request adequate protection or any other relief in connection therewith and, to the extent the Liens
securing any First Lien Obligations are subordinated or pari passu with such DIP Financing, will subordinate (and will be deemed hereunder to have subordinated) its Liens in the Shared Collateral to
(A) such DIP Financing (and all obligations relating thereto) on the same basis as the Liens securing the Second Lien Obligations are so subordinated to Liens securing First Lien Obligations
under the First Lien/Second Lien Intercreditor Agreement, (B) any adequate protection Liens provided to the First Lien Secured Parties, and (C) any "carve-out" for professional and
United States Trustee fees agreed to by the First Lien Representatives;
-
(3)
-
any
motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of First Lien Obligations made by any First Lien
Representative or any other First Lien Secured Party;
-
(4)
-
any
exercise by any First Lien Secured Party of the right to credit bid First Lien Obligations at any sale of First Lien Collateral under Section 363(k) of
the Bankruptcy Code or any similar provision of any other Bankruptcy Law;
-
(5)
-
any
other request for judicial relief made in any court by any First Lien Secured Party relating to the lawful enforcement of any Lien on First Lien Collateral; or
-
(6)
-
any
order relating to a sale or other disposition of assets of any Issuer or Guarantor to which any First Lien Representative has consented or not objected that
provides, to the extent such sale or other disposition is to be free and clear of Liens, that the Liens securing the First Lien Debt Obligations and the Second Lien Obligations will attach to the
proceeds of the sale on the same basis of priority as the Liens on the Shared Collateral securing the First Lien Obligations rank to the Liens on the Shared Collateral securing the Second Lien
Obligations pursuant to the First Lien/Second Lien Intercreditor Agreement.
The
First Lien/Second Lien Intercreditor Agreement provides that no Second Lien Secured Party will be allowed to provide DIP Financing to any Issuer or any Guarantor secured by Liens
equal or senior in priority to the Liens securing any First Lien Obligations;
provided that
if no First Lien Secured Party
offers to provide DIP Financing to the extent permitted under the second paragraph under this caption "Agreements With Respect to Insolvency or Liquidation Proceedings", after the
respective Issuer provides the Designated First Lien Representative with an opportunity to provide such DIP Financing (and consults with the Designated First Lien Representative for a reasonable
period of time with respect to such DIP Financing), then a Second Lien Secured Party may seek to provide such
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DIP
Financing secured by Liens equal or senior in priority to the Liens securing any First Lien Obligations, and First Lien Secured Parties may object thereto; provided, further, that such DIP
Financing may not "roll-up" or otherwise include or refinance any pre-petition Second Lien Obligations.
Until
the Discharge of First Lien Obligations has occurred, none of the Second Lien Representatives and the Second Lien Secured Parties shall seek relief from the automatic stay or any
other stay in any Insolvency or Liquidation Proceeding or take any action in derogation thereof, in each case in respect of any Shared Collateral, without the prior written consent of the Designated
First Lien Representative.
The
First Lien/Second Lien Intercreditor Agreement provides that none of the Second Lien Representatives and Second Lien Secured Parties shall:
-
(1)
-
object,
contest or support any other Person objecting to or contesting (i) any request by any First Lien Representative or any First Lien Secured Parties for
adequate protection, (ii) any objection by any First Lien Representative or any First Lien Secured Parties to any motion, relief, action or proceeding based on any First Lien Representative's
or First Lien Secured Party's claiming a lack of adequate protection or (iii) the payment of interest, fees, expenses or other amounts of any First Lien Representative or any other First Lien
Secured Party under Section 506(b) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law; or
-
(2)
-
assert
or support any claim for costs or expenses of preserving or disposing of any Second Lien Collateral under Section 506(c) of the Bankruptcy Code or any
similar provision of any other Bankruptcy Law.
Notwithstanding
anything contained in this caption "Agreements With Respect to Insolvency or Liquidation Proceedings", in any Insolvency or Liquidation Proceeding,
-
(1)
-
if
the First Lien Secured Parties (or any subset thereof) are granted adequate protection in the form of additional collateral or superpriority claims in connection
with any DIP Financing or use of cash collateral under Section 363 or 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, then each Second Lien Representative, for
itself and on behalf of each Second Lien Secured Party under its Second Lien Debt Facility, may seek or request adequate protection in the form of a replacement Lien or superpriority claim on such
additional collateral, which (i) Lien is subordinated to the Liens securing all First Lien Obligations and such DIP Financing (and all obligations relating thereto) on the same basis as the
other Liens securing the Second Lien Obligations are so subordinated to the Liens securing First Lien Obligations under the First Lien/Second Lien Intercreditor Agreement and (ii) superpriority
claim is subordinated to all superpriority claims of the First Lien Secured Parties on the same basis as the other Liens of the Second Lien Secured Parties are so subordinated to the Liens of the
First Lien Secured Parties under the First Lien/Second Lien Intercreditor Agreement;
-
(2)
-
in
the event Second Lien Representatives, for themselves and on behalf of the Second Lien Secured Parties under their Second Lien Debt Facilities, seek or request
adequate protection and such adequate protection is granted (in each instance, to the extent such grant is otherwise permissible under the terms and conditions of the First Lien/Second Lien
Intercreditor Agreement) in the form of additional or replacement collateral, then each First Lien Representative shall also be granted a senior Lien on such additional or replacement collateral as
security for the First Lien Obligations and any such DIP Financing and any Lien on such additional or replacement collateral securing the Second Lien Obligations shall be subordinated to the Liens on
such collateral securing the First Lien Obligations and any such
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Nothing
contained in this caption "Agreements With Respect to Insolvency or Liquidation Proceedings" shall, except as expressly provided herein, prohibit or in any way limit
any First Lien Representative or any other First Lien Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Second Lien Secured Party,
including the seeking by any Second Lien Secured Party of adequate protection or the assertion by any Second Lien Secured Party of any of its rights and remedies under the Second Lien Documents or
otherwise.
The
First Lien/Second Lien Intercreditor Agreement provides that to the extent that any Second Lien Representative or any Second Lien Secured Party has or acquires rights under
Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Shared Collateral, such Second Lien Representative or
Second Lien Secured Party will not assert any such rights without the prior written consent of each First Lien Representative,
provided that
if
requested by any First Lien Representative, such Second Lien Representative shall timely exercise such rights in the manner requested by the First Lien Representatives (acting unanimously), including
any rights to payments in respect of such rights.
Until
the Discharge of First Lien Obligations has occurred, each Second Lien Representative and each Second Lien Secured Party shall not assert or enforce any claim under
Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law senior to or on a parity with the Liens securing the First Lien Obligations for costs or expenses of
preserving or disposing of any Shared Collateral.
If,
in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a
plan of reorganization or similar dispositive restructuring plan, on account of both the First Lien Obligations and the Second Lien Obligations, then, to the extent the debt obligations distributed on
account of the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same assets or property, the provisions of the First Lien/Second Lien Intercreditor
Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
No
Second Lien Secured Party (whether in the capacity of a secured creditor or an unsecured creditor) shall propose, vote in favor of, or otherwise directly or indirectly support any
plan of reorganization that is inconsistent with the priorities or other provisions of the First Lien/Second Lien Intercreditor Agreement or otherwise impairs the repayment of the First Lien
Obligations (with impairment to be
determined under Section 1124 of the Bankruptcy Code), other than (i) with the prior written consent of the Designated First Lien Representative, or (ii) to the extent any such
plan is proposed or supported by the number of First Lien Secured Parties required under Section 1126(d) of the Bankruptcy Code.
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The First Lien/Second Lien Intercreditor Agreement additionally provides that none of the Second Lien Representatives and Second Lien Secured Parties shall object
to, oppose, support any objection, or take any other action to impede, the right of any First Lien Secured Party to make an election under Section 1111(b)(2) of the Bankruptcy Code; and that
each Second Lien Representative and Second Lien Secured Party shall waive any claim it may hereafter have against any senior claimholder arising out of the election by any First Lien Secured Party of
the application of Section 1111(b)(2) of the Bankruptcy Code.
Without
the consent of the First Lien Representative in its sole discretion, the Second Lien Representative, for itself and on behalf of each other Second Lien Secured Party, shall not
file an involuntary bankruptcy claim or seek the appointment of an examiner or a trustee for any Issuer or any Guarantor.
None
of the Second Lien Representatives and the Second Lien Secured Parties shall oppose or seek to challenge any claim by any First Lien Representative or any other First Lien Secured
Party for allowance in any Insolvency or Liquidation Proceeding of First Lien Obligations consisting of Post-Petition Interest of the First Lien Representatives on behalf of the First Lien Secured
Parties on
the Shared Collateral or any other First Lien Secured Party's Lien, without regard to the existence of the Liens of the Second Lien Representatives on behalf of the Second Lien Secured Parties on the
Shared Collateral.
None
of the First Lien Representatives and the First Lien Secured Parties shall oppose or seek to challenge any claim by any Second Lien Representative or any other Second Lien Secured
Party for allowance in any Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of Post-Petition Interest of the Second Lien Representatives on behalf of the Second Lien Secured
Parties on the Shared Collateral.
The First Lien/Second Lien Intercreditor Agreement also provides for various advance notice requirements and other procedural provisions typical
for agreements of this type, including procedural provisions to allow any successor First Lien Agent to become a party to the First Lien/Second Lien Intercreditor Agreement (without the consent of any
holder of First Lien Obligations or Second Lien Obligations (including holders of the notes)) upon the refinancing or replacement of the First Lien Obligations as permitted by the applicable First
Lien Documents.
The First Lien/Second Lien Intercreditor Agreement provides that, so long as the Discharge of First Lien Debt Obligations has not occurred, no
Issuer or Guarantor shall, or shall permit any of its Subsidiaries to, grant or permit any Lien on any asset to secure any Second Lien Obligation and no Second Lien Secured Party shall hold any Lien
on any asset to secure any Second Lien Obligation, unless such Issuer or Guarantor has granted, or concurrently therewith grants, a First Priority Lien on such asset to secure the First Lien Debt
Obligations. To the extent that the provisions of the preceding sentence are not complied with for any reason, or should any Lien upon any Shared Collateral be released or become unperfected due to
breach of the First Lien/Second Lien Intercreditor Agreement or due to inadvertence, neglect or error by any of the First Lien Secured Parties, (i) each Second Lien Representative and the other
Second Lien Secured Parties shall be deemed to hold and have held such Lien for the benefit of each of the First Lien Representatives and the other First Lien Secured Parties and (ii) any
amounts received by or distributed to any Second Lien Secured Party pursuant to or as a result of any Lien granted in contravention of this paragraph, or as a result of such a release or lack of
perfection, shall be applied as set out in in the caption "Application of Proceeds" and in the first paragraph of the caption "Payment Over".
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To
the extent any Issuer or Guarantor or any of their respective Subsidiaries grants or permits a Second Lien Representative or any other Second Lien Secured Party any right or remedy
with respect to the Shared Collateral that has not also been granted or permitted to the First Lien Representative or any other First Lien Secured Party, (i) such Second Lien Representative
shall be required to exercise such right or remedy at the direction of the Designated First Lien Representative and (ii) any exercise of such right or remedy by such Second Lien Representative
shall be for the benefit of the First Lien Representatives and the other First Lien Secured Parties pursuant to and in accordance with the terms of the First Lien/Second Lien Intercreditor Agreement.
The
First Lien/Second Lien Intercreditor Agreement provides that the intention of the parties thereto that they each hold liens in the Shared Collateral may not be construed as a
condition to the grant, attachment or perfection of any Lien held by any of the First Lien Secured Parties, nor shall it be construed to confer on any third party any right, interest or priority
superior to that which such party would hold in the absence of such intention.
The First Lien Secured Parties have the right to be named as additional insureds and loss payees on insurance policies, and, so long as the
Discharge of First Lien Obligations has not occurred, the sole right to adjust settlement for any insurance policy on the Shared Collateral in the event of loss, and to approve any condemnation award.
The Second Lien Secured Parties may be added as additional insureds and loss payees on insurance policies subject to the rights of the First Lien Secured Parties. In connection therewith and so long
as the Discharge of First Lien Obligations has not occurred, the Second Lien Secured Parties shall agree to execute such documentation to disclaim any interest in the proceeds or as requested by the
First Lien Secured Parties necessary or desirable for the First Lien Secured Parties to enable the First Lien Secured Parties to adjust settlement for any such insurance policy or to approve any
condemnation award or otherwise to exercise their rights in such policies and proceeds and the First/Second Lien Intercreditor Agreement shall grant to the First Lien Representative a power of
attorney coupled with an interest to execute any such documentation on behalf of the Second Lien Secured Parties. Unless and until the Discharge of First Lien Obligations has occurred, all proceeds of
any such policy and any such award, if in respect of the Shared Collateral, shall be paid (1) first, prior to the occurrence of the Discharge of First Lien Obligations, to the Designated First
Lien Representative for the benefit of First Lien Secured Parties pursuant to the terms of the First Lien Documents, (2) second, after the occurrence of the Discharge of First Lien Obligations,
to the Designated Second Lien Representative for the benefit of the Second Lien Secured Parties pursuant to the terms of the applicable Second Lien Documents, (3) third, after the occurrence of
the Discharge of First Lien Debt Obligations, then to the Designated First Lien Representative for
the benefit of the First Lien Secured Parties pursuant to the terms of the First Lien Documents, and (4) fourth, after the occurrence of the Discharge of all First Lien Debt Obligations, then
to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Second Lien Representative or any Second Lien
Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of the First Lien/Second Lien Intercreditor Agreement, it shall pay such proceeds
over to the Designated First Lien Representative as set out in the first paragraph of the caption "Payment Over".
The First Lien Documents may be amended, restated, supplemented or otherwise modified in accordance with their terms, and the Debt under the
First Lien Documents may be Refinanced, in each case, without the consent of any Second Lien Secured Party;
provided
,
however
,
that
, without the consent of the Designated Second Lien Representative, no such amendment,
restatement, supplement,
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modification
or Refinancing (or successive amendments, restatements, supplements, modifications or Refinancings) shall contravene any provision of the First Lien/Second Lien Intercreditor Agreement.
Without
the prior written consent of the First Lien Representatives or unless permitted under the First Lien Documents, unless and until the Discharge of First Lien Debt Obligations has
occurred, no Second Lien Document may be amended, restated, supplemented or otherwise modified and no Debt under the Second Lien Documents may be Refinanced, to the extent such amendment, restatement,
supplement or modification or Refinancing, or the terms of such new Second Lien Document, would (i) contravene the provisions of the First Lien/Second Lien Intercreditor Agreement,
(ii) change to earlier dates any scheduled dates for payment of principal (including the final maturity date) under such Second Lien Document or of interest on Debt under such Second Lien
Document, (iii) modify (or have the effect of a modification of) the mandatory prepayment provisions of the applicable Second Lien Document for such Second Lien Debt Facility in a manner that
would result in the weighted average life to maturity being less than the weighted average life to maturity of the Obligations under the indenture and other Pari Passu Secured Debt under such Second
Lien Document prior to giving effect thereto or (iv) reduce the capacity to incur debt for borrowed money constituting First Lien Obligations to an amount less than the aggregate principal
amount of term loans and aggregate principal amount of revolving commitments, in each case, under the First Lien Documents on the day of any such amendment, restatement, supplement, modification or
Refinancing.
In
the event that each applicable First Lien Representative and/or the First Lien Secured Parties enter into any amendment, waiver or consent in respect of any of the First Lien
Collateral Documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, any First Lien Collateral Document or changing in any manner the
rights of the First Lien Representatives, the First Lien Secured Parties, any Issuer or Guarantor thereunder (including the release of any Liens in First Lien Collateral) in a manner that is
applicable to all First Lien Facilities, then such amendment, waiver or consent shall apply automatically to any comparable provision of each comparable Second Lien Collateral Document without the
consent of any Second Lien Representative or any Second Lien Secured Party and without any action by any Second Lien Representative, any Issuer or Guarantor; provided, however, that no such amendment,
waiver or consent shall (i) remove assets subject to the Second Priority Liens or release any such Liens, except to the extent that such release is permitted or required the caption
"Automatic Release of Second Priority Liens" and
provided that
there is a concurrent release of the corresponding First Priority Liens or
(ii) amend, modify or otherwise affect the rights or duties of any Second Lien Representative in its role as Second Lien Representative without its prior written consent.
The First Lien/Second Lien Intercreditor Agreement provides that following (i) the acceleration of the First Lien Obligations in
accordance with the terms of the Credit Agreement or (ii) the commencement of an Insolvency or Liquidation Proceeding (each, a "Purchase Event"), within thirty (30) days of the
Purchase Event, one or more of the Second Lien Secured Parties may request, and the First Lien Secured Parties offer the Second Lien Secured Parties the option, to purchase all, but not less than all,
of the aggregate amount of outstanding First Lien Obligations (including unfunded commitments under any First Lien Document) outstanding at the time of purchase at par, plus any premium that would be
applicable upon prepayment of the First Lien Obligations and accrued and unpaid interest, Post-Petition Interest, Default Interest and fees (including breakage costs and, in the case of any secured
Hedging Obligations, the amount that would be payable by the relevant Issuer or Guarantor if such Issuer or Guarantor were to terminate the hedge agreement in respect thereof on the date of the
purchase or, if not terminated an amount determined by the relevant First Lien Secured Party to be necessary to collateralize its credit risk arising out of such agreement and, if applicable, the cash
collateral to be furnished to the First Lien Secured Parties providing letters of
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credit
under the First Lien Documents in such amounts (not to exceed 105% thereof) as such First Lien Secured Party determines is reasonably necessary to secure such First Lien Secured Party in
connection with any such outstanding and undrawn letters of credit), without warranty or representation or recourse (except for representations and warranties required to be made by assigning lenders
pursuant to the Assignment (as such term is defined in the Credit Agreement)). If such right is
exercised, the First Lien Secured Parties and the Second Lien Secured Parties shall endeavor to close promptly thereafter but in any event within ten (10) Business Days of the request. If one
or more of the Second Lien Secured Parties exercise such purchase right, it shall be exercised pursuant to documentation mutually acceptable to each of the First Lien Representative and the purchasing
Second Lien Secured Parties. If none of the Second Lien Secured Parties exercises such right, the First Lien Secured Parties shall have no further obligations pursuant to this paragraph for such
Purchase Event and may take any further actions in their sole discretion in accordance with the First Lien Documents and the First Lien/Second Lien Intercreditor Agreement. Each First Lien Secured
Party will retain all rights to indemnification provided in the relevant First Lien Document for all claims and other amounts relating to the period prior to the purchase of the First Lien Obligations
pursuant to this paragraph.
The First Lien/Second Lien Intercreditor Agreement provides that regardless of whether an Insolvency or Liquidation Proceeding has been
commenced, Shared Collateral or Proceeds upon the exercise of remedies will be applied:
-
(1)
-
first
, to the payment in full in cash of all First Lien Obligations,
-
(2)
-
second
, to the payment in full in cash of all Second Lien Obligations,
-
(3)
-
third
, to the payment in full in cash of all First Lien Debt Obligations in excess of the First Lien Obligations, and
-
(4)
-
fourth
, to the Issuers or as otherwise required by applicable law.
Any
Shared Collateral or Proceeds received by any Representative, any First Lien Secured Party or Second Lien Secured Party on account of its secured claim in connection with any
Insolvency or Liquidation Proceeding shall be deemed to be the result of an exercise of remedies. Any non-cash
Shared Collateral or non-cash proceeds may be held by the applicable Representative as Shared Collateral unless the failure to apply such amounts would be commercially unreasonable.
The First Lien/Second Lien Intercreditor Agreement provides that each Second Lien Representative and each Second Lien Secured Party will waive
any rights of subrogation it may acquire as a result of any payment under the First Lien/Second Lien Intercreditor Agreement until the Discharge of First Lien Obligations has occurred.
In case any Issuer or Guarantor incurs Pari Passu Secured Debt, the Collateral Agent will enter into pari passu second lien intercreditor
agreement (the "Pari Passu Second Lien Intercreditor Agreement") having the terms set forth below (or such other terms satisfactory to the parties thereto, so long as such other terms are not
materially adverse to the interests of the holders as compared to the terms contemplated herein (as determined in good faith by the Company)) with the trustee, administrative agent, collateral agent,
security agent or similar agent under the indenture, loan agreement or other agreement with respect to such series of Pari Passu Secured Debt (the "Initial Additional Second Lien Representative"), to
provide for, among other things, the relative rights and
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remedies
of the Second Lien Secured Parties with respect to Second Lien Collateral. Although the holders of the notes will not be parties to the Pari Passu Second Lien Intercreditor Agreement, by
their acceptance of the notes they will agree to be bound thereby and to have directed the Collateral Agent to enter into and perform its obligations thereunder as Second Lien Representative. The Pari
Passu Second Lien Intercreditor Agreement will permit the Second Lien Obligations to be refunded, refinanced or replaced by certain permitted refinancing Debt without affecting the relative rights and
remedies set forth in the Pari Passu Second Lien Intercreditor Agreement, in each case without the consent of any holder of any Series of Second Lien Obligations (including holders of the notes).
The Pari Passu Second Lien Intercreditor Agreement will provide that, subject to the provisions of the immediately following paragraph, but
otherwise notwithstanding:
-
(1)
-
the
date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of Second Lien Obligations granted on the Shared Second
Lien Collateral;
-
(2)
-
any
provision of the Uniform Commercial Code of any jurisdiction or any other applicable law;
-
(3)
-
any
provision of the Second Lien Documents;
-
(4)
-
any
defect or deficiencies in the Liens securing the Second Lien Obligations of any Series; or
-
(5)
-
any
other circumstance whatsoever;
the
Liens securing any Series of Second Lien Obligations on any Shared Second Lien Collateral shall be of equal priority.
The
Pari Passu Second Lien Intercreditor Agreement will provide that the holders of Second Lien Obligations of each Series (and not the Second Lien Secured Parties of any other Series)
bear the risk of (i) any determination by a court of competent jurisdiction that (1) any of the Second Lien Obligations of such Series are unenforceable under applicable law or are
subordinated to any other obligations (other than another Series of Second Lien Obligations), (2) any of the Second Lien Obligations of such Series do not have a valid and perfected security
interest in any of the Second Lien Collateral securing
any other Series of Second Lien Obligations and/or (3) any intervening security interest exists securing any other obligations (other than another Series of Second Lien Obligations) on a basis
ranking prior to the security interest of such Series of Second Lien Obligations but junior to the security interest of any other Series of Second Lien Obligations or (ii) the existence of any
Second Lien Collateral for any other Series of Second Lien Obligations that is not Shared Second Lien Collateral (any such condition referred to in the foregoing clauses (i) or (ii) with
respect to any Series of Second Lien Obligations, an "Impairment" of such Series). In the event of any Impairment with respect to any Series of Second Lien Obligations, the results of such Impairment
shall be borne solely by the holders of such Series of Second Lien Obligations, and the rights of the holders of such Series of Second Lien Obligations (including, without limitation, the provisions
of the caption "Application of Second Lien Proceeds" with respect to the right to receive distributions in respect of such Series of Second Lien Obligations) shall be modified to the
extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such Second Lien Obligations subject to such Impairment. Additionally, in the event the Second
Lien Obligations of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such Second Lien
Obligations or the Second Lien Collateral Documents governing such Second Lien Obligations shall refer to such Obligations or such documents as so modified.
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The Pari Passu Second Lien Intercreditor Agreement will provide that only the Designated Second Lien Representative shall act or refrain from
acting with respect to any Shared Second Lien Collateral (including with respect to any intercreditor agreement with respect to any Shared Second Lien Collateral). At any time when the Collateral
Agent is the Designated Second Lien Representative, no Additional Second Lien Secured Party shall or shall instruct any Second Lien Representative to, and neither the Initial Additional Second Lien
Representative nor any other Second Lien Representative that is not the Designated Second Lien Representative shall, commence any judicial or nonjudicial foreclosure proceedings with respect to, seek
to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any
action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Second Lien Collateral (including with respect to any intercreditor
agreement with respect to any Shared Second Lien Collateral), whether under any Additional Second Lien Collateral Document, applicable law or otherwise; only the Collateral Agent, acting in accordance
with the Security Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Second Lien Collateral at such time.
With
respect to any Shared Second Lien Collateral at any time when the Major Non-Controlling Second Lien Representative is the Designated Second Lien Representative, (i) such
Designated Second Lien Representative shall act only on the instructions of the Controlling Second Lien Secured Parties, (ii) such Designated Second Lien Representative shall not follow any
instructions with respect to such Shared Second Lien Collateral (including with respect to any intercreditor agreement with respect to any Shared Second Lien Collateral) from any Non-Controlling
Second Lien Representative and (iii) no Non-Controlling Second Lien Representative or other Second Lien Secured Party (other than the Designated Second Lien Representative) shall or shall
instruct the Designated Second Lien Representative to, commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official
appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon,
or take any other action available to it in respect of, any Shared Second Lien Collateral (including with respect to any intercreditor agreement with respect to any Shared Second Lien Collateral),
whether under any Second Lien Collateral Document, applicable law or otherwise; only the Designated Second Lien Representative, acting in accordance with the applicable Additional Second Lien
Collateral Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Second Lien Collateral.
Notwithstanding the equal priority of the Liens securing each Series of Second Lien Obligations, the Designated Second Lien Representative may
deal with the Shared Second Lien Collateral as if such Designated Second Lien Representative had a senior Lien on such Shared Second Lien Collateral. No Non-Controlling Second Lien Representative or
Non-Controlling Second Lien Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Designated Second Lien Representative or the Controlling Second Lien
Secured Party or any other exercise by the Designated Second Lien Representative or the Controlling Second Lien Secured Party of any rights and remedies relating to the Shared Second Lien Collateral,
or to cause the Designated Second Lien Representative to do so.
The
Pari Passu Second Lien Intercreditor Agreement provides that, except with respect to any actions expressly prohibited or required to be taken thereunder, each of the Second Lien
Secured Parties will waive any claim it may now or hereafter have against any Second Lien Representative of any other Series of Second Lien Obligations or any other Second Lien Secured Party of any
other Series arising out of (i) any actions which any Second Lien Representative or the Second Lien Secured
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Parties
take or omit to take (including, actions with respect to the creation, perfection or continuation of Liens on any Second Lien Collateral, actions with respect to the foreclosure upon, sale,
release or depreciation of, or failure to realize upon, any of the Second Lien Collateral and actions with respect to the collection of any claim for all or any part of the Second Lien Obligations
from any account debtor, guarantor or any other party) in accordance with the Second Lien Collateral Documents or any other agreement related thereto or to the collection of the Second Lien
Obligations or the valuation, use, protection or release of any security for the Second Lien Obligations, (ii) any election by any Designated Second Lien Representative or any holders of Second
Lien Obligations, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to caption
"Agreements with respect to Insolvency or Liquidation Proceedings", any borrowing by, or grant of a security interest or administrative expense priority under Section 364 of the
Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, by any Issuer or any Guarantor, as debtor-in-possession. Notwithstanding any other provision of the Pari Passu Second Lien
Intercreditor Agreement, the Designated Second Lien Representative shall not (i) accept any Shared Second Lien Collateral in full or partial satisfaction of any Second Lien Obligations pursuant
to Section 9-620 of the Uniform Commercial Code of any jurisdiction, without the consent of each Second Lien Representative representing holders of Second Lien Obligations for whom such Second
Lien Collateral constitutes Shared Second Lien Collateral or (ii) "credit-bid" for or purchase (other than for cash) Shared Second Lien Collateral at any public, private or judicial foreclosure
upon such Shared Second Lien Collateral, without the consent of each Second Lien Representative representing holders of Second Lien Obligations for whom such Second Lien Collateral constitutes Shared
Second Lien Collateral.
The Pari Passu Second Lien Intercreditor Agreement will provide that each Second Lien Secured Party will not (and will waive any right to)
question or contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment or enforceability
of a Lien held by or on behalf of any of the Second Lien Secured Parties in all or any part of the Second Lien Collateral, or the provisions of the Pari Passu Second Lien Intercreditor Agreement.
The
Pari Passu Second Lien Intercreditor Agreement will provide that each Second Lien Secured Party:
-
(1)
-
will
not challenge or question in any proceeding the validity or enforceability of any Second Lien Obligations of any Series or any Second Lien Collateral Document
or the validity, attachment, perfection or priority of any Lien under any Second Lien Collateral Document or the validity or enforceability of the priorities, rights or duties established by or other
provisions of the Pari Passu Second Lien Intercreditor Agreement (
provided that
rights of any Second Lien Secured Party to challenge or question the
validity or enforceability of any Second Lien Obligations constituting unmatured interest or the validity of any Lien relating thereto pursuant to Section 502(b)(2) of the Bankruptcy Code will
not be restricted);
-
(2)
-
will
not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial
proceedings or otherwise, any sale, transfer or other disposition of the Shared Second Lien Collateral by the Designated Second Lien Representative;
-
(3)
-
except
as provided under caption "Limitation on Enforcement of Remedies", shall have no right to (i) direct the Designated Second Lien
Representative or any other Second Lien Secured Party to exercise, and shall not exercise, any right, remedy or power with respect to any Shared Second Lien Collateral (including pursuant to any
intercreditor agreement) or
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If
any Second Lien Secured Party obtains possession of any Shared Second Lien Collateral or realizes any proceeds or payment in respect of any such Shared Second Lien Collateral,
pursuant to any Second Lien Collateral Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of
remedies (including pursuant to any intercreditor agreement), at any time prior to the Discharge of each of the Second Lien Obligations, then it shall hold such Shared Second Lien Collateral, proceeds
or payment in trust for the other Second Lien Secured Parties and promptly transfer such Shared Second Lien Collateral, proceeds or payment, as the case may be, to the Designated Second Lien
Representative, to be distributed in accordance with the provisions of caption "Application of Second Lien Proceeds".
In
the event that any of the Second Lien Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment
for disgorgement of a preference under the Bankruptcy Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of
the Pari Passu Second Lien Intercreditor Agreement shall be fully applicable thereto until all such Second Lien Obligations shall again have been paid in full in cash.
If, at any time the Designated Second Lien Representative forecloses upon or otherwise exercises remedies against any Shared Second Lien
Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of each other Second Lien Representative
for the benefit of each Series of Second Lien Secured Parties upon such Shared Second Lien Collateral will automatically be released and discharged as and when, but only to the extent, such Liens of
the Designated Second Lien Representative on such Shared Second Lien Collateral are released and discharged;
provided that
any proceeds of any Shared
Second Lien Collateral realized therefrom shall be applied in accordance with the provisions of caption "Application of Second Lien Proceeds". If in connection with any such foreclosure
or other exercise of remedies by the Designated Second Lien Representative, the
Designated Second Lien Representative or related Second Lien Representative of such Series of Second Lien Obligations releases any guarantor from its obligation under a guarantee of the Series of
Second Lien Obligations, such guarantor also shall be released from its guarantee of all other Second Lien Obligations; if in connection with any such foreclosure or other exercise of remedies by the
Designated Second Lien
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Representative,
in each case prior to the Discharge of such Series of Second Lien Obligations, the equity interest of any Person is foreclosed upon or otherwise disposed of and the Designated Second
Lien Representative releases its Lien on the property or assets of such Person, then the Liens of each other Second Lien Representative (or in favor of such other Second Lien Secured Parties if
directly secured by such Liens) with respect to any Shared Second Lien Collateral consisting of the property or assets of such Person will be automatically released to the same extent as the Liens of
the Designated Second Lien Representative;
provided that
any proceeds of any such equity assets of such Person on which another Series of Second Lien
Obligations holds a Lien on the assets of such Person (any such assets, the "Underlying Assets") which Lien is released as provided in this sentence (any such proceeds being referred to herein as
"Equity Release Proceeds" regardless of whether or not such other Series of Second Lien Obligations holds a Lien on such equity interest so disposed of) shall be applied pursuant to provisions of
caption "Application of Proceeds".
The
Designated Second Lien Representative shall be entitled, for the benefit of the Second Lien Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Second
Lien Collateral as provided in the Pari Passu Second Lien Intercreditor Agreement and in the Second Lien Collateral Documents, as applicable, pursuant to which the Designated Second Lien
Representative is the agent for such Shared Second Lien Collateral, without regard to any rights to which the Non-Controlling Second Lien Secured Parties would otherwise be entitled as a result of the
Second Lien Obligations held by such Non-Controlling Second Lien Secured Parties. None of the Designated Second Lien Representative or any other Second Lien Secured Party shall have any duty or
obligation first to marshal or realize upon any type of Shared Second Lien Collateral (or any other Second Lien Collateral), or to sell, dispose of or otherwise liquidate all or any portion of such
Shared Second Lien Collateral (or any other Second Lien Collateral), in any manner that would maximize the return to the Non-Controlling Second Lien Secured Parties, notwithstanding that the order and
timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Non-Controlling Second Lien Secured Parties from such realization, sale,
disposition or liquidation.
The Pari Passu Second Lien Intercreditor Agreement shall continue in full force and effect notwithstanding the commencement of any proceeding
under the Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law by or against any Issuer or any of its Subsidiaries. Provisions of the Pari Passu
Second Lien Intercreditor Agreement are intended to be enforceable as contemplated by Section 510(a) of the Bankruptcy Code.
If
any Issuer and/or any other Guarantor shall become subject to a case (a "Bankruptcy Case") under the Bankruptcy Code and shall, as debtor(s)-in-possession, move for approval of DIP
Financing to be provided by one or more lenders (the "
DIP Lenders
") under Section 364 of the Bankruptcy Code or any equivalent provision of any
other Bankruptcy Law or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each Second Lien Secured Party (other than
any Controlling Second Lien Secured Party or the Second Lien Representative of any Controlling Second Lien Secured Party) agrees that it will raise no objection to any such financing or to the Liens
on the Shared Second Lien Collateral securing the same ("DIP Financing Liens") or to any use of cash collateral that constitutes Shared Second Lien Collateral, unless the Designated Second Lien
Representative shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the
Liens on any such Shared Second Lien Collateral for the benefit of the Controlling Second Lien Secured Parties, each Non-Controlling Second Lien Secured Party will subordinate its Liens with respect
to such Shared Second Lien Collateral on the same terms as the Liens of the Controlling Second Lien Secured Parties (other than any Liens of any Second Lien Secured Parties constituting DIP Financing
Liens) are subordinated thereto, and (ii) to the extent that
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such
DIP Financing Liens rank pari passu with the Liens on any such Shared Second Lien Collateral granted to secure the Second Lien Obligations of the Controlling Second Lien Secured Parties, each
Non-Controlling Second Lien Secured Party will confirm the priorities with respect to such Shared Second Lien Collateral as set forth in the Pari Passu Second Lien Intercreditor Agreement), in each
case so long as (1) the Second Lien Secured Parties of each Series retain the benefit of their Liens on all such Shared Second Lien Collateral pledged to the DIP Lenders, including proceeds
thereof arising after the commencement of such proceeding, with the same priority vis-à-vis all the other Second Lien Secured Parties (other than any Liens of the Second Lien Secured
Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Case, (2) the Second Lien Secured Parties of each Series are granted Liens on any additional
collateral pledged to any Second Lien Secured Parties as adequate protection or otherwise in connection with such DIP Financing or use of cash collateral, with the same priority
vis-à-vis the Second Lien Secured Parties as set forth in the Pari Passu Second Lien Intercreditor Agreement (other than any Liens of the Second Lien Secured Parties constituting DIP
Financing Liens), (3) if any amount of such DIP Financing or cash collateral is applied
to repay any of the Second Lien Obligations, such amount is applied pursuant to provisions of caption "Application of Second Lien Proceeds" (unless such Second Lien Collateral fails to
constitute Shared Second Lien Collateral because the Lien in respect thereof constitutes a Declined Lien with respect to such Second Lien Secured Parties or their Second Lien Representative), and
(4) if any Second Lien Secured Parties are granted adequate protection, including in the form of periodic payments, in connection with such DIP Financing or use of cash collateral, the proceeds
of such adequate protection are applied pursuant to provisions of caption "Application of Second Lien Proceeds";
provided that
the Pari
Passu Second Lien Intercreditor Agreement shall not limit the right of the Second Lien Secured Parties of each Series to object to the grant of a Lien to secure the DIP Financing over any Second Lien
Collateral subject to Liens in favor of the Second Lien Secured Parties of such Series or its Second Lien Representative that shall not constitute Shared Second Lien Collateral; and
provided, further, that
the Second Lien Secured Parties receiving adequate protection shall not object to any other Second Lien Secured Party receiving
adequate protection comparable to any adequate protection granted to such Second Lien Secured Parties in connection with a DIP Financing or use of cash collateral.
If
any Second Lien Secured Party is granted adequate protection (i) in the form of Liens on any additional collateral, then each other Second Lien Secured Party shall be entitled
to seek, and each Second Lien Secured Party will consent and not object to, adequate protection in the form of Liens on such additional collateral with the same vis-à-vis the Second
Lien Secured Parties as set forth in the Pari Passu Second Lien Intercreditor Agreement, (ii) in the form of a superpriority or other administrative claim, then each other Second Lien Secured
Party shall be entitled to seek, and each Second Lien Secured Party will consent and not object to, adequate protection in the form of a pari passu superpriority or administrative claim or
(iii) in the form of periodic or other cash payments, then the proceeds of such adequate protection must be applied to all Second Lien Obligations pursuant to provisions of caption
"Application of Second Lien Proceeds".
The Pari Passu Second Lien Intercreditor Agreement shall provide that the Second Lien Collateral shall be identical for all Second Lien Secured
Parties; provided that this provision will not be violated with respect to any particular Series if the Second Lien Document for such Series prohibits the Second Lien Representative for that Series
from accepting a Lien on such asset or property or such Second Lien Representative otherwise expressly declines to accept a Lien on such asset or property (any such
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prohibited
or declined Liens with respect to a particular Series, a "Declined Lien"). In furtherance of, but subject to, the foregoing, the Pari Passu Second Lien Intercreditor Agreement shall provide
that:
-
(1)
-
upon
request by any Second Lien Representative, the Second Lien Secured Parties shall cooperate in good faith (and to direct their counsel to cooperate in good
faith) from time to time in order to determine the specific items included in the Shared Second Lien Collateral and the steps taken to perfect their respective Liens thereon and the identity of the
respective parties obligated under the Second Lien Documents; and
-
(2)
-
that
the documents and agreements creating or evidencing the Liens on Shared Second Lien Collateral securing the Second Lien Obligations shall be in all material
respects the same forms of documents as on another, except that the documents and agreements creating or evidencing the Liens securing the additional Second Lien Obligations may contain additional
provisions as may be necessary or appropriate to establish the intercreditor arrangements among the various separate classes of creditors holding additional Second Lien Obligations and to address any
Declined Lien.
As between the Second Lien Secured Parties, to the extent contemplated by the Second Lien Documents, the Designated Second Lien Representative
shall have the right (but no obligation) to adjust or settle any insurance policy or claim covering or constituting Shared Second Lien Collateral in the event of any loss thereunder and to approve any
award granted in any condemnation or similar proceeding affecting the Shared Second Lien Collateral. To the extent any Second Lien Representative receives proceeds of such insurance policy and such
proceeds are not permitted or required to be returned to any Issuer or any Guarantor under the applicable Second Lien Documents, such proceeds shall be turned over to the Designated Second Lien
Representative for application as provided in caption "Application of Second Lien Proceeds".
Without the prior written consent of the Collateral Agent, no Additional Second Lien Collateral Document may be amended, supplemented or
otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Additional Second Lien Collateral Document would be prohibited by, or would require
any Issuer or any Guarantor to act or refrain from acting in a manner that would violate, any of the terms of the Pari Passu Second Lien Intercreditor Agreement.
Without
the prior written consent of the Second Lien Representative of each Series of Second Lien Obligations, no Security Document may be amended, supplemented or otherwise modified or
entered into to the extent such amendment, supplement or modification, or the terms of any new Security Document would be prohibited by, or would require any Issuer or any Guarantor to act or refrain
from acting in a manner that would violate, any of the terms of the Pari Passu Second Lien Intercreditor Agreement.
Notwithstanding any other provision of the Pari Passu Second Lien Intercreditor Agreement or in any Second Lien Document to the contrary (but
subject to the second paragraph of the caption "Priorities of the Liens Securing Second Lien Obligations"), if an event of default under any Second Lien Document has occurred and is
continuing, and the Designated Second Lien Representative or any Second Lien Secured Party is taking action to enforce rights in respect of any Shared Second Lien Collateral, or any distribution is
made in respect of any Shared Second Lien Collateral in any Bankruptcy Case of any Issuer or any Guarantor or any Second Lien Secured Party receives any
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payment
pursuant to any intercreditor agreement (other than the Pari Passu Second Lien Intercreditor Agreement) with respect to any Shared Second Lien Collateral, the proceeds of any sale, collection
or other liquidation of any such Second Lien Collateral or Equity Released Proceeds received by the Designated Second Lien Representative or any Second Lien Secured Party on account of such
enforcement of rights or remedies or received by the Designated Second Lien Representative or any
Second Lien Secured Party pursuant to any such intercreditor agreement with respect to such Shared Second Lien Collateral and proceeds of any such distribution (subject, in the case of any such
distribution, to the paragraph immediately following) to which the Second Lien Obligations are entitled under any intercreditor agreement (other than the Pari Passu Second Lien Intercreditor
Agreement) (all proceeds of any sale, collection or other liquidation of any Second Lien Collateral comprising either Shared Second Lien Collateral or Equity Release Proceeds and all proceeds of any
such distribution and any proceeds of any insurance covering the Shared Second Lien Collateral received by the Designated Second Lien Representative and not returned to any Issuer or any Guarantor
under any Second Lien Document being collectively referred to as "Second Lien Proceeds"), shall be applied:
-
(1)
-
first
, to the payment of all amounts owing to each Second Lien Representative (in its capacity as such) secured by
such Shared Second Lien Collateral or in the case of Equity Release Proceeds, secured by the Underlying Assets pursuant to the terms of any Second Lien Document, owing to such Second Lien
Representatives ratably to each such Second Lien Representative in accordance with the amounts payable to it pursuant to this clause first;
-
(2)
-
second
, subject to the second paragraph of the caption "Priorities of the Liens Securing Second Lien
Obligations", to the payment in full of the other Second Lien Obligations of each Series secured by such Shared Second Lien Collateral or, in the case of Equity Release Proceeds, secured by the
Underlying Assets, and, if the amount of such Second Lien Proceeds is insufficient to pay in full the Second Lien Obligations of each Series so secured then such Second Lien Proceeds shall be
allocated among the Second Lien Representative of each Series secured by such Shared Second Lien Collateral or, in the case of Equity Release Proceeds, secured by the Underlying Assets, pro rata
according to the amounts of such Second Lien Obligations owing to each such respective Second Lien Representative and the other Second Lien Secured Parties represented by it for distribution by such
Second Lien Representative in accordance with its respective terms of the applicable Second Lien Documents and
-
(3)
-
third
, after payment of all Second Lien Obligations, to the Issuers and the Guarantors or their successors or
assigns, as their interests may appear, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.
If,
despite the provisions of the previous paragraph, any Second Lien Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the
Second Lien Obligations to which it is then entitled in accordance with the previous paragraph, such Second Lien Secured Party shall hold such payment or recovery in trust for the benefit of all
Second Lien Secured Parties for distribution in accordance with the previous paragraph. Notwithstanding the foregoing, with respect to any Shared Second Lien Collateral or Equity Release Proceeds for
which a third party (other than a Second Lien Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of Second Lien Obligations but senior (as
determined by appropriate legal
proceedings in the case of any dispute) to the security interest of any other Series of Second Lien Obligations (such third party, an "Intervening Creditor"), the value of any Shared Second Lien
Collateral or Equity Release Proceeds or Second Lien Proceeds allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Second Lien Collateral or Equity
Release Proceeds or Second Lien Proceeds to be distributed in respect of the Series of Second Lien Obligations with respect to which such Impairment exists.
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The indenture provides that the Collateral Agent's Second Priority Liens upon the Collateral will no longer secure the notes outstanding under
the indenture or any other Obligations under the Note Documents, and the right of the holders to the benefits and proceeds of the Collateral Agent's Second Priority Liens on the Collateral will
terminate and be discharged:
-
(1)
-
upon
satisfaction and discharge of the indenture as set forth under the caption "Defeasance and Discharge";
-
(2)
-
upon
a legal defeasance or covenant defeasance of the notes as set forth under the caption "Defeasance and Discharge";
-
(3)
-
upon
payment in full in cash and discharge of all notes outstanding under the indenture and all other Obligations that are outstanding, due and payable under the
indenture and the other Note Documents at the time the notes are paid in full in cash and discharged;
-
(4)
-
as
to any Collateral of any Issuer or a Guarantor that is sold, transferred or otherwise disposed of by such Issuer or Guarantor to a Person that is not (either
before or after such sale, transfer or disposition) the Company or a Restricted Subsidiary of the Company in a transaction or other circumstance that does not violate the provisions described in the
first paragraph under the caption "Certain Covenants"Limitation on Asset Sales" below (other than the obligation to apply proceeds of such Asset Sale as provided in such
provision) and is permitted by all of the other Note Documents, at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of;
provided that the Collateral Agent's Liens upon the Collateral will not be released if the sale or disposition is subject to the covenant described below under the caption "Certain
CovenantsConsolidation, Merger or Sale of AssetsThe Company and the Parent Guarantor";
-
(5)
-
in
whole or in part, with the consent of the holders of the requisite percentage of notes in accordance with the provisions described below under the caption
"Amendments and Waivers";
-
(6)
-
with
respect to the assets of any Guarantor, at the time that such Guarantor is released from its Note Guaranty as described above under the caption
"Guaranties"; or
-
(7)
-
if
and to the extent required by the provisions of the Pari Passu Second Lien Intercreditor Agreement or the provisions of the First Lien/Second Lien Intercreditor
Agreement described above under the captions "Certain Intercreditor ProvisionsPari Passu Second Lien Intercreditor AgreementAutomatic Release of Second Priority
Liens" and "Certain Intercreditor ProvisionsThe First/Second Lien Intercreditor AgreementAutomatic Release of Second Priority Liens."
Optional Redemption
Except as set forth in the next three paragraphs and the last paragraph of the covenant described below under "Certain
CovenantsRepurchase of Notes Upon a Change of Control," the notes will not be redeemable at the option of the Issuers.
At
any time prior to November 1, 2018, the Issuers may redeem the notes, in whole or in part, upon prior notice as described under "Selection and Notice," by paying a
redemption price equal to 100% of the principal amount of the notes to be redeemed plus the Applicable Premium, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption
date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
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At
any time and from time to time on or after November 1, 2018, the Issuers may redeem the notes, in whole or in part, upon prior notice as described under "Selection
and Notice," at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to, but excluding, the redemption date (subject to the right of holders
of record on the relevant record date to receive interest due on the relevant interest payment date).
|
|
|
|
|
12-month period commencing November 1 in Year
|
|
|
|
2018
|
|
|
106.000
|
%
|
2019
|
|
|
103.000
|
%
|
2020
|
|
|
100.000
|
%
|
At
any time and from time to time prior to November 1, 2018, the Issuers may redeem up to 35% of the original aggregate principal amount of the notes issued under the indenture
(including any additional notes that may be issued after the Issue Date) at a redemption price equal to 112.000% of the principal amount plus accrued and unpaid interest to, but excluding, the
redemption date (subject to the right of holders of record on the relevant record date to receive interest on the relevant interest payment date), but in an aggregate principal amount not to exceed
the net cash proceeds of one or more Equity Offerings, provided that
-
(1)
-
in
each case, the redemption takes place not later than 180 days after the closing of the related Equity Offering, and
-
(2)
-
not
less than 65% of the aggregate principal amount of the notes issued under the indenture (including any additional notes issued after the Issue Date) remains
outstanding immediately thereafter.
Selection and Notice
If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows:
-
(1)
-
if
the notes are listed on any national securities exchange and the trustee knows of such listing, in compliance with the requirements of the principal national
securities exchange on which the notes are listed; or
-
(2)
-
if
the notes are not listed on any national securities exchange, on a pro rata basis (or, in the case of global notes, the notes represented thereby will be selected
in accordance with DTC's procedures).
No
notes of $1,000 or less can be redeemed in part. Notices of optional redemption will be given by first class mail (or electronically in the case of global notes) at least 15 but not
more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that optional redemption notices may be given more than 60 days
prior to a redemption date if the notice is issued in connection with a defeasance or discharge of the notes.
Notice
of any redemption of the notes (including upon an Equity Offering) may, at the Issuers' discretion, be given prior to a transaction or event and any such redemption or notice may,
at the Issuers' discretion, be subject to one or more conditions precedent, including, but not limited to, completion or occurrence of the related transaction or event, as the case may be. In
addition, if such redemption or purchase is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, shall state that, in the
Issuers' discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption or purchase may not occur and such notice may be rescinded
in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed, or such notice may be rescinded at any time in the Issuers'
discretion if in the good faith
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judgment
of the Issuers any or all of such conditions will not be satisfied. In addition, the Issuers may provide in such notice that payment of the redemption price and performance of the Issuers'
obligations with respect to such redemption may be performed by another Person.
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 the name of the holder upon cancellation of the original note. Notes called for redemption without a
condition precedent will become due on the date fixed for redemption. On and after the redemption date, interest will cease to accrue on notes or portions of them called for redemption, unless the
Issuers default in making such redemption payment.
No Mandatory Redemption or Sinking Fund
There will be no mandatory redemption or sinking fund payments for the notes.
Termination of Covenants
If at any time after the Original Issue Date that (i) the notes are rated Investment Grade by each of S&P and Moody's (or, if either (or
both) of S&P and Moody's have been substituted in accordance with the definition of "Rating Agencies," by each of the then applicable Rating Agencies), (ii) no Default has occurred and is
continuing under the indenture and (iii) the Issuers have delivered to the trustee an officers' certificate certifying to the foregoing provisions of this sentence, the Parent Guarantor and its
Restricted Subsidiaries will no longer be subject to the covenants in the indenture specifically listed under the following captions in this "Description of the Notes" section of this prospectus
supplement:
-
(1)
-
"Certain
CovenantsLimitation on Debt and Disqualified Stock or Preferred Stock;"
-
(2)
-
"Certain
CovenantsLimitation on Restricted Payments;"
-
(3)
-
"Certain
CovenantsLimitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries;"
-
(4)
-
"Certain
CovenantsLimitation on Asset Sales;"
-
(5)
-
"Certain
CovenantsLimitation on Transactions with Affiliates;" and
-
(6)
-
clause (a)(3)
of "Consolidation, Merger or Sale of AssetsThe Company."
If
the covenants are terminated, the Parent Guarantor may not thereafter designate any Restricted Subsidiary as an Unrestricted Subsidiary. There can be no assurance that the notes will
ever achieve or maintain a rating of Investment Grade from any Rating Agency. The trustee shall have no obligation to monitor the ratings of the notes or notify holders of the suspension of covenants.
Certain Covenants
The indenture contains covenants including, among others, the following:
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Guarantor
or a Restricted Subsidiary, so long as it is so held); provided that the Parent Guarantor or any Restricted Subsidiary may Incur Debt (including Acquired Debt) or Disqualified Stock and any
Restricted Subsidiary may Incur Preferred Stock if, on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, the Fixed Charge
Coverage Ratio is not less than 2.0:1.0 (the "Fixed Charge Coverage Ratio Test"); provided that the maximum aggregate principal amount of Debt, Disqualified Stock or Preferred Stock that
Restricted Subsidiaries that are neither Issuers nor Guarantors may incur under this paragraph (a) is $10.0 million outstanding at any time.
-
(b)
-
Notwithstanding
the foregoing, the Parent Guarantor and, to the extent provided below, any Restricted Subsidiary may Incur the following items of Debt or
Disqualified Stock ("Permitted Debt"):
-
(1)
-
Debt
of the Parent Guarantor or any of its Restricted Subsidiaries pursuant to Credit Facilities (including a portion of the notes incurred on the Issue Date);
provided that the aggregate principal amount at any time outstanding does not exceed the greater of (i) $700.0 million and (ii) 35% of Consolidated Net Tangible Assets;
-
(2)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary owed to the Parent Guarantor or any Restricted Subsidiary so long as such Debt continues to be owed to the
Parent Guarantor or a Restricted Subsidiary and which, if the obligor is an Issuer or a Guarantor and if the Debt is owed to a Restricted Subsidiary that is neither an Issuer nor a Guarantor, is
subordinated in right of payment to the notes;
-
(3)
-
[Reserved];
-
(4)
-
Debt
constituting an extension or renewal of, replacement of, or substitution for, or issued in exchange for, or the net proceeds of which are used to repay, redeem,
repurchase, replace, refinance or refund, including by way of defeasance (all of the above, for purposes of this clause, "refinance") then outstanding Debt ("Permitted Refinancing Debt") in an amount
not to exceed the principal amount of the Debt so refinanced, plus premiums, fees and expenses; provided that
-
(A)
-
in
case the Debt to be refinanced is subordinated in right of payment to the notes, the new Debt, by its terms or by the terms of any agreement or instrument
pursuant to which it is outstanding, is expressly made subordinate in right of payment to the notes at least to the extent that the Debt to be refinanced is subordinated to the notes,
-
(B)
-
the
new Debt does not have a Stated Maturity prior to the Stated Maturity of the Debt to be refinanced, and the Average Life of the new Debt is at least equal to the
remaining Average Life of the Debt to be refinanced or (B) the new debt does not have a Stated Maturity prior to the stated Maturity of the notes, and the Average Life of the new Debt is at
least equal to the remaining Average Life of the notes;
-
(C)
-
in
no event may Debt of an Issuer or any Guarantor be refinanced pursuant to this clause by means of any Debt of any Restricted Subsidiary that is neither a
Guarantor nor an Issuer; and
-
(D)
-
Debt
Incurred pursuant to clauses (1), (2), (5), (6), (7) and (11) through (18) may not be refinanced pursuant to this clause but Debt
incurred pursuant to clause (a) or any other clause of this paragraph (b) may be refinanced under this clause;
-
(5)
-
Bank
Products Obligations and Permitted Hedging Agreements of the Parent Guarantor or any Restricted Subsidiary;
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-
(6)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary in connection with one or more standby or trade-related letters of credit, performance bonds, bid bonds,
appeal bonds, bankers acceptances, insurance obligations, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, issued by the Parent
Guarantor or a Restricted Subsidiary in the ordinary course of business or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances;
-
(7)
-
Debt
arising from agreements of the Parent Guarantor or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar
obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;
-
(8)
-
Acquired
Debt, provided that after giving effect to the Incurrence thereof on a pro forma basis, either (a) the Parent Guarantor (or the Successor Company, as
applicable) could Incur at least $1.00 of Debt under the Fixed Charge Coverage Ratio Test or (b) the Fixed Charge Coverage Ratio of the Parent Guarantor (or the Successor Company, as
applicable) and its Restricted Subsidiaries on a consolidated basis is greater than immediately prior to such Incurrence;
-
(9)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary (other than any Debt incurred pursuant to clause (1) above) outstanding on the Issue Date (and, for
purposes of clause (4)(D), not otherwise constituting Permitted Debt);
-
(10)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary (A) in existence on the date any Person becomes a Restricted Subsidiary as a result of an
acquisition by the Parent Guarantor or any of its other Restricted Subsidiaries or (B) Incurred to finance the acquisition, construction or improvement of any assets, including Capital Lease
Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets before the acquisition thereof; provided that the aggregate principal
amount at any time outstanding of any Debt Incurred pursuant to this clause, including all Permitted Refinancing Debt Incurred to refund, refinance or replace any Debt Incurred pursuant to this
clause (10), may not exceed the greater of (x) $150.0 million or (y) 8% of Consolidated Net Tangible Assets;
-
(11)
-
Debt
of the Issuers or any Guarantor consisting of Guarantees (or co-issuances in the case of the Co-issuer) of Debt of the Issuers or any Guarantor otherwise
permitted under this covenant;
-
(12)
-
Preferred
Stock of a Restricted Subsidiary issued to the Parent Guarantor or another Restricted Subsidiary; provided that any subsequent transfer of any Capital
Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Preferred Stock (except to the Parent
Guarantor or another Restricted Subsidiary) shall be deemed, in each case, to be an issue of Preferred Stock;
-
(13)
-
Debt
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary
course of business;
-
(14)
-
any
Permitted Receivables Financing in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $100.0 million or
(y) 5% of Consolidated Net Tangible Assets;
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-
(15)
-
Debt
Incurred by any Foreign Restricted Subsidiary for general corporate purposes in an aggregate principal amount not to exceed, at any one time outstanding and
together with any other Debt incurred under this clause (15), $10.0 million;
-
(16)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations
contained in supply or other arrangements;
-
(17)
-
Debt
of the Parent Guarantor or any Restricted Subsidiary Incurred on or after the Original Issue Date not otherwise permitted hereunder in an aggregate principal
amount at any time outstanding not to exceed the greater of (x) $150.0 million and (y) 8% of Consolidated Net Tangible Assets; and
-
(18)
-
Guarantees
by the Parent Guarantor or any Restricted Subsidiary of borrowings by current or former officers, managers, directors, employees or consultants in
connection with the purchase of Equity Interests of the Parent Guarantor by any such person in an aggregate principal amount not to exceed $2.5 million at any one time outstanding.
For
purposes of determining compliance with this covenant, in the event that an item of Debt or Disqualified Stock or Preferred Stock meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (18) above or is entitled to be incurred pursuant to paragraph (a) of this covenant, the Parent Guarantor shall, in
its sole discretion, classify such item in any manner that complies with this covenant, and such Debt or Disqualified Stock or Preferred Stock will be treated as having been Incurred pursuant to the
clauses of Permitted Debt or paragraph (a) hereof, as the case may be, designated by the Parent Guarantor, and from time to time may change the classification of an item of Debt (or any portion
thereof) to any other type of Debt described in this covenant at any time, including pursuant to clause (a); provided that Debt under the Credit Agreement outstanding on the Original Issue Date
shall be deemed at all times to be Incurred under clause (1) of Permitted Debt.
Accrual
of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of
additional Debt, Disqualified Stock or Preferred Stock of the same class will not be deemed to be an Incurrence of Debt, Disqualified Stock or Preferred Stock for purposes of this covenant but will be
included in subsequent calculations of the amount of outstanding Debt for purposes of Incurring future Debt; provided that such accrual, accretion, amortization or payment is included in the
calculation of Fixed Charges to the extent specified in the definition of such term. Notwithstanding any other provision of this covenant, the maximum amount of Debt that the Parent Guarantor or any
Restricted Subsidiary may Incur pursuant to this covenant will not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. Further, the accounting
reclassification of any obligation of the Parent Guarantor or any of its Restricted Subsidiaries as Debt will not be deemed an Incurrence of Debt for purposes of this covenant.
Neither
the Issuers nor any Guarantor may Incur any Debt that is subordinated in right of payment to other Debt of the Issuers or the Guarantor unless such Debt is also subordinated in
right of payment to the notes or the relevant Note Guaranty on substantially identical terms.
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Limitation on Restricted Payments
-
(a)
-
The
Parent Guarantor will not, and will not permit any Restricted Subsidiary to, directly or indirectly (the payments and other actions described in the following
clauses being collectively "Restricted Payments"):
-
(1)
-
declare
or pay any dividend or make any distribution on its Equity Interests (other than dividends or distributions paid in the Parent Guarantor's Qualified Equity
Interests) held by Persons other than the Parent Guarantor or any of its Restricted Subsidiaries;
-
(2)
-
purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the Parent Guarantor held by Persons other than the Parent Guarantor or any of its
Restricted Subsidiaries;
-
(3)
-
repay,
redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Existing Unsecured Notes or Subordinated
Debt (other than a payment of interest or principal at Stated Maturity thereof or the redemption, repurchase or other acquisition or retirement for value of any Existing Unsecured Notes or
Subordinated Debt in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of such redemption,
repurchase, acquisition or retirement); or
-
(4)
-
make
any Investment other than a Permitted Investment (a "Restricted Investment');
unless,
at the time of, and after giving effect to, the proposed Restricted Payment:
-
(1)
-
no
Default has occurred and is continuing,
-
(2)
-
the
Parent Guarantor could Incur at least $1.00 of Debt under the Fixed Charge Coverage Ratio Test, and
-
(3)
-
the
aggregate amount expended for all Restricted Payments made on or after the Original Issue Date would not, subject to paragraph (c), exceed the sum of
-
(A)
-
50%
of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the amount of the loss) accrued on a
cumulative basis during the period, taken as one accounting period, beginning on the first day of the fiscal quarter in which the Original Issue Date occurred and ending on the last day of the Parent
Guarantor's most recently completed fiscal quarter for which internal financial statements are available, plus
-
(B)
-
subject
to paragraph (c), the aggregate net proceeds, including cash proceeds and the Fair Market Value of property other than cash, received by the Parent
Guarantor (other than from a Subsidiary) after the Original Issue Date
-
(i)
-
from
the issuance and sale of its Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted
into Qualified Equity Interests of the Parent Guarantor, or
-
(ii)
-
as
a contribution to its common equity, plus
-
(C)
-
an
amount equal to the sum, for all Unrestricted Subsidiaries, of the following:
-
(i)
-
the
cash return, after the Original Issue Date, on Restricted Investments in an Unrestricted Subsidiary made after the Original Issue Date as a result of any sale
for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), plus
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-
(ii)
-
the
portion (proportionate to the Parent Guarantor's equity interest in such Subsidiary) of the Fair Market Value of the assets less liabilities of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary, not to exceed, in the case of any Unrestricted Subsidiary, the amount of Restricted Investments made after
the Original Issue Date by the Parent Guarantor and its Restricted Subsidiaries in such Unrestricted Subsidiary, plus
-
(D)
-
the
cash return, after the Original Issue Date, on any other Restricted Investment made after the Original Issue Date, as a result of any sale for cash, repayment,
redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), not to exceed the amount of such Restricted Investment so made; plus
-
(E)
-
any
amount which previously qualified as a Restricted Payment on account of any Guarantee entered into by the Parent Guarantor or any Restricted Subsidiary; provided
that such Guarantee has not been called upon and the obligation arising under such Guarantee no longer exists.
The
amount of any Restricted Payment, if other than in cash, will be the Fair Market Value, on the date of the Restricted Payment, of the assets or securities proposed to be transferred or issued to
or by the Parent Guarantor or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment, except that the Fair Market Value of any non-cash dividend or distribution paid within
60 days after the date of its declaration shall be determined as of such date.
-
(b)
-
The
foregoing will not prohibit:
-
(1)
-
the
payment of any dividend or distribution within 60 days after the date of declaration thereof if, at the date of declaration, such payment would comply
with paragraph (a);
-
(2)
-
dividends
or distributions by a Restricted Subsidiary payable, on a pro rata basis or on a basis more favorable to the Parent Guarantor, to all holders of any class
of Equity Interests of such Restricted Subsidiary a majority of which is held, directly or indirectly through Restricted Subsidiaries, by the Parent Guarantor;
-
(3)
-
the
repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of Existing Unsecured Notes or Subordinated Debt with the proceeds of,
or in exchange for, Permitted Refinancing Debt;
-
(4)
-
the
purchase, redemption or other acquisition or retirement for value of Equity Interests of the Parent Guarantor in exchange for, or out of the proceeds of a
substantially concurrent offering (with any offering within 45 days deemed as substantially concurrent) of, Qualified Equity Interests of the Parent Guarantor or of a contribution to the common
equity of the Parent Guarantor, including a contribution of the Capital Stock of the Parent Guarantor;
-
(5)
-
the
repayment, redemption, repurchase, defeasance or other acquisition or retirement of Existing Unsecured Notes or Subordinated Debt in exchange for, or out of the
proceeds of, a cash or non-cash contribution to the capital of the Parent Guarantor or a substantially concurrent offering (with any offering within 45 days deemed as substantially concurrent)
of, Qualified Equity Interests of the Parent Guarantor;
-
(6)
-
any
Investment acquired as a capital contribution to the Parent Guarantor, or made in exchange for, or out of the net cash proceeds of, a substantially concurrent
offering (with any offering within 45 days deemed as substantially concurrent) of Qualified Equity Interests of the Parent Guarantor;
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-
(7)
-
amounts
paid to the Parent Guarantor for the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Parent Guarantor held by
current officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries under their estates or their immediate family members), of the Parent Guarantor
or any of its Restricted Subsidiaries upon death, disability, retirement, severance or termination of employment or pursuant to any agreement under which the Equity Interests were issued, and
Investments in the Equity Interests of the Parent Guarantor in connection with certain purchases or redemptions of Equity Interests held by officers, directors and employees or any employee pension
benefit plan of a type specified in the indenture; provided that the aggregate cash consideration paid therefor in any twelve-month period after the Original Issue Date does not exceed an aggregate
amount of $5.0 million;
-
(8)
-
the
repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of any Existing Unsecured Notes, Subordinated Debt or Disqualified
Stock at a purchase price not greater than 101% of the principal amount or liquidation preference thereof in the event of (x) a change of control pursuant to a provision no more favorable to
the holders thereof than in the covenant described below under "Repurchase of Notes Upon a Change of Control" or (y) an asset sale pursuant to a provision no more favorable to the
holders thereof than in the covenant described below under "Limitation on Asset Sales," provided that, in each case, prior to the repurchase the Company has made an Offer to Purchase and
repurchased all notes issued under the indenture that were validly tendered for payment in connection with the Offer to Purchase; and
-
(9)
-
payments
of dividends on the Parent Guarantor's Common Stock or purchases by the Parent Guarantor of its Common Stock, in an aggregate amount in any year not to
exceed the product of (x) 2.5%, (y) the average price of the Parent Guarantor's Common Stock over the calendar year immediately preceding the date of such dividend or purchase, as
applicable (adjusted appropriately to reflect subsequent stock splits, subdivisions and reclassifications) and (z) the number of shares of the Parent Guarantor's Common Stock outstanding on the
last Business Day of such preceding calendar year;
-
(10)
-
cash
payments in lieu of fractional shares upon exercise of options or warrants or conversion or exchange of convertible securities, repurchases of Equity Interests
deemed to occur upon the exercise of options, warrants or other convertible securities to the extent such securities represent a portion of the exercise price of such options, warrants or other
convertible securities and repurchases of Equity Interests in connection with the withholding of a portion of the Equity Interests granted or awarded to a director or an employee to pay for the Taxes
payable by such director or employee upon such grant or award;
-
(11)
-
Restricted
Payments in an aggregate amount not to exceed $150.0 million since the Original Issue Date; and
-
(12)
-
Restricted
Payments in connection with the Transactions.
provided
that, in the case of clauses (7), (8), (9) and (11), no Default has occurred and is continuing or would occur as a result thereof.
-
(c)
-
Proceeds
of the issuance of Qualified Equity Interests will be included under subclause (B) of clause (3) of paragraph (a) only to the extent
they are not applied as described in clause (4), (5) or (6) of paragraph (b). Restricted Payments permitted pursuant to clause (2), (3), (4), (5), (6) or
(12) will not be included in making the calculations under any of subclauses (A)-(E) of clause (3) of paragraph (a).
For
purposes of determining compliance with this covenant, in the event that a Restricted Payment permitted pursuant to this covenant or a Permitted Investment meets the criteria of more
than one of
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the
categories of Restricted Payment described in clauses (1) through (12) above or one or more clauses of the definition of Permitted Investments, the Parent Guarantor shall be
permitted to classify such Restricted Payment or Permitted Investment on the date it is made, or later reclassify all or a portion of such Restricted Payment or Permitted Investment, in any manner
that complies with this covenant, and such Restricted Payment or Permitted Investment shall be treated as having been made pursuant to only one of such clauses of this covenant or of the definition of
Permitted Investments. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of
such Investment, less any amount paid, repaid, returned, distributed or otherwise received in cash in respect of such Investment.
Limitation on Liens
The Parent Guarantor will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur or permit to exist any Lien of
any nature whatsoever on any of its properties or assets, whether owned at the Original Issue Date or thereafter acquired, to secure any Debt other than Permitted Liens.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
-
(a)
-
Except
as provided in paragraph (b), the Parent Guarantor will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to
-
(1)
-
pay
dividends or make any other distributions on its Equity Interests to the Parent Guarantor or any other Restricted Subsidiary,
-
(2)
-
pay
any Debt owed to the Parent Guarantor or any other Restricted Subsidiary,
-
(3)
-
make
loans or advances to the Parent Guarantor or any other Restricted Subsidiary, or
-
(4)
-
transfer
any of its property or assets to the Parent Guarantor or any other Restricted Subsidiary.
-
(b)
-
The
provisions of paragraph (a) do not apply to any encumbrances or restrictions:
-
(1)
-
existing
on the Original Issue Date in the Credit Agreement, the indenture or any other agreements in effect on the Original Issue Date, and any amendments,
modifications, restatements, extensions, renewals, replacements or refinancings of any of the foregoing; provided that the encumbrances and restrictions in the amendment, modification, restatement,
extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the noteholders than the encumbrances or restrictions being amended, modified,
restated, extended, renewed, replaced or refinanced;
-
(2)
-
existing
pursuant to the indenture, the notes, the Note Guaranty or the other Note Documents;
-
(3)
-
existing
under or by reason of applicable law, rule, regulation or order;
-
(4)
-
existing
under any agreements or other instruments of, or with respect to
-
(A)
-
any
Person, or the property or assets of any Person, at the time the Person is acquired by the Parent Guarantor or any Restricted Subsidiary, or
-
(B)
-
any
Unrestricted Subsidiary at the time it is designated or is deemed to become a Restricted Subsidiary, which encumbrances or restrictions (i) are not
applicable to any other Person or the property or assets of any other Person and (ii) were not put in place in anticipation of such event and any amendments, modifications, restatements,
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extensions,
renewals, replacements or refinancings of any of the foregoing, provided that the encumbrances and restrictions in the amendment, modification, restatement, extension, renewal, replacement
or refinancing are, taken as a whole, no less favorable in any material respect to the noteholders than the encumbrances or restrictions being amended, modified, restated, extended, renewed, replaced
or refinanced;
-
(5)
-
of
the type described in clause (a)(4) arising or agreed to (i) in the ordinary course of business that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is subject to a lease, license, conveyance or similar contract, including with respect to intellectual property, (ii) that restrict in a
customary manner, pursuant to provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements, the transfer
of ownership interests in, or assets of, such partnership, limited liability company, joint venture or similar Person or (iii) by virtue of any Lien on, or agreement to transfer, option or
similar right with respect to any property or assets of, the Parent Guarantor or any Restricted Subsidiary;
-
(6)
-
with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of the Capital Stock of, or
property and assets of, the Restricted Subsidiary pending closing of such sale or disposition that is permitted by the indenture;
-
(7)
-
consisting
of customary restrictions pursuant to any Permitted Receivables Financing;
-
(8)
-
existing
pursuant to Permitted Refinancing Debt; provided that the encumbrances and restrictions contained in the agreements governing such Permitted Refinancing
Debt are, taken as a whole, no less favorable in any material respect to the noteholders than those contained in the agreements governing the Debt being refinanced;
-
(9)
-
consisting
of restrictions on cash or other deposits or net worth imposed by customers, suppliers or required by insurance surety bonding companies, in each case, in
the ordinary course of business;
-
(10)
-
existing
pursuant to purchase money obligations for property acquired in the ordinary course of business and Capital Leases or operating leases or Specified Coal
Agreements or Mining Leases that impose encumbrances or restrictions discussed in clause (a)(4) above on the property so acquired or covered thereby;
-
(11)
-
existing
pursuant to any Debt Incurred by, or other agreement of, a Foreign Subsidiary, which encumbrances or restrictions are customary for a financing or
agreement of such type;
-
(12)
-
existing
pursuant to customary provisions in joint venture, operating or similar agreements, asset sale agreements and stock sale agreements required in connection
with the entering into of such transaction; or
-
(13)
-
existing
pursuant to any agreement or instrument relating to any Debt permitted to be Incurred subsequent to the Original Issue Date by the covenant described above
under "Limitation on Debt and Disqualified Stock and Preferred Stock" (A) if the encumbrances and restrictions contained in any such agreement or instrument are, taken as a whole,
no less favorable in any material respect to the noteholders than the encumbrances and restrictions contained in the Credit Agreement in effect as of the Original Issue Date (as determined in good
faith by the Parent Guarantor) or (B) such encumbrances and restrictions are, taken as a whole, no less favorable in any material respect to the noteholders than is customary in comparable
financings (as determined in good faith by the Parent Guarantor), and the Parent Guarantor determines in good faith that such encumbrances and restrictions will not materially affect the Company's
ability to make principal or interest payments on the notes as and when they become due.
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Note Guaranties by Restricted Subsidiaries
If and for so long as any Domestic Restricted Subsidiary of the Parent Guarantor (other than an Issuer), directly or indirectly, Guarantees any
Debt of an Issuer or a Guarantor under the Credit Agreement, such Domestic Restricted Subsidiary shall provide a Note Guaranty within 15 days, and, if the guaranteed Debt is Subordinated Debt,
the Guarantee of such guaranteed Debt must be subordinated in right of payment to the Note Guaranty to at least the extent that the guaranteed Debt is subordinated to the notes.
Repurchase of Notes Upon a Change of Control
Not later than 30 days following a Change of Control, the Company will make an Offer to Purchase (as defined below) all outstanding notes
at a purchase price equal to 101% of the principal amount of the notes plus accrued and unpaid interest to the date of purchase (subject to the right of holders of record on the relevant record date
to receive interest due on the relevant interest payment date); provided, however, that notwithstanding the occurrence of a Change of Control, the Company shall not be obligated to purchase the notes
pursuant to this covenant in the event that (i) prior to the requirement to commence the Offer to Purchase the Company has given the notice to exercise its right to redeem all the notes under
the terms described in "Optional Redemption" and redeemed the notes in accordance with such notice or (ii) a third party makes the Offer to Purchase in the manner, at the time and
otherwise in compliance with the requirements set forth in the indenture applicable to an Offer to Purchase made by the Company and purchases all notes properly tendered and not withdrawn under the
offer.
An
"Offer to Purchase" must be made by written offer, which will specify the principal amount of notes subject to the offer and the purchase price. The offer must specify an expiration
date (the "expiration date") not less than 30 days or more than 60 days after the date of the offer, and a settlement date for purchase (the "purchase date") not more than five Business
Days after the expiration date. The offer must include information concerning the business of the Company and its Subsidiaries which the Company in good faith believes will enable the holders to make
an informed decision with respect to the Offer to Purchase. The offer will also contain instructions and materials necessary to enable holders to tender notes pursuant to the offer. If the Offer to
Purchase is sent prior to the occurrence of the Change of Control, it may be conditioned upon the consummation of the Change of Control.
A
holder may tender all or any portion of its notes pursuant to an Offer to Purchase, subject to the requirement that any portion of a note tendered must be in a minimum of $1,000
principal amount or a multiple of $1,000 principal amount in excess thereof. Holders are entitled to withdraw notes tendered up to the close of business on the expiration date. On the purchase date
the purchase price will become due and payable on each note accepted for purchase pursuant to the Offer to Purchase, and interest on notes purchased will cease to accrue on and after the purchase
date.
The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations
are applicable in connection with the purchase of the notes pursuant to an Offer to Purchase pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict
with the Change of Control provisions in the indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the indenture by virtue of such compliance.
Holders
may not be entitled to require us to purchase their notes in certain circumstances involving a significant change in the composition of our Board of Directors, including in
connection with a proxy contest where our Board of Directors does not approve a dissident slate of directors but approves them as continuing directors, even if our Board of Directors initially opposed
the directors.
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The
Credit Agreement also provides that the occurrence of certain change of control events with respect to the Company or the Parent Guarantor would constitute a default thereunder.
Future
debt of the Issuers may prohibit the Company from purchasing notes in the event of a Change of Control, provide that a Change of Control is a default or require the Company to
repurchase the notes upon a Change of Control. Moreover, the exercise by the noteholders of their right to require the Company to purchase the notes could cause a default under other debt, even if the
Change of Control itself does not, due to the financial effect of the purchase on the Issuers.
Finally,
the Company's ability to pay cash to the noteholders following the occurrence of a Change of Control may be limited by the Company's then existing financial resources. There can
be no assurance that sufficient funds will be available when necessary to make the required purchase of the notes. See "Risk FactorsRisks Related to the NotesWe may be unable
to repurchase notes in the event of a change of control."
Except
as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holder of the notes to require that the Issuer purchase or redeem
the notes in the event of a takeover, recapitalization or similar transaction.
The
provisions under the indenture relating to the Company's obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or amended as described
below in "Amendments and Waivers."
In
the event that holders of not less than 90% of the aggregate principal amount of the outstanding notes accept an Offer to Purchase and the Company (or the third party making the Offer
to Purchase in lieu of the Company) purchases all of the notes held by such holders, the Issuers will have the right, upon not less than 15 nor more than 60 days' prior notice, given not more
than 30 days following the purchase pursuant to the Offer to Purchase described above, to redeem all of the notes that remain outstanding following such purchase at a redemption price equal to
the Offer to Purchase payment
price plus accrued and unpaid interest on the notes redeemed to the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date).
Limitation on Asset Sales
The Parent Guarantor will not, and will not permit any Restricted Subsidiary to, make any Asset Sale unless the following conditions are
met:
-
(1)
-
The
Asset Sale is for at least Fair Market Value (measured at the time of contractually agreeing to such Asset Sale).
-
(2)
-
At
least 75% of the aggregate consideration received by the Parent Guarantor or its Restricted Subsidiaries for such Asset Sale and all other Asset Sales since the
Original Issue Date consists of cash or Cash Equivalents.
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90 days
of the closing, converted by the Parent Guarantor or such Restricted Subsidiary to cash or Cash Equivalents, to the extent of the cash or Cash Equivalents actually so received, and
-
(D)
-
any
Designated Non-cash Consideration received by the Parent Guarantor or such Restricted Subsidiary in the Asset Sale having an aggregate Fair Market Value, taken
together with all other Designated Non-cash Consideration received pursuant to this clause (D) that is at that time outstanding, not to exceed the greater of (x) $20.0 million and
(y) 1.0% of the Parent Guarantor's Consolidated Net Tangible Assets at the time of receipt of such outstanding Designated Non-cash Consideration (with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value),
A
binding commitment to make an acquisition referred to in clause (B) shall be treated as a permitted application of the Net Cash Proceeds from the date of such commitment; provided that
(x) such investment is consummated within 360 days after the earlier of the making of such commitment and the end of the 360-day period referred to in the first sentence of this
clause (3) (it being understood that if such commitment is for an LBA, LBM or any other purchase, lease or other arrangement for mineral or surface rights, the Net Cash Proceeds need only be
applied as and when installments are due and payable) and (y) if such acquisition is not consummated within the period set forth in subclause (x) or such binding commitment is
terminated, the Net Cash Proceeds not so applied will be deemed to be Excess Proceeds (as defined below).
-
(4)
-
The
Net Cash Proceeds of an Asset Sale not applied pursuant to clause (3) within 360 days of the Asset Sale constitute "Excess Proceeds." Excess
Proceeds of less than $25.0 million will be carried forward and accumulated. When the aggregate amount of the accumulated Excess Proceeds equals or exceeds such amount, the Company must, within
30 days, make an Offer to Purchase notes having a principal amount equal to
-
(A)
-
accumulated
Excess Proceeds, multiplied by
-
(B)
-
a
fraction (x) the numerator of which is equal to the outstanding aggregate principal amount of the notes and (y) the denominator of which is equal to
the outstanding aggregate principal amount of the notes and all other Pari Passu Secured Debt similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale, rounded down
to the nearest $1,000. The purchase price for the notes will be 100% of
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the
principal amount plus accrued interest to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment
date). If the Offer to Purchase is for less than all of the outstanding notes and notes in an aggregate principal
amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase notes having an aggregate principal amount equal to the purchase amount on a pro
rata basis, with adjustments so that only notes in multiples of $1,000 principal amount (and in a minimum amount of $1,000) will be purchased. Upon completion of the Offer to Purchase, Excess Proceeds
will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by the indenture.
The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations
are applicable in connection with each purchase of notes pursuant to an Offer to Purchase pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict
with the Asset Sale provisions in the indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset
Sale provisions of the indenture by virtue of such compliance.
Limitation on Transactions with Affiliates
-
(a)
-
The
Parent Guarantor will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any transaction or arrangement
including the purchase, sale, lease or exchange of property or assets, or the rendering of any service with any Affiliate of the Parent Guarantor or any Restricted Subsidiary (a "Related Party
Transaction") involving aggregate consideration in excess of $2.0 million, unless the Related Party Transaction is on fair and reasonable terms that are not materially less favorable (as
reasonably determined by the Parent Guarantor) to the Parent Guarantor or the relevant Restricted Subsidiary than those that could be obtained in a comparable arm's-length transaction with a Person
that is not an Affiliate of the Parent Guarantor.
-
(b)
-
Any
Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $15.0 million must first be approved by a majority
of the Board of Directors who are disinterested in the subject matter of the transaction pursuant to a Board Resolution.
-
(c)
-
The
foregoing paragraphs do not apply to:
-
(1)
-
any
transaction between the Parent Guarantor and any of its Restricted Subsidiaries or between Restricted Subsidiaries of the Parent Guarantor;
-
(2)
-
the
payment of reasonable and customary regular fees to directors of the Company or the Parent Guarantor who are not employees of the Company or the Parent
Guarantor;
-
(3)
-
any
Permitted Investment or any Restricted Payment permitted under the covenant described above under "Limitation on Restricted Payments;"
-
(4)
-
any
issuance of Equity Interests (other than Disqualified Equity Interests) of the Parent Guarantor;
-
(5)
-
loans
or advances to officers, directors or employees of the Company or the Parent Guarantor in the ordinary course of business of the Parent Guarantor or its
Restricted Subsidiaries or Guarantees in respect thereof or otherwise made on their behalf (including payment on such Guarantees) but only to the extent permitted by applicable law, including the
Sarbanes-Oxley Act of 2002;
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-
(6)
-
any
employment, consulting, service or termination agreement, or reasonable and customary indemnification arrangements, entered into by the Parent Guarantor or any
of its Restricted Subsidiaries with officers and employees of the Parent Guarantor or any of its Restricted Subsidiaries that are Affiliates of the Parent Guarantor and the payment of compensation to
such officers and employees (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans) so long as such agreement has been entered into in the ordinary course
of business;
-
(7)
-
transactions
with customers, clients, suppliers, joint venture partners or purchasers or sellers of goods or services (including pursuant to joint venture
agreements) in the ordinary course of business on terms at least as favorable as might reasonably have been obtained at such time from a Person that is not an Affiliate of the Parent Guarantor, as
determined in good faith by the Parent Guarantor;
-
(8)
-
transactions
arising under any contract, agreement, instrument or other arrangement in effect on the Original Issue Date, as amended, modified or replaced from time
to time so long as the amended, modified or new arrangements, taken as a whole at the time such arrangements are entered into, are not materially less favorable to the Parent Guarantor and its
Restricted Subsidiaries than those in effect on the Original Issue Date;
-
(9)
-
transactions
entered into as part of a Permitted Receivables Financing;
-
(10)
-
transactions
with any Affiliate in its capacity as a holder of Debt or Equity Interests; provided that such Affiliate owns less than a majority of the interests of
the relevant class and is treated the same as other holders; and
-
(11)
-
payments
to or from, and transactions with, any joint ventures or similar arrangements (including, without limitation, any cash management activities relating
thereto); provided that such arrangements are on terms no less favorable to the Parent Guarantor and its Restricted Subsidiaries, on the one hand, than to the relevant joint venture partner and its
Affiliates, on the other hand, taking into account all related agreements and transactions entered in by the Parent Guarantor and its Restricted Subsidiaries, on the one hand, and the relevant joint
venture partner and its Affiliates, on the other hand.
Designation of Restricted and Unrestricted Subsidiaries
-
(a)
-
The
Parent Guarantor may designate any Subsidiary, including a newly acquired or created Subsidiary (other than the Company or the Co-issuer), to be an Unrestricted
Subsidiary if it meets the following qualifications and the designation would not cause a Default.
-
(1)
-
Such
Subsidiary does not own any Capital Stock of the Parent Guarantor or any Restricted Subsidiary or hold any Debt of, or any Lien on any property of, the Parent
Guarantor or any Restricted Subsidiary.
-
(2)
-
At
the time of the designation, the designation would be permitted under the covenant described above under "Limitation on Restricted Payments."
-
(3)
-
To
the extent the Debt of the Subsidiary is not Non-Recourse Debt, any Guarantee or other credit support thereof by the Parent Guarantor or any Restricted Subsidiary
is permitted under the covenants described above under "Limitation on Debt and Disqualified Stock or Preferred Stock" and "Limitation on Restricted Payments."
-
(4)
-
The
Subsidiary is not party to any transaction or arrangement with the Parent Guarantor or any Restricted Subsidiary that would not be permitted under the covenant
described above under "Limitation on Transactions with Affiliates" after giving effect to the exceptions thereto.
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-
(5)
-
Neither
the Parent Guarantor nor any Restricted Subsidiary has any obligation to subscribe for additional Equity Interests of the Subsidiary or to maintain or
preserve its financial condition or cause it to achieve specified levels of operating results, except to the extent permitted by covenants described above under "Limitation on Debt and
Disqualified Stock or Preferred Stock" and "Limitation on Restricted Payments."
|
|
|
|
|
(b)
|
|
(1)
|
|
A Subsidiary previously designated an Unrestricted Subsidiary which fails to meet the qualifications set forth in paragraph (a) will be deemed to become at that time a Restricted Subsidiary, subject to the
consequences set forth in paragraph (d).
|
|
|
(2)
|
|
The Board of Directors may designate an Unrestricted Subsidiary to be a Restricted Subsidiary if the designation would not cause a Default.
|
-
(c)
-
Upon
a Restricted Subsidiary becoming an Unrestricted Subsidiary,
-
(1)
-
all
existing Investments of the Parent Guarantor and the Restricted Subsidiaries therein (valued at the Parent Guarantor's proportional share of the Fair Market
Value of its assets less liabilities) will be deemed made at that time;
-
(2)
-
all
existing Capital Stock or Debt of the Parent Guarantor or a Restricted Subsidiary held by it will be deemed Incurred at that time, and all Liens on property of
the Parent Guarantor or a Restricted Subsidiary held by it will be deemed incurred at that time;
-
(3)
-
all
existing transactions between it and the Parent Guarantor or any Restricted Subsidiary will be deemed entered into at that time;
-
(4)
-
it
shall be released at that time from its Note Guaranty, if any; and
-
(5)
-
it
will cease to be subject to the provisions of the indenture and the Note Documents as a Restricted Subsidiary.
-
(d)
-
Upon
an Unrestricted Subsidiary becoming, or being deemed to become, a Restricted Subsidiary,
-
(1)
-
all
of its Debt and Disqualified Stock or Preferred Stock will be deemed Incurred at that time for purposes of the covenant described above under
"Limitation on Debt and Disqualified Stock or Preferred Stock," but will not be considered the sale or issuance of Equity Interests for purposes of the covenant described above under
"Limitation on Asset Sales;"
-
(2)
-
Investments
therein previously charged under the covenant described above under "Limitation on Restricted Payments" will be credited thereunder;
-
(3)
-
it
may be required to issue a Note Guaranty pursuant to the covenant described above under "Note Guaranties by Restricted Subsidiaries;" and
-
(4)
-
it
will thenceforward be subject to the provisions of the indenture as a Restricted Subsidiary.
-
(e)
-
Any
designation by the Parent Guarantor of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary will be evidenced to the trustee by promptly filing
with the trustee a copy of the Board Resolution giving effect to the designation and an officers' certificate certifying that the designation complied with the foregoing provisions.
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Financial Reports
Whether or not the Parent Guarantor is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any
notes are outstanding the Parent Guarantor must provide the trustee and noteholders (or make available on EDGAR) within the time periods specified in those sections with
-
(1)
-
all
quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Parent
Guarantor were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to annual information only, a report
thereon by the Parent Guarantor's certified independent accountants, and
-
(2)
-
all
current reports that would be required to be filed with the Commission on Form 8-K if the Parent Guarantor were required to file such reports.
Delivery
of such reports, information and documents to the trustee is for informational purposes only and its receipt of such reports shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including either of the Issuers' or any other Person's compliance with any of its covenants under the indenture or the
notes (as to which the trustee is entitled to rely exclusively on an officers' certificate).
Any
and all Defaults or Events of Default arising from a failure to furnish or file in a timely manner any information or report required by this covenant shall be deemed cured (and the
Parent Guarantor shall be deemed to be in compliance with this covenant) upon furnishing or filing such information or report as contemplated by this covenant (but without regard to the date on which
such information or report is so furnished or filed); provided that such cure shall not otherwise affect the rights of the holders described below under "Default and Remedies" if
principal and interest have
been accelerated in accordance with the terms of the indenture and such acceleration has not been rescinded or cancelled prior to such cure.
Reports to Trustee
The Issuers will deliver to the trustee:
-
(1)
-
within
120 days after the end of each fiscal year an officers' certificate stating that the Issuers have fulfilled their obligations under the indenture or,
if there has been a Default, specifying the Default and its nature and status; and
-
(2)
-
within
30 days after either Issuer becomes aware of the occurrence of a Default, a written notice setting forth the details of the Default, and (unless such
Default has already been cured) the action which such Issuer proposes to take with respect thereto.
The Co-issuer may not hold any material assets, become liable for any material obligations or engage in any significant business activities;
provided that it may be a co-obligor with respect to the notes or any other Debt issued by the Company, and may engage in any activities directly related thereto or necessary in connection therewith.
The Co-issuer shall be a Wholly Owned Subsidiary of the Company at all times.
Consolidation, Merger or Sale of Assets
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-
(2)
-
sell,
convey, transfer, or otherwise dispose of all or substantially all of its assets, in one transaction or a series of related transactions, to any Person unless
-
(A)
-
either
(x) the Company or the Parent Guarantor, as applicable, is the continuing Person or (y) the resulting, surviving or transferee Person (the
"Surviving Company") is a corporation, partnership (including a limited partnership), trust or limited liability company organized and validly existing under the laws of the United States of America,
any state thereof or the District of Columbia and expressly assumes by supplemental indenture (or other agreement or instrument, as applicable) all of the obligations of its predecessor under the
indenture, the notes, the Note Guaranties and the other Note Documents, as applicable;
-
(B)
-
immediately
after giving effect to the transaction, no Default has occurred and is continuing;
-
(C)
-
immediately
after giving effect to the transaction on a pro forma basis, the Parent Guarantor (or the Surviving Company, as applicable) (i) could Incur at
least $1.00 of Debt under the Fixed Charge Coverage Ratio Test or (ii) would have a Fixed Charge Coverage Ratio on a pro forma basis that is at least equal to the Fixed Charge Coverage Ratio of
the Parent Guarantor immediately prior to such transaction; and
-
(D)
-
the
Parent Guarantor delivers to the trustee an officers' certificate and an opinion of counsel, each stating that the consolidation, merger or transfer and the
supplemental indenture (or other agreement or instrument, as applicable) (if any) comply with the indenture;
provided,
that clauses (B) and (C) will not apply (i) to the consolidation, merger, sale, conveyance, transfer or other disposition of either the Company or the Parent Guarantor
with or into a Wholly Owned Restricted Subsidiary or the consolidation, merger, sale, conveyance, transfer or other disposition of a Wholly Owned Restricted Subsidiary with or into either the Company
or the Parent Guarantor or (ii) if, in the good faith determination of the Board of Directors of the Parent Guarantor, whose determination is evidenced by a Board Resolution, the sole purpose
of the transaction is to change the jurisdiction of formation or incorporation of the Company or the Parent Guarantor, as applicable.
-
(b)
-
Neither
the Company nor the Parent Guarantor shall lease all or substantially all of its assets, whether in one transaction or a series of transactions, to one or
more other Persons.
-
(c)
-
Upon
the consummation of any transaction effected in accordance with these provisions, if the Company or the Parent Guarantor, as applicable, is not the continuing
Person, the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company or the Parent Guarantor, as applicable, under the indenture, the notes,
the Note Guaranties and the other Note Documents, as applicable, with the same effect as if such Successor Company had been named as the Company or the Parent Guarantor, as applicable, in the
Indenture. Upon any such substitution in the case of the Company, except for its sale, conveyance, transfer or disposition of less than all its assets, the Company will be released from its
obligations under the indenture, the notes and the other Note Documents, and, upon any such substitution in the case of the Parent Guarantor, it will be released from its obligations under the
indenture, its Note Guaranty and the other Note Documents as described above under "Guarantees."
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The Co-issuer shall not consolidate or merge with or into any Person, or permit any Person to merge with or into the Co-issuer
unless:
-
(1)
-
concurrently
therewith, a corporate Wholly Owned Restricted Subsidiary of the Company organized and validly existing under the laws of the United States of America,
any state thereof or the District of Columbia (which may be the continuing Person as a result of such transaction) shall expressly assume, by a supplemental indenture (or other agreement or
instrument, as applicable), all of the obligations of the Co-issuer under the indenture, the notes and the other Note Documents; or
-
(2)
-
after
giving effect thereto, at least one obligor on the notes shall be a corporation organized and validly existing under the laws of the United States of America
or any jurisdiction thereof; and
-
(3)
-
immediately
after such transaction, no Default has occurred and is continuing.
Default and Remedies
An "Event of Default" occurs with respect to the notes if:
-
(1)
-
the
Issuers default in the payment of the principal and premium, if any, of any note when the same becomes due and payable at final maturity, upon acceleration or
redemption, or otherwise (other than pursuant to an Offer to Purchase);
-
(2)
-
the
Issuers default in the payment of interest on any note when the same becomes due and payable, and the default continues for a period of 30 days;
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-
(3)
-
the
Company fails to make an Offer to Purchase and thereafter accept and pay for the notes tendered when and as required pursuant to the covenant described above
under "Certain CovenantsRepurchase of Notes Upon a Change of Control" or the Issuers or any Guarantor fails to comply with the covenant described above under
"Consolidation, Merger or Sale of Assets;"
-
(4)
-
the
Issuers or the Parent Guarantor defaults in the performance of or breach any other of its covenants or agreements in the indenture or, under the notes or under
the other Note Documents (other than a default specified in clause (1), (2) or (3) above) and the default or breach continues for a period of 60 consecutive days (or 90
consecutive days in the case of a failure to comply with the reporting obligations described under the caption "Certain CovenantsFinancial Reports") after written notice to
the Issuers by the trustee or to the Issuers and the trustee by the holders of 25% or more in aggregate principal amount of the notes;
-
(5)
-
there
occurs with respect to any Debt of the Parent Guarantor or any of its Significant Restricted Subsidiaries having an outstanding principal amount of
$50.0 million or more in the aggregate for all such Debt of all such Persons (i) an event of default that results in such Debt being due and payable prior to its scheduled maturity or
(ii) failure to make a principal payment on such Debt when due and such defaulted payment is not made, waived or extended within the applicable grace period;
-
(6)
-
one
or more final judgments or orders for the payment of money are rendered against the Parent Guarantor or any of its Restricted Subsidiaries and are not paid or
discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid
or discharged against all such Persons to exceed $50.0 million (in excess of amounts which the Parent Guarantor's insurance carriers have agreed to pay under applicable policies) during which a
stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;
-
(7)
-
certain
bankruptcy defaults occur with respect to the Parent Guarantor or any Significant Restricted Subsidiary;
-
(8)
-
any
Note Guaranty ceases to be in full force and effect, other than in accordance the terms of the indenture, or a Guarantor denies or disaffirms its obligations
under its Note Guaranty; or
-
(9)
-
the
occurrence of the following:
-
(a)
-
except
as permitted by the Note Documents, any Note Document establishing the Second Priority Liens ceases for any reason to be enforceable; provided that it will
not be an Event of Default under this clause (9)(a) if the sole result of the failure of one or more Note Documents to be fully enforceable is that any Second Priority Lien purported to be
granted under such Note Documents on Collateral, individually or in the aggregate, having a fair market value of not more than $50.0 million, ceases to be an enforceable and perfected Second
Priority Lien;
provided
that if such failure is susceptible to cure, no Event of Default shall arise with respect thereto until 30 days after any
officer of the Company or any Restricted Subsidiary becomes aware of such failure, which failure has not been cured during such time period;
-
(b)
-
except
as permitted by the Note Documents, any Second Priority Lien purported to be granted under any Note Document on Collateral, individually or in the aggregate,
having a fair market value in excess of $50.0 million, ceases to be an enforceable and perfected second priority Lien, subject to the First/Second Lien Intercreditor Agreement and Permitted
Liens; provided that if such failure is susceptible to cure, no Event of Default shall arise with respect thereto until 30 days after any officer of the Company or any Restricted Subsidiary
becomes aware of such failure, which failure has not been cured during such time period; and
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-
(c)
-
any
Issuer or Guarantor, or any Person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of such Issuer or Guarantor set forth in or
arising under any Note Document establishing Second Priority Liens.
If an Event of Default, other than a bankruptcy default with respect to the Parent Guarantor or the Company, occurs and is continuing under the
indenture, the trustee or the holders of at least 25% in aggregate principal amount of the notes issued under the indenture then outstanding, by written notice to the Issuers (and to the trustee if
the notice is given by the holders), may declare the principal of and accrued interest on the notes to be immediately due and payable. Upon a
declaration of acceleration, such principal and accrued interest will become immediately due and payable. If a bankruptcy default occurs with respect to the Parent Guarantor or the Company, the
principal of and accrued interest on the notes then outstanding will become immediately due and payable without any declaration or other act on the part of the trustee or any holder.
The
holders of a majority in principal amount of the outstanding notes issued under the indenture by written notice to the Issuers and to the trustee may waive all past defaults and
rescind and annul a declaration of acceleration and its consequences if
-
(1)
-
all
existing Events of Default, other than the nonpayment of the principal of, and interest on, the notes that have become due solely by the declaration of
acceleration, have been cured or waived, and
-
(2)
-
the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction.
Except
as otherwise provided in "Consequences of an Event of Default" or "Amendments and WaiversAmendments with Consent of Holders," the holders of
a majority in aggregate principal amount of the outstanding notes may, by notice to the trustee, waive an existing Default and its consequences. Upon such waiver, the Default will cease to exist, and
any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other Default or impair any right consequent thereon.
In
the event of a declaration of acceleration of the notes because an Event of Default described in clause (5) under "Events of Default" has occurred and is
continuing, the declaration of acceleration of the notes shall be automatically annulled, without any action by the trustee or the holders, if the event of default or payment default triggering such
Event of Default pursuant to clause (5) shall be remedied or cured, or rescinded or waived by the holders of the Debt, or the Debt that gave rise to such Event of Default shall have been
discharged in full, within 30 days after the declaration of acceleration with respect thereto and if (i) the annulment of the acceleration of the notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing Events of Default, except nonpayment of principal, premium or interest on the notes that became due solely because
of the acceleration of the notes, have been cured or waived.
The
holders of a majority in aggregate principal amount of the outstanding notes may direct the time, method and place of conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the trustee. However, the trustee may refuse to follow any direction that conflicts with law or the indenture or the other Note Documents, that
may involve the trustee in personal liability, or that the trustee determines in good faith may be unduly prejudicial to the rights of
holders of notes not joining in the giving of such direction. In addition, the trustee may take any other action it deems proper that is not inconsistent with any such direction received from holders
of notes. Neither the trustee nor the Collateral Agent shall be obligated to take any action at
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the
direction of holders unless such holders have offered to the trustee and Collateral Agent indemnity or security satisfactory to the trustee and Collateral Agent.
A
holder may not institute any proceeding, judicial or otherwise, with respect to the indenture, the notes or the other Note Documents, or for the appointment of a receiver or trustee,
or for any other remedy under the indenture, the notes or the other Note Documents, unless:
-
(1)
-
the
holder has previously given to the trustee written notice of a continuing Event of Default;
-
(2)
-
holders
of at least 25% in aggregate principal amount of outstanding notes have made written request to the trustee to institute proceedings in respect of the Event
of Default in its own name as trustee under the Indenture;
-
(3)
-
holders
have offered to the trustee indemnity reasonably satisfactory to the trustee against any costs, liabilities or expenses to be incurred in compliance with
such request;
-
(4)
-
the
trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
-
(5)
-
during
such 60-day period, the holders of a majority in aggregate principal amount of the outstanding notes have not given the trustee a direction that is
inconsistent with such written request.
Notwithstanding
anything in the indenture to the contrary, the right of a holder of a note to receive payment of principal of or interest on its note on or after the Stated Maturities
thereof, or to bring suit for the enforcement of any such payment on or after such dates, may not be impaired or affected without the consent of that holder.
If
any Default occurs and is continuing and is known to the trustee, the trustee will send notice of the Default to each holder within 90 days after it occurs, unless the Default
has been cured; provided that, except in the case of a default in the payment of the principal of or interest on any note, the trustee may withhold the notice if and so long as the trustee in good
faith determines that withholding the notice is in the interest of the holders.
Subject
to certain limited exceptions, pursuant to the terms of the First/Second Lien Intercreditor Agreement, so long as the Credit Agreement is outstanding, the First Lien Agent will
determine the time and method by which the security interests in the Collateral will be enforced. See "Certain Intercreditor ProvisionsThe First/Second
LienIntercreditor Agreement."
No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders
No director, officer, employee, incorporator, member or stockholder of the Issuers or any Guarantor, as such, will have any liability for any
obligations of the Issuers or such Guarantor under the notes, any Note Guaranty, the indenture or any other Note Document or for any claim based on, in respect of, or by reason of, such obligations.
Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. This waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.
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Amendments and Waivers
The Issuers, the trustee and the Collateral Agent, as applicable, may amend or supplement the indenture, the notes and the other Note Documents
without notice to or the consent of any noteholder:
-
(1)
-
to
cure any ambiguity, defect, omission or inconsistency in the Note Documents;
-
(2)
-
to
comply with the covenant described above under "Consolidation, Merger or Sale of Assets;"
-
(3)
-
to
comply with any requirements of the SEC in connection with the qualification of the indenture under the Trust Indenture Act;
-
(4)
-
to
evidence and provide for the acceptance of an appointment by a successor trustee;
-
(5)
-
to
provide for uncertificated notes in addition to or in place of certificated notes, provided that the uncertificated notes are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the uncertificated notes are described in Section 163(f)(2)(B) of the Code;
-
(6)
-
to
provide for any Guarantee of the notes, or to confirm and evidence the release, termination or discharge of any Guarantee when such release, termination or
discharge is permitted by the indenture;
-
(7)
-
to
provide for the issuance of additional notes in accordance with the terms of the indenture;
-
(8)
-
(a)
to conform any provision to this "Description of the Notes" and (b) conform the text of the Note Documents or any other such documents (in recordable
form) as may be necessary or advisable to preserve and confirm the relative priorities of the First Lien Obligations and Second Lien Obligations as such priorities are contemplated and set forth in
the First Lien/Second Lien Intercreditor Agreement;
-
(9)
-
make,
complete or confirm any grant of Collateral permitted or required by any of the Note Documents, including to secure additional First Priority Secured Debt and
Pari Passu Secured Debt;
-
(10)
-
release,
discharge, terminate or subordinate Liens on Collateral in accordance with the Note Documents and to confirm and evidence any such release, discharge,
termination or subordination;
-
(11)
-
as
provided in the First/Second Lien Intercreditor Agreement and the Pari Passu Second Lien Intercreditor Agreement; or
-
(12)
-
to
make any other change that does not materially and adversely affect the rights of any holder.
In
addition, the First/Second Lien Intercreditor Agreement and the Pari Passu Second Lien Intercreditor Agreement may be amended in accordance with their terms and without the consent of
any holder or the trustee with the consent of the parties thereto or otherwise in accordance with their
terms, including to add additional First Priority Secured Debt and Pari Passu Secured Debt and add other parties (or any authorized agent thereof or trustee therefor) holding such Debt thereto and to
establish that the Liens on any Collateral securing such Debt shall rank equally with the Liens on such Collateral securing the other First Priority Secured Debt or Pari Passu Secured Debt, as
applicable, then outstanding, in each case to the extent permitted by the then extant First Lien Documents and Second Lien Documents. The First/Second Lien Intercreditor Agreement also provides that
in certain
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circumstances
the Security Documents may be amended automatically without the consent of holders of notes, the trustee or the Collateral Agent in connection with any amendments to corresponding
security documents creating First Priority Liens.
Except
as otherwise provided in "Default and RemediesConsequences of an Event of Default" or paragraph (b) below, the Issuers and the trustee may amend
the indenture, the notes and the other Note Documents with the consent of the holders of a majority in aggregate principal amount of the outstanding notes, and the holders of a majority in aggregate
principal amount of the outstanding notes may waive future compliance by the Issuers with any provision of the indenture, the notes or the other Note Documents.
Notwithstanding
the provisions of paragraph (a), without the consent of each holder affected, an amendment or waiver may not
-
(1)
-
reduce
the principal amount of or change the Stated Maturity of any installment of principal of any note,
-
(2)
-
reduce
the rate of or change the Stated Maturity of any interest payment on any note,
-
(3)
-
reduce
the amount payable upon the redemption of any note or, in respect of an optional redemption, the times at which any note may be redeemed or,
-
(4)
-
after
the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase
date thereunder,
-
(5)
-
make
any note payable in money other than that stated in the note,
-
(6)
-
impair
the right of any holder of notes to receive any principal payment or interest payment on such holder's notes or Note Guaranty, on or after the Stated Maturity
thereof, or to institute suit for the enforcement of any such payment,
-
(7)
-
make
any change in the percentage of the principal amount of the notes whose holders must consent to an amendment or waiver,
-
(8)
-
modify
or change any provision of the indenture affecting the ranking of the notes or any Note Guaranty in a manner materially adverse to the holders of the notes,
or
-
(9)
-
make
any change in any Note Guaranty that would adversely affect the noteholders.
In
addition, the consent of holders representing at least 66.67% of outstanding notes issued under the indenture will be required to release the Liens for the benefit of the holders of
the notes on all or substantially all of the Collateral, other than in accordance with the Note Documents.
It
is not necessary for noteholders to approve the particular form of any proposed amendment or waiver, but is sufficient if their consent approves the substance thereof.
Neither
the Parent Guarantor nor any of its Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid or
agreed to be paid to all holders of the
notes that consent, waive or agree to amend such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver or amendment.
Defeasance and Discharge
The Issuers may discharge their obligations under the notes, the indenture and the other Note Documents (except for certain surviving rights of
the trustee and the Issuers' obligations with respect thereto) by irrevocably depositing in trust with the trustee money or U.S. Government Obligations (or
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a
combination thereof) sufficient to pay principal of and interest on the notes to final maturity or redemption within one year, subject to meeting certain other conditions.
The
Issuers may also elect to
-
(1)
-
discharge
most of their obligations in respect of the notes, the indenture and the other Note Documents, not including obligations related to the defeasance trust or
to the replacement of notes or their obligations to the trustee ("legal defeasance") or
-
(2)
-
discharge
their obligations under most of the covenants and under clauses (2) and (3) of the covenant described above under
"Consolidation, Merger or Sale of AssetsThe Company" (and the events listed in clauses (3), (4), (5), (6), (8) and (9) under "Default and
RemediesEvents of Default" will no longer constitute Events of Default) ("covenant defeasance"),
if
either Issuer deposits in trust with the trustee money or U.S. Government Obligations sufficient to pay principal of and interest on the notes to final maturity or redemption and meets certain
other conditions, including delivery to the trustee of either a ruling received from the Internal Revenue Service or an opinion of counsel to the effect that the holders will not recognize income,
gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise
have been the case. In the case of legal defeasance, such an opinion could not be given absent a change of law after the date of the indenture. The defeasance would in each case be effective when
123 days have passed since the date of the deposit in trust.
In
the case of either discharge or defeasance, the Note Guaranties, if any, will terminate with respect to notes and the Collateral securing the notes and the Note Guaranties will be
released.
Concerning the Trustee and Paying Agent
Wilmington Trust, National Association will be the trustee under the indenture.
Except
during the continuance of an Event of Default, the trustee will be required to perform only those duties that are specifically set forth in the indenture and no others, and no
implied covenants or obligations will be read into the indenture against the trustee. In case an Event of Default has occurred and is continuing, the trustee shall exercise those rights and powers
vested in it by the indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No
provision of the indenture requires the trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties thereunder, or in the exercise of its rights
or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense.
The
indenture (including the provisions of the Trust Indenture Act incorporated by reference therein) will limit the rights of the trustee, should it become a creditor of any obligor on
the notes or the Note Guaranties, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The trustee may engage
in other transactions with the Parent Guarantor and its Affiliates; provided that if it acquires any conflicting interest (as defined in the Trust Indenture Act) after a Default has occurred and is
continuing, it must either eliminate the conflict within 90 days, apply to the Commission for permission to continue or resign.
Wilmington
Trust, National Association will also initially serve as the security registrar and paying agent for the notes. We may at any time designate additional paying agents or
rescind the designation of
paying agents or approve a change in the office through which any paying agent acts. We may also choose to act as our own paying agent, but must also maintain a paying agency in the contiguous
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United
States. Whenever there are changes in the paying agent for the notes we must notify the trustee.
References
in the indenture to the trustee shall, as appropriate, refer also to the paying agent and security registrar, and such other entities and any authentication agent shall be
entitled to the same rights, protections and indemnities as those granted to the trustee.
Form, Denomination and Registration of Notes
The notes will be issued in registered form, without interest coupons, in minimum denominations of $1,000 and integral multiples of $1,000 above
such amount, in the form of both global notes and certificated notes, as further described below under "Book Entry, Delivery and Form."
The
trustee will not be required (i) to issue, register the transfer of or exchange any note for a period of 15 days before a selection of notes to be redeemed,
(ii) to register the transfer of or exchange any note so selected for redemption in whole or in part, except, in the case of a partial redemption, that portion of the note not being redeemed,
or (iii) if a redemption is to occur after a regular record date but on or before the corresponding interest payment date, to register the transfer or exchange any note on or after the regular
record date and before the date of redemption.
No
service charge will be imposed in connection with any transfer or exchange of any note, but the Issuers may in general require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
Governing Law
The indenture, including any Note Guaranties, the notes and the other Note Documents shall be governed by, and construed in accordance with, the
laws of the State of New York; however, the Mortgages shall be governed by, and construed in accordance with, the laws of the state in which the applicable premises is located.
Certain Definitions
"
Accounts Receivable Securitization Facility
" means the Receivables Purchase Agreement, dated as
of February 11, 2013, as amended, among Cloud Peak Energy Receivables LLC, as seller, the Company, as servicer, the various conduit purchasers, related committed purchasers and purchaser
agents from time to time party thereto, and PNC Bank, National Association, as administrator, establishing a $75 million receivables securitization program.
"
Acquired Debt
" means Debt of a Person existing at the time the Person is acquired by, or merges with or into, the Parent Guarantor or any
Restricted Subsidiary or becomes a Restricted Subsidiary; provided that such Debt is not Incurred in connection with, or in contemplation of, the Person being acquired by or merging with or into or
becoming a Restricted Subsidiary.
"
Additional Assets
" means all or substantially all of the assets of a Permitted Business, or Voting Stock of another Person engaged in a
Permitted Business that will, on the date of acquisition, be a Restricted Subsidiary, or other assets (other than cash and Cash Equivalents or securities (including Equity Interests)) that are to be
used in a Permitted Business.
"
Affiliate
" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with, such specified Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise, and a Person shall be presumed
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to
"control" another Person if (A) the first Person either (i) is the Beneficial Owner, directly or indirectly, of 35% or more of the total voting power of the Voting Stock of such
specified Person or (ii) (x) is the Beneficial Owner, directly or indirectly, of 10% or more of the total voting power of the Voting Stock of such specified Person and (y) has the
right to appoint or nominate, or has an officer or director that is, at least one member of the Board of Directors of such specified Person, or (B) if the specified Person is a limited
liability company, the first Person is the managing member. "Controlled" has a meaning correlative thereto.
"
Applicable Premium
" means with respect to any note on any redemption date the excess (if any) of (a) the present value at such
redemption date of (1) the redemption price of such note at November 1, 2018, as set forth under "Optional Redemption" plus (2) all required interest payments due on
such note from the redemption date through November 1, 2018 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate with
respect to such redemption date plus 50 basis points over (b) the principal amount of such note.
"
Asset Sale
" means any sale, lease (other than operating leases or capital leases entered into in the ordinary course of a Permitted
Business), transfer or other disposition of any assets by the Parent Guarantor or any Restricted Subsidiary outside of the ordinary course of business, including by means of a merger, consolidation or
similar transaction and including any sale or issuance of the Equity Interests of any Restricted Subsidiary (each of the above referred to as a "disposition"), provided that the following are not
included in the definition of "Asset Sale":
-
(1)
-
a
disposition to the Parent Guarantor or a Restricted Subsidiary, including the sale or issuance by the Parent Guarantor or any Restricted Subsidiary of any Equity
Interests of any Restricted Subsidiary to the Parent Guarantor or any Restricted Subsidiary;
-
(2)
-
the
sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof, and dispositions of
Receivables and related assets by a Securitization Subsidiary in connection with a Permitted Receivables Financing;
-
(3)
-
a
transaction covered by the covenant described above under "Consolidation, Merger or Sale of AssetsThe Company and the Parent Guarantor;"
-
(4)
-
a
Restricted Payment permitted under the covenant described above under "Certain CovenantsLimitation on Restricted Payments" or a Permitted
Investment;
-
(5)
-
any
transfer of property or assets that consists of grants by the Parent Guarantor or its Restricted Subsidiaries in the ordinary course of business of licenses or
sub-licenses, including with respect to intellectual property rights;
-
(6)
-
the
sale of Capital Stock of an Unrestricted Subsidiary;
-
(7)
-
the
sale of assets by the Parent Guarantor and its Restricted Subsidiaries consisting of leases and subleases of real property solely to the extent that such real
property is not necessary for the normal conduct of operations of the Parent Guarantor and its Restricted Subsidiaries;
-
(8)
-
foreclosure
of assets of the Parent Guarantor or any of its Restricted Subsidiaries to the extent not constituting a Default;
-
(9)
-
the
sale or other disposition of cash or Cash Equivalents;
-
(10)
-
the
unwinding of any Hedging Agreements;
-
(11)
-
the
surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;
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-
(12)
-
the
issuance of Disqualified Stock or Preferred Stock pursuant to the covenant described above under "Certain CovenantsLimitation on Debt
and Disqualified Stock or Preferred Stock;"
-
(13)
-
(a)
the sale of damaged, obsolete, unusable or worn out equipment or equipment that is no longer needed in the conduct of the business of the Parent Guarantor and
its Restricted Subsidiaries and (b) sales of inventory, used or surplus equipment or reserves and dispositions related to the burn-off of mines;
-
(14)
-
any
disposition in a transaction or series of related transactions of assets with a Fair Market Value of less than $7.5 million;
-
(15)
-
dispositions
of assets by virtue of an asset exchange or swap with a third party in any transaction (w) with an aggregate Fair Market Value less than or
equal to $12.5 million, (x) involving a coal-for-coal swap, (y) to the extent that an exchange is for Fair Market Value and for credit against the purchase price of similar
replacement property or (z) consisting of a coal swap involving any Real Property; and
-
(16)
-
exchanges
and relocation of easements for pipelines, oil and gas infrastructure and similar arrangements in the ordinary course of business.
If,
in connection with an acquisition by the Parent Guarantor or any Restricted Subsidiary, a portion of the acquired assets are disposed of within 90 days of such acquisition,
such disposition shall not be deemed to be an Asset Sale; provided that such assets are disposed of for Fair Market Value.
"
Average Life
" means, as of the date of determination with respect to any Debt, the quotient obtained by dividing (i) the sum of
the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment of such Debt and (y) the amount of such principal
payment by (ii) the sum of all such principal payments.
"
Attributable Indebtedness
" means, at any date, in respect of Capital Leases of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared in accordance with GAAP.
"
Bank Products Agreement
" means any agreement pursuant to which a bank or other financial institution agrees to provide
(a) treasury services, (b) credit card, merchant card, purchasing card or stored value card services (including, without limitation, the processing of payments and other administrative
services with respect thereto), (c) cash management services (including, without limitation, controlled disbursements, automated clearinghouse transactions, return items, netting, overdrafts,
depository, lockbox, stop payment, electronic funds transfer, information reporting, wire transfer and interstate depository network services) and (d) other banking products or services as may
be requested by the Company or any Restricted Subsidiary (other than letters of credit and other than loans and advances).
"
Bank Products Obligations
" of any Person means the obligations of such Person pursuant to any Bank Products Agreement.
"
Bankruptcy Code
" "means Title 11 of the United States Code, as amended or any similar federal or state law for the relief of debtors.
"
Bankruptcy Law
" means the Bankruptcy Code and any federal, state or foreign 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
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other
securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" have
correlative meanings. For purposes of this definition, a Person shall be deemed not to Beneficially Own securities that are the subject of a stock purchase agreement, merger agreement, amalgamation
agreement, arrangement agreement or similar agreement until consummation of the transactions or, as applicable, series of related transactions contemplated thereby.
"
Board of Directors
" means:
-
(1)
-
with
respect to the Company, its board of members or, if the Company does not have a board of members, the board of directors of the Parent Guarantor;
-
(2)
-
with
respect to the Parent Guarantor, the board of directors of the Parent Guarantor; and
-
(3)
-
with
respect to any other Person, (i) if the Person is a corporation, the board of directors of the corporation, (ii) if the Person is a partnership,
the Board of Directors of the general partner of the partnership and (iii) with respect to any other Person, the board or committee or subcommittee of such Person serving a similar function.
"
Capital Lease
" means, with respect to any Person, any lease of any property which, in conformity with GAAP, is required to be capitalized
on the balance sheet of such Person.
"
Capital Stock
" means
-
(1)
-
in
the case of a corporation, corporate stock;
-
(2)
-
in
the case of an association or business entity, any and all shares, interests, participations rights or other equivalents (however designated) of corporate stock;
-
(3)
-
in
the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and
-
(4)
-
any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing
Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
"
Cash Equivalents
" means
-
(1)
-
U.S.
Government Obligations or certificates representing an ownership interest in U.S. Government Obligations with maturities not exceeding two years from the date
of acquisition,
-
(2)
-
(i)
demand deposits, (ii) time deposits and certificates of deposit with maturities of two years or less from the date of acquisition, (iii) bankers'
acceptances with maturities not exceeding two years from the date of acquisition, and (iv) overnight bank deposits, in each case with any bank or trust company organized or licensed under the
laws of the United States or any state thereof (including any branch of a foreign bank licensed under any such laws) having capital, surplus and undivided profits in excess of $250 million (or
the foreign currency equivalent thereof) whose short-term debt is rated A-2 or higher by S&P or P-2 or higher by Moody's,
-
(3)
-
commercial
paper maturing within 364 days from the date of acquisition thereof and having, at such date of acquisition, ratings of at least A-1 by S&P or P-1
by Moody's,
-
(4)
-
readily
marketable direct obligations issued by any state, commonwealth or territory of the U.S. or any political subdivision thereof, in each case rated at least
A-1 by S&P or P-1 by Moody's with maturities not exceeding one year from the date of acquisition,
-
(5)
-
bonds,
debentures, notes or other obligations with maturities not exceeding two years from the date of acquisition issued by any corporation, partnership, limited
liability company or similar
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"
Change of Control
" means:
-
(1)
-
any
"person" or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than (in the case of the Company) the
Parent Guarantor, is or becomes the "beneficial owner" (as such term is used in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the
Voting Stock of the Parent Guarantor or the Company;
-
(2)
-
individuals
who on the Original Issue Date constituted the Board of Directors of the Parent Guarantor (or, from and after the time, if any, at which the Company
shall have a board of directors, individuals who, on such date, constituted the board of directors of the Company), together with any new directors whose election by the Board of Directors or whose
nomination for election by the holders of the Voting Stock of the Company or the Parent Guarantor was approved by a majority of the directors then still in office who were either directors or whose
election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors of the Company or the Parent Guarantor then in office;
-
(3)
-
the
Parent Guarantor ceases to be the managing member of the Company; or
-
(4)
-
the
adoption of a plan relating to the liquidation or dissolution of the Parent Guarantor or the Company.
Notwithstanding
the preceding, (i) a merger or consolidation of the Company with or into the Parent Guarantor or (ii) a conversion of the Parent Guarantor or any of its
Restricted Subsidiaries from a limited partnership, corporation, limited liability company or other form of entity to a limited partnership, corporation, limited liability company or other form of
entity or an exchange of all of the outstanding Equity Interests in one form of entity for Equity Interests for another form of entity shall not constitute a Change of Control, so long as following
such transaction the "persons" (as that term is used in Section 13(d) of the Exchange Act) who Beneficially Owned the Voting Stock of the Parent Guarantor or the Company, as the case may be,
immediately prior to such transaction continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests in
such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity or its general partner, as applicable, and, in either case no
"person," Beneficially Owns more than 50% of the Voting Stock of such entity or its general partner, as applicable.
"
Code
" means the Internal Revenue Code of 1986, as amended from time to time.
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"
Collateral
" means all of the property and assets, other than Excluded Collateral with respect to which a Lien is
granted pursuant to the Security Documents as security for the Obligations under the indenture and the notes.
"
Collateral Agent
" means Wilmington Trust, National Association, and any successor or replacement collateral agent.
"
Commission
" or "
SEC
" means the Securities and Exchange Commission.
"
common equity,
" when used with respect to a contribution of capital to the Parent Guarantor, means a capital contribution to the Parent
Guarantor in a manner that does not constitute Disqualified Equity Interests.
"
Common Stock
" means Capital Stock not entitled to any preference on dividends or distributions, upon liquidation or otherwise.
"
Consolidated Current Liabilities
" means, as of any date of determination, the aggregate amount of liabilities of the Parent Guarantor and
its consolidated Restricted Subsidiaries which may properly be classified as current liabilities (including Taxes accrued as estimated, but excluding Specified Coal Agreement Obligations), after
eliminating (a) all intercompany items between the Parent Guarantor and any Restricted Subsidiary or between Restricted Subsidiaries and (b) all current maturities of long-term Debt.
"
Consolidated Net Income
" means, for any period, the aggregate net income (or loss) of the Parent Guarantor and its Restricted
Subsidiaries for such period determined on a consolidated basis in conformity with GAAP, provided that the following (without duplication) will be excluded in computing Consolidated Net
Income:
-
(1)
-
the
net income (or loss) of any Person that is a non-Wholly Owned Restricted Subsidiary (including any joint venture that is a Restricted Subsidiary), except to the
extent of the Parent Guarantor's share, determined pro rata with its percentage interest (direct or indirect) of Common Stock of such Person, of such Person's net income earned during such period;
-
(2)
-
the
net income (or loss) of any Person other than a Restricted Subsidiary (including any joint venture that is not a Restricted Subsidiary), except to the extent of
dividends or other distributions actually paid in cash to the Parent Guarantor or any of its Restricted Subsidiaries by such Person during such period;
-
(3)
-
the
net income (or loss) of any Person (other than the Company and the Subsidiary Guarantors) to the extent that the declaration or payment of dividends or similar
distributions by such Person of its net income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the
operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Person or the holders of its Common Stock,
unless such restriction with respect to the payment of dividends or in similar distributions has been legally waived;
-
(4)
-
any
net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to asset sales or other dispositions, in each case other than
in the ordinary course of business;
-
(5)
-
any
net after-tax extraordinary gains or losses; and
-
(6)
-
the
cumulative effect of a change in accounting principles
"
Consolidated Net Tangible Assets
" means, as of any date of determination, (a) the sum of all amounts that would, in accordance
with GAAP, be set forth opposite the caption "total assets" (or any
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like
caption) on a consolidated balance sheet of the Parent Guarantor and its Restricted Subsidiaries minus (b) the sum of all amounts that would, in accordance with GAAP, be set forth opposite
the captions "goodwill" or other intangible categories (or any like caption) on a consolidated balance sheet of the Parent Guarantor and its Restricted Subsidiaries minus (c) Consolidated
Current Liabilities, all determined as of such date and after giving pro forma effect to any transactions occurring on such date.
"
Credit Agreement
" means the Credit Agreement dated as of February 21, 2014, among the Company, the guarantors party thereto, the
lenders party thereto, the issuing banks party thereto, PNC Bank, National Association, as administrative agent and swingline lender, and the arrangers, bookrunners, syndication agent and
documentation agents named therein, together with any related documents (including any security documents and guarantee agreements), as such agreement has been or may be amended, restated, modified,
supplemented, extended, renewed, refunded, restructured, refinanced or replaced or substituted from time to time and whether by the same or any other agent, lender or group of lenders or other party.
"
Credit Facilities
" means (i) one or more credit facilities (including the Credit Agreement) with banks or other lenders providing
for revolving credit loans, term loans, receivables financing (including a Permitted Receivables Financing through the sale of receivables to lenders or to special purpose entities formed to borrow
from lenders against such receivables) or the issuance of letters of credit or bankers' acceptances or the like, (ii) debt securities, indentures or other forms of debt financing (including
convertible or exchangeable debt instruments), or (iii) instruments or agreements evidencing any other Debt, in each case, with the same or different borrowers or issuers and, in each case, as
amended, restated, modified, supplemented, extended, renewed, refunded, restructured, refinanced or replaced or substituted in whole or in part from time to time and whether by the same or any other
agent, lender or group of lenders or other party.
"
Debt
" means, with respect to any Person, without duplication,
-
(1)
-
all
indebtedness of such Person for borrowed money;
-
(2)
-
all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (other than any obligations in respect of performance bonds, bid
bonds, appeal bonds, surety bonds, reclamation bonds and completion guarantees and similar obligations in respect of Specified Coal Agreements or under any Mining Law or Environmental Law or with
respect to workers' compensation benefits);
-
(3)
-
all
obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments (solely to the extent such letters of credit,
bankers' acceptances or other similar instruments have been drawn);
-
(4)
-
all
obligations of such Person to pay the deferred and unpaid purchase price of property or services provided by third-party service providers which are recorded as
liabilities under GAAP, excluding (i) trade payables arising in the ordinary course of business, (ii) inter-company payables, (iii) working capital-based and other customary
post-closing adjustments in acquisition transactions and (iv) salary and other employee compensation obligations incurred in the ordinary course;
-
(5)
-
the
Attributable Indebtedness of such Person in respect of Capital Leases;
-
(6)
-
the
amount of all Permitted Receivables Financings of such Person;
-
(7)
-
all
Debt of other Persons Guaranteed by such Person to the extent so Guaranteed;
-
(8)
-
all
Debt of other Persons secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person; and
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-
(9)
-
all
obligations of such Person under Hedging Agreements;
provided
that in no event shall Debt include (i) Specified Coal Agreement Obligations or asset retirement obligations or (ii) obligations
(other than obligations with respect to Debt for borrowed money or other Funded Debt) related to surface rights under an agreement for the acquisition of surface rights for the production of coal
reserves in the ordinary course of business in a manner consistent with historical practice of the Company (including RTEA, as its predecessor) and its Subsidiaries.
The
amount of Debt of any Person will be deemed to be:
-
(a)
-
with
respect to Debt secured by a Lien on an asset of such Person but not otherwise the obligation, contingent or otherwise, of such Person, the lesser of
(x) the Fair Market Value of such asset on the date the Lien attached and (y) the amount of such Debt;
-
(b)
-
with
respect to any Debt issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of
such Debt;
-
(c)
-
with
respect to any Hedging Agreement, the amount payable (determined after giving effect to all contractually permitted netting) if such Hedging Agreement
terminated at that time; and
-
(d)
-
otherwise,
the outstanding principal amount thereof.
"
Default
" means any event that is, or after notice or passage of time or both would be, an Event of Default.
"
Designated Non-cash Consideration
" means the Fair Market Value of non-cash consideration received by the Parent Guarantor or any of its
Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an officers' certificate, less the amount of Cash Equivalents received
in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.
"
Disqualified Equity Interests
" means Equity Interests that by their terms (or by the terms of any security into which such Equity
Interests are convertible, or for which such Equity Interests are exchangeable, in each case at the option of the holder thereof) or upon the happening of any event
-
(1)
-
mature
or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or are required to be redeemed or redeemable at the option of the holder
for consideration other than Qualified Equity Interests, or
-
(2)
-
are
convertible at the option of the holder into Disqualified Equity Interests or exchangeable for Debt,
in
each case prior to the date that is 91 days after the Stated Maturity of the notes; provided that Equity Interests will not constitute Disqualified Equity Interests solely because of
provisions giving holders thereof the right to require the repurchase or redemption upon an "asset sale" or "change of control" occurring prior to 91 days after the Stated Maturity of the notes
if those provisions
-
(a)
-
are
no more favorable to the holders of such Equity Interests than the provisions of the indenture described above under "Certain
CovenantsLimitation on Asset Sales" and "Certain CovenantsRepurchase of Notes Upon a Change of Control," and
-
(b)
-
specifically
state that repurchase or redemption pursuant thereto will not be required prior to the Company's repurchase of the notes as required by the indenture.
"
Disqualified Stock
" means Capital Stock constituting Disqualified Equity Interests.
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"
Disregarded Domestic Person
" means any direct or indirect Domestic Restricted Subsidiary of which substantially all of its assets consist
of the equity of one or more direct or indirect Foreign Restricted Subsidiaries.
"
Domestic Restricted Subsidiary
" means any Restricted Subsidiary formed under the laws of the United States of America or any jurisdiction
thereof.
"
EBITDA
" means, for any period, the sum of
-
(1)
-
Consolidated
Net Income, plus
-
(2)
-
Fixed
Charges, to the extent deducted in calculating Consolidated Net Income, plus
-
(3)
-
to
the extent deducted in calculating Consolidated Net Income and as determined on a consolidated basis for the Parent Guarantor and its Restricted Subsidiaries in
conformity with GAAP (and without duplication):
-
(a)
-
the
provision for Taxes based on income, profits or capital, including, without limitation, state franchise and similar Taxes;
-
(b)
-
depreciation,
depletion, amortization (including, without limitation, amortization of intangibles, deferred financing fees and any amortization included in pension,
OPEB or other employee benefit expenses) and all other non-cash items reducing Consolidated Net Income (including, without limitation, write-downs and impairment of property, plant, equipment and
intangibles and other long-lived assets and the impact of purchase accounting) but excluding, in each case, non-cash charges in a period which reflect cash expenses paid or to be paid in another
period); and
-
(c)
-
all
non-recurring or unusual losses (and less all non-recurring or unusual gains);
-
(d)
-
all
non-cash start-up and transition costs, business optimization expenses and other non-cash restructuring charges;
-
(e)
-
the
non-cash portion of "straight-line" rent expense;
-
(f)
-
non-cash
compensation expense or other non-cash expenses or charges arising from the granting of stock options, the granting of stock appreciation rights and similar
arrangements (including any repricing, amendment, modification, substitution or change of any such stock option, stock appreciation rights or similar arrangements);
-
(g)
-
any
debt extinguishment costs;
-
(h)
-
accretion
of asset retirement obligations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic
No. 410, Asset Retirement and Environmental Obligations, and any similar accounting in prior periods;
-
(i)
-
net
after-tax losses attributable to asset sales, and net after-tax extraordinary losses;
-
(j)
-
(I)
mark-to-market gains (and less any mark-to-market losses) relating to any Permitted Hedging Agreements and (II) any mark-to-market losses attributed to
short positions in any actual or synthetic forward sales contracts relating to coal or any other similar device or instrument or other instrument classified as a "derivative" pursuant to FASB ASC
Topic No. 815, Derivatives and Hedging; and
-
(k)
-
commissions,
premiums, discounts, fees or other charges relating to performance bonds, bid bonds, appeal bonds, surety bonds, reclamation and completion guarantees
and other similar obligations;
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provided
that, with respect to any Restricted Subsidiary, such items will be added only to the extent and in the same proportion that the relevant
Restricted Subsidiary's net income was included in calculating Consolidated Net Income. Any reimbursement or equity contribution which is included in calculating EBITDA shall be excluded for purposes
of calculations under paragraph (a)(3)(B) under the covenant described above under "Certain CovenantsLimitation on Restricted Payments;"
minus
-
(1)
-
the
sum of (in each case without duplication and to the extent the respective amounts described in subclauses (A) and (B) of this clause (1)
increased such Consolidated Net Income for the respective period for which EBITDA is being determined):
-
(a)
-
non-cash
items increasing Consolidated Net Income for such period (but excluding any such items in respect of which cash was received in a prior period or will be
received in a future period or which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period), and
-
(b)
-
the
cash portion of "straight-line" rent expense which exceeds the amount expensed in respect of such rent expense.
"
Environment
" means soil, land surface or subsurface strata, water, surface waters (including navigable waters, ocean waters within
applicable territorial limits, streams, ponds, drainage basins, and wetlands), ground waters, drinking water supply, water related sediments, air, plant and animal life, and any other environmental
medium.
"
Environmental Laws
" means all laws (including common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions
or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, the preservation, restoration or reclamation of natural resources, or
the presence, use, storage, discharge, management, release or threatened release of any pollutants, contaminants or hazardous or toxic substances, wastes or material or the effect of the environment
on human health and safety.
"
Equity Interests
" means all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but
excluding Debt convertible into, or exchangeable for, Capital Stock.
"
Equity Offering
" means an offer and sale of Qualified Stock of the Parent Guarantor or the Company after the Original Issue Date other
than an issuance registered on Form S-4 or S-8 or any successor thereto or any issuance pursuant to employee benefit plans or otherwise relating to compensation to officers, directors or
employees.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended.
"
Excluded Accounts
" means deposit accounts (i) used to fund payroll, employee benefits or tax obligations, (ii) in the
nature of fiduciary accounts, trust accounts, suspense accounts, escrow accounts, deposit accounts holding only purchase price deposits or other contractual or legal requirements to deposit or reserve
money, or deposit accounts holding funds from unaffiliated third parties that are subject to return pursuant to binding agreements with such third parties and (iii) funded for petty cash and
working capital needs with a balance at all times of less than $5,000,000 in the aggregate.
"
Existing Unsecured Notes
" means, collectively, the 2019 Notes and the 2024 Notes, in each case that are outstanding on the Original Issue
Date.
"
Fair Market Value
" means, with respect to any property, the price that could be negotiated in an arm's-length transaction between a
willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined, except as otherwise provided,
(a) if such property has a Fair Market Value equal to or less than $20.0 million, by
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any
officer; or (b) if such property has a Fair Market Value in excess of $20.0 million, by at least a majority of the disinterested members of the Board of Directors of the Parent
Guarantor and evidenced by a resolution of the Board of Directors delivered to the trustee.
"
First Lien Cap
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
First Lien Document
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
First Lien Obligations
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
First Priority Liens
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
First Priority Secured Debt
" means any Debt of any Issuer or Guarantor that is secured by a Lien on the Collateral that ranks senior in
priority to the Lien securing the notes in accordance with the terms of the First Lien/Second Lien Intercreditor Agreement.
"
Fixed Charge Coverage Ratio
" means, on any date (the "transaction date"), the ratio of
-
(1)
-
the
aggregate amount of EBITDA for the four fiscal quarters immediately prior to the transaction date for which internal financial statements are available (the
"reference period") to
-
(2)
-
the
aggregate Fixed Charges during such reference period.
In
making the foregoing calculation,
-
(1)
-
pro
forma effect will be given to any Debt, Disqualified Stock or Preferred Stock Incurred during or after the reference period to the extent the Debt, Disqualified
Stock or Preferred Stock is outstanding or is to be Incurred on the transaction date as if the Debt, Disqualified Stock or Preferred Stock had been Incurred on the first day of the reference period;
-
(2)
-
pro
forma calculations of interest on Debt bearing a floating interest rate will be made as if the rate in effect on the transaction date (taking into account any
Hedging Agreement applicable to the Debt if the Hedging Agreement has a remaining term of at least 12 months) had been the applicable rate for the entire reference period;
-
(3)
-
Fixed
Charges related to any Debt, Disqualified Stock or Preferred Stock no longer outstanding or to be repaid or redeemed on the transaction date, except for
Interest Expense accrued during the reference period under a revolving Credit Facility to the extent of the commitments thereunder (or under any successor revolving credit) in effect on the
transaction date, will be excluded;
-
(4)
-
pro
forma effect will be given to
-
(a)
-
the
creation, designation or redesignation of Restricted and Unrestricted Subsidiaries,
-
(b)
-
the
acquisition or disposition of companies, divisions or lines of businesses by the Parent Guarantor and its Restricted Subsidiaries, including any acquisition or
disposition of a company, division or line of business since the beginning of the reference period by a Person that became a Restricted Subsidiary after the beginning of the reference period, and
-
(c)
-
the
discontinuation of any discontinued operations but, in the case of Fixed Charges, only to the extent that the obligations giving rise to the Fixed Charges will
not be obligations of the Parent Guarantor or any Restricted Subsidiary following the transaction date that
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have
occurred since the beginning of the reference period as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of the reference period.
To the extent that pro forma effect is to be given to an acquisition or disposition of a company, division or line of business, the pro forma calculation will be based upon the most recent four full
fiscal quarters for which the relevant financial information is available.
"
Fixed Charges
" means, for any period, the sum of
-
(1)
-
Interest
Expense for such period; and
-
(2)
-
the
product of
-
(a)
-
cash
and non-cash dividends paid, declared, accrued or accumulated on any Disqualified Stock of the Parent Guarantor or any Preferred Stock of a Restricted
Subsidiary, except for dividends payable in the Parent Guarantor's Qualified Stock or paid to the Parent Guarantor or to a Restricted Subsidiary, and
-
(b)
-
a
fraction, the numerator of which is one and the denominator of which is one minus the sum of the currently effective combined Federal, state, local and foreign tax
rate applicable to the Parent Guarantor and its Restricted Subsidiaries.
"
Flood Insurance Laws
" means, collectively, (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any
successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of
1994 as now or hereafter in effect or any successor statute thereto, (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and
(v) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.
"
Flood Structure
" means a "building" or "mobile home" (each as defined in the Flood Insurance Laws).
"
Foreign Restricted Subsidiary
" means any Restricted Subsidiary that is not a Domestic Restricted Subsidiary.
"
Funded Debt
" means, at any time, and determined on a consolidated basis without duplication, the consolidated Debt of the Parent
Guarantor and its Restricted Subsidiaries of the type referred to in clauses (1), (2), (3) (but only with respect to reimbursement obligations related thereto), (5), (6), (7) and
(8) in the definition of Debt (but in the case of clauses (7) and (8), only to the extent that the Debt of other Persons so Guaranteed or secured is itself of the type referred to in
clauses (1), (2), (3) (but only with respect to reimbursement obligations related thereto), (5) or (6) of such definition).
"
GAAP
" means generally accepted accounting principles in the United States of America as in effect on the Original Issue Date.
"
Governmental Authority
" means the government of the United States, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"
Guarantee
" by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing any Debt or other
obligation of any other Person (the "primary obligor"), whether directly or indirectly, and including any written obligation of the guarantor, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation or to purchase (or advance or supply funds for the purchase of) any security for the payment thereof, (b) to maintain working
capital, equity capital or any other financial statement condition or liquidity of the
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primary
obligor so as to enable the primary obligor to pay such Debt or other obligation or (c) as an account party in respect of any letter of credit or letter of guaranty issued to support
such Debt or other obligation; provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business.
"
Guarantors
" means collectively the Parent Guarantor and the Subsidiary Guarantors.
"
Hedging Agreement
" means (i) any interest rate swap agreement, interest rate cap agreement, interest rate future agreement,
interest rate option agreement, interest rate hedge agreement or other agreement or arrangement designed to protect against or mitigate interest rate risk, (ii) any foreign exchange forward
contract, currency swap agreement, currency option agreements or other agreement or arrangement designed to protect against or mitigate foreign exchange risk or (iii) any commodity or raw
material futures contract, commodity hedge agreement, any actual or synthetic forward sale contract or other similar device or instrument or any other agreement designed to protect against or mitigate
raw material price risk.
"
Hedging Obligations
" means, with respect to any Issuer or Guarantor, the obligations of such Issuer or Guarantor under a Hedging
Agreement.
"
Immaterial Subsidiary
" means any Subsidiary that (a) did not, as of the last day of the fiscal quarter of the Parent Guarantor
most recently ended for which financial statements have been delivered pursuant to the covenant set forth under the heading "Reports" have assets with a value in excess of 2.5% of the
Consolidated Net Tangible Assets or revenues representing in excess of 2.5% of
total revenues of the Parent Guarantor and the Restricted Subsidiaries on a consolidated basis as of such date, and (b) taken together with all Immaterial Subsidiaries as of such date, did not
have assets with a value in excess of 5.0% of Consolidated Net Tangible Assets or revenues representing in excess of 5.0% of total revenues of the Parent Guarantor and its Restricted Subsidiaries on a
consolidated basis as of such date.
"
Incur
" means, with respect to any Debt or Capital Stock, to incur, create, issue, assume or Guarantee such Debt or Capital Stock. If any
Person becomes a Restricted Subsidiary on any date after the date of the indenture (including by redesignation of an Unrestricted Subsidiary or failure of an Unrestricted Subsidiary to meet the
qualifications necessary to remain an Unrestricted Subsidiary), the Debt and Capital Stock of such Person outstanding on such date will be deemed to have been Incurred by such Person on such date for
purposes of the covenant described above under "Certain CovenantsLimitation on Debt and Disqualified Stock or Preferred Stock," but will not be considered the sale or
issuance of Equity Interests for purposes of the covenant described above under "Certain CovenantsLimitation on Asset Sales."
"
Interest Expense
" means, for any period, the consolidated interest expense (net of any interest income) of the Parent Guarantor and its
Restricted Subsidiaries, plus, to the extent not included in such consolidated interest expense, and to the extent incurred, accrued or payable by the Parent Guarantor or its Restricted Subsidiaries,
without duplication, (i) interest expense attributable to Capital Leases and imputed interest expense in respect of Specified Coal Agreement Obligations, (ii) amortization of debt
discount and debt issuance costs, (iii) capitalized interest, (iv) non-cash interest expense, (v) any of the above expenses with respect to Debt of another Person Guaranteed by
the Parent Guarantor or any of its Restricted Subsidiaries and (vi) any interest, premiums, fees, discounts, expenses and losses on the sale of accounts receivable (and any amortization
thereof) payable by the Parent Guarantor or any Restricted Subsidiary in connection with a Permitted Receivables Financing, and any yields or other charges or other amounts comparable to, or in the
nature of, interest payable by the Parent Guarantor or any Restricted Subsidiary under any Permitted Receivables Financing, but excluding (a) amortization of deferred financing charges incurred
in respect of any of the 2019 Notes, the 2024 Notes, the notes, the Credit Agreement and any other Funded Debt, and (b) the write off of any deferred financing fees or debt discount, all as
determined on a
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consolidated
basis and in accordance with GAAP. Interest Expense shall be determined for any period after giving effect to any net payments made or received and costs incurred by the Parent Guarantor
and its Restricted Subsidiaries with respect to any related interest rate Hedging Agreements.
"
Investment
" means
-
(1)
-
any
advance, loan or other extension of credit to another Person (but excluding (i) advances to customers, suppliers, joint venture partners or the like in
the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivables, prepaid expenses or deposits on the balance sheet of the Parent Guarantor or its Restricted
Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business, (ii) commission, travel and similar advances to officers and employees made in the ordinary
course of business and (iii) advances, loans or extensions of trade credit in the ordinary course of business by the Parent Guarantor or any of its Restricted Subsidiaries),
-
(2)
-
any
capital contribution to another Person, by means of any transfer of cash or other property or in any other form,
-
(3)
-
any
purchase or acquisition of Equity Interests, bonds, notes or other Debt, or other instruments or securities issued by another Person, including the receipt of
any of the above as consideration for the disposition of assets or rendering of services, or
-
(4)
-
any
Guarantee of any Debt or Disqualified Stock of another Person.
If
the Parent Guarantor or any Restricted Subsidiary (x) sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary so that, after giving
effect to that sale or disposition, such Person is no longer a Subsidiary of the Parent Guarantor, or (y) designates any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with
the provisions of the indenture, all remaining Investments of the Parent Guarantor and the Restricted Subsidiaries in such Person shall be deemed to have been made at such time. The acquisition by the
Parent Guarantor or any Restricted Subsidiary of a Person that holds an Investment in a third Person shall be deemed to be an Investment by the Person or such Restricted Subsidiary in such third
Person in an amount equal to the Fair Market Value of the Investment held by the acquired Person in such third Person on the date of such acquisition.
"
Investment Grade Rating
" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB(or the
equivalent) by S&P.
"
Issue Date
" means the date on which the New Notes are issued under the indenture.
"
LBA
" means the acquisition of federal coal through an application for a federal coal lease submitted in accordance with the Bureau of
Land Management competitive leasing regulations.
"
LBM
" means the acquisition of federal coal through an application to modify an existing coal lease submitted in accordance with the
Bureau of Land Management non-competitive leasing regulations.
"
Lien
" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or Capital Lease), including, in relation to First Lien/Second Lien Intercreditor Agreement only, superpriority claims as a form of adequate protection in any Bankruptcy
Case.
"
Material Real Property
" means (i) any Mining Lease and (ii) any fee-owned Real Property of the Company or its Restricted
Subsidiaries having a net book value in excess of $5,000,000 other than that certain Real Property located in Sequatchie Valley Tennessee; provided that a Flood Structure which is not necessary or
integral in order to recover coal from any Mine (such as, for example, storage sheds) shall not constitute Material Real Property unless such Flood Structure has a net book value in excess of
$5,000,000.
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"
Mine
" means any excavation or opening into the earth now and hereafter made from which coal is or can be
extracted from any of the Real Properties.
"
Mining Laws
" means any and all applicable federal, state, local and foreign statutes, laws, regulations, legally-binding guidance,
ordinances, rules, judgments, orders, decrees or common law causes of action relating to mining operations and activities under the Mineral Leasing Act of 1920, the Federal Coal Leasing Amendments Act
or the Surface Mining Control and Reclamation Act, each as amended or its replacement, and their state and local counterparts or equivalents.
"
Mining Lease
" means a lease, license or other use agreement which provides the Company or any Restricted Subsidiary the real property and
water rights, other interests in land, including coal, mining and surface rights, easements, rights of way and options, and rights to timber and natural gas (including coalbed methane and gob gas)
necessary or integral in order to recover coal from any Mine. Leases (other than Capital Leases or operating leases of personal property even if such personal property would become fixtures) which
provide the Company or any other Restricted Subsidiary the right to construct and operate a conveyor, crusher plant, silo, load out facility, rail spur, shops, offices and
related facilities on the surface of the Real Property containing such reserves shall also be deemed a Mining Lease.
"
Moody's
" means Moody's Investors Service, Inc. and its successors.
"
Mortgages
" means all mortgages, debentures, hypothecs, deeds of trust, deeds to secure Debt and similar documents, instruments and
agreements (and all amendments, modifications and supplements thereof) creating, evidencing, perfecting or otherwise establishing the Liens on real estate and other related assets to secure payment of
the notes and the Note Guaranties or any part thereof.
"
Net Cash Proceeds
" means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash (including
(i) payments in respect of deferred payment obligations to the extent corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds from the
conversion of other consideration received when converted to cash), net of
-
(1)
-
brokerage
commissions and other fees and expenses related to such Asset Sale, including fees and expenses of counsel, accountants and investment bankers and any
relocation expenses incurred as a result thereof;
-
(2)
-
provisions
for Taxes as a result of such Asset Sale taking into account the consolidated results of operations of the Parent Guarantor and its Restricted
Subsidiaries;
-
(3)
-
payments
required to be made to holders of minority interests in Restricted Subsidiaries as a result of such Asset Sale or to repay Debt outstanding at the time of
such Asset Sale that is secured by a Lien on the property or assets sold; and
-
(4)
-
appropriate
amounts to be provided as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities,
liabilities related to environmental matters and indemnification obligations associated with such Asset Sale, with any subsequent reduction of the reserve other than by payments made and charged
against the reserved amount to be deemed a receipt of cash.
"
Non-Recourse Debt
" means Debt as to which (i) neither the Parent Guarantor nor any Restricted Subsidiary provides any Guarantee
and as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of the Parent Guarantor or any Restricted Subsidiary and (ii) no
default thereunder would, as such, constitute a default under any Debt of the Parent Guarantor or any Restricted Subsidiary.
"
Note Documents
" means the indenture, the notes and the Security Documents.
"
Note Guaranty
" means the guaranty of the notes by a Guarantor pursuant to the indenture.
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"
Obligations
" means, with respect to any Debt, all obligations (whether in existence on the Original Issue Date or arising afterwards,
absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to
purchase, or otherwise), premium, interest, penalties, fees, indemnification, reimbursement, expenses, damages and other amounts payable and liabilities with respect to such Debt, including all
interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate
applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is allowed as a claim in such case or proceeding.
"
Original Issue Date
" means October 17, 2016.
"
Parent Guarantor
" means Cloud Peak Energy Inc., a Delaware corporation, and its successors.
"
Pari Passu Secured Debt
" means the notes and any other Debt of any Issuer or Guarantor which Debt is secured by a Lien on the Collateral
that has the same priority as the Lien securing the notes in accordance with the terms of the First Lien/Second Lien Intercreditor Agreement.
"
Permitted Business
" means any of the following, whether domestic or foreign: the mining, production, marketing, sale, trading and
transportation (including, without limitation, any business related to terminals) of natural resources including coal, ancillary natural resources and mineral products, exploration of natural
resources, any acquired business activity so long as a material portion of such
acquired business was otherwise a Permitted Business, and any business that is ancillary or complementary to the foregoing.
"
Permitted Hedging Agreements
" means Hedging Agreements entered into in the ordinary course of business of the Parent Guarantor and its
Restricted Subsidiaries to hedge interest rate, foreign currency or commodity risk or otherwise for non-speculative purposes (regardless of whether such agreement or instrument is classified as a
"derivative" pursuant to FASB ASC Topic No. 815 and required to be marked-to-market).
"
Permitted Investments
" means:
-
(1)
-
any
Investment in the Parent Guarantor or in a Restricted Subsidiary of the Parent Guarantor;
-
(2)
-
any
Investment in cash or Cash Equivalents;
-
(3)
-
any
Investment by the Parent Guarantor or any Subsidiary of the Parent Guarantor in a Person, if as a result of such Investment
-
(a)
-
such
Person becomes a Restricted Subsidiary of the Parent Guarantor, or
-
(b)
-
such
Person is merged or consolidated with or into, or transfers or conveys substantially all its assets to, or is liquidated into, the Parent Guarantor or a
Restricted Subsidiary;
-
(4)
-
Investments
received as non-cash consideration in an asset sale made pursuant to and in compliance with the covenant described above under "Certain
CovenantsLimitation on Asset Sales;"
-
(5)
-
any
Investment acquired solely in exchange for Qualified Stock of the Parent Guarantor or in exchange for Capital Stock of the Parent Guarantor which the Parent
Guarantor did not receive in exchange for a cash payment, Debt or Disqualified Stock;
-
(6)
-
Permitted
Hedging Agreements;
-
(7)
-
(i)
receivables owing to the Parent Guarantor or any Restricted Subsidiary if created or acquired in the ordinary course of business, (ii) endorsements for
collection or deposit in the
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ordinary
course of business, and (iii) securities, instruments or other obligations received in compromise or settlement of debts created in the ordinary course of business, or by reason of a
composition or readjustment of debts or reorganization of another Person, or in satisfaction of claims or judgments;
-
(8)
-
Investments
in Unrestricted Subsidiaries and joint ventures in an aggregate amount, taken together with all other Investments made in reliance on this clause, not to
exceed the greater of (x) $150.0 million and (y) 8% of Consolidated Net Tangible Assets (net of, with respect to the Investment in any particular Person, the cash return thereon
received after the Original Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), not to
exceed the amount of Investments in such Person made after the Original Issue Date in reliance on this clause); provided, however, that if any Investment pursuant to this clause (8) is made in
any Person that is not a Restricted Subsidiary of the Parent Guarantor at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Parent Guarantor after such
date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (8) for so long as such Person
continues to be a Restricted Subsidiary of the Parent Guarantor;
-
(9)
-
to
the extent they involve an Investment, payroll, travel and other loans or advances to, or Guarantees issued to support the obligations of, current or former
officers, managers, directors, consultants and employees, in each case in the ordinary course of business, not in excess of $7.5 million outstanding at any time; and
-
(10)
-
to
the extent they involve an Investment, extensions of credit to customers, suppliers and joint venture partners in the ordinary course of business;
-
(11)
-
Investments
arising as a result of any Permitted Receivables Financing;
-
(12)
-
any
Production Payments, royalties, dedication of reserves under supply agreements or similar rights or interests granted, taken subject to, or otherwise imposed on
properties with normal practices in the mining industry;
-
(13)
-
to
the extent they involve an Investment, purchases and acquisitions, in the ordinary course of business, of inventory, supplies, material or equipment or the
licensing or contribution of intellectual property;
-
(14)
-
[Reserved];
-
(15)
-
Investments
made pursuant to surety bonds, reclamation bonds, performance bonds, bid bonds, appeal bonds and similar obligations, in each case, to the extent such
surety bonds, reclamation bonds, performance bonds, bid bonds, appeal bonds and similar obligations are permitted under the indenture;
-
(16)
-
Investments
resulting from pledges and deposits permitted under the definition of "Permitted Liens;"
-
(17)
-
Investments
consisting of indemnification obligations in respect of performance bonds, bid bonds, appeal bonds, surety bonds, reclamation bonds and completion
guarantees and similar obligations in respect of Specified Coal Agreements or under any Mining Law or Environmental Law or with respect to workers' compensation benefits, in each case entered into in
the ordinary course of business, and pledges or deposits made in the ordinary course of business in support of obligations under existing coal sales contracts (and extensions or renewals thereof on
similar terms); and
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-
(18)
-
in
addition to Investments listed above, Investments in Persons engaged in Permitted Businesses in an aggregate amount, taken together with all other Investments
made in reliance on this clause, not to exceed the greater of (x) $100.0 million and (y) 6% of Consolidated Net Tangible Assets (net of, with respect to the Investment in any
particular Person made pursuant to this clause, the cash return thereon received after the Original Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or
other cash realization (not included in Consolidated Net Income) not to exceed the amount of such Investments in such Person made after the Original Issue Date in reliance on this clause) provided,
however, that if any Investment pursuant to this clause (18) is made in any Person that is not a Restricted Subsidiary of the Parent Guarantor at the date of the making of such Investment and
such Person becomes a Restricted Subsidiary of the Parent Guarantor after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to
have been made pursuant to this clause (18) for so long as such Person continues to be a Restricted Subsidiary of the Parent Guarantor;
"
Permitted Liens
" means
-
(1)
-
Liens
existing on the Original Issue Date (other than Liens permitted under clause (3));
-
(2)
-
[Reserved];
-
(3)
-
Liens
securing (i) First Priority Secured Debt and Pari Passu Secured Debt (including a portion of the notes and the Note Guaranties Incurred on the Issue
Date) Incurred under clause (1) of the definition of Permitted Debt (and all Obligations incurred, issued or arising with respect thereto that permit borrowings not in excess of the limit set
out in such clause (1)) (
provided
that the principal amount of First Priority Secured Debt Incurred pursuant to this clause (3)(i) shall
not exceed the Total First Lien Cap Amount) and (ii) Obligations of the Parent Guarantor and its Subsidiaries under Hedging Agreements and Bank Products Agreements;
-
(4)
-
Liens
securing Debt (other than First Priority Secured Debt, but including Pari Passu Secured Debt) in an aggregate amount (and all Obligations in respect thereof)
not to exceed an amount (measured on the date of Incurrence) equal to 15% of the Parent Guarantor's Consolidated Net Tangible Assets (it being understood that any decrease in Consolidated Net Tangible
Assets following the date of Incurrence shall not create a Default with respect to such previously incurred Debt or Liens);
-
(5)
-
(A)
pledges or deposits under worker's compensation laws, unemployment insurance and other social security laws or regulations or similar legislation, or to secure
liabilities to insurance carriers under insurance arrangements in respect of such obligations, or good faith deposits, prepayments or cash payments in connection with bids, tenders, contracts or
leases, or to secure public or statutory obligations, surety bonds, customs duties and the like, or for the payment of rent, in each case incurred in the ordinary course of business, (B) Liens
in support of obligations under existing coal sales contracts (and extensions or renewals thereof on similar terms) and (C) Liens on the property or assets of the Parent Guarantor or any
Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds,
contractual arrangements with suppliers, reclamation bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not
Incurred in connection with the borrowing of money or the obtaining of advances or credit;
-
(6)
-
Liens
imposed by law, such as carriers', vendors', warehousemen's and mechanics' liens, in each case for sums not yet due or being contested in good faith and by
appropriate
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-
(20)
-
Liens
in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Parent Guarantor
or any Restricted Subsidiary on deposit with or in possession of such bank;
-
(21)
-
deposits
made in the ordinary course of business to secure liability to insurance carriers;
-
(22)
-
Liens
on assets of Foreign Subsidiaries securing Debt of Foreign Subsidiaries;
-
(23)
-
extensions,
renewals or replacements of any Lien referred to in clauses (1), (2), (4), (13), (14) or (15) in connection with the refinancing of
the obligations secured thereby;
provided
that (i) such Lien does not extend to any other property (plus improvements on and accessions to such
property, proceeds and products thereof, customary security deposits and any other assets pursuant to after-acquired property clauses to the extent such assets secured (or would have secured) the Debt
being refinanced, refunded, extended, renewed or replaced), (ii) except as contemplated by the definition of "Permitted Refinancing Debt," the aggregate principal amount of Debt secured by such
Lien is not increased and (iii) such Lien has no greater priority than the Lien being extended, renewed or replaced;
-
(24)
-
Liens
on accounts receivable and related assets and proceeds thereof arising in connection with a Permitted Receivables Financing;
-
(25)
-
surface
use agreements, easements, zoning restrictions, rights of way, encroachments, pipelines, leases (other than Capital Lease Obligations), licenses, special
assessments, trackage rights, transmission and transportation lines related to Mining Leases or mineral right or other Real Property including any re-conveyance obligations to a surface owner
following mining, royalty payments and other obligations under surface owner purchase or leasehold arrangements necessary to obtain surface disturbance rights to access the subsurface coal deposits
and similar encumbrances on Real Property imposed by law or arising in the ordinary course of business that do not secure any monetary obligation and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the Parent Guarantor or any Subsidiary;
-
(26)
-
pledges,
deposits or non-exclusive licenses to use intellectual property rights of the Parent Guarantor or its Subsidiaries to secure the performance of bids,
tenders, trade contracts, leases, public or statutory obligations, surety and appeal bonds, reclamation bonds, performance bonds and other obligations of a like nature, in each case in the ordinary
course of business;
-
(27)
-
Production
Payments, royalties, dedication of reserves under supply agreements, Liens in connection with any Mining Leases, or similar rights or interests granted,
taken subject to, or otherwise imposed on properties consistent with normal practices in the mining industry and any precautionary UCC financing statement filings in respect of leases (and not any
Debt) entered into in the ordinary course of business; and
-
(28)
-
Liens
for Specified Coal Agreements arising as a result of Specified Coal Agreement Obligations or obligations to grant surface or water rights.
"
Permitted Receivables Financing
" means the Accounts Receivable Securitization Facility and any other receivables financing facility or
arrangement pursuant to which a Securitization Subsidiary purchases or otherwise acquires Receivables of the Parent Guarantor or any Restricted Subsidiary and enters into a third party financing
thereof on terms that the Board of Directors of the Parent Guarantor has concluded are customary and fair to the Parent Guarantor and its Restricted Subsidiaries.
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"
Person
" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity,
including a government or political subdivision or an agency or instrumentality thereof.
"
Preferred Stock
" means, with respect to any Person, any and all Capital Stock which is preferred as to the payment of dividends or
distributions, upon liquidation or otherwise, over another class of Capital Stock of such Person.
"
Private Coal Agreement
" means an agreement between the Parent Guarantor or one or more of its Subsidiaries, on the one hand, and a seller
or lessee (in each case, that is not a Governmental Authority) (the "Transferee") under which the Parent Guarantor or one or more of its Subsidiaries acquire coal through (i) a lease from such
Transferee, (ii) the purchase of one or more coal deposit or other assets from such Transferee or (iii) the exchange of coal assets between the Parent Guarantor or one or more of its
Subsidiaries, on the one hand, and such Transferee, on the other.
"
Production Payments
" means with respect to any Person, all production payment obligations and other similar obligations with respect to
coal and other natural resources of such Person that are recorded as a liability or deferred revenue on the financial statements of such Person in accordance with GAAP.
"
Qualified Equity Interests
" means all Equity Interests of a Person other than Disqualified Equity Interests.
"
Qualified Stock
" means all Capital Stock of a Person other than Disqualified Stock.
"
Rating Agencies
" means S&P and Moody's; provided, that if either S&P or Moody's (or both) shall cease issuing a rating on the notes for
reasons outside the control of the Parent Guarantor, the Parent Guarantor may select a nationally recognized statistical rating agency to substitute for S&P or Moody's (or both).
"
Real Property
" shall mean, collectively, all right, title and interest of the Parent Guarantor or any Subsidiary (including any leasehold
or mineral estate) in and to any and all parcels of real property owned or operated by the Parent Guarantor or any Subsidiary, whether by lease, license or other use agreement, including but not
limited to, coal leases and surface use agreements, together with, in each case, all improvements and appurtenant fixtures (including all conveyors, preparation plants or other coal processing
facilities, silos, shops and load out and other transportation facilities), easements and other property and rights incidental to the ownership, lease or operation thereof, including but not limited
to, access rights, water rights and extraction rights for minerals.
"
Receivables
" means accounts receivable (including all rights to payment created by or arising from the sale of goods, leases of goods or
the rendition of services, no matter how evidenced (including in the form of a chattel paper)).
"
Restricted Subsidiary
" means any Subsidiary of a Person other than any Unrestricted Subsidiary of such Person. Unless otherwise
specified, "Restricted Subsidiary" means a Restricted Subsidiary of the Parent Guarantor. For the avoidance of doubt, each of the Company and the Co-issuer shall constitute a Restricted Subsidiary.
"
RTEA
" means Rio Tinto Energy America Inc., a Delaware corporation.
"
S&P
" means S&P Global Ratings and its successors.
"
Second Lien Documents
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
Second Lien Obligations
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
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"
Second Priority Liens
" has the meaning given to such term set forth under the heading "Certain Definitions Related to the
Intercreditor Agreements."
"
Securitization Subsidiary
" means CPE Receivables LLC and any other Subsidiary of the Parent Guarantor
-
(1)
-
that
is designated a "Securitization Subsidiary" by the Parent Guarantor,
-
(2)
-
that
does not engage in, and whose charter prohibits it from engaging in, any activities other than Permitted Receivables Financings and any activity necessary,
incidental or related thereto,
-
(3)
-
no
portion of the Debt or any other obligation, contingent or otherwise, of which
-
(a)
-
is
Guaranteed by the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor,
-
(b)
-
is
recourse to or obligates the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor in any way, or
-
(c)
-
subjects
any property or asset of the Parent Guarantor or any other Restricted Subsidiary of the Parent Guarantor, directly or indirectly, contingently or otherwise,
to the satisfaction thereof,
-
(4)
-
with
respect to which neither the Parent Guarantor nor any other Restricted Subsidiary of the Parent Guarantor (other than an Unrestricted Subsidiary) has any
obligation to maintain or preserve its financial condition or cause it to achieve certain levels of operating results other than, in respect of clauses (3) and (4), pursuant to customary
representations, warranties, covenants and indemnities entered into in connection with a Permitted Receivables Financing.
"
Security Agreement
" means the security agreement dated as of October 17, 2016 among the Collateral Agent, the Issuers and the
Guarantors granting, among other things, a Second Priority Lien on the Collateral subject to Permitted Liens, in each case in favor of the Collateral Agent for its benefit and for the benefit of the
trustee and the holders, as amended, modified, restated, supplemented or replaced from time to time in accordance with its terms.
"
Security Documents
" means the Security Agreement, any Mortgages, the First/Second Lien Intercreditor Agreement, the Pari Passu Second
Lien Intercreditor Agreement (if any), and all of the security agreements, pledges, collateral assignments, mortgages, deeds of trust, trust deeds or other instruments evidencing or creating or
purporting to create any security interests in favor of the
Collateral Agent for its benefit and for the benefit of the trustee and the holders, in all or any portion of the Collateral, as amended, modified, restated, supplemented or replaced from time to
time.
"
Significant Restricted Subsidiary
" means (i) the Co-issuer and (ii) any Restricted Subsidiary, or group of Restricted
Subsidiaries, that would, taken together, be a "significant subsidiary" as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities
Act, as such regulation is in effect on the date of the indenture.
"
Specified Coal Agreement Obligations
" means installment or deferred payment obligations or royalty payment obligations or obligations in
connection with the acquisition of related surface rights, in each case in connection with a Specified Coal Agreement owed solely to the seller or lessor thereunder (and not to a bank or other
third-party financer), but, (i) in the case of any such obligations under a Private Coal Agreement, only to the extent that the proven and probable coal reserves and other non-reserve coal
deposits acquired under all such Private Coal Agreements do not in the aggregate exceed 15% of the total proven and probable coal reserves and other non-reserve coal deposits of the Parent Guarantor
and its Restricted Subsidiaries at such time, and (ii) excluding, in any event, any Funded Debt.
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"
Specified Coal Agreements
" means any LBA, LBM, State Coal Lease and Private Coal Agreements.
"
State Coal Lease
" means the acquisition of coal owned by a state in accordance with the coal leasing regulations of such state.
"
Stated Maturity
" means (i) with respect to any Debt, the date specified as the fixed date on which the final installment of
principal of such Debt is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Debt, the date specified as the fixed date on which such
installment is due and payable as set forth in the documentation governing such Debt, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for
payment.
"
Subordinated Debt
" means any Debt of an Issuer or any Guarantor which is subordinated in right of payment to the notes or the Note
Guaranty, as applicable, pursuant to a written agreement to that effect.
"
Subsidiary
" means with respect to any Person, any corporation, association, limited liability company or other business entity of which
more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of
which are, such Person and one or more Subsidiaries of such Person (or a combination thereof). Unless otherwise specified, "Subsidiary" means a Subsidiary of the Parent Guarantor.
"
Subsidiary Guarantor
" means (i) each Domestic Restricted Subsidiary of the Company in existence on the Original Issue Date (other
than the Co-issuer) that Guarantees Debt of the Company under the Credit Agreement, (ii) each Restricted Subsidiary of the Parent Guarantor that executes a supplemental indenture in the form
attached to the indenture providing for the guarantee of payment of the notes, and (iii) any successor obligor under its Note Guaranty, in each case unless and until such Subsidiary Guarantor
is released from its Note Guaranty pursuant to the indenture.
"
Taxes
" means any present or future tax, levy, import, duty, charge, deduction, withholding, assessment or fee of any nature (including
interest, penalties, and additions thereto) that is imposed by any Governmental Authority or other taxing authority.
"
Total First Lien Cap Amount
" has the meaning given to such term set forth under the heading "Certain Definitions Related to
the Intercreditor Agreements" in the definition of the term "First Lien Obligations."
"
Transactions
" means the offers to exchange the Existing Unsecured Notes for the Existing 2021 Notes and any transactions related thereto,
including the payment of cash consideration and fees and expenses in connection therewith.
"
Treasury Rate
" means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities
with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15 (519) that has become publicly available at least two Business Days prior to the
redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to
November 1, 2018; provided, however, that if the period from the redemption date to such date is less than one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year will be used. The Company will calculate the Treasury Rate at least two but no more than four Business Days prior to the applicable redemption
date and file with the trustee, before such redemption date, a written statement setting forth the Applicable Premium and showing the calculation of the Applicable Premium in reasonable detail, and
the trustee will have no responsibility for verifying any such calculation.
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"
2019 Notes
" means the Issuers' 8.500% Senior Notes due 2019.
"
2024 Notes
" means the Issuers' 6.375% Senior Notes due 2024.
"
U.S. Government Obligations
" means obligations issued or directly and fully guaranteed or insured by the United States of America or by
any agency or instrumentality thereof, provided that the full faith and credit of the United States of America is pledged in support thereof.
"
Unrestricted Subsidiary
" means any Subsidiary of the Parent Guarantor that at the time of determination has previously been designated,
and continues to be, an Unrestricted Subsidiary in accordance with the covenant described above under "Certain CovenantsDesignation of Restricted and Unrestricted
Subsidiaries."
"
Voting Stock
" means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election
of directors, managers or other voting members of the governing body of such Person.
"
Wholly Owned
" means, with respect to any Restricted Subsidiary, a Restricted Subsidiary all of the outstanding Capital Stock of which
(other than any director's qualifying shares) is owned by the Parent Guarantor and one or more Wholly Owned Restricted Subsidiaries (or a combination thereof).
Certain Definitions Related to the Intercreditor Agreements
"
Additional First Lien Debt
" means any Indebtedness that is incurred, issued or guaranteed by
any Issuer and/or any Guarantor (other than Indebtedness constituting First Lien Credit Agreement Obligations) which Indebtedness and guarantees are secured by the First Lien Collateral (or a portion
thereof) on a
pari passu
basis with the First Lien Credit Agreement Obligations;
provided
,
however
, that
(i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each then extant First Lien Document and
Second Lien Document and (ii) unless already a party with respect to that series of Additional First Lien Debt, the Representative for the holders of such Indebtedness shall have
(A) executed and delivered the First Lien/Second Lien Intercreditor Agreement as of the date hereof or become party to the First Lien/Second Lien Intercreditor Agreement (by executing a joinder
agreement or otherwise) pursuant to, and by satisfying the conditions set forth in, such Agreement and (B) become a party to the First Lien Intercreditor Agreement;
provided further
that, if such
Indebtedness will be the initial Additional First Lien Debt incurred by an Issuer or a Guarantor, then the Issuers, the
Guarantors, the First Lien Agent and the Representative for such Indebtedness shall have executed and delivered the First Lien Intercreditor Agreement.
"
Additional First Lien Debt Documents
" means, with respect to any series, issue or class of Additional First Lien Debt, the loan
agreements, the promissory notes, indentures, the First Lien Collateral Documents or other operative agreements evidencing or governing such Debt.
"
Additional First Lien Debt Facility
" means each indenture, loan agreement or other governing agreement with respect to any Additional
First Lien Debt.
"
Additional First Lien Debt Obligations
" means, with respect to any series, issue or class of Additional First Lien Debt, all amounts
owing pursuant to the terms of such Additional First Lien Debt, including, without limitation, the obligation (including guarantee obligations) to pay principal, interest (including Post-Petition
Interest), letter of credit commissions, reimbursement obligations, charges, expenses, fees, attorneys costs, indemnities and other amounts payable by any Issuer or any Guarantor under any Additional
First Lien Debt Document. For the avoidance of doubt, Additional First Lien Debt
Obligations shall not include any obligations in connection with the Receivables Purchase Agreement or any DIP Financing.
"
Additional First Lien Debt Parties
" means, with respect to any series, issue or class of Additional First Lien Debt, the holders of such
Debt, the Representative with respect thereto, any trustee or agent
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therefor
under any related Additional First Lien Debt Documents and the beneficiaries of each indemnification obligation undertaken by any Issuer or any Guarantor under any related Additional First
Lien Debt Documents.
"
Additional Second Lien Collateral Docume
nt" means any Second Lien Collateral Documents other than Security Documents.
"
Additional Second Lien Debt
" means any Indebtedness that is incurred, issued or guaranteed by any Issuer and/or any Guarantor (other than
Indebtedness constituting Second Lien Indenture Obligations), which Indebtedness and guarantees are secured by the Second Lien Collateral (or any portion thereof) for which the applicable Additional
Second Lien Debt Documents provide that such Indebtedness and guarantees are to be secured by such Second Lien Collateral on a subordinate or junior basis to the First Lien Obligations;
provided
,
however
, that (i) such Indebtedness is permitted to be incurred, secured and guaranteed
on such basis by each then extant First Lien Document and Second Lien Document and (ii) unless already a party with respect to that series of Additional Second Lien Debt, the Representative for
the holders of such Indebtedness shall have (a) become party to the First Lien/Second Lien Intercreditor Agreement (by executing a joinder agreement or otherwise) pursuant to, and by satisfying
the conditions set forth in, the First Lien/Second Lien Intercreditor Agreement and (b) become a party to the Pari Passu Second Lien Intercreditor Agreement pursuant to, and by satisfying the
conditions set forth therein;
provided further
that, if such Indebtedness will be the initial Additional Second Lien Debt incurred by any Issuer or
Guarantor, then the Issuers, the Guarantors, the Collateral Agent and the Representative for such Indebtedness shall have executed and delivered the Pari Passu Second Lien Intercreditor Agreement.
"
Additional Second Lien Debt Documents
" means, with respect to any series, issue or class of Additional Second Lien Debt, the loan
agreements, the promissory notes, indentures, the Second Lien Collateral Documents or other operative agreements evidencing or governing such Debt.
"
Additional Second Lien Debt Facility
" means each indenture, loan agreement or other governing agreement with respect to any Additional
Second Lien Debt.
"
Additional Second Lien Obligations
" means, with respect to any series, issue or class of Additional Second Lien Debt, all amounts owing
pursuant to the terms of such Additional Second Lien Debt, including, without limitation, the obligation (including guarantee obligations) to pay principal, interest (including Post-Petition
Interest), letter of credit commissions, reimbursement obligations, charges, expenses, fees, attorneys costs, indemnities and other amounts payable by an Issuer or Guarantor under any Additional
Second Lien Debt Document.
"
Additional Second Lien Secured Parties
" means any Second Lien Secured Parties, other than Collateral Agent and holders of the notes.
"
Bankruptcy Case
" means a case under the Bankruptcy Code or any other Bankruptcy Law.
"
Controlling Second Lien Secured Parties
" means, with respect to any Shared Second Lien Collateral, (i) at any time when the
Collateral Agent is the Designated Second Lien Representative, the Second Lien Indenture Secured Parties and (ii) at any other time, the Series of Second Lien Secured Parties whose Second Lien
Representative is the Designated Second Lien Representative.
"
Debt Facility
" means each indenture, loan agreement or other governing document with respect to any First Lien Obligation or Second Lien
Obligation.
"
Default Interest
" means any additional interest payable pursuant to the First Lien Documents arising from or related to a default,
whether or not such interest accrues before or after the commencement of any Insolvency or Liquidation Proceeding, whether allowed or allowable.
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"
Designated First Lien Representative
" means (i) if at any time there is only one First Lien Representative for a First Lien
Document with respect to which the Discharge of First Lien Debt Obligations has not occurred, such First Lien Representative and (ii) at any time when clause (i) does not apply, the
"Authorized First Lien Representative" determined in accordance with (and defined under) the First Lien Intercreditor Agreement.
"
Designated Second Lien Representative
" means (1) the Collateral Agent, until the earlier of (a) the Discharge of Second
Lien Indenture Obligations and (b) if indenture ceases to be the only Second Lien Debt Facility under First Lien/Second Lien Intercreditor Agreement, the occurrence of the Non-Controlling
Second Lien Representative Enforcement Date; and (2) the Major Non-Controlling Second Lien Representative from and after the earlier of (a) the Discharge of Second Lien Indenture
Obligations and (b) if indenture ceases to be the only Second Lien Debt Facility under First Lien/Second Lien Intercreditor Agreement, the occurrence of the Non-Controlling Second Lien
Representative Enforcement Date.
"
Discharge of First Lien Obligations
" means the occurrence of all of the following:
-
(1)
-
termination
or expiration of all commitments to extend credit that would constitute First Lien Obligations;
-
(2)
-
payment
in full in cash of the principal of and interest and premium (if any) on all First Lien Obligations (other than any undrawn letters of credit);
-
(3)
-
discharge
or cash collateralization at the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable First Lien
Document of all outstanding letters of credit constituting First Lien Obligations;
-
(4)
-
payment
in full in cash of obligations in respect of Hedging Obligations constituting First Lien Obligations (and, with respect to any particular agreement regarding
Hedging Obligations, termination of such agreement and payment in full in cash of all obligations thereunder or such other arrangements as have been made by the counterparty thereto (and communicated
to the Designated First Lien Representative) pursuant to the terms of the First Lien Documents); and
-
(5)
-
payment
in full in cash of all other First Lien Obligations, including without limitation, Bank Products Obligations, that are outstanding and unpaid at the time the
First Lien Obligations are paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for
payment has been made at or prior to such time).
"
Discharge of First Lien Debt Obligations
" means the occurrence of all of the following:
-
(1)
-
termination
or expiration of all commitments to extend credit that would constitute First Lien Debt Obligations;
-
(2)
-
payment
in full in cash of the principal of and interest and premium (if any) on all First Lien Debt Obligations (other than any undrawn letters of credit);
-
(3)
-
discharge
or cash collateralization at the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable First Lien
Document of all outstanding letters of credit constituting First Lien Debt Obligations;
-
(4)
-
payment
in full in cash of all other First Lien Debt Obligations that are outstanding and unpaid at the time the First Lien Debt Obligations are paid in full in cash
(other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at or prior to such
time).
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"
Discharge of Second Lien Obligations
" means the occurrence of all of the following:
-
(1)
-
payment
in full in cash of the principal of and interest and premium (if any) on all Second Lien Obligations; and
-
(2)
-
payment
in full in cash of all other Second Lien Obligations that are outstanding and unpaid at the time the Second Lien Obligation is paid in full in cash (other
than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at or prior to such time).
"
First Lien Agent
" means the collateral agent under the Credit Agreement, and any successor or replacement collateral agent.
"
First Lien Cap
" means $450,000,000.
"
First Lien Collateral
" means any "Collateral" as defined in any Loan Document (as defined in the Credit Agreement) or any other First
Lien Document and any other assets of any Issuer or any Guarantor with respect to which a Lien is granted or purported to be granted or required to be granted pursuant to a First Lien Collateral
Document as security for any First Lien Obligations.
"
First Lien Collateral Document
" means the "Security Documents" as defined in the Credit Agreement, the First Lien Intercreditor Agreement
(upon and after the initial execution and delivery thereof by the initial parties thereto) and each of the collateral agreements, security agreements, mortgages, deeds of trust and other instruments
and documents executed and delivered by any Issuer or any Guarantor for purposes of providing collateral security for any First Lien Obligation.
"
First Lien Credit Agreement Obligations
" means the "Secured Obligations" as defined in Section I of the First Lien Security
Agreement, including all Post-Petition Interest relating thereto. For the avoidance of doubt, First Lien Credit Agreement Obligations shall not include any obligations in connection with the
Receivables Purchase Agreement or any DIP Financing.
"
First Lien Credit Agreement Secured Parties
" means the "Secured Parties" as defined in the Credit Agreement.
"
First Lien Debt Obligations
" means the First Lien Credit Agreement Obligations and the Additional First Lien Debt Obligations.
"
First Lien Document
" means the Credit Agreement, the other Loan Documents (as defined in the Credit Agreement), Additional First Lien
Debt Documents and each of the other agreements, documents, and instruments providing for or evidencing any other First Lien Obligation and any other document or instrument executed or delivered at
any time in connection with any First Lien Obligation (including any intercreditor or joinder agreement among holders of First Lien Obligations), to the
extent such are effective at the relevant time, as each may be amended, modified, restated, supplemented, replaced or refinanced from time to time (whether or not with the same lenders or agents).
"
First Lien Facilities
" means the Credit Agreement and any Additional First Lien Debt Facilities.
"
First Lien Intercreditor Agreement
" means one or more intercreditor agreements entered into after the date hereof with the First Lien
Agent and the other Representatives with respect to any Additional First Lien Debt party thereto.
"
First Lien Obligations
" means the First Lien Credit Agreement Obligations and any Additional First Lien Debt Obligations, including all
Post-Petition Interest relating thereto, provided, that if, the sum of: (1) the aggregate principal amount of Loans of the Issuers then outstanding under the Credit Agreement; plus
(2) unreimbursed amounts in respect of letters of credit under any First Lien Facility; plus (3) the aggregate principal amount of Additional First Lien Debt Obligations of the Issuers
and
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the
Guarantors; is in excess of the sum of (x) the First Lien Cap plus (y) the amount of any premium on any such Debt in connection with any Refinancing, extension, renewal, restatement,
refunding or replacement thereof, plus fees and expenses incurred in connection therewith (the "
Total First Lien Cap Amount
"), then only that portion of
the principal amount of such Loans and principal amount of Additional First Lien Debt Obligations, and such unreimbursed amounts in respect of letters of credit (on a pro rata basis based on the
aggregate outstanding principal amount of such Debt and face amount of letters of credit not reimbursed) that does not exceed the Total First Lien Cap Amount shall be included in First Lien
Obligations. For the avoidance of doubt, Bank Products Obligations, Hedging Obligations, interest, Default Interest, Post-Petition Interest, letter of credit commissions, charges, expenses, fees,
attorneys costs, indemnities and other similar amounts payable by a Guarantor under any First Lien Document and any other similar charges which may be due pursuant to the First Lien Documents, shall
not be subject to the Total First Lien Cap Amount.
"
First Lien Representative
" means (i) in the case of any First Lien Credit Agreement Obligations or the First Lien Credit Agreement
Secured Parties, the First Lien Agent and (ii) in the case of any Additional First Lien Debt Facility and the Additional First Lien Debt Parties thereunder, the trustee, administrative agent,
collateral agent, security agent or similar agent under such Additional First Lien Debt Facility that is named as the Representative in respect of such Additional First Lien Debt Facility under the
First Lien/Second Lien Intercreditor Agreement.
"
First Lien Secured Party
" means the First Lien Credit Agreement Secured Parties and any Additional First Lien Debt Parties.
"
First Lien Security Agreement
" means Guarantee and Security Agreement, dated as of February 21, 2014, by and between the Company,
its subsidiaries party thereto and PNC Bank, National Association, as administrative agent, as it has been or may be, in whole or in part, in one or more instances, amended, restated, renewed,
extended, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time (including, without limitation, any successive amendments, restatements, renewals,
extensions, substitutions, of the foregoing).
"
First Priority Liens
" means all Liens that secure the First Lien Obligations.
"
Indebtedness
" means debt for borrowed money, including drawn and undrawn letters of credit, obligations evidenced by bonds, debentures,
notes or other similar instruments (other than any obligations in respect of performance bonds, bid bonds, appeal bonds, surety bonds, reclamation bonds and completion guarantees and similar
obligations), Bank Products Obligations, and Hedging Obligations.
"
Insolvency or Liquidation Proceeding
" means:
-
(1)
-
any
case commenced by or against the Company, Co-Issuer or any Guarantor under the Bankruptcy Code or any other bankruptcy law, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of Company, Co-Issuer or any Guarantor, any receivership or assignment for the benefit of creditors relating
to Company, Co-Issuer or any Guarantor or any similar case or proceeding relative to Company, Co-Issuer or any Guarantor or its creditors, as such, in each case whether or not voluntary;
-
(2)
-
any
liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to Company, Co-Issuer or any Guarantor, in each case whether or
not voluntary and whether or not involving bankruptcy or insolvency; or
-
(3)
-
any
other proceeding of any type or nature in which substantially all claims of creditors of Company, Co-Issuer or any Guarantor are determined and any payment or
distribution is or may be made on account of such claims.
"
Loans
" has the meaning assigned to the term "Loans" in the Credit Agreement.
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"
Major Non-Controlling Second Lien Representative
" means the Second Lien Representative of the Series of Second Lien Obligations (other
than Second Lien Indenture Obligations) that constitutes the largest outstanding principal amount of any then outstanding Series of Second Lien Obligations.
"
Non-Controlling Second Lien Representative
" means, at any time with respect to any Shared Second Lien Collateral, any Second Lien
Representative that is not the Designated Second Lien Representative at such time with respect to such Shared Second Lien Collateral.
"
Non-Controlling Second Lien Representative Enforcement Date
" means, with respect to any Non-Controlling Second Lien Representative,
(1) after the Discharge of First Lien Obligations, the date which is 150 days (throughout which 150 day period such Non-Controlling Second Lien Representative was the Major
Non-Controlling Second Lien Representative) after the occurrence of both (a) an event of default (under and as defined in the Additional Second Lien Debt Document under which such
Non-Controlling Second Lien Representative is the Second Lien Representative) and (b) each other Second Lien Representative's receipt of written notice from such Non-Controlling Second Lien
Representative certifying that (i) such Non-Controlling Second Lien Representative is the Major Non-Controlling Second Lien Representative, (ii) an event of default (under and as defined
in the Additional Second Lien Debt Document under which such Non-Controlling Second Lien Representative is the Second Lien Representative) has occurred and is continuing and (iii) the Second
Lien Obligations of the Series with respect to which such Non-Controlling Second Lien Representative is the Second Lien Representative are currently due and payable in full (whether as a result of
acceleration thereof or otherwise) in accordance with the terms of the applicable Additional Second Lien Debt Document; and (2) prior to the Discharge of First Lien Obligations, the date which
is 90 days after the Second Lien Enforcement Date; provided that the Non-Controlling Second Lien Representative Enforcement Date shall be stayed and shall not occur and shall be deemed not to
have occurred (a) at any time the Collateral Agent has commenced and is diligently pursuing any enforcement action, (b) at any time prior to the Discharge of First Lien Obligations, the
Designated First Lien Representative has commenced and is diligently pursuing any enforcement action with respect to all or any material portion of the Shared Collateral or (c) at any time the
Issuer or the Guarantor which has granted a security interest in Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
"
Non-Controlling Second Lien Secured Party
" means, with respect to any Shared Second Lien Collateral, the Second Lien Secured Parties
which are not Controlling Second Lien Secured Parties with respect to such Shared Second Lien Collateral.
"
Permitted Refinancing Increase
" means, with respect to the Refinancing of any Indebtedness, an amount equal to (1) any premium or
other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such Refinancing, (2) any unpaid accrued interest on the Indebtedness being Refinanced,
(3) any existing commitments unutilized under the Indebtedness being Refinanced and (4) any amount by which the original principal amount of any Indebtedness has been repaid.
"
Post-Petition Interest
" means interest, Default Interest, fees, expenses and other charges that pursuant to the First Lien Documents or
the Second Lien Documents, as applicable, continue to accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest, fees, expenses and other charges are
allowed or allowable under Bankruptcy Law or in any such Insolvency or Liquidation Proceeding.
"
Proceeds
" means "proceeds," as that term is defined in the Uniform Commercial Code, of Shared Collateral as well as any payment or
distribution made in respect of Shared Collateral in a Bankruptcy Case, any distributions made to the Second Lien Secured Parties on account of its secured claim in an Insolvency or Liquidation
Proceeding, and any amounts received by any First Lien Representative or any First Lien Secured Party from a Second Lien Secured Party in respect of Shared Collateral pursuant to the First Lien/Second
Lien Intercreditor Agreement.
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"
Receivables Purchase Agreement
" means the Receivables Purchase Agreement dated as of February 11, 2013 among Cloud Peak Energy
Receivables, LLC, as seller, Parent Guarantor, as servicer, the various Conduit Purchasers, Related Committed Purchasers, and Purchaser Agents from time to time party thereto, and the First
Lien Agent, as administrator, and as it otherwise has been or may be, in whole or in part, in one or more instances, amended, restated, renewed, extended, substituted, restructured, replaced,
supplemented or otherwise modified from time to time, and all agreements related thereto.
"
Representatives
" means the First Lien Representatives and the Second Lien Representatives.
"
Refinancing
" means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement,
restructure, refund, replace or repay, or to issue other Indebtedness or enter into alternative financing arrangements, in exchange or replacement for such Indebtedness (in whole or in part along with
any Permitted Refinancing Increase), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including, in each case, but not limited to, after the original
instrument giving rise to such Indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement.
"
Refinanced
" and "
Refinancing
" have correlative meanings.
"
Second Lien Collateral
" means any "Collateral" as defined in any Note Document or any other Second Lien Document and any other assets of
any Issuer or any Guarantor with respect to which a Lien is granted or purported to be granted or required to be granted pursuant to a Second Lien Collateral Document as security for any Second Lien
Obligation.
"
Second Lien Collateral Documents
" means the Security Agreement and the other Security Documents and each of the collateral agreements,
security agreements, mortgages, deeds of trust and other instruments and documents executed and delivered by any Issuer or any Guarantor for purposes of providing collateral security for any Second
Lien Obligation.
"
Second Lien Debt Facilities
" means the indenture and any Additional Second Lien Debt Facilities.
"
Second Lien Documents
" means the indenture, the Security Documents, and each of the other agreements, documents, and instruments
providing for or evidencing any other Second Lien Obligation and any other document or instrument executed or delivered at any time in connection with any Second Lien Obligation (including any
intercreditor or joinder agreement among holders of Second Lien Obligations or with holders of First Lien Obligations), to the extent such are effective at the relevant time, as each may be amended,
modified, restated, supplemented, replaced or refinanced from time to time (whether or not with the same lenders or agents).
"
Second Lien Enforcement Date
" means, with respect to any Second Lien Representative, the date which is 180 days after the
occurrence of both (i) an Event of Default (under and as defined in the Second Lien Document for which such Second Lien Representative has been named as Representative) and (ii) the
Designated First Lien Representative's and each other Representative's receipt of written notice from such Second Lien Representative that (x) such Second Lien Representative is the Designated
Second Lien Representative and that an Event of Default (under and as defined in the Second Lien Document for which such Second Lien Representative has been named as Representative) has occurred and
is continuing and (y) the Second Lien Obligations of the series with respect to which such Second Lien Representative is the Second Lien Representative are currently due and payable in full
(whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable Second Lien Document; provided that the Second Lien Enforcement Date shall be stayed and shall
not occur and shall be deemed not to have occurred at any time the Designated First Lien Representative has commenced and is diligently pursuing any enforcement action with respect to all or any
material portion of the Shared Collateral (with prompt written notice of the commencement of such action to be given to such Second Lien Representative) or at any time the Issuer or the Guarantor
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which
has granted a security interest in such Shared Collateral is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
"
Second Lien Indenture Obligations
" means the Indebtedness incurred and Obligations under the indenture and the notes.
"
Second Lien Indenture Secured Parties
" means the holders of Second Lien Indenture Obligations, the Collateral Agent and the trustee under
the indenture.
"
Second Lien Obligations
" means the Second Lien Indenture Obligations and any Additional Second Lien Obligations.
"
Second Lien Representative
" means (1) in the case of the Second Lien Indenture Obligations or the Second Lien Indenture Secured
Parties, the Collateral Agent and (2) in the case of any Second Lien Debt Facility incurred after the date of the indenture and the Second Lien Debt Parties thereunder, the trustee,
administrative agent, collateral agent, security agent or similar agent under such Second Lien Debt Facility that is named as the Representative in respect of such Second Lien Debt Facility.
"
Second Lien Secured Party
" means the holders of Second Lien Obligations, the Collateral Agent, the trustee and any agent, trustee and/or
similar representative of any Pari Passu Secured Debt.
"
Second Priority Lien
" means the Liens on the Second Lien Collateral in favor of Second Lien Secured Parties under Second Lien Collateral
Documents.
"
Series
" means, (a) with respect to Second Lien Obligations, such Second Lien Obligations incurred under a single Second Lien Debt
Facility; and (b) with respect to the Second Lien Secured Parties, each of the Second Lien Indenture Secured Parties (in their capacities as such) and the Additional Second Lien Secured Parties
(in their capacities as such) that are represented by a common Second Lien Representative (in its capacity as such for such Additional Second Lien Secured Parties).
"
Shared Collateral
" means, at any time, any property and assets wherever located and whether now owned or later acquired, in which holders
of Fist Lien Debt Obligations under at least one First Lien Document and Second Lien Secured Parties under at least one Second Lien Debt Facility (or their
Representatives) hold a security interest or Lien (or, in case of First Lien Secured Parties, are deemed to hold a Lien pursuant to First Lien/Second Lien Intercreditor Agreement) at such time. If, at
any time, any portion of the First Lien Collateral under one or more First Lien Documents does not constitute Second Lien Collateral under one or more Second Lien Debt Facilities, then such portion of
such First Lien Collateral shall constitute Shared Collateral only with respect to the Second Lien Debt Facilities for which it constitutes Second Lien Collateral and shall not constitute Shared
Collateral for any Second Lien Debt Facility which does not have a security interest in such Second Lien Collateral at such time.
"
Shared Second Lien Collateral
" means, at any time, Second Lien Collateral in which the holders of Second Lien Obligations under two or
more Second Lien Debt Facilities (or their respective Second Lien Representatives on behalf of such holders) hold a valid security interest or Lien at such time. If Second Lien Obligations under more
than two Second Lien Debt Facilities are outstanding at any time and the holders of less than all Second Lien Obligations hold a valid security interest or Lien in any Second Lien Collateral at such
time, then such Second Lien Collateral shall constitute Shared Second Lien Collateral for Second Lien Obligations under Second Lien Debt Facilities secured by Lien in such Second Lien Collateral at
such time and shall not constitute Shared Second Lien Collateral for any Second Lien Secured Parties who do not have a valid security interest in such Second Lien Collateral at such time.
"
Uniform Commercial Code
" or "
UCC
" means, unless otherwise specified, the Uniform
Commercial Code as from time to time in effect in the State of New York.
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Book-Entry, Delivery and Form
We have obtained the information in this section concerning The Depository Trust Company ("DTC"), Clearstream Banking, societe anonyme,
Luxembourg ("Clearstream, Luxembourg") and Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear"), and their book-entry systems and procedures from sources that we believe
to be reliable. We take no responsibility for an accurate portrayal of this information. In addition, the description of the clearing systems in this section reflects our understanding of the rules
and procedures of DTC, Clearstream, Luxembourg and Euroclear as they are currently in effect. Those systems could change their rules and procedures at any time.
The
notes will initially be represented by one or more fully registered global notes. Each such global note will be deposited with, or on behalf of, DTC or any successor thereto and
registered in the name of Cede & Co. (DTC's nominee). You may hold your interests in the global notes in the United States through DTC, or in Europe through Clearstream, Luxembourg or
Euroclear, either as a participant in such systems or indirectly through organizations which are participants in such systems. Clearstream, Luxembourg and Euroclear will hold interests in the global
notes on behalf of their respective participating organizations or customers through customers' securities accounts in Clearstream, Luxembourg's or Euroclear's names on the books of their respective
depositaries, which in turn will hold those positions in customers' securities accounts in the depositaries' names on the books of DTC. Citibank, N.A. will act as depositary for Clearstream,
Luxembourg and JPMorgan Chase Bank, N.A. will act as depositary for Euroclear.
So
long as DTC or its nominee is the registered owner of the global securities representing the notes, DTC or such nominee will be considered the sole owner and holder of the notes for
all purposes of the notes and the indenture. Except as provided below, owners of beneficial interests in the notes will not be entitled to have the notes registered in their names, will not receive or
be entitled to receive physical delivery of the notes in definitive form and will not be considered the owners or holders of the notes under the indenture, including for purposes of receiving any
reports delivered by us or the trustee pursuant to the indenture. Accordingly, each person owning a beneficial interest in a note must rely on the procedures of DTC or its nominee and, if such person
is not a participant, on the procedures of the participant through which such person owns its interest, in order to exercise any rights of a holder of notes.
Unless
and until we issue the notes in fully certificated, registered form under the limited circumstances described below under the heading "Certificated
Notes":
-
(a)
-
you
will not be entitled to receive a certificate representing your interest in the notes;
-
(b)
-
all
references in this prospectus supplement to actions by holders will refer to actions taken by DTC upon instructions from its direct participants; and
-
(c)
-
all
references in this prospectus supplement to payments and notices to holders will refer to payments and notices to DTC or Cede & Co., as the
registered holder of the notes, for distribution to you in accordance with DTC procedures.
The Depository Trust Company
DTC acts as securities depositary for the notes. The notes will be issued as fully registered notes registered in the name of
Cede & Co. DTC is:
-
(a)
-
a
limited-purpose trust company organized under the New York Banking Law;
-
(b)
-
a
"banking organization" under the New York Banking Law;
-
(c)
-
a
member of the Federal Reserve System;
-
(d)
-
a
"clearing corporation" under the New York Uniform Commercial Code; and
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-
(e)
-
a
"clearing agency" registered under the provisions of Section 17A of the Exchange Act.
DTC holds securities that its direct participants deposit with DTC. DTC facilitates the settlement among direct participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized book-entry changes in direct participants' accounts, thereby eliminating the need for physical movement of securities
certificates.
Direct
participants of DTC include securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its direct participants. Indirect participants of DTC, such as securities brokers and dealers, banks and trust companies, can also access the DTC system if they maintain a
custodial relationship with a direct participant.
Purchases
of notes under DTC's system must be made by or through direct participants, which will receive a credit for the notes on DTC's records. The ownership interest of each
beneficial owner is in turn to be recorded on the records of direct participants and indirect participants. Beneficial owners will not receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct participants or indirect
participants through which such beneficial owners entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of participants acting
on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in notes, except as provided below in "Certificated Notes."
To
facilitate subsequent transfers, all notes deposited with DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of notes with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes. DTC's records reflect only the
identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance
of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Book-entry Format
Under the book-entry format, the paying agent will pay interest or principal payments to Cede & Co., as nominee of DTC. DTC will
forward the payment to the direct participants, who will then forward the payment to the indirect participants (including Clearstream, Luxembourg or Euroclear) or to you as the beneficial owner. You
may experience some delay in receiving your payments under this system. None of us, any Subsidiary Guarantor, the trustee or any of our or its agents under the indenture or any paying agent has any
direct responsibility or liability for the payment of principal or interest on the notes to owners of beneficial interests in the notes.
DTC
is required to make book-entry transfers on behalf of its direct participants and is required to receive and transmit payments of principal, premium, if any, and interest on the
notes. Any direct participant or indirect participant with which you have an account is similarly required to make book-entry transfers and to receive and transmit payments with respect to the notes
on your behalf. We, the Subsidiary Guarantors and the trustee under the indenture have no responsibility for any aspect of the actions of DTC, Clearstream, Luxembourg or Euroclear or any of their
direct or indirect
participants. In addition, we, the Subsidiary Guarantors and the trustee under the indenture and each of our or its agents have no responsibility or liability for any aspect of the records kept by
DTC,
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Clearstream,
Luxembourg, Euroclear or any of their direct or indirect participants relating to or payments made on account of beneficial ownership interests in the notes or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests. We also do not supervise these systems in any way.
The
trustee will not recognize you as a holder under the indenture, and you can only exercise the rights of a holder indirectly through DTC and its direct participants. DTC has advised
us that it will only take action regarding a note if one or more of the direct participants to whom the note is credited direct DTC to take such action and only in respect of the portion of the
aggregate principal amount of the notes as to which that participant or participants has or have given that direction. DTC can only act on behalf of its direct participants. Your ability to pledge
notes to non-direct participants, and to take other actions, may be limited because you will not possess a physical certificate that represents your notes.
Neither
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the notes unless authorized by a direct participant in accordance with DTC's
procedures. Under its usual procedures, DTC will mail an omnibus proxy to its direct participant as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the notes are credited on the record date (identified in a listing attached to the omnibus proxy).
Clearstream,
Luxembourg or Euroclear will credit payments to the cash accounts of Clearstream, Luxembourg customers or Euroclear participants in accordance with the relevant system's
rules and procedures, to the extent received by its depositary. These payments will be subject to tax reporting in accordance with relevant United States tax laws and regulations. Clearstream,
Luxembourg or Euroclear, as the case may be, will take any other action permitted to be taken by a holder under the indenture on behalf of a Clearstream, Luxembourg customer or Euroclear participant
only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect those actions on its behalf through DTC.
DTC,
Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the notes among participants of DTC, Clearstream, Luxembourg and
Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.
Transfers Within and Among Book-entry Systems
Transfers between DTC's direct participants will occur in accordance with DTC rules. Transfers between Clearstream, Luxembourg customers and
Euroclear participants will occur in accordance with their respective applicable rules and operating procedures.
DTC
will effect cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg customers
or Euroclear participants, on the other hand, in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary. However, cross-market transactions will
require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, instruct its depositary to effect final settlement on its
behalf by delivering or receiving securities in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream, Luxembourg
customers and Euroclear participants may not deliver instructions directly to the depositaries.
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Because
of time-zone differences, credits of securities received in Clearstream, Luxembourg or Euroclear resulting from a transaction with a DTC direct participant will be made during
the subsequent securities settlement processing, dated the business day following the DTC settlement date. Those credits or any transactions in those securities settled during that processing will be
reported to the relevant Clearstream, Luxembourg customer or Euroclear participant on that business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or
through a Clearstream, Luxembourg customer or a Euroclear participant to a DTC direct participant will be received with value on the DTC settlement date but will be available in the relevant
Clearstream, Luxembourg or Euroclear cash amount only as of the business day following settlement in DTC.
Although
DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of debt securities among their respective participants, they
are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time.
Certificated Notes
Unless and until they are exchanged, in whole or in part, for notes in definitive form in accordance with the terms of the notes, the notes may
not be transferred except (1) as a whole by DTC to a nominee of DTC, (2) by a nominee of DTC to DTC or another nominee of DTC or (3) by DTC or any such nominee to a successor of
DTC or a nominee of such successor.
We
will issue notes to you or your nominees, in fully certificated registered form, rather than to DTC or its nominees, only if:
-
(a)
-
we
advise the trustee in writing that DTC is no longer willing or able to discharge its responsibilities properly or that DTC is no longer a registered clearing
agency under the Exchange Act, and we have not appointed a qualified successor within 90 days;
-
(b)
-
an
Event of Default has occurred and is continuing under the indenture and DTC has notified us and the trustee of its desire to exchange the global notes for
certificated notes; or
-
(c)
-
subject
to DTC's rules, we, at our option, elect to terminate the book-entry system through DTC.
If
any of the three above events occurs, DTC is required to notify all direct participants that notes in fully certificated registered form are available through DTC. DTC will then
surrender the global note representing the notes along with instructions for re-registration. We will re-issue the notes in fully certificated registered form and will recognize the registered holders
of the certificated notes as holders under the indenture.
Unless
and until we issue the notes in fully certificated, registered form, (1) you will not be entitled to receive a certificate representing your interest in the notes;
(2) all references in this prospectus supplement to actions by holders will refer to actions taken by the depositary upon instructions from its direct participants; and (3) all
references in this prospectus supplement to payments and notices to
holders will refer to payments and notices to the depositary or its nominee, as the registered holder of the notes, for distribution to you in accordance with its policies and procedures.
Same Day Settlement and Payment
We will make payments in respect of the notes represented by the global notes (including principal, premium, if any, and interest) by wire
transfer of immediately available funds to the accounts specified by DTC or its nominee. We will make all payments of principal, interest and premium, if any, with respect to certificated notes by
wire transfer of immediately available funds to the accounts
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specified
by the holders of the certificated notes or, if no such account is specified, by mailing a check to each such holder's registered address. The notes represented by the global notes will be
eligible to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will be, therefore, required by DTC to be settled in immediately
available funds. We expect that secondary trading in any certificated notes will also be settled in immediately available funds.
Because
of time zone differences, the securities account of a Clearstream, Luxembourg customer or Euroclear participant purchasing an interest in a global note from another customer or
participant will be credited, and any such crediting will be reported to the relevant Clearstream, Luxembourg customer or Euroclear participant, during the securities settlement processing day (which
must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised us that cash received in Clearstream, Luxembourg or Euroclear as a result of
sales of interests in a global note by or through a Clearstream, Luxembourg customer or Euroclear participant to another customer or participant will be received with value on the settlement date of
DTC but will be available in the relevant Clearstream, Luxembourg or Euroclear cash account only as of the business day for Euroclear or Clearstream, Luxembourg following DTC's settlement date.
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