EXHIBIT 4.1
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Arch Western Finance, LLC,
AS ISSUER
Arch Western Resources, LLC
Arch of Wyoming, LLC
Mountain Coal Company, L.L.C.
Thunder Basin Coal Company, L.L.C.,
AS GUARANTORS
AND
The Bank of New York,
AS TRUSTEE
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INDENTURE
Dated as of June 25, 2003
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$700,000,000
6 3/4% Senior Notes due 2013
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CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
------------ ------------------
310 (a)(1)......................................................................... 7.10
(a)(2)......................................................................... 7.08; 7.10
(a)(3)......................................................................... 7.12
(a)(4)......................................................................... N/A
(a)(5)......................................................................... 7.10
(b)............................................................................ 7.03; 7.10
(c)............................................................................ N/A
311 (a)............................................................................ 7.03; 7.11
(b)............................................................................ 7.03; 7.11
(c)............................................................................ N/A
312 (a)............................................................................ 2.05(a)
(b)............................................................................ 13.03
(c)............................................................................ 13.03
313 (a)............................................................................ 7.06
(b)(1)......................................................................... 7.06
(b)(2)......................................................................... 7.06; 7.07
(c)............................................................................ 7.05; 7.06; 13.02(b)
(d)............................................................................ 7.06
314 (a)(1)......................................................................... 4.17
(a)(2)......................................................................... 4.17
(a)(3)......................................................................... 4.17
(a)(4)......................................................................... 4.05(a); 8.01(a)
(b)............................................................................ N/A
(c)(1)......................................................................... 13.04(a)
(c)(2)......................................................................... 13.04(b)
(d)............................................................................ N/A
(e)............................................................................ 13.05
(f)............................................................................ N/A
315 (a)............................................................................ 7.01(b)
(b)............................................................................ 7.05
(c)............................................................................ 7.01(a)
(d)............................................................................ 7.01(c)
(e)............................................................................ 6.11
316 (a) (last sentence)............................................................ 2.09
(a)(1)(A)...................................................................... 6.05
(a)(1)(B)...................................................................... 6.04
(a)(2)......................................................................... N/A
(b)............................................................................ 6.07
(c)............................................................................ 9.04
317 (a)(1)......................................................................... 6.08
(a)(2)......................................................................... 6.09
(b)............................................................................ 2.04
318 (a)............................................................................ 13.01
(c)............................................................................ 13.01
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N/A means not applicable.
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Article One
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................................................. 1
SECTION 1.02. Other Definitions........................................................... 28
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........................... 28
SECTION 1.04. Rules of Construction....................................................... 29
Article Two
THE NOTES
SECTION 2.01. The Notes................................................................... 30
SECTION 2.02. Execution and Authentication................................................ 32
SECTION 2.03. Registrar, Transfer Agent and Paying Agent.................................. 32
SECTION 2.04. Paying Agent to Hold Money in Trust......................................... 33
SECTION 2.05. Holder Lists and Registration Rights Agreements............................. 33
SECTION 2.06. Transfer and Exchange....................................................... 34
SECTION 2.07. Replacement Notes........................................................... 38
SECTION 2.08. Outstanding Notes........................................................... 38
SECTION 2.09. Notes Held by Issuer........................................................ 38
SECTION 2.10. Certificated Notes.......................................................... 39
SECTION 2.11. Cancellation................................................................ 39
SECTION 2.12. Defaulted Interest.......................................................... 40
SECTION 2.13. Computation of Interest..................................................... 40
SECTION 2.14. CUSIP, ISIN and Common Code Numbers......................................... 41
SECTION 2.15. Issuance of Additional Notes and Exchange Notes............................. 41
Article Three
REDEMPTION; OFFERS TO PURCHASE
SECTION 3.01. Optional Redemption......................................................... 41
SECTION 3.02. Notices to Trustee.......................................................... 42
SECTION 3.03. Selection of Notes to be Redeemed........................................... 42
SECTION 3.04. Notice of Redemption........................................................ 42
SECTION 3.05. Effect of Notice of Redemption.............................................. 43
SECTION 3.06. Deposit of Redemption Price................................................. 43
SECTION 3.07. Payment of Notes Called for Redemption...................................... 44
SECTION 3.08. Notes Redeemed in Part...................................................... 44
Article Four
COVENANTS
SECTION 4.01. Payment of Notes............................................................ 44
SECTION 4.02. Corporate Existence......................................................... 44
SECTION 4.03. Maintenance of Properties................................................... 45
SECTION 4.04. Insurance................................................................... 45
SECTION 4.05. Statement as to Compliance.................................................. 45
SECTION 4.06. Limitation on Debt.......................................................... 46
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SECTION 4.07. Limitation on Liens......................................................... 47
SECTION 4.08. Limitation on Restricted Payments........................................... 48
SECTION 4.09. Limitation on Asset Sales................................................... 50
SECTION 4.10. Limitation on Transactions with Affiliates.................................. 53
SECTION 4.11. Change of Control........................................................... 54
SECTION 4.12. Limitation on Sale and Leaseback Transactions............................... 55
SECTION 4.13. Guarantees by Restricted Subsidiaries....................................... 55
SECTION 4.14. Limitation on Restrictions on Distributions from Restricted Subsidiaries.... 56
SECTION 4.15. Designation of Unrestricted and Restricted Subsidiaries..................... 57
SECTION 4.16. Payment of Taxes and Other Claims........................................... 58
SECTION 4.17. Reports to Holders.......................................................... 58
SECTION 4.18. Legal Existence............................................................. 59
SECTION 4.19. Waiver of Stay, Extension or Usury Laws..................................... 59
SECTION 4.20. Further Instruments and Acts................................................ 59
SECTION 4.21. Covenant Termination........................................................ 59
Article Five
CONSOLIDATION, MERGER OR SALE OF ASSETS
SECTION 5.01. Consolidation, Merger or Sale of Assets..................................... 60
SECTION 5.02. Successor Substituted....................................................... 62
Article Six
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default........................................................... 62
SECTION 6.02. Acceleration................................................................ 64
SECTION 6.03. Other Remedies.............................................................. 66
SECTION 6.04. Waiver of Past Defaults..................................................... 66
SECTION 6.05. Control by Majority......................................................... 67
SECTION 6.06. Limitation on Suits......................................................... 67
SECTION 6.07. Unconditional Right of Holders to Receive Payment........................... 68
SECTION 6.08. Collection Suit by Trustee.................................................. 68
SECTION 6.09. Trustee May File Proofs of Claim............................................ 68
SECTION 6.10. Application of Money Collected.............................................. 69
SECTION 6.11. Undertaking for Costs....................................................... 69
SECTION 6.12. Restoration of Rights and Remedies.......................................... 69
SECTION 6.13. Rights and Remedies Cumulative.............................................. 70
SECTION 6.14. Delay or Omission Not Waiver................................................ 70
SECTION 6.15. Record Date................................................................. 70
SECTION 6.16. Waiver of Stay or Extension Laws............................................ 70
Article Seven
TRUSTEE
SECTION 7.01. Duties of Trustee........................................................... 70
SECTION 7.02. Certain Rights of Trustee................................................... 71
SECTION 7.03. Individual Rights of Trustee................................................ 73
SECTION 7.04. Trustee's Disclaimer........................................................ 73
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SECTION 7.05. Notice of Defaults.......................................................... 74
SECTION 7.06. Reports by Trustee to Holders............................................... 74
SECTION 7.07. Compensation and Indemnity.................................................. 74
SECTION 7.08. Replacement of Trustee...................................................... 75
SECTION 7.09. Successor Trustee by Merger................................................. 76
SECTION 7.10. Eligibility: Disqualification............................................... 77
SECTION 7.11. Preferential Collection of Claims Against Issuer............................ 77
SECTION 7.12. Appointment of Co-Trustee................................................... 77
Article Eight
DEFEASANCE; SATISFACTION AND DISCHARGE
SECTION 8.01. Arch Western and the Issuer's Option to Effect Defeasance or Covenant
Defeasance.................................................................. 79
SECTION 8.02. Defeasance and Discharge.................................................... 79
SECTION 8.03. Covenant Defeasance......................................................... 79
SECTION 8.04. Conditions to Defeasance.................................................... 80
SECTION 8.05. Satisfaction and Discharge of Indenture..................................... 81
SECTION 8.06. Survival of Certain Obligations............................................. 81
SECTION 8.07. Acknowledgment of Discharge by Trustee...................................... 81
SECTION 8.08. Application of Trust Money.................................................. 81
SECTION 8.09. Repayment to Issuer......................................................... 81
SECTION 8.10. Indemnity for Government Securities......................................... 82
SECTION 8.11. Reinstatement............................................................... 82
Article Nine
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.................................................. 82
SECTION 9.02. With Consent of Holders..................................................... 83
SECTION 9.03. Compliance with Trust Indenture Act......................................... 84
SECTION 9.04. Effect of Supplemental Indentures........................................... 84
SECTION 9.05. Notation on or Exchange of Notes............................................ 84
SECTION 9.06. Payment for Consent......................................................... 85
SECTION 9.07. Notice of Amendment or Waiver............................................... 85
SECTION 9.08. Trustee to Sign Supplemental Indentures..................................... 85
Article Ten
GUARANTEE
SECTION 10.01. Note Guarantee.............................................................. 85
SECTION 10.02. Subrogation................................................................. 86
SECTION 10.03. Release of Subsidiary Guarantors............................................ 87
SECTION 10.04. Additional Guarantors....................................................... 87
SECTION 10.05. Limitation of Guarantee..................................................... 87
SECTION 10.06. Notation Not Required....................................................... 87
SECTION 10.07. Successors and Assigns...................................................... 88
SECTION 10.08. No Waiver................................................................... 88
SECTION 10.09. Modification................................................................ 88
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Article Eleven
SECURITY DOCUMENTS
SECTION 11.01. Security Documents.......................................................... 88
SECTION 11.02. Recording and Opinions...................................................... 89
SECTION 11.03. Release of Collateral....................................................... 89
SECTION 11.04. Authorization of Actions To Be Taken by the Collateral Trustee Under the
Security Documents.......................................................... 89
SECTION 11.05. Authorization of Receipt of Funds and Possessory Collateral Under the
Security Documents.......................................................... 90
SECTION 11.06. Termination of Security Interest............................................ 90
SECTION 11.07. Limitation on Duty of Trustee in respect of Collateral...................... 90
Article Twelve
HOLDERS' MEETINGS
SECTION 12.01. Purposes of Meetings........................................................ 91
SECTION 12.02. Place of Meetings........................................................... 91
SECTION 12.03. Call and Notice of Meetings................................................. 91
SECTION 12.04. Voting at Meetings.......................................................... 92
SECTION 12.05. Voting Rights, Conduct and Adjournment...................................... 92
SECTION 12.06. Revocation of Consent by Holders at Meetings................................ 92
Article Thirteen
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls................................................ 93
SECTION 13.02. Notices..................................................................... 93
SECTION 13.03. Communication by Holders with Other Holders................................. 94
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.......................... 94
SECTION 13.05. Statements Required in Certificate or Opinion............................... 95
SECTION 13.06. Rules by Trustee, Paying Agent and Registrar................................ 95
SECTION 13.07. Legal Holidays.............................................................. 95
SECTION 13.08. Governing Law............................................................... 95
SECTION 13.09. No Recourse Against Others.................................................. 95
SECTION 13.10. Successors.................................................................. 95
SECTION 13.11. Multiple Originals.......................................................... 95
SECTION 13.12. Table of Contents, Cross-Reference Sheet and Headings....................... 95
SECTION 13.13. Severability................................................................ 96
Exhibits
Exhibit A - Form of Notes
Exhibit B - Form of Transfer Certificate for Transfer from Restricted Global
Note to Regulation S Global Note
Exhibit C - Form of Transfer Certificate for Transfer from Regulation S
Global Note to Restricted Global Note
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INDENTURE dated as of June 25, 2003 among Arch Western Finance, LLC, a
limited liability company incorporated under the laws of Delaware (the
"Issuer"), Arch Western Resources, LLC, a limited liability company organized
under the laws of Delaware ("Arch Western"), and Arch of Wyoming, LLC, Mountain
Coal Company, L.L.C., and Thunder Basin Coal Company, L.L.C. (each a "Subsidiary
Guarantor," collectively the "Subsidiary Guarantors" and together with Arch
Western, the "Guarantors") and The Bank of New York, a New York banking
corporation (the "Trustee").
RECITALS OF THE ISSUER AND THE GUARANTORS
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its (i) 6 3/4% Senior Notes due 2013
issued on the date hereof (the "Original Notes"), (ii) any additional Notes
("Additional Notes") that may be issued on any other Issue Date (as defined
herein) and (iii) 6 3/4% Senior Notes due 2013 issued pursuant to the
Registration Rights Agreement (as defined herein) in exchange for any Original
Notes or Additional Notes (the "Exchange Notes," and together with the Original
Notes and any Additional Notes, the "Notes"). Each Guarantor has duly authorized
the execution and delivery of this Indenture to provide for the issuance of its
Guarantee. Each of the Issuer and the Guarantors has received good and valuable
consideration for the execution and delivery of this Indenture and the
Guarantees, as the case may be. Each Guarantor will derive substantial direct
and indirect benefits from the issuance of the Notes. All necessary acts and
things have been done to make (i) the Notes, when duly issued and executed by
the Issuer and authenticated and delivered hereunder, the legal, valid and
binding obligations of the Issuer, (ii) the Guarantees, when executed by each
Guarantor and delivered hereunder, the legal, valid and binding obligations of
each Guarantor and (iii) this Indenture a legal, valid and binding agreement of
each of the Issuer and the Guarantor in accordance with the terms of this
Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Debt" means Debt of a Person (a) existing at the time such
Person becomes a Restricted Subsidiary, (b) assumed in connection with the
acquisition of assets from such Person or (c) at the time it merges or
consolidates with the Issuer or any Restricted Subsidiary, in each case.
Acquired Debt shall be deemed to be incurred on the date the acquired Person
becomes a Restricted Subsidiary, the date of the related acquisition of assets
from any Person or at the time of such merger or consolidation, as the case may
be.
"Additional Assets" means:
(a) any Property (other than cash, Cash Equivalent and securities)
to be owned by Arch Western or any of its Restricted Subsidiaries and used in a
Permitted Business; or
(b) Capital Stock of a Person that becomes a Restricted Subsidiary
as a result of the acquisition of such Capital Stock by Arch Western or another
Restricted Subsidiary from any Person other than Arch Western or an Affiliate of
Arch Western; provided, however, that, in the case of this clause (b), such
Restricted Subsidiary is primarily engaged in a Permitted Business.
"Affiliate" of any specified Person means:
(a) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person, or
(b) any other Person who is a director or officer of:
(1) such specified Person,
(2) any Subsidiary of such specified Person, or
(3) any Person described in clause (a) above.
For the purposes of this definition, "control," when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of Section 4.09 and 4.10 of
this Indenture and the definition of "Additional Assets" only, "Affiliate" shall
also mean any beneficial owner of shares representing 5% or more of the total
voting power of the Voting Stock (on a fully diluted basis) of Arch Western or
of rights or warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Arch Coal" means Arch Coal, Inc., a corporation organized under the
laws of Delaware.
"Arch Coal Notes" means all existing and future unsubordinated demand
promissory notes issued by Arch Coal to Arch Western as consideration for loans
and advances made by Arch Western to Arch Coal or any of its Affiliates (other
than Arch Western or a Restricted Subsidiary), which shall bear interest payable
no less frequently than quarterly from the date made until paid in full at a
rate per annum no less favorable to Arch Western than if such loan or advance
had been made by an unaffiliated financial institution.
"Arch Western Notes" means, collectively, a demand promissory note
issued by Arch Western to Thunder Basin Coal Company, L.L.C. as consideration
for the proceeds from the offering of the Notes or any Additional Notes and a
demand promissory note issued by Thunder Basin Coal Company, L.L.C. to the
Issuer as consideration for the proceeds from the offering of the Notes or any
Additional Notes. Each Arch Western Note issued will be in an amount equal to
the aggregate principal amount of the Notes or Additional Notes issued.
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"Arch Western Guarantee" means the unconditional guarantee by Arch
Western of all of the Issuer's obligations under the Notes, including its
obligations to pay principal, interest, and premium, if any, with respect to the
Notes.
"Asset Sale" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by Arch Western or any of its Restricted Subsidiaries, including
any disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of
(a) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares), or
(b) any other Property of Arch Western or any of its Restricted
Subsidiaries outside of the ordinary course of business of Arch Western or such
Restricted Subsidiary,
other than, in the case of clause (a) or (b) above,
(1) any disposition by a Restricted Subsidiary to Arch
Western or by Arch Western or its Restricted Subsidiary to a Restricted
Subsidiary,
(2) any disposition that constitutes a Permitted
Investment or Restricted Payment permitted by the covenant described
under Section 4.08 of this Indenture.
(3) any disposition effected in compliance with the first
paragraph of the covenant described under Section 5.01 of this
Indenture and
(4) any disposition in a single transaction or a series
of related transactions of assets for aggregate consideration of less
than $5,000,000 million.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
means, at any date of determination,
(a) if such Sale and Leaseback Transaction is a Capital Lease
Obligation, the amount of Debt represented thereby according to the definition
of "Capital Lease Obligations," and
(b) in all other instances, the greater of:
(1) the Fair Market Value of the Property subject to such
Sale and Leaseback Transaction, and
(2) the present value (discounted at the interest rate
borne by the Notes, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease
included in such Sale and Leaseback Transaction (including any period
for which such lease has been extended).
"Available Cash" means, as of any date, the cash of Arch Western as of
such date less amounts necessary to pay for operating expenses, interest,
principal and sinking fund payments on indebtedness, capital expenditures,
improvements and replacements, contingencies, reserves
3
and other expenses of Arch Western and its Subsidiaries and less any Net
Available Cash received from an Asset Sale consisting of all of the Capital
Stock of Canyon Fuel or Mountain Coal Company, L.L.C. not used to Repay any Debt
of Arch Western (other than Subordinated Obligations) or reinvest in Additional
Assets (including by reason of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by Arch Western).
"Average Life" means, as of any date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing:
(a) the sum of the product of the numbers of years (rounded to the
nearest one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock not defined multiplied by
the amount of such payment by
(b) the sum of all such payments.
"Bankruptcy Law" means any law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law, including, without
limitation, the bankruptcy law of the Issuer's jurisdiction and title 11, United
States Bankruptcy Code of 1978, as amended.
"Board of Directors" means the board of directors, or equivalent, of
Arch Western; provided, however, that if no such entity exists, "Board of
Directors" means the board of directors of Arch Coal or, if Arch Coal does not
control Arch Western, the board of directors, or equivalent, of the Person that
controls Arch Western; provided further, however, that for purposes of Affiliate
Transactions with Arch Coal or its Affiliates (other than Arch Western or a
Restricted Subsidiary) under Section 4.10 of this Indenture, "Board of
Directors" shall mean the board of directors, or equivalent, of Arch Western.
"Business Day" means any day (other than a Saturday or Sunday) which is
not a day on which banking institutions in New York, New York are authorized or
obligated by law to close for business.
"Canyon Fuel" means Canyon Fuel Company, LLC, a limited liability
company organized and existing under the laws of the State of Delaware.
"Capital Lease Obligations" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.07 of this Indenture, a Capital Lease Obligation shall be deemed
secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any shares or other
equivalents (however designated) of any class of corporate stock or partnership
or limited liability company interests or any other participations, rights,
warrants, options or other interests in the nature of an
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equity interest in such Person, including Preferred Stock, but excluding any
debt security convertible or exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate cash proceeds
received by Arch Western from the issuance or sale (other than to a Subsidiary
of Arch Coal or an employee stock ownership plan or trust established by Arch
Coal or any such Subsidiary for the benefit of their employees) by Arch Western
of its Capital Stock (other than Disqualified Stock) after the Issue Date, net
of attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes or Tax Amount
paid or payable as a result thereof.
"Cash Equivalents" means any of the following:
(a) Investments in U.S. Government Obligations maturing within 365
days of the date of acquisition thereof;
(b) Investments in time deposit accounts, certificates of deposit
and money market deposits maturing within 90 days of the date of acquisition
thereof issued by a bank or trust company organized under the laws of the United
States of America or any state thereof having capital, surplus and undivided
profits aggregating in excess of $500 million and whose long-term debt is rated
"A-3" or "A-" or higher according to Xxxxx'x or S&P (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act));
(c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (a) entered into
with:
(1) a bank meeting the qualifications described in clause
(b) above, or
(2) any primary government securities dealer reporting to
the Market Reports Division of the Federal Reserve Bank of New York;
(d) Investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation (other than an
Affiliate of Arch Western) organized and in existence under the laws of the
United States of America with a rating at the time as of which any Investment
therein is made of "P-1" (or higher) according to Xxxxx'x or "A-1" (or higher)
according to S&P (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)); and
(e) direct obligations (or certificates representing an ownership
interest in such obligations) of any state of the United States of America
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of such state is pledged and which are not callable or
redeemable at the issuer's option; provided that:
(1) the long-term debt of such state is rated "A-3" or
"A-" or higher according to Xxxxx'x or S&P (or such similar equivalent
rating by at least one "nationally recognized statistical rating
organization" (as defined in Rule 436 under the Securities Act)), and
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(2) such obligations mature within 180 days of the date
of acquisition thereof.
"Change of Control" means the occurrence of any of the following
events:
(a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act or any successor provisions to either of the
foregoing), including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act, other than Arch Coal, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a person will be
deemed to have "beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 50% or more of the total voting
power of the Voting Stock of Arch Western (for purposes of this clause (a), such
person or group shall be deemed to beneficially own any Voting Stock of a
corporation held by any other corporation (the "parent corporation") so long as
such person or group beneficially owns, directly or indirectly, in the aggregate
at least a majority of the total voting power of the Voting Stock of such parent
corporation); or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the Property of
Arch Western and its Restricted Subsidiaries, considered as a whole (other than
a disposition of such Property as an entirety or virtually as an entirety to a
Wholly Owned Restricted Subsidiary of Arch Western), shall have occurred, or
Arch Western merges, consolidates or amalgamates with or into any other Person
or any other Person merges, consolidates or amalgamates with or into Arch
Western in any such event pursuant to a transaction in which the outstanding
Voting Stock of Arch Western is reclassified into or exchanged for cash,
securities or other Property, other than any such transaction where:
(1) the outstanding Voting Stock of Arch Western is
reclassified into or exchanged for other Voting Stock of Arch Western
or for Voting Stock of the Surviving Person, and
(2) the Holders of the Voting Stock of Arch Western
immediately prior to such transaction own, directly or indirectly, not
less than a majority of the Voting Stock of Arch Western, or the
Surviving Person immediately after such transaction and in
substantially the same proportion as before the transaction; or
(c) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by such Board or whose
nomination for election by the shareholders of Arch Western, Arch Coal or such
other Person who controls Arch Western, as applicable, was approved by a vote of
not less than three-fourths of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute at
least a majority of the Board of Directors then in office; or
(d) the adoption of any plan of liquidation or dissolution of Arch
Coal, Arch Western or the Issuer; or
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(e) the first day on which (1) Arch Coal's direct or indirect
percentage ownership of the Capital Stock of Arch Western is less than 80% or
(2) Arch Coal ceases to control (as defined in the definition of "Affiliate")
Arch Western.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning ascribed to it in the Note Pledge
Agreement.
"Collateral Trustee" means (a) except as otherwise provided in clause
(b) immediately below, the Trustee, acting in such capacity under the Note
Pledge Agreement, or (b) in the event a "Collateral Trustee" has been appointed
pursuant to a Collateral Trust Agreement, such "Collateral Trustee."
"Collateral Trust Agreement" has the meaning ascribed to it in the Note
Pledge Agreement.
"Commission" means the U.S. Securities and Exchange Commission.
"Commodity Price Protection Agreement" means, in respect of a Person,
any forward contract, commodity swap agreement, commodity option agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Consolidated Current Liabilities" means, as of any date of
determination, the aggregate amount of liabilities of Arch Western and its
consolidated Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), after eliminating:
(a) all intercompany items between Arch Western and any Restricted
Subsidiary or between Restricted Subsidiaries, and
(b) all current maturities of long-term Debt.
"Consolidated Interest Coverage Ratio" of a Person means, as of any
date of determination, the ratio of:
(a) the aggregate amount of EBITDA of such Person for the most
recent four consecutive fiscal quarters ending at least 45 days prior to such
determination date to
(b) Consolidated Interest Expense of such Person for such four
fiscal quarters;
provided, however, that:
(1) if
(A) since the beginning of such period such
Person or any Restricted Subsidiary of such
Person has Incurred any Debt that remains
outstanding or Repaid any Debt, or
7
(B) the transaction giving rise to the need to
calculate the Consolidated Interest Coverage
Ratio is an Incurrence or Repayment of Debt,
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Incurrence or Repayment as
if such Debt was Incurred or Repaid on the first day of such period,
provided that, in the event of any such Repayment of Debt, EBITDA for
such period shall be calculated as if such Person or such Restricted
Subsidiary of such Person had not earned any interest income actually
earned during such period in respect of the funds used to Repay such
Debt, and
(2) if
(A) since the beginning of such period such
Person or any Restricted Subsidiary of such
Person shall have made any Asset Sale or an
Investment (by merger or otherwise) in any
Restricted Subsidiary of such Person (or any
Person which becomes a Restricted Subsidiary
of such Person) or an acquisition of
Property which constitutes all or
substantially all of an operating unit of a
business,
(B) the transaction giving rise to the need to
calculate the Consolidated Interest Coverage
Ratio is such an Asset Sale, Investment or
acquisition, or
(C) since the beginning of such period any other
Person (that subsequently became a
Restricted Subsidiary of such Person or was
merged with or into such Person or any
Restricted Subsidiary of such Person since
the beginning of such period) shall have
made such an Asset Sale, Investment or
acquisition,
then EBITDA for such period shall be calculated after giving pro forma
effect to such Asset Sale, Investment or acquisition as if such Asset
Sale, Investment or acquisition had occurred on the first day of such
period.
If any Debt bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Debt shall be calculated as if the
base interest rate in effect for such floating rate of interest on the date of
determination had been the applicable base interest rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Debt if such
Interest Rate Agreement has a remaining term in excess of 12 months). In the
event the Capital Stock of any Restricted Subsidiary of such Person is sold
during the period, such Person shall be deemed, for purposes of clause (1)
above, to have Repaid during such period the Debt of such Restricted Subsidiary
to the extent such Person and its continuing Restricted Subsidiaries are no
longer liable for such Debt after such sale.
"Consolidated Interest Expense" of a Person means, for any period, the
total interest expense of such Person and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent Incurred by such Person or its Restricted Subsidiaries,
8
(a) interest expense attributable Capital Lease Obligations,
(b) amortization of debt discount and debt issuance cost,
including commitment fees,
(c) capitalized interest,
(d) non-cash interest expense,
(e) commissions, discounts and other fees and charges owed with
respect to letters of credit and banker's acceptance financing,
(f) net costs associated with Hedging Obligations (including
amortization of fees),
(g) Disqualified Stock Dividends,
(h) Preferred Stock Dividends,
(i) interest Incurred in connection with Investments in
discontinued operations,
(j) interest accruing on any Debt of any other Person to the
extent such Debt is Guaranteed by such Person or any of its Restricted
Subsidiaries, and
(k) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or trust to
pay interest or fees to any Person (other than such Person) in connection with
Debt Incurred by such plan or trust.
"Consolidated Net Income" of a Person means, for any period, the net
income (loss) of such Person and its consolidated Restricted Subsidiaries;
provided, however, that there shall not be included in such Consolidated Net
Income:
(a) any net income (loss) of any other Person (other than such
Person) if such other Person is not a Restricted Subsidiary, except that:
(1) subject to the exclusion contained in clause (c)
below, equity of such Person and its consolidated Restricted
Subsidiaries in the net income of any such other Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash distributed by such other Person during such period to
such Person or its Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
to a Restricted Subsidiary, to the limitations contained in clause (b)
below), and
(2) the equity of such Person and its consolidated
Restricted Subsidiaries in a net loss of any other Person for such
period shall be included in determining such Consolidated Net Income to
the extent such Person or any Restricted Subsidiary of such Person has
actually contributed, lent or transferred cash to such other Person,
9
(b) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions, directly or indirectly, to
such Person, except that:
(1) subject to the exclusion contained in clause (c)
below, the equity of such Person and its consolidated Restricted
Subsidiaries in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Restricted Subsidiary
during such period to such Person or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to another Restricted Subsidiary, to the limitation
contained in this clause), and
(2) the equity of such Person and its consolidated
Restricted Subsidiaries in a net loss of any such Restricted Subsidiary
for such period shall be included in determining such Consolidated Net
Income,
(c) any gain (but not loss) realized upon the sale or other
disposition of any Property of such Person or any of its consolidated
Subsidiaries (including pursuant to any Sale and Leaseback Transaction) that is
not sold or otherwise disposed of in the ordinary course of business,
(d) any extraordinary gain or loss,
(e) the cumulative effect of a change in accounting principles;
and
(f) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors and
employees of such Person or any Restricted Subsidiary, provided that such
shares, options or other rights can be redeemed at the option of the holder only
for Capital Stock of such Person (other than Disqualified Stock).
Notwithstanding the foregoing, for purposes of the covenant described under
Section 4.08 of this Indenture only, there shall be excluded from Consolidated
Net Income any dividends, repayments of loans or advances or other transfers of
Property from Unrestricted Subsidiaries to such Person or a Restricted
Subsidiary to the extent such dividends, repayments or transfers increase the
amount of Restricted Payments permitted under such covenant pursuant to clause
(c)(iv) thereof.
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of Arch Western and its consolidated Restricted Subsidiaries, less
any amounts attributable to non-Wholly Owned Restricted Subsidiaries that are
not consolidated with Arch Western and plus the portion of the consolidated net
tangible assets of a non-Wholly Owned Restricted Subsidiary that is not
consolidated with Arch Western equal to the percentage of its outstanding
Capital Stock owned by Arch Western and its Restricted Subsidiaries, as of the
end of the most recent fiscal quarter ending at least 45 days prior to such
determination date as the total assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) of Arch Western and its Restricted
Subsidiaries, after giving
10
effect to purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of (without
duplication):
(a) the excess of cost over fair market value of assets or
businesses acquired;
(b) any revaluation or other write-up in book value of assets
subsequent to the last day of the fiscal quarter of Arch Western immediately
preceding the Issue Date as a result of a change in the method of valuation in
accordance with GAAP; and
(c) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or developmental expenses and other
intangible items.
"Consolidation" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its subsidiaries if and to the extent
the accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP. The term
"Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee, at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx, Xxx Xxxx, XX 00000, Attention: Corporate
Trust Department Corporate Finance Unit or such other address as the Trustee may
designate from time to time by notice to the Holders and the Issuer, or the
principal corporate trust office of any successor Trustee (or such other address
as such successor Trustee may designate from time to time by notice to the
Holders and the Issuer).
"Credit Facility" or "Credit Facilities" means, with respect to any
Guarantor and the Restricted Subsidiaries, one or more debt facilities or
commercial paper facilities with banks, insurance companies or other
institutional lenders providing for revolving credit loans, term loans, notes,
receivables financing (including through the sale or factoring of receivables to
such lenders or to special purpose entities formed to borrow from or issue
securities to such lenders against such receivables), letters of credit or other
forms of guarantees and assurances or other credit facilities, including
overdrafts, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time; provided, however,
that "Credit Facilities" will not mean any Debt that expressly provides that it
is subordinated in right of payment to any other Indebtedness.
"Currency Exchange Protection Agreement" means, in respect of a Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian, administrator or similar official under any Bankruptcy Law.
"Debt" means, with respect to any Person on any date of determination
(without duplication):
(a) the principal of and premium (if any) in respect of:
11
(1) debt of such Person for money borrowed, and
(2) debt evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible
or liable;
(b) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale and Leaseback Transactions entered into by
such Person;
(c) all obligations of such Person representing the deferred
purchase price of Property, all conditional sale obligations of such Person and
all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(d) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in (a) through (c) above) entered
into in the ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if and to the extent drawn upon, such
drawing is reimbursed no later than the third business day following receipt by
such Person of a demand for reimbursement following payment on the letter of
credit);
(e) the amount of all obligations of such Person with respect to
the Repayment of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends);
(f) all obligations of the type referred to in clauses (a) through
(e) above of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(g) all obligations of the type referred to in clauses (a) through
(f) above of other Persons secured by any Lien on any Property of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the Fair Market Value of such
Property and the amount of the obligation so secured; and
(h) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Debt of any Person at any date shall be the outstanding balance,
or the accreted value of such Debt in the case of Debt issued with original
issue discount, at such date of all unconditional obligations as described above
and the maximum liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date. The amount of Debt
represented by a Hedging Obligation shall be equal to:
(1) zero if such Hedging Obligation has been Incurred
pursuant to clause (d), (e) or (f) of the second paragraph of the
covenant described under Section 4.06 of this Indenture, or
12
(2) the notional amount of such Hedging Obligation if not
Incurred pursuant to such clauses.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depositary" means DTC until a successor Depositary, if any, shall have
become such pursuant to this Indenture, and thereafter Depositary shall mean or
include each Person who is then a Depositary hereunder.
"Disqualified Stock" means any Capital Stock of a Person or any of its
Restricted Subsidiaries that by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable, in either case at the
option of the holder thereof) or otherwise:
(a) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise,
(b) is or may become redeemable or repurchaseable at the option of
the holder thereof, in whole or in part, or
(c) is convertible or exchangeable at the option of the holder
thereof for Debt or Disqualified Stock,
on or prior to, in the case of clause (a), (b) or (c), the first anniversary of
the Stated Maturity of the Notes.
"Disqualified Stock Dividends" of a Person means all dividends with
respect to Disqualified Stock of such Person held by Persons other than a Wholly
Owned Restricted Subsidiary of such Person. The amount of any such dividend
shall be equal to the quotient of such dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a
decimal number between 1 and 0) then applicable to such Person (or if such
Person is a limited liability company, the tax rate used to calculate the Tax
Amount).
"Domestic Subsidiary" means any Restricted Subsidiary of Arch Western
other than a Foreign Subsidiary.
"DTC" means The Depository Trust Company.
"EBITDA" of a Person means, for any period, an amount equal to, for
such Person and its consolidated Restricted Subsidiaries:
(a) the sum of Consolidated Net Income for such period, plus the
following to the extent reducing Consolidated Net Income for such period:
(1) the provision for taxes based on income or profits or
utilized in computing net loss,
(2) Consolidated Interest Expense,
13
(3) depreciation,
(4) amortization of intangibles,
(5) any other non-cash items (other than any such
non-cash item to the extent that it represents an accrual of, or
reserve for, cash expenditures in any future period), and
(6) to the extent not included in (1) through (5) above,
the portion of any of the items described in (1) through (5) above of a
non-Wholly Owned Restricted Subsidiary that is not consolidated with
such Person equal to the percentage of the outstanding common Capital
Stock of the non-Wholly Owned Restricted Subsidiary owned by such
Person and its Restricted Subsidiaries, minus
(b) all non-cash items increasing Consolidated Net Income for such
period (other than any such non-cash item to the extent that it will result in
the receipt of cash payments in any future period).
Notwithstanding the foregoing clause (a), the provision for taxes and the
depreciation, amortization and non-cash items of a Restricted Subsidiary shall
be added to Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Restricted Subsidiary was
included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to such
Person by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its shareholders or members.
"Event of Default" has the meaning set forth under Section 6.01 of this
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the notes issued in exchange for the Notes
issued in this offering or any Additional Note pursuant to the Registration
Rights Agreement or any similar registration rights agreement with respect to
any Additional Notes.
"Exchange Offer" means the exchange offer by the Issuer and the
Guarantors of the Exchange Notes for original Notes to be effected pursuant to
the Registration Rights Agreement or any similar Registration Rights Agreement
with respect to any Additional Notes.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any Property, the price that
could be negotiated in an arm's-length free market transaction, for cash,
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,
14
(a) if such Property has a Fair Market Value equal to or less than
$5,000,000, by any Officer, or
(b) if such Property has a Fair Market Value in excess of
$5,000,000, by at least a majority of the disinterested members of the Board of
Directors and evidenced by a Board Resolution, dated within 30 days of the
relevant transaction, delivered to the Trustee.
"Foreign Subsidiary" means any Subsidiary of Arch Western that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date, including those set forth in:
(a) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants,
(b) the statements and pronouncements of the Financial Accounting
Standards Board,
(c) such other statements by such other entity as approved by a
significant segment of the accounting profession, and
(d) the rules and regulations of the Commission governing the
inclusion of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the Commission.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person:
(a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt of such other Person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise), or
(b) entered into for the purpose of assuring in any other manner
the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include:
(1) endorsements for collection or deposit in the
ordinary course of business, or
(2) a contractual commitment by one Person to invest in
another Person for so long as such Investment is reasonably expected to
constitute a Permitted Investment under clause (a), (b) or (c) of the
definition of "Permitted Investment."
The term "Guarantee" used as a verb has a corresponding meaning.
15
"Guarantor" means each of Arch Western, the Subsidiary Guarantors and
any Subsidiary of Arch Western that has issued a Guarantee in favor of the
Notes.
"Hedging Obligation" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
"Holder" means a Person in whose name a Note is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by merger, conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in respect of such Debt or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Debt or obligation on the balance sheet of such Person (and "Incurrence"
and "Incurred" shall have meanings correlative to the foregoing); provided,
however, that any Debt or other obligations of a Person existing at the time
such Person becomes a Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it
becomes a Subsidiary; and provided further, however, that solely for purposes of
determining compliance with Section 4.06 of this Indenture amortization of debt
discount shall not be deemed to be the Incurrence of Debt, provided that in the
case of Debt sold at a discount, the amount of such Debt Incurred shall at all
times be the aggregate principal amount at Stated Maturity.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture following the effectiveness of a registration statement under the
Securities Act covering the Notes, the provisions of the TIA that are deemed to
be a part of and govern this instrument, and any such supplemental indenture,
respectively.
"Indenture Obligations" means the obligations of the Issuer and any
other obligor under this Indenture or under the Notes, including any Guarantor,
to pay principal of, premium, if any, and interest when due and payable, and all
other amounts due or to become due under or in connection with this Indenture,
the Notes and the performance of all other obligations to the Trustee and the
Holders under this Indenture and the Notes, according to the respective terms
thereof.
"Independent Financial Advisor" means an investment banking firm of
national standing or any third party appraiser of national standing, provided
that such firm or appraiser is not an Affiliate of Arch Western.
"Initial Purchasers" means Citigroup Global Markets Inc., X.X. Xxxxxx
Securities Inc., Xxxxxx Xxxxxxx & Co. Incorporation, PNC Capital Markets, Inc.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Credit Suisse First Boston
LLC, Credit Lyonnais Securities (USA) Inc., U.S. Bancorp Xxxxx Xxxxxxx Inc., BNY
Capital Markets, Inc. and BNP Paribas Securities Corp..
"Interest Payment Date" means January 1 and July 1 of each year to
Stated Maturity.
16
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, or Incurrence of a Guarantee of any
obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by, any other Person.
For purposes of the covenants described under Section 4.08 and 4.15 of this
Indenture and the definition of "Restricted Payment," the term "Investment"
shall include the portion (proportionate to Arch Western's or a Restricted
Subsidiary's equity interest in such Subsidiary) of the Fair Market Value of the
net assets of any Subsidiary of Arch Western at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, Arch Western shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary of an amount (if positive) equal to:
(a) Arch Western's "Investment" in such Subsidiary at the time of
such redesignation, less
(b) the portion (proportionate to Arch Western's or a Restricted
Subsidiary's equity interest in such Subsidiary) of the Fair Market Value of the
net assets of such Subsidiary at the time of such redesignation.
In determining the amount of any Investment made by transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such Investment.
"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 Notes are initially issued.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"Issuer Order" means a written order signed in the name of the Issuer
by any Person authorized by a resolution of the Members of the Issuer or such
other similar governing body or Person of the Issuer as set forth in the
Issuer's Limited Liability Company Agreement dated June 4, 2003.
"Lien" means, with respect to any Property of any Person, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
17
"LLC Agreement" means the Limited Liability Company Agreement of Arch
Western Resources LLC dated as of June 1, 1998 between Arch Western Acquisition
Corporation and Delta Housing, Inc.
"Maturity" means, with respect to any indebtedness, the date on which
any principal of such indebtedness becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to the
rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other
non-cash form), in each case net of:
(a) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale,
(b) all payments made on or in respect of any Debt that is secured
by any Property subject to such Asset Sale, in accordance with the terms of any
Lien upon such Property, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale,
(c) all distributions and other payments required to be made to
minority interest Holders in Subsidiaries or joint ventures as a result of such
Asset Sale, and
(d) the deduction of appropriate amounts provided by the seller as
a reserve, in accordance with GAAP, against any liabilities associated with the
Property disposed of in such Asset Sale and retained by Arch Western or any
Restricted Subsidiary after such Asset Sale.
"Note Guarantees" means the Arch Western Guarantee and the Subsidiary
Guarantees.
"Note Pledge Agreement" means the Note Pledge Agreement dated as of
June 25, 2003 made by Arch Western in favor of the Trustee.
"Officer" means the Chief Executive Officer, the President, the Chief
Financial Officer or any Executive Vice President of Arch Western, or, in the
event no such officers exist, of Arch Coal or the Person who controls Arch
Western.
"Officers' Certificate" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer or principal
financial officer, and delivered to the Trustee.
18
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to Arch
Western, the Issuer or the Trustee.
"Pari Passu Debt" means (a) with respect to the Notes, any Debt of the
Issuer that ranks pari passu in right of payment to the Notes and (b) with
respect to any Guarantees, Debt which ranks pari passu in right of payment to
such Guarantees.
"Permitted Business" means any business that is related, ancillary or
complementary to the businesses of Arch Western and its Restricted Subsidiaries
on the Issue Date.
"Permitted Investments" means any Investment by Arch Western or its
Restricted Subsidiary in:
(a) Arch Western or any Restricted Subsidiary,
(b) any Person that will, upon the making of such Investment,
become a Restricted Subsidiary, provided that the primary business of such
Restricted Subsidiary is a Permitted Business;
(c) any Person if as a result of such Investment such Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, Arch Western or its Restricted Subsidiary,
provided that such Person's primary business is a Permitted Business;
(d) Cash Equivalents;
(e) receivables owing to Arch Western or its Restricted
Subsidiary, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as
Arch Western or such Restricted Subsidiary deems reasonable under the
circumstances;
(f) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business;
(g) loans and advances to employees made in the ordinary course of
business permitted by law and consistent with past practices of Arch Western or
such Restricted Subsidiary, as the case may be; provided that such loans and
advances do not exceed $2.5 million in the aggregate at any one time
outstanding;
(h) stock, obligations or other securities received in settlement
of debts created in the ordinary course of business and owing to Arch Western or
a Restricted Subsidiary or in satisfaction of judgments;
(i) any Person to the extent such Investment represents the
non-cash portion of the consideration received in connection with an Asset Sale
consummated in compliance with the covenant described under Section 4.09 of this
Indenture.
19
(j) Investments in Permitted Joint Ventures in an aggregate
amount, together with all other Investments made pursuant to this clause (j),
not to exceed 5.0% of Consolidated Net Tangible Assets; and
(k) other Investments made for Fair Market Value that do not
exceed $50.0 million in the aggregate outstanding at any one time.
"Permitted Joint Ventures" means any Person which is, directly or
indirectly, through its Subsidiaries or otherwise, engaged principally in a
Permitted Business, and the Capital Stock (or securities convertible into
Capital Stock) of which is owned by Arch Western or one or more of its
Restricted Subsidiaries and one or more other Person other than Arch Coal or any
of its Subsidiaries or Affiliates.
"Permitted Liens" means:
(a) Liens to secure Debt permitted to be Incurred under clause (b)
of the second paragraph of the covenant described under Section 4.06 of this
Indenture and other purchase money Liens to finance Property of Arch Western or
any of its Restricted Subsidiaries; provided that any such Lien may not extend
to any Property of Arch Western or any Restricted Subsidiary, other than the
Property acquired, constructed or leased and any improvements or accessions to
such Property (including, in the case of the acquisition of Capital Stock of a
Person that becomes a Restricted Subsidiary, Liens on the Property of the Person
whose Capital Stock was acquired);
(b) Liens for taxes, assessments or governmental charges or levies
on the Property of Arch Western or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings promptly instituted
and diligently concluded, provided that any reserve or other appropriate
provision that shall be required in conformity with GAAP shall have been made
therefore;
(c) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens, on the Property of Arch Western or any
Restricted Subsidiary arising in the ordinary course of business and securing
payment of obligations that are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;
(d) Liens on the Property of Arch Western 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, 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, the obtaining of
advances or credit or the payment of the deferred purchase price of Property and
which do not in the aggregate impair in any material respect the use of Property
in the operation of the business of Arch Western and the Restricted Subsidiaries
taken as a whole;
(e) Liens on Property at the time Arch Western or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into Arch Western or any Restricted Subsidiary;
provided, however, that any such Lien may not extend to any other Property of
Arch Western or any Restricted Subsidiary; provided further, however, that
20
such Liens shall not have been Incurred in anticipation of or in connection with
the transaction or series of transactions pursuant to which such Property was
acquired by Arch Western or any Restricted Subsidiary;
(f) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such Lien may not
extend to any other Property of Arch Western or any other Restricted Subsidiary
that is not a direct Subsidiary of such Person; provided further, however, that
any such Lien was not Incurred in anticipation of or in connection with the
transaction or series of transactions pursuant to which such Person became a
Restricted Subsidiary;
(g) pledges or deposits by Arch Western or any Restricted
Subsidiary under workers' compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which Arch Western
or any Restricted Subsidiary is party, or deposits to secure public or statutory
obligations of Arch Western, or deposits for the payment of rent, in each case
Incurred in the ordinary course of business;
(h) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(i) Liens existing on the Issue Date not otherwise described in
clauses (a) through (h) above;
(j) Liens on the Property of Arch Western or any Restricted
Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured
by Liens referred to in clause (a), (e), (f) or (i) above; provided, however,
that any such Lien shall be limited to all or part of the same Property that
secured the original Lien (together with improvements and accessions to such
Property), and the aggregate principal amount of Debt that is secured by such
Lien shall not be increased to an amount greater than the sum of:
(1) the outstanding principal amount, or, if greater, the
committed amount, of the Debt secured by Liens described under clause
(a), (e), (f) or (i) above, as the case may be, at the time the
original Lien became a Permitted Lien under this Indenture, and
(2) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, incurred by Arch Western or
such Restricted Subsidiary in connection with such Refinancing;
(k) Liens on the Arch Coal Notes to secure Debt under a credit
facility of Arch Western in an aggregate principal amount not to exceed
$100,000,000 at any one time outstanding; and
(l) Liens not otherwise permitted by clauses (a) through (k) above
encumbering Property having an aggregate Fair Market Value not in excess of 5.0%
of Consolidated Net Tangible Assets.
21
"Permitted Refinancing Debt" means any Debt that Refinances any other
Debt, including any successive Refinancings, so long as:
(a) such Debt is in an aggregate principal amount (or if Incurred
with original issue discount, an aggregate issue price) not in excess of the sum
of:
(1) the aggregate principal amount (or if Incurred with
original issue discount, the aggregate accreted value) then outstanding
of the Debt being Refinanced, and
(2) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, related to such Refinancing,
(b) the Average Life of such Debt is equal to or greater than the
Average Life of the Debt being Refinanced,
(c) the Stated Maturity of such Debt is no earlier than the Stated
Maturity of the Debt being Refinanced, and
(d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced;
provided, however, that Permitted Refinancing Debt shall not include:
(x) Debt of a Subsidiary of Arch Western that is not a
Subsidiary Guarantor that Refinances Debt of Arch Western or a
Subsidiary Guarantor, or
(y) Debt of Arch Western or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including any
limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Possessory Collateral" means any Collateral that, under the Uniform
Commercial Code of the applicable jurisdiction, may only be perfected by the
secured party's taking, and maintaining, possession thereof, with or without any
necessary endorsement.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"Preferred Stock Dividends" of a Person means all dividends with
respect to Preferred Stock of Restricted Subsidiaries of such Person held by
Persons other than such Person or a Wholly Owned Restricted Subsidiary of such
Person. The amount of any such dividend shall be equal to the quotient of such
dividend divided by the difference between one and the maximum statutory federal
income rate (expressed as a decimal number between 1 and 0) then applicable to
22
the issuer of such Preferred Stock (or if the issuer is a limited liability
company, the tax rate used to calculate the Tax Amount).
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms hereof, a calculation performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of Arch Western, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of Arch Western, as the case may
be.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten public offering of
common Capital Stock (other than Disqualified Stock) of Arch Western pursuant to
an effective registration statement under the Securities Act.
"Purchase Money Debt" means Debt:
(a) consisting of the deferred purchase price of Property,
conditional sale obligations, obligations under any title retention agreement,
other purchase money obligations and obligations in respect of industrial
revenue bonds, in each case where the maturity of such Debt does not exceed the
anticipated useful life of the Property being financed, and
(b) Incurred to finance the acquisition, construction or lease by
Arch Western or a Restricted Subsidiary of such Property, including additions
and improvements thereto;
provided, however, that such Debt is Incurred within 180 days after the
acquisition, construction or lease of such Property by Arch Western or such
Restricted Subsidiary.
"Qualified Capital Stock" of any Person means any and all Capital Stock
of such Person other than Redeemable Capital Stock.
"QIB" means a "Qualified Institutional Buyer" as defined under Rule
144A.
"Rating Agency" means S&P and/or Moody's.
"Record Date" for the interest payable on any Interest Payment Date
means June 15 or December 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"Redemption Date," when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
23
"Refinance" means, in respect of any Debt, to refinance, extend, renew,
refund or Repay, or to issue other Debt, in exchange or replacement for, such
Debt. "Refinanced" and "Refinancing" shall have correlative meanings.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Notes dated June 25, 2003, among the Issuer, Arch Coal, the
Guarantors and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act (including
any successor regulation thereto), as it may be amended from time to time.
"Repay" means, in respect of any Debt, to repay, prepay, repurchase,
redeem, legally defease or otherwise retire such Debt. "Repayment" and "Repaid"
shall have correlative meanings. For purposes of the covenant described under
Section 4.09 of this Indenture and the definition of "Consolidated Interest
Coverage Ratio," Debt shall be considered to have been Repaid only to the extent
the related loan commitment, if any, shall have been permanently reduced in
connection therewith.
"Restricted Payment" means:
(a) any dividend or distribution (whether made in cash, securities
or other Property) declared or paid on or with respect to any shares of Capital
Stock of Arch Western or any Restricted Subsidiary (including any payment in
connection with any merger or consolidation with or into Arch Western or any
Restricted Subsidiary), except for any dividend or distribution that is made
solely to Arch Western or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other
shareholders or members of such Restricted Subsidiary on a pro rata basis or on
a basis that results in the receipt by Arch Western or a Restricted Subsidiary
of dividends or distributions of greater value than it would receive on a pro
rata basis) or any dividend or distribution payable solely in shares of Capital
Stock (other than Disqualified Stock) of Arch Western;
(b) the purchase, repurchase, redemption, acquisition or
retirement for value of any Capital Stock of Arch Western or any Restricted
Subsidiary (other than from Arch Western or a Restricted Subsidiary) or any
securities exchangeable for or convertible into any such Capital Stock,
including the exercise of any option to exchange any Capital Stock (other than
for or into Capital Stock of Arch Western that is not Disqualified Stock);
(c) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity, sinking fund
or amortization or other installment payment, of any Subordinated Obligation
(other than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a scheduled maturity, sinking
fund or amortization or other installment obligation, in each case due within
one year of the date of acquisition);
(d) any Investment (other than Permitted Investments) in any
Person; or
(e) the issuance, sale or other disposition of Capital Stock of
any Restricted Subsidiary to a Person other than Arch Western or another
Restricted Subsidiary if the result
24
thereof is that such Restricted Subsidiary shall cease to be a Restricted
Subsidiary, in which event the amount of such "Restricted Payment" shall be the
Fair Market Value of the remaining interest, if any, in such former Restricted
Subsidiary held by Arch Western and the other Restricted Subsidiaries.
"Restricted Subsidiary" means any Subsidiary of Arch Western other
than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"S&P" means Standard and Poor's Rating Services or any successor to the
rating agency business thereof and its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement relating to Property now owned or hereafter acquired whereby Arch
Western or a Restricted Subsidiary transfers such Property to another Person and
Arch Western or a Restricted Subsidiary leases it from such Person.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended, or
any successor statute, and the rules and regulations promulgated by the SEC
thereunder.
"Security Documents" means the Note Pledge Agreement, any Collateral
Trust Agreement and any other documents or instruments pursuant to which a Lien
on the Arch Coal Notes is granted to secure the Obligations (as defined in the
Note Pledge Agreement).
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" of Arch Western within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"Special Interest" has the meaning set forth in Exhibit A.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
25
"Subordinated Obligation" means any Debt of Arch Western or a
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) that is subordinate or junior in right of payment to the Note
Guarantees pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation, company
(including any limited liability company), association, partnership, joint
venture or other business entity of which at least a majority of the total
voting power of the Voting Stock is at the time owned or controlled, directly or
indirectly, by:
(a) such Person,
(b) such Person and one or more Subsidiaries of such Person, or
(c) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of
all of the Issuer's obligations with respect to the Notes.
"Subsidiary Guarantor" means any Subsidiary of Arch Western that
executes a Guarantee of the Notes pursuant to Article 10 hereof.
"Surviving Person" means the surviving Person formed by a merger,
consolidation or amalgamation and, for purposes of Section 5.01 of this
Indenture, a Person to whom all or substantially all of the Property of Arch
Western or a Subsidiary Guarantor is sold, transferred, assigned, leased,
conveyed or otherwise disposed.
"Tax Amount" means the portion of the Hypothetical Income Tax Amount
(as defined in the LLC Agreement as in effect on the Issue Date) allocated to
the members of Arch Western, other than Arch Coal or any of its Affiliates.
"Tax Distribution" means a distribution in respect of taxes pursuant to
clause (e) of the second paragraph of Section 4.08 of this Indenture.
"TIA" means the United States Trust Indenture Act of 1939 as in effect
on the date hereof; provided, however, that in the event the Trust Indenture Act
of 1939 is amended after such date, "TIA" means, to the extent required by any
such amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any vice
president, assistant vice president, assistant treasurer or trust officer within
the Corporate Trust Division of the Trustee (or any successor unit, department
or division of the Trustee) located at the Corporate Trust Office of the Trustee
who has direct responsibility for the administration of this Indenture and, for
the purposes of Sections 7.01(c)(ii) and the second sentence of Section 6.01(b)
shall also include any other officer of the Trustee to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
26
"Unrestricted Subsidiary" means:
(a) any Subsidiary of Arch Western that is designated after the
Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to
the covenant described under Section 4.15 of this Indenture and is not
thereafter redesignated as a Restricted Subsidiary as permitted pursuant
thereto; and
(b) any Subsidiary of an Unrestricted Subsidiary.
After the date upon which Arch Western and its Restricted Subsidiaries cease to
be subject to the Specified Covenants, all Unrestricted Subsidiaries shall be
Restricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Voting Stock" of any Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Restricted Subsidiary" of a Person means, at any time, a
Restricted Subsidiary all the Voting Stock of which (except directors'
qualifying shares) is at such time owned, directly or indirectly, by such Person
and its other Wholly Owned Subsidiaries.
27
SECTION 1.02. Other Definitions.
Term Defined in Section
--------------------------------------------------------- ------------------
"Additional Notes....................................... Recitals
"Affiliate Transaction.................................. 4.10
"Allocable Excess Proceeds.............................. 4.09
"Authorized Agent"...................................... 12.09
"Change of Control Offer"............................... 4.11(a)
"Change of Control Purchase Price"...................... 4.11(a)
"Defaulted Interest".................................... 2.12
"Event of Default"...................................... 6.01(a)
"Excess Proceeds"....................................... 4.09(b)
"Exchange Global Note".................................. 2.01(b)
"Global Notes".......................................... 2.01 (c)
"incorporated provision"................................ 12.01
"Notes"................................................. Recitals
"Notice of Default...................................... 6.01(a)(iii)
"Obligations"........................................... 10.01(a)
"Original Notes"........................................ Recitals
"Participants".......................................... 2.01 (c)
"Paying Agent".......................................... 2.03
"Permitted Debt"........................................ 4.06
"Prepayment Offer....................................... 4.09
"Recovery Currency"..................................... 12.15
"Registrar"............................................. 2.03
"Regulation S Global Note".............................. 2.01 (c)
"Restricted Global Note"................................ 2.01 (c)
"Security Register"..................................... 2.03
"Transfer Agent"........................................ 2.03
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act. The mandatory provisions of the TIA that are required to be a
part of and govern indentures qualified under the TIA are incorporated by
reference in and are a part of this Indenture, whether or not this Indenture is
so qualified. The following TIA terms have the following meanings as used in
this Indenture:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securities holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the "indenture securities" means the Issuer and
the Guarantors.
28
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) "including" or "include" means including or include
without limitation;
(v) words in the singular include the plural and words in
the plural include the singular;
(vi) "interest" shall include Special Interest, if any;
(vii) unsecured or unguaranteed Debt shall not be deemed to
be subordinate or junior to secured or guaranteed Debt merely by virtue
of its nature as unsecured or unguaranteed Debt;
(viii) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section, clause or other subdivision
(ix) unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance with GAAP as in
effect from time to time, applied on a basis consistent with the most
recent audited consolidated financial statements of the Company;
(x) "$," "U.S. Dollars" and "United States Dollars" each
refer to United States dollars, or such other money of the United
States that at the time of payment is legal tender for payment of
public and private debts; and
(xi) whenever in this Indenture there is mentioned, in any
context, principal, interest or any other amount payable under or with
respect to any Note, such mention shall be deemed to include mention of
the payment of Special Interest to the extent that, in such context,
Special Interest is, was or would be payable in respect thereof.
29
ARTICLE TWO
THE NOTES
SECTION 2.01. The Notes. (a) The Trustee shall initially
authenticate Notes for original issue on the Issue Date in an aggregate
principal amount of $700,000,000 upon a written order of the Issuer in the form
of an Officers' Certificate of the Company (other than as provided in Section
2.07). The Company may, as long as permitted under this Indenture, issue and the
Trustee shall authenticate (1) the Exchange Notes and (2) Additional Notes after
the Issue Date in unlimited amount for original issue upon a written order of
the Company in the form of an Officers' Certificate in aggregate principal
amount as specified in such order. Each such written order shall specify the
amount of Notes to be authenticated and the date on which such Notes are to be
authenticated.
(b) Form and Dating. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture. The Notes may have notations, legends
or endorsements required by law, the rules of any securities exchange or usage.
The Issuer shall approve the form of the Notes. Each Note shall be dated the
date of its authentication. The terms and provisions contained in the form of
the Notes shall constitute and are hereby expressly made a part of this
Indenture. The Notes shall be issued only in registered form without coupons and
only in minimum denominations of $1,000 in principal amount and any integral
multiples of $1,000 in excess thereof.
(c) Global Notes. Notes offered and sold to QIBs in reliance on
Rule 144A as provided in the Purchase Agreement shall be issued initially in the
form of one or more Global Notes substantially in the form of Exhibit A hereto,
with such applicable legends as are provided in Exhibit A hereto, except as
otherwise permitted herein (the "Restricted Global Note"), which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Depositary, and registered in the name of the Depositary or its nominee, as the
case may be, duly executed by the Issuer and authenticated by the Trustee (or
its agent in accordance with Section 2.02) as hereinafter provided. The
aggregate principal amount of the Restricted Global Note may from time to time
be increased or decreased by adjustments made by the Registrar on Schedule A to
the Restricted Global Note and recorded in the Security Register, as hereinafter
provided. Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Global Notes substantially in the form of
Exhibit A hereto, with such applicable legends as are provided in Exhibit A
hereto, except as otherwise permitted herein (the "Regulation S Global Note"),
which shall be deposited on behalf of the purchasers of the Notes represented
thereby with the Depositary, and registered in the name of the Depositary or its
nominee, as the case may be, duly executed by the Issuer and authenticated by
the Trustee (or an authenticating agent appointed by the Trustee in accordance
with Section 2.02) as hereinafter provided. The aggregate principal amount of
the Regulation S Global Note may from time to time be increased or decreased by
adjustments made by the Registrar on Schedule A to the Regulation S Global Note
and recorded in the Security Register, as hereinafter provided.
If and when issued, Exchange Notes offered to Holders, as provided in
the Registration Rights Agreement, shall be issued initially in the form of one
or more Global Notes substantially in the form of Exhibit A hereto, with such
applicable omissions and legends as are provided in
30
Exhibit A hereto, except as otherwise permitted herein (the "Exchange Global
Note"), which shall be deposited on behalf of the Holders of the Exchange Notes
represented thereby with the Depositary, and registered in the name of the
Depositary or its nominee, as the case may be, duly executed by the Issuer and
authenticated by the Trustee (or an authenticating agent appointed by the
Trustee in accordance with Section 2.02) as hereinafter provided. The aggregate
principal amount of the Exchange Global Note may from time to time be increased
or decreased by adjustments made by the Registrar on Schedule A to the Exchange
Global Note and recorded in the Security Register, as hereinafter provided.
Upon the transfer, exchange or replacement of any Original Note
remaining outstanding after the consummation of an Exchange Offer, the Registrar
shall deliver such new Original Note only in global form, subject to Section
2.10, and such new Original Note shall continue to bear the applicable legends
set forth in Exhibit A hereto. In the case of a Restricted Global Note, such
legends shall include the private placement legend unless (x) the appropriate
period referred to in Rule 144(k) under the Securities Act has elapsed or (y)
there is delivered to the Registrar an opinion of counsel reasonably
satisfactory to the Issuer and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the Securities Act.
Upon the transfer, exchange or replacement of any Note pursuant to a
Shelf Registration Statement, the Registrar shall deliver such new Note only in
global form, subject to Section 2.10, and such new Note shall continue to bear
the applicable legends set forth in Exhibit A hereto; provided, however, that
such new Note shall not be required to bear the private placement legend set
forth in Exhibit A hereto. Beneficial interests in any such new Note shall be
reflected in the Exchange Global Note.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply to the
Restricted Global Note, the Regulation S Global Note, and, if and when issued,
the Exchange Global Note (collectively, the "Global Notes") deposited with or on
behalf of the Depositary.
Members of, or participants and account holders in, DTC
("Participants") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary, or by the Trustee or any
custodian of the Depositary or under such Global Note, and the Depositary or its
nominee may be treated by the Issuer, a Guarantor, the Trustee and any agent of
the Issuer, a Guarantor or the Trustee as the sole owner of such Global Note for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, a Guarantor, the Trustee or any agent of the Issuer, a
Guarantor or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and their Participants, the operation of customary practices of such
persons governing the exercise of the rights of a Holder of a beneficial
interest in any Global Note.
Subject to the provisions of Section 2.10(b), the registered Holder of
a Global Note may grant proxies and otherwise authorize any Person, including
Participants and Persons that may hold interests through Participants, to take
any action that a Holder is entitled to take under this Indenture or the Notes.
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Except as provided in Section 2.10, owners of a beneficial interest in
Global Notes will not be entitled to receive physical delivery of certificated
Notes.
SECTION 2.02. Execution and Authentication. An authorized
officer shall sign the Notes for the Issuer by manual or facsimile signature.
If an authorized officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.
A Note shall not be valid or obligatory for any purpose until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Note. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
Pursuant to an Issuer Order, the Issuer shall execute and the Trustee
shall authenticate (a) Original Notes for original issue up to an aggregate
principal amount of $700,000,000, (b) Additional Notes subject to compliance at
the time of issuance of such Additional Notes with the provisions of this
Indenture in an unlimited amount and Exchange Notes for issue only in an
Exchange Offer, pursuant to the Registration Rights Agreement, for Notes up to
an aggregate principal amount of Original Notes and Additional Notes exchanged
in such Exchange Offer.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Issuer to authenticate the Notes. Unless limited by the terms of such
appointment, any such authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by any such agent. An authenticating agent has
the same rights as any Registrar, co-Registrar Transfer Agent or Paying Agent to
deal with the Issuer or an Affiliate of the Issuer.
The Trustee shall have the right to decline to authenticate and deliver
any Notes under this Section 2.02 if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability to existing Holders.
SECTION 2.03. Registrar, Transfer Agent and Paying Agent.
The Issuer shall maintain an office or agency for the registration of the Notes
and of their transfer or exchange (the "Registrar"), an office or agency where
Notes may be transferred or exchanged (the "Transfer Agent"), an office or
agency where the Notes may be presented for payment (the "Paying Agent") and an
office or agency where notices or demands to or upon the Issuer in respect of
the Notes may be served. The Issuer may appoint one or more Transfer Agents, one
or more co-Registrars and one or more additional Paying Agents.
The Issuer shall maintain a Transfer Agent and Paying Agent in New
York, New York. The Issuer any or its Affiliates may act as Transfer Agent,
Registrar, co-Registrar, Paying Agent and agent for service of notices and
demands in connection with the Notes; provided, however, that neither the Issuer
nor any of its Affiliates shall act as Paying Agent for the purposes of Articles
Three and Eight and Sections 4.09 and 4.11.
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The Issuer hereby appoints the office of The Bank of New York in the
Borough of Manhattan located at the address set forth in Section 13.02(a) as
Registrar and as Transfer Agent and Paying Agent.
Subject to any applicable laws and regulations, the Issuer shall cause
the Registrar to keep a register (the "Security Register") at its corporate
trust office in which, subject to such reasonable regulations it may prescribe,
the Issuer shall provide for the registration of ownership, exchange, and
transfer of the Notes. Such registration in the Security Register shall be
conclusive evidence of the ownership of Notes. Included in the books and records
for the Notes shall be notations as to whether such Notes have been paid,
exchanged or transferred, canceled, lost, stolen, mutilated or destroyed and
whether such Notes have been replaced. In the case of the replacement of any of
the Notes, the Registrar shall keep a record of the Note so replaced and the
Note issued in replacement thereof. In the case of the cancellation of any of
the Notes, the Registrar shall keep a record of the Note so canceled and the
date on which such Note was canceled.
The Issuer shall enter into an appropriate agency agreement with any
Paying Agent or co-Registrar not a party to this Indenture, which, following the
effectiveness of a Registration Statement pursuant to the Registration Rights
Agreement, shall incorporate the terms of the TIA. The agreement shall implement
the provisions of this Indenture that relate to such agent. The Issuer shall
notify the Trustee of the name and address of any such agent. If the Issuer
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.07
of this Indenture.
SECTION 2.04. Paying Agent to Hold Money in Trust. Not
later than 10:00 am (New York time) on each due date of the principal, premium,
if any, and interest on any Notes, the Issuer shall deposit with the Paying
Agent money in immediately available funds sufficient to pay such principal,
premium, if any, and interest so becoming due on the due date for payment under
the Notes. The Issuer shall require each Paying Agent other than the Trustee to
agree in writing that such Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, and interest on the Notes (whether such money has
been paid to it by the Issuer or any other obligor on the Notes), and such
Paying Agent shall promptly notify the Trustee of any default by the Issuer (or
any other obligor on the Notes) in making any such payment. The Issuer at any
time may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If the Issuer or
any Affiliate of the Issuer acts as Paying Agent, it will, on or before each due
date of any principal, premium, if any, or interest on the Notes, segregate and
hold in a separate trust fund for the benefit of the Holders a sum of money
sufficient to pay such principal, premium, if any, or interest so becoming due
until such sum of money shall be paid to such Holders or otherwise disposed of
as provided in this Indenture, and will promptly notify the Trustee of its
action or failure to act.
SECTION 2.05. Holder Lists and Registration Rights
Agreements. (a) The Registrar shall preserve in as current a form as is
reasonably practicable the most recent list
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available to it of the names and addresses of Holders and shall otherwise comply
with TIA Section 312(a). If the Trustee is not the Registrar, the Issuer shall
furnish to the Trustee, in writing no later than the Record Date for each
Interest Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such Record Date as the Trustee may
reasonably require of the names and addresses of Holders, including the
aggregate principal amount of Notes held by each Holder.
(b) The Trustee shall maintain copies of the Registration Rights
Agreement available for inspection by Holders during normal business hours at
its Corporate Trust Office for so long as there are Notes outstanding that are
subject to registration under the Registration Rights Agreement.
SECTION 2.06. Transfer and Exchange. (a) Where Notes are
presented to the Registrar or a co-Registrar with a request to register a
transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange in
accordance with the requirements of this Section 2.06. To permit registrations
of transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denominations and of a
like aggregate principal amount, at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange of Notes (except as
otherwise expressly permitted herein), but the Issuer may require payment of a
sum sufficient to cover any agency fee or similar charge payable in connection
with any such registration of transfer or exchange of Notes (other than any
agency fee or similar charge payable upon exchanges pursuant to Sections 2.10,
3.08 or 9.05) or in accordance with an Excess Proceeds Offer pursuant to Section
4.09 or Change of Control Offer pursuant to Section 4.11, not involving a
transfer.
Upon presentation for exchange or transfer of any Note as permitted by
the terms of this Indenture and by any legend appearing on such Note, such Note
shall be exchanged or transferred upon the Security Register and one or more new
Notes shall be authenticated and issued in the name of the Holder (in the case
of exchanges only) or the transferee, as the case may be. No exchange or
transfer of a Note shall be effective under this Indenture unless and until such
Note has been registered in the name of such Person in the Security Register.
Furthermore, the exchange or transfer of any Note shall not be effective under
this Indenture unless the request for such exchange or transfer is made by the
Holder or by a duly authorized attorney-in-fact at the office of the Registrar.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Issuer or the Registrar) be duly endorsed,
or be accompanied by a written instrument or transfer, in form satisfactory to
the Issuer and the Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer evidencing the same indebtedness,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
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In the event that the Issuer delivers to the Trustee a copy of an
Officers' Certificate certifying that a registration statement under the
Securities Act with respect to the Exchange Offer, or a Shelf Registration
Statement, as the case may be, has been declared effective by the SEC, and that
the Issuer has offered Exchange Notes to the Holders in accordance with the
Exchange Offer or that Notes have been offered pursuant to such Shelf
Registration Statement, the Trustee shall exchange or issue upon transfer, as
the case may be, upon request of any Holder, such Holder's Notes for (i) in the
case of an Exchange Offer, Exchange Notes upon the terms set forth in the
Exchange Offer or (ii) in the case of a transfer pursuant to a Shelf
Registration Statement, Notes that comply with the requirements applicable
following such a transfer as set forth in Section 2.01(c).
The Issuer shall not be required (i) to issue, register the transfer
of, or exchange any Note during a period beginning at the opening of 15 Business
Days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.02 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
(b) Notwithstanding any provision to the contrary herein, so long
as a Global Note remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Note, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Section
2.01(d), Section 2.06(a) and this Section 2.06(b); provided, however, that a
beneficial interest in a Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the restricted Note
legend on the Note, if any.
(i) Except for transfers or exchanges made in accordance
with any of clauses (ii), (iii), (iv) or (v) of this Section 2.06(b),
transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.
(ii) Restricted Global Note to Regulation S Global Note.
If the Holder of a beneficial interest in the Restricted Global Note at
any time wishes to exchange its interest in such Restricted Global Note
for an interest in the Regulation S Global Note, or to transfer its
interest in such Restricted Global Note to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Regulation
S Global Note, such transfer or exchange may be effected, only in
accordance with this clause (ii) and the rules and procedures of the
Depositary. Upon receipt by the Registrar from the Transfer Agent of
(A) instructions directing the Registrar to credit or cause to be
credited an interest in the Regulation S Global Note in a specified
principal amount and to cause to be debited an interest in the
Restricted Global Note in such specified principal amount, and (B) a
certificate in the form of Exhibit B attached hereto given by the
Holder of such beneficial interest stating that the transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and (x) pursuant to and in accordance
with Regulation S or (y) that the Note being transferred is being
transferred in a transaction permitted by Rule 144, then the Registrar
shall instruct the Depositary to reduce or cause to be reduced the
principal amount of the Restricted Global Note and to
35
increase or cause to be increased the principal amount of the
Regulation S Global Note by the aggregate principal amount of the
interest in the Restricted Global Note to be exchanged.
(iii) Regulation S Global Note to Restricted Global Note.
If the Holder of a beneficial interest in the Regulation S Global Note
at any time wishes to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in the
Restricted Global Note, such transfer may be effected only in
accordance with this clause (iii) and the rules and procedures of the
Depositary. Upon receipt by the Registrar from the Transfer Agent of
(A) instructions directing the Registrar to credit or cause to be
credited an interest in the Restricted Global Note in a specified
principal amount and to cause to be debited an interest in the
Regulation S Global Note in such specified principal amount, and (B) a
certificate in the form of Exhibit C attached hereto given by the
Holder of such beneficial interest stating that the transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and stating that (x) the Person
transferring such Interest reasonably believes that the Person
acquiring such interest is a QIB and is obtaining such interest in a
transaction meeting the requirements of Rule 144A and any applicable
securities laws of any state of the United States or (y) that the
Person transferring such interest is relying on an exemption other than
Rule 144A from the registration requirements of the Securities Act and,
in such circumstances, such Opinion of Counsel as the Issuer or the
Trustee may reasonably request to ensure that the requested transfer or
exchange is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act, then the Registrar shall instruct the Depositary to
reduce or cause to be reduced the principal amount of the Regulation S
Global Note and to increase or cause to be increased the principal
amount of the Restricted Global Note by the aggregate principal amount
of the interest in the Regulation S Global Note to be exchanged or
transferred.
(iv) Restricted Global Note to Exchange Global Note.
Following the earlier of the consummation of the Exchange Offer or the
transfer of a Note pursuant to a Shelf Registration Statement that
results in beneficial interests in such Note being reflected in the
Exchange Global Note, if the Holder of a beneficial interest in the
Restricted Global Note at any time wishes to exchange its interest in
such Restricted Global Note for an interest in the Exchange Global
Note, or to transfer its interest in such Restricted Global Note to a
Person who wishes to take delivery thereof in the form of a beneficial
interest in the Regulation S Global Note, such transfer or exchange, if
not effected pursuant to Section 2.06(a) may be effected only in
accordance with this clause (iv) and the rules and procedures of the
Depositary. Upon receipt by the Registrar from the Transfer Agent of
(A) instructions directing the Registrar to credit or cause to be
credited an interest in the Exchange Global Note in a specified
principal amount and to cause to be debited an interest in the
Restricted Global Note in such specified principal amount, and (B) a
certificate in the form of Exhibit B attached hereto given by the
Holder of such beneficial interest stating that the transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and (x) pursuant to and in accordance
with Regulation S or (y) that the Note being transferred is being
transferred in a transaction permitted by Rule 144, then the Registrar
shall instruct the Depositary to
36
reduce or cause to be reduced the principal amount of the Restricted
Global Note and to increase or cause to be increased the principal
amount of the Regulation S Global Note by the aggregate principal
amount of the interest in the Restricted Global Note to be exchanged or
transferred.
(v) Regulation S Global Note to Exchange Global Note.
Following the earlier of the consummation of the Exchange Offer or the
transfer of a Note pursuant to a Shelf Registration Statement that
results in beneficial interests in such Note being reflected in the
Exchange Global Note, if the Holder of a beneficial interest in the
Regulation S Global Note at any time wishes to exchange its interest in
such Regulation S Global Note for an interest in the Exchange Global
Note, or to transfer its interest in such Regulation S Global Note to a
Person who wishes to take delivery thereof in the form of a beneficial
interest in the Exchange Global Note, such transfer or exchange, if not
effected pursuant to an Exchange Offer or a Shelf Registration
Statement in accordance with Section 2.06(a) may be effected only in
accordance with this clause (v) and the rules and procedures of the
Depositary. Upon receipt by the Registrar from the Transfer Agent of
instructions directing the Registrar to credit or cause to be credited
an interest in the Exchange Global Note in a specified principal amount
and to cause to be debited an interest in the Regulation S Global Note
in such specified principal amount, then the Registrar shall instruct
the Depositary to reduce or cause to be reduced the principal amount of
the Regulation S Global Note and to increase or cause to be increased
the principal amount of the Exchange Global Note by the aggregate
principal amount of the interest in the Regulation S Global Note to be
exchanged or transferred.
(vi) Global Notes to Certificated Notes. In the event that
a Global Note is exchanged for Notes in certificated, registered form
pursuant to Section 2.10, the effectiveness of a Shelf Registration
Statement with respect to such Notes, such Notes may be exchanged only
in accordance with such procedures as are substantially consistent with
the provisions of clauses (ii) and (iii) above (including the
certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S under the Securities Act, as the
case may be) and such other procedures as may from time to time be
adopted by the Issuer and the Trustee.
(c) Except in connection with an Exchange Offer or a Shelf
Registration Statement contemplated by and in accordance with the terms of the
Registration Rights Agreement, if Notes are issued upon the transfer, exchange
or replacement of Notes bearing the restricted Notes legends set forth in
Exhibit A hereto, the Notes so issued shall bear the restricted Notes legends,
and a request to remove such restricted Notes legends from Notes will not be
honored unless there is delivered to the Issuer such satisfactory evidence,
which may include an Opinion of Counsel licensed to practice law in the State of
New York, as may be reasonably required by the Issuer, that neither the legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144(k) under
the Securities Act. Upon provision of such satisfactory evidence, the Trustee,
at the direction of the Issuer, shall authenticate and deliver Notes that do not
bear the legend.
(d) The Trustee shall have no responsibility for any actions taken
or not taken by the Depositary, for any Depositary records or beneficial
ownership interests or for any transactions
37
between the Depositary and any Agent Member or between or among the Depositary,
a participant and/or any holder or owner of a beneficial interest in a Global
Note.
(e) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Notes (including any transfers between or among the Depositary's
participants or beneficial owners of interests in any Global Note) other than to
require delivery of such certificates and other documentation, including
delivery of Opinions of Counsel, as is expressly required by, and to do so if
and when expressly required by, the terms of this Indenture and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 2.07. Replacement Notes. If a mutilated
certificated Note is surrendered to the Registrar or if the Holder claims that
the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue
and the Trustee shall authenticate a replacement Note in such form as the Note
mutilated, lost, destroyed or wrongfully taken if the Holder satisfies any other
reasonable requirements of the Trustee or the Issuer. If required by the Trustee
or the Issuer, such Holder shall furnish an indemnity or indemnity bond
sufficient in the judgment of the Issuer and the Trustee to protect the Issuer,
the Trustee, the Paying Agent, the Transfer Agent, the Registrar and any
co-Registrar, and any authenticating agent from any loss that any of them may
suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder
for their expenses in replacing a Note.
Every replacement Note shall be an additional obligation of the Issuer.
SECTION 2.08. Outstanding Notes. Notes outstanding at any
time are all Notes authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.08 as not outstanding. A Note does not cease to be outstanding because the
Issuer or an Affiliate of the Issuer holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Issuer receive proof satisfactory to them
that the Note which has been replaced is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a Redemption Date or maturity date money sufficient to pay
all principal, premium, if any, interest payable on that date with respect to
the Notes (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the Holders on
that date pursuant to the terms of this Indenture, then on and after that date
such Notes (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Notes Held by Issuer. In determining whether
the Holders of the required principal amount of Notes have concurred in any
direction or consent or any amendment, modification or other change to this
Indenture, Notes owned by the Issuer or by an Affiliate of the Issuer shall be
disregarded and treated as if they were not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent or any amendment, modification or other change
to this Indenture,
38
only Notes which a Trust Officer of the Trustee actually knows are so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
shall not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to the Notes and that the
pledgee is not the Issuer or an Affiliate of the Issuer.
SECTION 2.10. Certificated Notes. (a) A Global Note
deposited with the Depositary or other custodian for the Depositary pursuant to
Section 2.01 shall be transferred to the beneficial owners thereof in the form
of certificated Notes only if such transfer complies with Section 2.06 and (i)
the Depositary notifies the Issuer that it is unwilling or unable to continue as
the Depositary for such Global Note, or if at any time the Depositary ceases to
be a "clearing agency" registered under the Exchange Act and a successor
depositary is not appointed by the Issuer within 90 days of such notice, or (ii)
the Issuer, at its option, executes and delivers to the Trustee a notice that
such Global Note be so transferable, registrable and exchangeable, or (iii) an
Event of Default, or an event which after notice or lapse of time or both would
be an Event of Default, has occurred and is continuing with respect to the Notes
or (iv) the issuance of such certificated Notes is necessary in order for a
Holder or beneficial owner to present its Note or Notes to a Paying Agent in
order to avoid any tax that is imposed on or with respect to a payment made to
such Holder or beneficial owner. Notice of any such transfer shall be given by
the Issuer in accordance with the provisions of Section 12.02(a).
(b) Any Global Note that is transferable to the beneficial owners
thereof in the form of certificated Notes pursuant to this Section 2.10 shall be
surrendered by the Depositary to the Transfer Agent, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount at maturity of Notes of authorized
denominations in the form of certificated Notes. Any portion of a Global Note
transferred or exchanged pursuant to this Section 2.10 shall be executed,
authenticated and delivered only in registered form in denominations of $1,000
and any integral multiple thereof and registered in such names as the Depositary
shall direct. Subject to the foregoing, a Global Note is not exchangeable except
for a Global Note of like denomination to be registered in the name of the
Depositary or its nominee. In the event that a Global Note becomes exchangeable
for certificated Notes, payment of principal, premium, if any, and interest on
the certificated Notes will be payable, and the transfer of the certificated
Notes will be registrable, at the office or agency of the Issuer maintained for
such purposes in accordance with Section 2.03. Such certificated Notes shall
bear the applicable legends set forth in Exhibit A hereto.
(c) In the event of the occurrence of any of the events specified
in Section 2.10(a), the Issuer will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
SECTION 2.11. Cancellation. The Issuer at any time may
deliver Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee, in accordance with
its customary procedures, and no one else shall cancel (subject to the record
retention requirements of the Exchange Act and the Trustee's retention policy)
all Notes surrendered for registration of transfer, exchange, payment or
cancellation and dispose of such cancelled Notes in its customary manner. Except
as otherwise provided in this Indenture the
39
Issuer may not issue new Notes to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.12. Defaulted Interest. Any interest on any
Note that is payable, but is not punctually paid or duly provided for, on the
dates and in the manner provided in the Notes and this Indenture (all such
interest herein called "Defaulted Interest") shall forthwith cease to be payable
to the Holder on the relevant Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Issuer, at its election in each
case, as provided in clause (a) or (b) below:
(a) The Issuer may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes are registered at the close of business
on a special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Issuer shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Note and the
date of the proposed payment, and at the same time the Issuer may deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest; or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. In addition, the Issuer
shall fix a special Record Date for the payment of such Defaulted Interest, such
date to be not more than 15 days and not less than 10 days prior to the proposed
payment date and not less than 15 days after the receipt by the Trustee of the
notice of the proposed payment date. The Issuer shall promptly but, in any
event, not less than 15 days prior to the special Record Date, notify the
Trustee of such special Record Date and, in the name and at the expense of the
Issuer, the Trustee shall cause notice of the proposed payment date of such
Defaulted Interest and the special Record Date therefor to be mailed
first-class, postage prepaid to each Holder as such Holder's address appears in
the Security Register, not less than 10 days prior to such special Record Date.
Notice of the proposed payment date of such Defaulted Interest and the special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Notes are registered at the close of
business on such special Record Date and shall no longer be payable pursuant to
clause (b) below.
(b) The Issuer may make payment of any Defaulted Interest on the
Notes in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Issuer to the
Trustee of the proposed payment date pursuant to this clause, such manner of
payment shall be deemed reasonably practicable.
Subject to the foregoing provisions of this Section 2.12, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 2.13. Computation of Interest. Interest on the
Notes shall be computed on the basis of a 360-day year of twelve 30-day
months.
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SECTION 2.14. CUSIP, ISIN and Common Code Numbers. The
Issuer in issuing the Notes may use CUSIP, ISIN and Common Code numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP, ISIN and Common Code
numbers, as appropriate, in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers or codes either as printed on the Notes or
as contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Issuer will promptly notify the Trustee of any change in the CUSIP, ISIN or
Common Code numbers.
SECTION 2.15. Issuance of Additional Notes and Exchange
Notes. The Issuer may, subject to Section 4.06 of this Indenture, issue
Additional Notes under this Indenture in accordance with the procedures of
Section 2.02. The Original Notes issued on the date of this Indenture and any
Additional Notes subsequently issued shall be treated as a single class for all
purposes under this Indenture.
ARTICLE THREE
REDEMPTION; OFFERS TO PURCHASE
SECTION 3.01. Optional Redemption. Except as set forth in
the next paragraph, the Notes will not be redeemable at the option of the Issuer
prior to July 1, 2008. Starting on that date, the Issuer may redeem all or any
portion of the Notes, at once or over time, after giving the required notice
under this Indenture. The Notes may be redeemed at the redemption prices set
forth below, plus accrued and unpaid interest to the redemption date (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant interest payment date). The following prices are for Notes
redeemed during the 12-month period commencing on July 1, 2008 of the years set
forth below, and are expressed as percentages of principal amount:
REDEMPTION
----------
YEAR PRICE
---- -----
2008..................................................................................... 103.375%
2009..................................................................................... 102.250%
2010..................................................................................... 101.125%
2011 and thereafter...................................................................... 100.000%
In addition, at any time and from time to time, prior to July 1, 2006,
the Issuer may redeem up to a maximum of 35% of the original aggregate principal
amount of the Notes (calculated giving effect to any issuance of Additional
Notes) with the proceeds of one or more Public Equity Offerings, at a redemption
price equal to 106.750% of the principal amount thereof, plus accrued and unpaid
interest to the redemption date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant interest
payment date); provided, however, that after giving effect to any such
redemption, at least 65% of the original aggregate principal amount of the Notes
(calculated giving effect to any issuance of Additional Notes) remains
outstanding (excluding Notes held by Arch Coal or any of its Subsidiaries). Any
such redemption shall be made within 75 days of such Public Equity Offering upon
not less than 30 nor more than 60 days' prior notice.
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Any redemption pursuant to this Section 3.01 shall be made pursuant to
the provisions of this Article Three.
SECTION 3.02. Notices to Trustee. If the Issuer elects to
redeem Notes pursuant to Section 3.01, it shall notify the Trustee in writing of
the Redemption Date, the principal amount of Notes to be redeemed and the
paragraph of the Notes pursuant to which the redemption will occur.
The Issuer shall give each notice to the Trustee provided for in this
Section 3.02 in writing at least 45 days before the date notice is mailed to the
Holders pursuant to Section 3.04 unless the Trustee consents to a shorter
period. Such notice shall be accompanied by an Officers' Certificate from the
Issuer to the effect that such redemption will comply with the conditions
herein. If fewer than all the Notes are to be redeemed, the Record Date relating
to such redemption shall be selected by the Issuer and given to the Trustee,
which Record Date shall be not less than 15 days after the date of notice to the
Trustee.
Except as otherwise provided herein, no notice or communication to the
Trustee shall be deemed effectively given unless it is actually received by a
Trust Officer at its Corporate Trust Office.
SECTION 3.03. Selection of Notes to be Redeemed. If less
than all of the Notes are to be redeemed, the Trustee shall select the Notes to
be redeemed in compliance with the requirements, as certified to it by the
Issuer, of the principal national securities exchange or automated quotation
system, if any, on which the Notes are listed or, if the Notes are not listed on
a national securities exchange or automated quotation system, by lot or by such
other method as the Trustee in its sole discretion shall deem fair and
appropriate; provided, however, that no such partial redemption shall reduce the
portion of the principal amount of a Note not redeemed to less than $1,000.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. The Trustee may select for redemption portions
equal to $1,000 in principal amount or any integral multiple thereof. Provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. The Trustee shall notify the Issuer and
the Registrar promptly in writing of the Notes or portions of Notes to be called
for redemption.
SECTION 3.04. Notice of Redemption. (a) At least 30 days
but not more than 60 days before a date for redemption of Notes, the Issuer
shall mail a notice of redemption by first-class mail to each Holder to be
redeemed and shall comply with the provisions of Section 13.02(b).
(b) The notice shall identify the Notes to be redeemed (including
CUSIP, ISIN and Common Code numbers) and shall state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accrued
interest, if any to be paid;
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(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price plus accrued
interest, if any;
(v) that, if any Note is being redeemed in part, the
portion of the principal amount (equal to $1,000 in principal amount or
any integral multiple thereof) of such Note to be redeemed and that, on
and after the Redemption Date, upon surrender of such Note, a new Note
or Notes in principal amount equal to the unredeemed portion thereof
will be reissued;
(vi) that, if any Note contains a CUSIP, ISIN or Common
Code number, no representation is being made as to the correctness of
such CUSIP, ISIN or Common Code number either as printed on the Notes
or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes;
(vii) that, unless the Issuer defaults in making such
redemption payment, interest on the Notes (or portion thereof) called
for redemption shall cease to accrue on and after the Redemption Date;
and
(viii) the paragraph of the Notes pursuant to which the
Notes called for redemption are being redeemed.
At the Issuer's written request, the Trustee shall give a notice of
redemption in the Issuer's name and at the Issuer's expense. In such event, the
Issuer shall provide the Trustee with the notice and the other information
required by this Section 3.04.
SECTION 3.05. Effect of Notice of Redemption. Once a
notice of redemption is mailed, Notes called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the notice.
Upon surrender of any Notes to the Paying Agent, such Notes shall be paid at the
Redemption Price stated in the notice, plus accrued interest, if any, to the
Redemption Date. In any event, failure to give such notice, or any defect
therein, shall not effect the validity of the proceedings for the redemption of
Notes held by Holders to whom such notice was properly given.
Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of Notes held by Holders to whom such notice was properly
given.
SECTION 3.06. Deposit of Redemption Price. On or prior to
any Redemption Date, the Issuer shall deposit or cause to be deposited with the
Paying Agent a sum in same day funds sufficient to pay the Redemption Price of
and accrued interest on all Notes to be redeemed on that date other than Notes
or portions of Notes called for redemption that have previously been delivered
by the Issuer to the Trustee for cancellation. The Paying Agent shall return to
the Issuer any money so deposited that is not required for that purpose.
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SECTION 3.07. Payment of Notes Called for Redemption. If
notice of redemption has been given in the manner provided above, the Notes or
portion of Notes specified in such notice to be redeemed shall become due and
payable on the Redemption Date at the Redemption Price stated therein, together
with accrued interest to such Redemption Date, and on and after such date
(unless the Issuer shall default in the payment of such Notes at the Redemption
Price and accrued interest to the Redemption Date, in which case the principal,
until paid, shall bear interest from the Redemption Date at the rate prescribed
in the Notes), such Notes shall cease to accrue interest. Upon surrender of any
Note for redemption in accordance with a notice of redemption, such Note shall
be paid and redeemed by the Issuer at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders registered as such at the close of business
on the relevant Record Date.
SECTION 3.08. Notes Redeemed in Part. (a) Upon surrender
of a Global Note that is redeemed in part, the Paying Agent shall forward such
Global Note to the Trustee who shall make a notation on the Security Register to
reduce the principal amount of such Global Note to an amount equal to the
unredeemed portion of the Global Note surrendered; provided, however, that each
such Global Note shall be in a principal amount at final Stated Maturity of
$1,000 or an integral multiple thereof.
(b) Upon surrender and cancellation of a certificated Note that is
redeemed in part, the Issuer shall execute and the Trustee shall authenticate
for the Holder (at the Issuer's expense) a new Note equal in principal amount to
the unredeemed portion of the Note surrendered and canceled; provided, however,
that each such certificated Note shall be in a principal amount at final Stated
Maturity of $1,000 or an integral multiple thereof.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. Each of the Issuer and
the Guarantors covenants and agrees for the benefit of the Holders that it shall
duly and punctually pay the principal of, premium, if any, and interest on the
Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal, premium, if any, and interest shall be considered paid on
the date due if on such date the Trustee or the Paying Agent (other than the
Issuer or any of its Affiliates) holds, in accordance with this Indenture, money
sufficient to pay all principal, premium, if any, and interest then due. If the
Issuer or any of its Affiliates acts as Paying Agent, principal, premium, if
any, and interest shall be considered paid on the due date if the entity acting
as Paying Agent complies with Section 2.04.
Each of the Issuer or the Guarantors shall pay interest on overdue
principal at the rate specified therefor in the Notes. The Issuer or the
Guarantors shall pay interest on overdue installments of interest at the same
rate to the extent lawful.
SECTION 4.02. Corporate Existence. Subject to Article
Five, the Issuer and each Restricted Subsidiary shall do or cause to be done all
things necessary to preserve and keep in full force and effect their corporate,
partnership, limited liability company or other
44
existence and the rights (charter and statutory), licenses and franchises of
Arch Western and each Restricted Subsidiary; provided, however, that Arch
Western shall not be required to preserve any such right, licence or franchise
if the Board of Directors of Arch Western shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Issuer and
the Restricted Subsidiaries as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 4.03. Maintenance of Properties. Arch Western
shall cause all properties owned by it or any of its Subsidiaries or used or
held for use in the conduct of its business or the business of Arch Western or
any of its Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of Arch Western, may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 4.03
shall prevent Arch Western from discontinuing the maintenance of any such
properties if such discontinuance is, in the judgment of Arch Western, desirable
in the conduct of the business of Arch Western and its Subsidiaries as a whole
and not disadvantageous in any material respect to the Holders.
SECTION 4.04. Insurance. Arch Western shall maintain, and
shall cause its Subsidiaries to maintain, insurance with carriers believed by
Arch Western to be responsible, against such risks and in such amounts, and with
such deductibles, retentions, self-insured amounts and coinsurance provisions,
as Arch Western believes are customarily carried by businesses similarly
situated and owning like properties, including as appropriate general liability,
property and casualty loss and interruption of business insurance.
SECTION 4.05. Statement as to Compliance. (a) The Issuer
shall deliver to the Trustee, within 90 days after the end of each fiscal year,
an Officers' Certificate stating that in the course of the performance by the
signer of its duties as an officer of the Issuer he would normally have
knowledge of any Default and whether or not the signer knows of any Default that
occurred during such period and if any specifying such Default, its status and
what action the Issuer is taking or proposed to take with respect thereto. For
purposes of this Section 4.05(a), such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
The Issuer shall comply with TIA Section 314(a)(4) The
Issuer's delivery to the Trustee of the reports, information and documents
required by said Section 314(a)(4) is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Issuer's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates)..
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee of, or the holder of, any other evidence of Debt of
Arch Western or any Subsidiary outstanding in a principal amount of $25,000,000
or more gives any notice stating that it is a Notice of Default or takes any
other action to accelerate such Debt or enforce any Note therefor, the Issuer
shall deliver to the Trustee within five Business Days by registered or
certified mail or
45
facsimile transmission an Officers' Certificate specifying such event, notice or
other action, its status and what action the Issuer is taking or proposes to
take with respect thereto.
SECTION 4.06. Limitation on Debt. The Issuer shall not
Incur any Debt other than the Notes and any Additional Notes. Arch Western shall
not, and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Debt unless, after giving effect to the application of the
proceeds thereof, no Default or Event of Default would occur as a consequence of
such Incurrence or be continuing following such Incurrence and either:
(1) such Debt is Debt of Arch Western or a Subsidiary
Guarantor and, after giving effect to the Incurrence of such Debt and
the application of the proceeds thereof, Consolidated Interest Coverage
Ratio of Arch Western would be at least 2.0 to 1.0, or
(2) such Debt is Permitted Debt.
The term "Permitted Debt" is defined to include the following:
(a) Debt of the Issuer evidenced by the Notes (not including any
Additional Notes) issued in this offering and the Exchange Notes issued in
exchange for such Notes and the Note Guarantees thereof;
(b) Debt of Arch Western or a Restricted Subsidiary in respect of
Capital Lease Obligations and Purchase Money Debt; provided that:
(i) the aggregate principal amount of such Debt does not
exceed the Fair Market Value (on the date of the Incurrence thereof) of
the Property acquired, constructed or leased, and
(ii) the aggregate principal amount of all Debt Incurred
and then outstanding pursuant to this clause (b) (together with all
Permitted Refinancing Debt Incurred and then outstanding in respect of
Debt previously Incurred pursuant to this clause (b)) does not exceed,
at any one time outstanding, 5% of Consolidated Net Tangible Assets;
(c) Debt of Arch Western owing to and held by any Restricted
Subsidiary and Debt of a Restricted Subsidiary owing to and held by Arch Western
or any Restricted Subsidiary; provided, however, that (1) any subsequent issue
or transfer of Capital Stock or other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Debt (except to Arch Western or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Debt by the issuer
thereof and (2) if a Guarantor is the obligor on such Debt, such Debt is
subordinated in right of payment to the Note Guarantee of such Guarantor;
(d) Debt under Interest Rate Agreements entered into by Arch
Western or a Restricted Subsidiary for the purpose of managing interest rate
risk in the ordinary course of the financial management of Arch Western or such
Restricted Subsidiary and not for speculative purposes, provided that the
obligations under such agreements are directly related to payment obligations on
Debt otherwise permitted by the terms of this covenant;
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(e) Debt under Currency Exchange Protection Agreements entered
into by Arch Western or a Restricted Subsidiary for the purpose of managing
currency exchange rate risks directly related to transactions entered into by
Arch Western or such Restricted Subsidiary in the ordinary course of business
and not for speculative purposes;
(f) Debt under Commodity Price Protection Agreements entered into
by Arch Western or a Restricted Subsidiary in the ordinary course of the
financial management of Arch Western or such Restricted Subsidiary and not for
speculative purposes;
(g) Debt in connection with one or more standby letters of credit
or performance or surety bonds or completion guarantees issued by Arch Western
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 or credit;
(h) Debt of Arch Western or a Restricted Subsidiary outstanding on
the Issue Date not otherwise described in clauses (a) through (g) above;
(i) other Debt of Arch Western or any Subsidiary Guarantor in an
aggregate principal amount outstanding at any one time not to exceed
$100,000,000;
(j) Permitted Refinancing Debt Incurred in respect of Debt
Incurred pursuant to clause (1) of the first paragraph of this Section 4.06 and
clauses (b) and (h) above; and
(k) Debt consisting of installment payment obligations to the
federal government in connection with the acquisition of coal leases in the
ordinary course of business and consistent with past practices.
Notwithstanding anything to the contrary contained in this Section
4.06;
(i) Arch Western shall not permit any Restricted
Subsidiary that is not a Guarantor to Incur any Debt pursuant to this
Section 4.06 if the proceeds thereof are used, directly or indirectly,
to Refinance any Debt of any Guarantor; and
(ii) accrual of interest, accretion or amortization of
original issue discount and the payment of interest or dividends in the
form of additional Debt, will be deemed not to be an Incurrence of Debt
for purposes of this covenant.
For purposes of determining compliance with this Section 4.06 in the
event that an item of Debt meets the criteria of more than one of the categories
of Permitted Debt described in clauses (a) through (j) above or is entitled to
be incurred pursuant to clause (1) of the first paragraph of this Section 4.06,
Arch Western shall, in its sole discretion, classify such item of Debt in any
manner that complies with this Section 4.06.
SECTION 4.07. Limitation on Liens. Arch Western shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur
or suffer to exist, any Lien on the Arch Coal Notes, except for the Liens
securing the Notes and Additional Notes and Liens described in clause (k) of the
definition of Permitted Liens.
47
Arch Western shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, Incur or suffer to exist, any Lien (other than
Permitted Liens) upon any of its Property (including Capital Stock of a
Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired,
or any interest therein or any income or profits therefrom, unless it has made
or will make effective provision whereby the Notes or any Note Guarantee will be
secured by such Lien equally and ratably with (or, if such other Debt
constitutes Subordinated Obligations, prior to) all other Debt of Arch Western
or any Restricted Subsidiary secured by such Lien for so long as such other Debt
is secured by such Lien.
SECTION 4.08. Limitation on Restricted Payments. Arch
Western shall not make, and shall not permit any Restricted Subsidiary to make,
directly or indirectly, any Restricted Payment if at the time of, and after
giving effect to, such proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be
continuing,
(b) Arch Western could not Incur at least $1.00 of additional Debt
pursuant to clause (1) of the first paragraph of Section 4.06 of this Indenture,
(c) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value at the time of such Restricted Payment) would exceed an amount equal to
the sum of:
(i) 50% of the aggregate amount of Consolidated Net
Income of Arch Western accrued during the period (treated as one
accounting period) from the beginning of the fiscal quarter during
which the Issue Date occurs to the end of the most recent fiscal
quarter ending at least 45 days prior to the date of such Restricted
Payment (or if the aggregate amount of Consolidated Net Income of Arch
Western for such period shall be a deficit, minus 100% of such
deficit), plus
(ii) 100% of the Capital Stock Sale Proceeds, plus
(iii) the sum of:
(1) the aggregate net cash proceeds received by
Arch Western or any Restricted Subsidiary from the issuance or
sale after the Issue Date of convertible or exchangeable Debt
that has been converted into or exchanged for Capital Stock
(other than Disqualified Stock) of Arch Western, and
(2) the aggregate amount by which Debt (other
than Subordinated Obligations) of Arch Western or any
Restricted Subsidiary is reduced on Arch Western's
consolidated balance sheet on or after the Issue Date upon the
conversion or exchange of any Debt issued or sold on or prior
to the Issue Date that is convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of Arch Western,
excluding, in the case of clause (1) or (2):
48
(x) any such Debt issued or sold to Arch Western or a
Subsidiary of Arch Western or an employee stock ownership plan or trust
established by Arch Coal or any such Subsidiary for the benefit of
their employees, and
(y) the aggregate amount of any cash or other Property
distributed by Arch Western or any Restricted Subsidiary upon any such
conversion or exchange;
plus
(iv) an amount equal to the sum of:
(B) the net reduction in Investments in any
Person other than Arch Western or a
Restricted Subsidiary resulting from
dividends, repayments of loans or advances
or other transfers of Property, in each case
to Arch Western or any Restricted Subsidiary
from such Person, and
(C) the portion (proportionate to Arch Western's
equity interest in such Unrestricted
Subsidiary) of the Fair Market Value of the
net assets of an Unrestricted Subsidiary of
Arch Western at the time such Unrestricted
Subsidiary is designated a Restricted
Subsidiary;
provided, however, that the foregoing sum shall not exceed, in the case
of any Person, the amount of Investments previously made (and treated
as a Restricted Payment) by Arch Western or any Restricted Subsidiary
in such Person.
Notwithstanding the foregoing limitation, Arch Western may:
(a) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on the declaration date, such dividends could have been
paid in compliance with this Indenture; provided, however, that such dividend
shall be included in the calculation of the amount of Restricted Payments;
(b) purchase, repurchase, redeem, legally defease, acquire or
retire for value Capital Stock of Arch Western or Subordinated Obligations in
exchange for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of Arch Western (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of Arch Coal or an employee stock
ownership plan or trust established by Arch Coal or any such Subsidiary for the
benefit of their employees); provided, however, that
(i) such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the
calculation of the amount of Restricted Payments and
(ii) the Capital Stock Sale Proceeds from such exchange or
sale shall be excluded from the calculation pursuant to clause (c)(ii)
above;
49
(c) purchase, repurchase, redeem, legally defease, acquire or
retire for value any Subordinated Obligations in exchange for, or out of the
proceeds of the substantially concurrent sale of, Permitted Refinancing Debt;
provided, however, that such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the amount of
Restricted Payments;
(d) repurchase shares of, or options to purchase shares of, common
stock of Arch Western or any of its Subsidiaries from current or former
officers, directors or employees of Arch Western or any of its Subsidiaries (or
permitted transferees of such current or former officers, directors or
employees), pursuant to the terms of agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of Directors
under which such individuals purchase or sell, or are granted the option to
purchase or sell, shares of such common stock; provided, however, that: (1) the
aggregate amount of such repurchases shall not exceed $2,500,000 in any calendar
year and (2) at the time of such repurchase, no other Default or Event of
Default shall have occurred and be continuing (or result therefrom); provided
further, however, that such repurchases shall be included in the calculation of
the amount of Restricted Payments;
(e) so long as no Default or Event of Default has occurred and is
continuing and Arch Western is a limited liability company, make distributions
to the ARCO Member (as defined in the LLC Agreement), with respect to any period
after March 31, 2003, not to exceed the Tax Amount allocated to such member
under the LLC Agreement for such period; provided, however, that such
distributions shall be included in the calculation of the amount of Restricted
Payments;
(f) so long as no Default or Event of Default has occurred and is
continuing, make distributions of the Preferred Return (as defined in the LLC
Agreement) to the ARCO Member (as defined in the LLC Agreement) pursuant to the
LLC Agreement in effect on the Issue Date; provided, however, that such
distribution shall be included in the calculation of the amount of Restricted
Payments; and
(g) so long as (i) no Default or Event of Default has occurred and
is continuing and (ii) Arch Western could incur at least $1.00 of additional
Debt pursuant to clause (l) of the first paragraph of Section 4.06 of this
Indenture make loans or advances in cash to Arch Coal out of Available Cash as
of the date of such loan or advance; provided, however, that such loans or
advances shall be included in the calculation of the amount of Restricted
Payments.
Notwithstanding the prior two paragraphs, any Restricted Payment to, or
Permitted Investments in, Arch Coal or any of its Affiliates (other than Arch
Western or a Restricted Subsidiary) shall be in the form of a loan for cash
which shall be evidenced by Arch Coal Notes that are immediately pledged to the
Trustee on behalf of the Holders.
SECTION 4.09. Limitation on Asset Sales. Arch Western
shall not, and shall not permit any Restricted Subsidiary, to, directly or
indirectly, sell, transfer or otherwise dispose of (including by means of a
merger, consolidation or similar transaction) any shares of Capital Stock of the
Issuer, Arch Western Notes or the Arch Coal Notes. Arch Western shall
50
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Sale unless:
(a) Arch Western or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the Property subject to such Asset Sale;
(b) at least 75% of the consideration paid to Arch Western or such
Restricted Subsidiary in connection with such Asset Sale is in the form of cash
or Cash Equivalents or the assumption by the purchaser of liabilities of Arch
Western or any Restricted Subsidiary (other than contingent liabilities or
liabilities that are by their terms subordinated to the Notes) as a result of
which Arch Western and the Restricted Subsidiaries are no longer obligated with
respect to such liabilities; and
(c) Arch Western delivers an Officers' Certificate to the Trustee
certifying that such Asset Sale complies with the foregoing clauses (a) and (b).
The Net Available Cash (or any portion thereof) from Asset Sales may be
applied by Arch Western or a Restricted Subsidiary to the extent Arch Western or
such Restricted Subsidiary elects (or is required by the terms of any Debt) to:
(a) Repay any Debt of Arch Western or such Restricted Subsidiary
(other than Subordinated Obligations); or
(b) reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by Arch Western or another Restricted Subsidiary).
Any Net Available Cash from an Asset Sale (other than an Asset Sale
consisting of all of the Capital Stock of Canyon Fuel or Mountain Coal Company,
L.L.C.) not applied in accordance with the preceding paragraph within 365 days
from the date of the receipt of such Net Available Cash or that is not
segregated from the general funds of Arch Western for investment in identified
Additional Assets in respect of a project that shall have been commenced, and
for which binding contractual commitments have been entered into, prior to the
end of such 365-day period and that shall not have been completed or abandoned
shall constitute "Excess Proceeds;" provided, however, that the amount of any
Net Available Cash that ceases to be so segregated as contemplated above and any
Net Available Cash that is segregated in respect of a project that is abandoned
or completed shall also constitute "Excess Proceeds" at the time any such Net
Available Cash ceases to be so segregated or at the time the relevant project is
so abandoned or completed, as applicable; provided further, however, that the
amount of any Net Available Cash that continues to be segregated for investment
and that is not actually reinvested within twenty-four months from the date of
the receipt of such Net Available Cash shall also constitute "Excess Proceeds."
Any Net Available Cash from an Asset Sale consisting of all of the Capital Stock
of Canyon Fuel or Mountain Coal Company, L.L.C. not applied in accordance with
the preceding paragraph within 365 days from the date of the receipt of such Net
Available Cash shall be segregated from the general funds of Arch Western and
invested in cash or Cash Equivalents pending application in accordance with the
preceding paragraph.
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When the aggregate amount of Excess Proceeds (including income earned
on such Excess Proceeds) exceeds $20,000,000, the Issuer will be required to
make an offer to repurchase (the "Prepayment Offer") the Notes, which offer
shall be in the amount of the Allocable Excess Proceeds (rounded to the nearest
$1,000), on a pro rata basis according to principal amount, at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
to the repurchase date (subject to the right of Holders of record on the
relevant Record Date to receive interest due on the relevant interest payment
date), in accordance with the procedures (including prorating in the event of
oversubscription) set forth in this Indenture. To the extent that any portion of
the amount of Net Available Cash remains after compliance with the preceding
sentence and provided that all Holders of Notes have been given the opportunity
to tender their Notes for repurchase in accordance with this Indenture, Arch
Western or such Restricted Subsidiary may use such remaining amount for any
purpose permitted by this Indenture, and the amount of Excess Proceeds will be
reset to zero.
The term "Allocable Excess Proceeds" shall mean the product of:
(a) the Excess Proceeds and
(b) a fraction,
(i) the numerator of which is the aggregate principal
amount of the Notes outstanding on the date of the Prepayment Offer,
and
(ii) the denominator of which is the sum of the aggregate
principal amount of the Notes outstanding on the date of the Prepayment
Offer and the aggregate principal amount of other Debt of Arch Western
outstanding on the date of the Prepayment Offer that is pari passu in
right of payment with the Arch Western Guarantee and subject to terms
and conditions in respect of Asset Sales similar in all material
respects to this covenant and requiring Arch Western to make an offer
to repurchase such Debt at substantially the same time as the
Prepayment Offer.
Within five business days after the Issuer is obligated to make a
Prepayment Offer as described in the preceding paragraph, the Issuer shall send
a written notice, by first-class mail, to the Holders of Notes, accompanied by
such information regarding Arch Western and its Subsidiaries as the Issuer in
good faith believes will enable such Holders to make an informed decision with
respect to such Prepayment Offer. Such notice shall state, among other things,
the purchase price and the repurchase date, which shall be, subject to any
contrary requirements of applicable law, a business day no earlier than 30 days
nor later than 60 days from the date such notice is mailed.
The Issuer will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this covenant by virtue thereof.
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SECTION 4.10. Limitation on Transactions with Affiliates.
Arch Western shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, assignment, lease, conveyance or exchange of any Property or the
rendering of any service) with, or for the benefit of, any Affiliate of Arch
Western (an "Affiliate Transaction"), unless:
(a) the terms of such Affiliate Transaction are:
(1) set forth in writing,
(2) in the best interest of Arch Western or such
Restricted Subsidiary, as the case may be, and
(3) no less favorable to Arch Western or such Restricted
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's-length transaction with a Person that is not an
Affiliate of Arch Western,
(b) if such Affiliate Transaction involves aggregate payments or
value in excess of $5,000,000, the Board of Directors (including at least a
majority of the disinterested members of the Board of Directors) approves such
Affiliate Transaction and, in its good faith judgment, believes that such
Affiliate Transaction complies with clauses (a)(2) and (3) of this paragraph as
evidenced by a Board Resolution promptly delivered to the Trustee; provided,
however, if there are no disinterested members of the Board of Directors, Arch
Western shall receive a written opinion from an Independent Financial Advisor
described in clause (c) below, and
(c) if such Affiliate Transaction involves aggregate payments or
value in excess of $25,000,000, Arch Western obtains a written opinion from an
Independent Financial Advisor to the effect that the consideration to be paid or
received in connection with such Affiliate Transaction is fair, from a financial
point of view, to Arch Western and its Restricted Subsidiaries.
Notwithstanding the foregoing limitation, Arch Western or any
Restricted Subsidiary may enter into or suffer to exist the following:
(a) any transaction or series of transactions between Arch Western
and one or more Restricted Subsidiaries or between two or more Restricted
Subsidiaries in the ordinary course of business, provided that no more than 5%
of the total voting power of the Voting Stock (on a fully diluted basis) of any
such Restricted Subsidiary is owned by an Affiliate of Arch Western (other than
a Restricted Subsidiary);
(b) any Restricted Payment (other than an Investment) permitted to
be made pursuant to the first paragraph of Section 4.08 of this Indenture;
(c) the payment of compensation (including amounts paid pursuant
to employee benefit plans) for the personal services of officers, directors and
employees of Arch Western or any of its Restricted Subsidiaries, so long as the
Board of Directors in good faith shall have
53
approved the terms thereof and deemed the services theretofore or thereafter to
be performed for such compensation to be fair consideration therefor;
(d) loans and advances to employees made in the ordinary course of
business permitted by law and consistent with the past practices of Arch Western
or such Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $2,500,000 in the aggregate at any one time outstanding;
(e) agreements in effect on the Issue Date and described in the
offering memorandum dated June 19, 2003, and any modifications, extensions or
renewals thereto that are no less favorable to Arch Western or any Restricted
Subsidiary than such agreements as in effect on the Issue Date; and
(f) the Arch Coal Notes.
SECTION 4.11. Change of Control. Upon the occurrence of a
Change of Control, each holder of Notes shall have the right to require the
Issuer to repurchase all or any part of such holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at a purchase price (the
"Change of Control Purchase Price") equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the repurchase date (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 repurchase date is after a Record
Date and on or before the relevant interest payment date, the accrued and unpaid
interest, if any, will be paid to the person or entity in whose name the Note is
registered at the close of business on that Record Date, and no additional
interest will be payable to Holders whose Notes shall be subject to redemption.
Within 30 days following any Change of Control, the Issuer shall:
(a) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Xxxxx News Service or similar business news service in the
United States; and
(b) send, by first-class mail, with a copy to the Trustee, to each
holder of Notes, at such holder's address appearing in the Security Register, a
notice stating:
(i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.11 of the
Indenture and that all Notes timely tendered will be accepted for
payment;
(ii) the Change of Control Purchase Price and the
repurchase date, which shall be, subject to any contrary requirements
of applicable law, a business day no earlier than 30 days nor later
than 60 days from the date such notice is mailed;
(iii) the circumstances and relevant facts regarding the
Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to
the Change of Control); and
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(iv) the procedures that Holders of Notes must follow in
order to tender their Notes (or portions thereof) for payment, and the
procedures that Holders of Notes must follow in order to withdraw an
election to tender Notes (or portions thereof) for payment.
The Issuer will not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Indenture applicable to a Change of Control Offer made by the
Issuer and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
The Issuer shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to a Change
of Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this covenant, the Issuer will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this covenant by virtue of such
compliance.
SECTION 4.12. Limitation on Sale and Leaseback
Transactions. Arch Western shall not, and shall not permit any of its Restricted
Subsidies to, enter into any Sale and Leaseback Transaction with respect to any
Property unless:
(a) Arch Western or such Restricted Subsidiary would be entitled
to:
(i) Incur Debt in an amount equal to the Attributable
Debt with respect to such Sale and Leaseback Transaction pursuant to
Section 4.06 of this Indenture and
(ii) create a Lien on such Property securing such
Attributable Debt without also securing the Notes or the applicable
Note Guarantee pursuant to Section 4.07 of this Indenture and
(b) such Sale and Leaseback Transaction is effected in compliance
with Section 4.09 of this Indenture.
SECTION 4.13. Guarantees by Restricted Subsidiaries. If
the Company acquires or creates another Domestic Subsidiary after the Issue
Date, then that newly acquired or created Subsidiary will become a Subsidiary
Guarantor and execute a supplemental indenture within 10 days of the date on
which it was created or acquired or became a Subsidiary; provided, however, that
all Subsidiaries that have been properly designated as Unrestricted Subsidiaries
in accordance with this Indenture for so long as they continue to constitute
Unrestricted Subsidiaries will not have to become a Subsidiary Guarantor
pursuant to this Section 4.13. In addition, Arch Western shall not permit any
Restricted Subsidiary that is not a Guarantor, directly or indirectly, to
Guarantee or secure the payment of any other Debt of Arch Western or any of its
Restricted Subsidiaries unless such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to the Indenture providing for a
Subsidiary Guarantee of the payment of the Notes by such Restricted Subsidiary;
provided that this paragraph shall not be applicable to:
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(i) any Guarantee of any Restricted Subsidiary that
existed at the time such Person became a Restricted Subsidiary and was
not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary;
(ii) any Guarantee arising under or in connection with
performance bonds, indemnity bonds, surety bonds or letters of credit
or bankers' acceptances; or
(iii) Permitted Liens.
If the Guaranteed Debt is a Subordinated Obligation, the Guarantee of
such Guaranteed Debt must be subordinated in right of payment to the Subsidiary
Guarantee to at least the extent that the Guaranteed Debt is subordinated to the
Notes, or the applicable Subsidiary Guarantee.
SECTION 4.14. Limitation on Restrictions on Distributions
from Restricted Subsidiaries. Arch Western shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist any consensual restriction on the right of any Restricted
Subsidiary to:
(a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay any Debt or other
obligation owed, to Arch Western or any other Restricted Subsidiary,
(b) make any loans or advances to Arch Western or any other
Restricted Subsidiary, or
(c) transfer any of its Property to Arch Western or any other
Restricted Subsidiary.
(d) The foregoing limitations will not apply:
(i) with respect to clauses (a), (b) and (c), to
restrictions:
(1) in effect on the Issue Date (including,
without limitation, restrictions pursuant to the Notes and the
Indenture);
(2) relating to Debt of a Restricted Subsidiary
of Arch Western and existing at the time it became a
Restricted Subsidiary if such restriction was not created in
connection with or in anticipation of the transaction or
series of transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by
Arch Western, or
(3) that result from any amendment, restatement,
renewal or replacement of an agreement referred to in clause
(1)(A) or (B) above or in clause (2)(A) or (B) below, provided
such restrictions are not less favorable, taken as a whole, to
the Holders of Notes than those under the agreement evidencing
the Debt so Refinanced, and
(ii) with respect to clause (c) only, to restrictions:
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(1) relating to Debt that is permitted to be
Incurred and secured without also securing the Notes pursuant
to Section 4.06 and 4.07 of this Indenture that limit the
right of the debtor to dispose of the Property securing such
Debt,
(2) encumbering Property at the time such
Property was acquired by Arch Western or any of its Restricted
Subsidiaries, so long as such restrictions relate solely to
the Property so acquired and were not created in connection
with or in anticipation of such acquisition,
(3) resulting from customary provisions
restricting subletting or assignment of leases or customary
provisions in other agreements that restrict assignment of
such agreements or rights thereunder, or
(4) customary restrictions contained in asset
sale agreements limiting the transfer of such Property pending
the closing of such sale.
SECTION 4.15. Designation of Unrestricted and Restricted
Subsidiaries. The Board of Directors of the Issuer may designate any Restricted
Subsidiary (other than the Issuer) to be an Unrestricted Subsidiary if that
designation (which would constitute an Investment in such Subsidiary) would not
result in a breach of Section 4.08 of this Indenture or otherwise cause a
Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary,
the aggregate Fair Market Value of all outstanding Investments owned by Arch
Western and its Restricted Subsidiaries in the Subsidiary properly designated
will be deemed to be an Investment made as of the time of the designation as set
forth under the definition of "Investment" and will reduce the amount available
for Restricted Payments under the first paragraph of Section 4.08 of this
Indenture or Permitted Investments, as determined by Arch Western. That
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
The Board of Directors may also designate any Subsidiary of Arch
Western to be an Unrestricted Subsidiary if:
(a) the Subsidiary to be so designated does not own any Capital
Stock or Debt of, or own or hold any Lien on any Property of, Arch Western or
any other Restricted Subsidiary and is not required to be a Guarantor pursuant
to this Indenture, and
(b) either:
(i) the Subsidiary to be so designated has total assets
of $1,000 or less, or
(ii) such designation is effective immediately upon such
entity becoming a Subsidiary of Arch Western.
Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of Arch Western will be classified as a Restricted
Subsidiary; provided, however, that such Subsidiary shall not be designated a
Restricted Subsidiary and shall be automatically classified as an Unrestricted
Subsidiary if either of the requirements set forth in clauses (x)
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and (y) of the second immediately following paragraph will not be satisfied
after giving pro forma effect to such classification or if such Person is a
Subsidiary of an Unrestricted Subsidiary.
In addition, neither Arch Western nor any of its Restricted
Subsidiaries shall at any time be directly or indirectly liable for any Debt
that provides that the holder thereof may (with the passage of time or notice or
both) declare a default thereon or cause the payment thereof to be accelerated
or payable prior to its Stated Maturity upon the occurrence of a default with
respect to any Debt, Lien or other obligation of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary).
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary if, immediately after giving pro forma effect to such
designation,
(x) Arch Western could Incur at least $1.00 of additional Debt
pursuant to clause (1) of the first paragraph of Section 4.06 of this
Indenture and
(y) no Default or Event of Default shall have occurred and be
continuing or would result therefrom.
Any such designation or redesignation by the Board of Directors will be
evidenced by filing with the Trustee a Board Resolution giving effect to such
designation or redesignation and an Officers' Certificate that:
(a) certifies that such designation or redesignation complies with
the foregoing provisions, and
(b) gives the effective date of such designation or redesignation,
such filing with the Trustee to occur within 45 days after the end of the fiscal
quarter of Arch Western in which such designation or redesignation is made (or,
in the case of a designation or redesignation made during the last fiscal
quarter of Arch Western's fiscal year, within 90 days after the end of such
fiscal year).
SECTION 4.16. Payment of Taxes and Other Claims. Arch
Western and the Issuer will pay or discharge and shall cause each of the
Subsidiaries to pay or discharge, or cause to be paid or discharged, before the
same shall become delinquent (a) all material taxes, assessments and
governmental charges levied or imposed upon (i) Arch Western, the Issuer or any
such Subsidiary, (ii) the income or profits of any such Subsidiary which is a
corporation or (iii) the property of Arch Western, the Issuer or any such
Subsidiary and (b) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a Lien upon the property of the Issuer or
any such Subsidiary; provided, however, that Arch Western and the Issuer shall
not be required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of which
is being contested in good faith by appropriate proceedings and for which
adequate reserves have been established.
SECTION 4.17. Reports to Holders. Notwithstanding that
Arch Coal or Arch Western may not be subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, Arch Coal and Arch Western shall file
with the Commission and provide the
58
Trustee and Holders of Notes with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and reports to be so filed with the Commission and
provided at the times specified for the filing of such information, documents
and reports under such Sections; provided, however, that Arch Coal and Arch
Western shall not be so obligated to file such information, documents and
reports with the Commission if the Commission does not permit such filings;
provided further, however, that Arch Coal and Arch Western will be required to
provide to the Trustee and the Holders of Notes any such information, documents
or reports that are not are so filed.
SECTION 4.18. Legal Existence. Subject to Article Five,
Arch Western shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, and the corporate,
partnership or other existence of each Restricted Subsidiary, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of each Restricted Subsidiary and the material rights (charter and
statutory) and franchises of Arch Western and the Restricted Subsidiaries;
provided that Arch Western shall not be required to preserve any such right,
franchise, or the corporate, partnership or other existence of any of its
Restricted Subsidiaries if the preservation thereof is no longer desirable in
the conduct of the business of Arch Western and its Restricted Subsidiaries
taken as a whole and that the loss thereof is not adverse in any material
respect to the Holders.
SECTION 4.19. Waiver of Stay, Extension or Usury Laws.
Arch Western, the Issuer and each of the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon, or
plead (as a defense or otherwise) or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
which would prohibit or forgive any of Arch Western, the Issuer and the
Subsidiary Guarantors from paying all or any portion of the principal of,
premium, if any, and/or interest on the Notes or the Note Guarantees as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that they may lawfully do so) each of Arch Western, the Issuer and the
Subsidiary Guarantors hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 4.20. Further Instruments and Acts. Upon request
of the Trustee (but without imposing any duty or obligation of any kind on the
Trustee to make any such request), the Issuer and the Subsidiary Guarantors
shall execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
SECTION 4.21. Covenant Termination. Upon and after the
first date that (a) the Notes have Investment Grade Ratings from both Ratings
Agencies and (b) no Default has occurred and is continuing hereunder, Arch
Western and its Restricted Subsidiaries will not be subject to the provisions of
this Indenture described under Sections 4.06, 4.08, 4.09, 4.10, clause (a)(i)
and (b) of Section 4.12, 4.14, 4.15 and clause (b)(iv) of Section 5.01 hereof.
59
ARTICLE FIVE
CONSOLIDATION, MERGER OR SALE OF ASSETS
SECTION 5.01. Consolidation, Merger or Sale of Assets. (a)
The Issuer shall not merge, consolidate or amalgamate with or into any other
Person. Arch Western shall not:
(i) consolidate with or merge with or into any Person
(other than a merger of a Wholly Restricted Subsidiary of Arch Western
into Arch Western); or
(ii) in a single transaction or through a series of
transactions, sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets to any
Person or Persons, if such transaction or series of transactions, in
the aggregate, would result in the sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
Property of Arch Western to any other Person or Persons.
(b) Section (a) above shall not apply to Arch Western if:
(i) at the time and immediately after giving effect to
any such consolidation, merger, transaction or series of transactions,
either Arch Western shall be the Surviving Person or the Person (if
other than Arch Western) formed by such consolidation or into which
Arch Western is merged or the Person that acquires by sale, assignment,
conveyance, transfer, lease or other disposition all or substantially
all of Arch Western's Property:
(1) shall be a limited liability company or a
corporation duly organized and validly existing under the laws
of the United States of America, any state thereof or the
District of Columbia; and
(2) expressly assumes (if other than Arch
Western), by a supplemental indenture in form satisfactory to
the Trustee, Arch Western's obligations under the Notes, this
Indenture, the Arch Western Guarantee, the Security Documents
and the Registration Rights Agreement, and the Notes, this
Indenture, the Arch Western Guarantee, the Security Documents
and the Registration Rights Agreement remain in full force and
effect as so supplemented;
(ii) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all the
Property, such Property shall have been transferred as an entirety or
virtually as an entirety to one Person;
(iii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis treating any
Debt that becomes, or is anticipated to become, an obligation of the
Surviving Person or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been Incurred by the
Surviving Person or such Restricted Subsidiary at the time of such
transaction or series of transactions), no Default or Event of Default
shall have occurred and be continuing;
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(iv) immediately after giving effect to any such
consolidation, merger, transaction or series of transactions on a pro
forma basis (on the assumption that the transaction or series of
transactions occurred on the first day of the four-quarter period
immediately prior to the consummation of such transaction or series of
transactions with the appropriate adjustments with respect to the
transaction or series of transactions being included in such pro forma
calculation), the Surviving Person could incur at least $1.00 of
additional Debt (other than Permitted Debt) in accordance with Section
4.06 hereto;
(v) at the time of and immediately after giving effect to
any such consolidation, merger, transaction or series of transactions,
Arch Western is able to make payments on the Notes without being
obligated to deduct or withhold any taxes or duties of whatever nature
levied by any jurisdiction in which Arch Western, any Guarantor, any
Subsidiary or any Surviving Person is organized, engaged in business,
resident for tax purposes or generally subject to tax on a net income
basis or from or through which payment is made;
(vi) at the time of any such consolidation, merger,
transaction or series of transactions, Arch Western or the Surviving
Person shall have delivered to the Trustee, in form and substance
satisfactory to the Trustee, an Officers' Certificate (attaching the
authentic computations to demonstrate compliance with clause (iv)
above) and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, conveyance, transfer, lease or other
disposition, and if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with the
requirements of this Indenture and that all conditions precedent
therein relating to such transaction have been complied with and that
this Indenture and the Guarantees constitute legal, valid and binding
obligations of the continuing person, enforceable in accordance with
their terms; and
(vii) Arch Western shall have delivered to the Trustee 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
such transaction and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such consolidation, merger, transaction or series of
transactions had not occurred.
(c) Arch Western shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into any Person or sell, assign, transfer,
convey or otherwise dispose of, all or substantially all of its Property, in one
or more related transactions, to any Person unless Arch Western has delivered to
the Trustee an Officers' Certificate and Opinion of Counsel stating that such
consolidation, merger, transaction or series of transactions complies with the
following conditions and each of the following conditions is satisfied:
(i) the other Person is Arch Western or any Wholly Owned
Restricted Subsidiary that is a Subsidiary Guarantor or becomes a
Subsidiary Guarantor concurrently with the transaction; or
(ii) (1) either (x) the Subsidiary Guarantor shall be the
Surviving Person or (y) the entity formed by such consolidation or into
which the Subsidiary Guarantor is
61
merged, expressly assumes, by a Guarantee or a supplemental indenture
in form satisfactory to the Trustee, executed and delivered to the
Trustee by such surviving Person the due and punctual performance and
observance of all the obligations of such Subsidiary Guarantor under
the Subsidiary Guarantee; and
(2) the Surviving Person, if other than the
Subsidiary Guarantor, is a corporation or limited liability
company organized under the laws of the United States, any
state thereof or the District of Columbia and immediately
after giving effect to the transaction and any related
Incurrence of Debt of, no Default or Event of Default shall
have occurred and be continuing; or
(iii) the transaction constitutes a sale or other
disposition (including by way of consolidation or merger) of the
Subsidiary Guarantor or the sale or disposition of all or substantially
all the assets of the Subsidiary Guarantor (in each case other than to
another Subsidiary Guarantor) and at the time of such transaction after
giving pro forma effect thereto, the provisions of clause (6)(iv) of
this covenant would be satisfied, the transaction is otherwise
permitted by this Indenture and the Subsidiary Guarantor is released
from its Subsidiary Guarantee at the time of such transaction in
accordance with this Indenture.
SECTION 5.02. Successor Substituted. Upon any
consolidation or merger, or any sale, conveyance, transfer, lease or other
disposition of all or substantially all of the property and assets of Arch
Western in accordance with Section 5.01 of this Indenture, any Surviving Person
formed by such consolidation or into which Arch Western is merged or to which
such sale, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
Arch Western under this Indenture (or of the Subsidiary Guarantor under the
Subsidiary Guarantee, as the case may be) with the same effect as if such
Surviving Person had been named as Arch Western (or such Subsidiary Guarantor)
herein; provided, however, that Arch Western shall not be released from its
obligation or covenants under this Indenture in the case of a sale, transfer,
assignment, conveyance or other disposition (unless such sale, transfer,
assignment, conveyance or other disposition is of all the assets of Arch Western
as an or virtually as an entirety) or a lease.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. (a) "Event of Default",
wherever used herein, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(i) a default in the payment of any interest on any Note
when it becomes due and payable, and such default shall continue for a
period of 30 days; or
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(ii) a default in the payment of the principal of (or
premium, if any, on) any Note at its Stated Maturity, upon
acceleration, redemption, optional redemption, required repurchase or
otherwise; or
(iii) a default in the performance, or breach, of any
covenant or agreement of Arch Western, the Issuer or any Guarantor
under Sections 4.09 or 4.11 or Article Five; or
(iv) (A) a default in the performance, or breach, of any
covenant or agreement of Arch Western, the Issuer or any Guarantor
under this Indenture, the Note Guarantees or the Security Documents
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with elsewhere in this Section
6.01) and such default or breach shall continue for a period of 60 days
after written notice (the "Notice of Default") has been given, by
registered or certified mail, (x) to Arch Western or the Issuer by the
Trustee or (y) to Arch Western or the Issuer and the Trustee by the
Holders of at least 25% in aggregate principal amount of the
outstanding Notes; Arch Western shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of an
Officers' Certificate of any event that with the giving of notice or
the lapse of time or both would become an Event of Default, its status
and what action is being taken or proposed to be taken with respect
thereto; or
(v) a default under any Debt by Arch Western or any
Restricted Subsidiary that results in acceleration of the maturity of
such debt, or failure to pay any such Debt at maturity, in an aggregate
amount greater than $25,000,000 or its foreign currency equivalent at
the time; or
(vi) any judgment or judgments for the payment of money in
an aggregate amount in excess of $25,000,000 (or its foreign currency
equivalent at the time) that shall be rendered against Arch Western or
any Restricted Subsidiary and that shall not be waived, satisfied or
discharged for any period of 30 consecutive days during which a stay of
enforcement shall not be in effect; or
(vii) the entry by a court of competent jurisdiction of (A)
a decree or order for relief in respect of Arch Coal, Arch Western, the
Issuer, any Guarantor or any other Significant Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or
(B) a decree or order adjudging Arch Coal, Arch Western, the Issuer,
any Guarantor or any other Significant Subsidiary bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of Arch Coal, Arch Western, the Issuer,
any Guarantor or any other Significant Subsidiary under any applicable
law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of Arch Coal, Arch
Western, the Issuer, any Guarantor or any other Significant Subsidiary
or of any substantial part of their respective properties or ordering
the winding up or liquidation of their affairs, and any such decree,
order or appointment pursuant to any Bankruptcy Law for relief shall
continue to be in effect, or any such other decree, appointment or
order shall be unstayed and in effect, for a period of 60 consecutive
days; or
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(viii) (A) Arch Coal, Arch Western, the Issuer, any
Guarantor or any other Significant Subsidiary (x) commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other
case or proceeding to be adjudicated bankrupt or insolvent or (y)
consents to the filing of a petition, application, answer or consent
seeking reorganization or relief under any applicable Bankruptcy Law,
(B) Arch Coal, Arch Western, the Issuer, any Guarantor or any other
Significant Subsidiary consents to the entry of a decree or order for
relief in respect of Arch Coal, Arch Western, the Issuer, any Guarantor
or any other Significant Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or to the commencement
of any bankruptcy or insolvency case or proceeding against it or, (C)
Arch Coal, Arch Western, the Issuer, any Guarantor or any other
Significant Subsidiary (x) consents to the appointment of, or taking
possession by, a custodian, receiver, liquidator, administrator,
supervisor, assignee, trustee, sequestrator or similar official of Arch
Coal, Arch Western, the Issuer, any Guarantor or any other Significant
Subsidiary or of any substantial part of their respective properties,
(y) makes an assignment for the benefit of creditors or (z) admits in
writing its inability to pay its debts generally as they become due; or
(ix) any Note Guarantee shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or any Person acting
on behalf of any Guarantor, shall deny or disaffirm its obligations
under any Note Guarantee; or
(x) the legal impairment of the security interests under
the Security Documents for any reason other than the satisfaction in
full of all obligations under this Indenture and discharge of the
Security Documents or any security interest created thereunder shall be
declared invalid or unenforceable or Arch Western or any of its
Subsidiaries asserting, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or
unenforceable.
(b) If a Default or an Event of Default occurs and is continuing
and is known to a Trust Officer of the Trustee, the Trustee shall mail to each
Holder notice of the Default or Event of Default within five business days after
its occurrence. Except in the case of a Default or an Event of Default in
payment of principal of, premium, if any, on the Notes or interest, if any, on
any Note, the Trustee may withhold the notice to the Holders if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of the Holders. The Issuer shall also notify the
Trustee within five Business Days of the occurrence of any Event of Default.
SECTION 6.02. Acceleration. (a) If an Event of Default
with respect to the Notes (other than an Event of Default specified in Section
6.01(a)(vii) or (viii) above) occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then outstanding by written notice to Arch Western or the
Issuer (and to the Trustee if such notice is given by the Holders) may and the
Trustee, upon the written request of such Holders shall, declare the principal
amount of all of the outstanding Notes immediately due and payable, and upon any
such declaration such principal amount in respect of the Notes shall become
immediately due and payable.
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(b) If an Event of Default specified in Section 6.01(a)(vii) or
(viii) above occurs and is continuing, then the principal amount of all of the
outstanding Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
(c) At any time after a declaration of acceleration under this
Indenture, but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the outstanding Notes, by written notice to Arch Western or the Issuer and
the Trustee, may waive all past Defaults and rescind and annul such declaration
of acceleration and its consequences if:
(i) The Issuer or the Guarantors have paid or deposited
with the Trustee a sum sufficient to pay:
(1) all overdue interest, if any, on all Notes
then outstanding;
(2) all unpaid principal of and premium, if any,
on any outstanding Notes that has become due otherwise than by
such declaration of acceleration and interest thereon at the
rate borne by the Notes;
(3) to the extent that payment of such interest
is lawful, interest upon overdue interest, if any, at the rate
borne by the Notes; and
(4) all sums paid or advanced by the Trustee
under this Indenture and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel;
(ii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction; and
(iii) all Events of Default, other than the non-payment of
amounts of principal of, premium, if any, and interest, if any, on the
Notes that has become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.04.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
(d) Notwithstanding Section 6.02(c) above, in the event of a
declaration of acceleration in respect of the Notes because of an Event of
Default specified in Section 6.01(a)(v) shall have occurred and be continuing,
such declaration of acceleration shall be automatically annulled if the
Indebtedness that is the subject of such Event of Default has been discharged or
the Holders thereof have rescinded their declaration of acceleration in respect
of such Indebtedness, and written notice of such discharge or rescission, as the
case may be, shall have been given to the Trustee by the Issuer and
countersigned by the Holders of such Indebtedness or a trustee, fiduciary or
agent for such Holders, within 30 days after such declaration of acceleration in
respect of the Notes, and no other Event of Default has occurred during such
30-day period which has not been cured or waived during such period.
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(e) Subject to the Article Seven this Indenture relating to the
duties of the Trustee, in case an Event of Default shall occur and be
continuing, the Trustee will be under no obligation to exercise any of its
rights or powers under this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
indemnity. Subject to such provisions for the indemnification of the Trustee,
the Holders of at least a majority in aggregate principal amount of the Notes
then outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Notes.
No holder of Notes will have any right to institute any proceeding with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any remedy thereunder, unless:
(i) such holder has previously given to the Trustee
written notice of a continuing Event of Default;
(ii) the registered Holders of at least 25% in aggregate
principal amount of the Notes then outstanding have made a written
request and offered reasonable indemnity to the Trustee to institute
such proceeding as Trustee; and
(iii) the Trustee shall not have received from the
registered Holders of at least a majority in aggregate principal amount
of the Notes then outstanding a direction inconsistent with such
request and shall have failed to institute such proceeding within 60
days.
However, such limitations do not apply to a suit instituted by a holder of any
Note for enforcement of payment of the principal of, and premium, if any, or
interest on, such Note on or after the respective due dates expressed in such
Note.
SECTION 6.03. Other Remedies. If an Event of Default
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders in respect of which such judgment has been recovered.
SECTION 6.04. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the outstanding Notes may on behalf
of the Holders of all the Notes waive any past Default hereunder and its
consequences, except a Default:
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(a) in respect of the payment of the principal of (or premium, if
any), or interest on, any Note, or
(b) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 6.05. Control by Majority. The Holders of not less
than a majority in aggregate principal amount of the Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee under this
Indenture; provided that:
(a) the Trustee may refuse to follow any direction that conflicts
with law, this Indenture or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders not joining in the giving of such
direction;
(b) the Trustee may refuse to follow any direction that the
Trustee determines is unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; and
(c) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction.
Prior to taking or not taking any action hereunder, the Trustee shall
be entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. A Holder may not pursue
any remedy with respect to this Indenture or the Notes unless:
(a) the Holder has previously given the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to pursue
such remedy;
(c) such Holder or Holders offer the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
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(e) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request.
The limitations in the foregoing provisions of this Section 6.06,
however, do not apply to a suit instituted by a Holder for the enforcement of
the payment of the principal of, premium, if any, or interest, if any, on such
Note on or after the respective due dates expressed in such Note.
A Holder may not use this Indenture to prejudice the rights of any
other Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Unconditional Right of Holders to Receive
Payment. Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of, premium, if any, and interest, if
any, on the Notes held by such Holder, on or after the respective due dates
expressed in the Notes, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. The Issuer
covenants that if default is made in the payment of:
(a) any installment of interest on any Note when such interest
becomes due and payable and such default continues for a period of 30 days, or
(b) the principal of (or premium, if any, on) any Note at the
Maturity thereof,
the Issuer shall, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any), and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the amounts provided for in Section 7.07 and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
(c) If the Issuer fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Issuer or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Issuer or any other obligor upon the Notes,
wherever situated.
SECTION 6.09. Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Issuer or any Guarantor, their creditors or their property and, unless
prohibited by law or
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applicable regulations, may vote on behalf of the Holders at their direction in
any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to empower the Trustee to
authorize or consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10. Application of Money Collected. If the
Trustee collects any money or other property (or the same is distributed)
pursuant to this Article Six, it shall pay out the money or property in the
following order:
FIRST: to the Trustee (including any predecessor Trustee)for amounts
due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal of, premium, if any, and interest, if any, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium,
if any, and interest, if any, respectively; and
THIRD: to the Issuer, any Guarantor or any other obligors of the
Notes, as their interests may appear, or as a court of
competent jurisdiction may direct.
The Trustee may fix a Record Date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such Record Date,
the Issuer shall mail to each Holder and the Trustee a notice that states the
Record Date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. A court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in the suit of an
undertaking to pay the costs of such suit, and such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by Holders of more than 10% in aggregate
principal amount of the outstanding Notes or to any suit by any Holder pursuant
to Section 6.07.
SECTION 6.12. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Issuer, any Guarantor, the Trustee and the Holders shall be
69
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes in Section 2.07, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Six or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.15. Record Date. The Issuer may set a Record
Date for purposes of determining the identity of Holders entitled to vote or to
consent to any action by vote or consent authorized or permitted by Sections
6.04, 6.05 and 12.04. Unless this Indenture provides otherwise, such Record Date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.05 prior to such solicitation.
SECTION 6.16. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) if an Event of
Default has occurred and is continuing of which a Trust Officer of the Trustee
has actual knowledge, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs;
(b) except during the continuance of an Event of Default of which
a Trust Officer of the Trustee has actual knowledge: (i) the Trustee undertakes
to perform such duties and only
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such duties as are specifically set forth in this Indenture and no others and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and (ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. In the case of any
such certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine same to
determine whether they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or other
facts stated therein);
(c) the Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05;
(d) the Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer or any
Guarantor. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law;
(e) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it; and
(f) whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01 and to the provisions of the TIA.
SECTION 7.02. Certain Rights of Trustee. (a) Subject
to Section 7.01:
(i) the Trustee may rely, and shall be protected in
acting or refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper person;
(ii) before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Section 13.05. The Trustee
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shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion;
(iii) the Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction;
(v) the Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized
or within its rights or powers, provided that the Trustee's conduct
does not constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate; and
(vii) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Issuer personally or by
agent or attorney.
(viii) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder (including its capacity
under the Note Pledge Agreement), and each agent, custodian and other
Person employed to act hereunder and under the Note Pledge Agreement;
and the permissive right of the Trustee to take any action under this
Indenture or under any other agreement in connection herewith shall not
be construed as a duty;
(ix) each Guarantor shall pay on demand to the Trustee any
and all costs, fees and expenses (including without limitation,
reasonable legal fees of counsel) incurred by the Trustee in enforcing
any rights under any Guarantee;
(x) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is
in fact such a default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and
this Indenture;
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(xi) the permissive right of the Trustee to take any
action under this Indenture or under any other agreement in connection
herewith shall not be construed as a duty;
(xii) unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Issuer
shall be sufficient if signed by an Officer of the Issuer; and
(xiii) the trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(b) The Trustee may request that the Issuer deliver an Officers'
Certificate setting forth the names of the individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee,
any Paying Agent, any Registrar or any other agent of the Issuer or of the
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to TIA Sections 310(b) and 311, may otherwise deal
with the Issuer with the same rights it would have if it were not Trustee,
Paying Agent, Registrar or such other agent.
SECTION 7.04. Trustee's Disclaimer. The recitals contained
herein and in the Notes, except for the Trustees certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and
agrees that the statements made by it in a Statement of Eligibility on Form T-1
supplied to the Issuer will be true and accurate, subject to the qualifications
set forth therein. The Trustee shall not be accountable for the use or
application by the Issuer of Notes or the proceeds thereof. It shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the issuance or sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.
Beyond the exercise of reasonable care in the custody thereof, the
Trustee shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to preservation of rights against prior parties or any other rights pertaining
thereto and the Trustee shall not be responsible for filing any financing or
continuation statements or recording any documents or instruments in any public
office at any time or times or otherwise perfecting or maintaining the
perfection of any security interest in the Collateral. The Trustee shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property and shall not be liable or responsible for any
loss or diminution
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in the value of any of the Collateral, by reason of the act or omission of any
carrier, forwarding agency or other agent or bailee selected by the Trustee in
good faith.
The Trustee shall not be responsible for the existence, genuineness or
value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Liens in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder, except to the extent such action or omission constitutes gross
negligence or willful misconduct on the part of the Trustee, for the validity or
sufficiency of the Collateral or any agreement or assignment contained therein,
for the validity of the title of the Company to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral or otherwise as to the maintenance of the Collateral. The Trustee
shall have no duty to ascertain or inquire as to the performance or observance
of any of the terms of this Indenture, the Collateral Agency Agreement or the
Security Documents by the Issuer, any secured creditors or secured creditors'
representatives, or the Collateral Trustee or any collateral agent.
SECTION 7.05. Notice of Defaults. If any Default or any
Event of Default occurs and is continuing and if such Default or Event of
Default is known to the Trustee, the Trustee shall mail to each Holder in the
manner and to the extent provided in TIA Section 313(c) notice of the Default or
Event of Default within 45 days after it occurs, unless such Default or Event of
Default has been cured; provided, however, that, except in the case of a default
in the payment of the principal of, premium, if any, or interest on any Note,
the Trustee shall be protected in withholding such notice if and so long as a
committee of its Trust Officers in good faith determine that the withholding of
such notice is in the interest of the Holders.
The Trustee shall not be deemed to have knowledge of a Default unless a
Trust Officer has actual knowledge of such Default or written notice of such
Default has been received by the Trustee at its Corporate Trust Office in New
York, New York, and such notice references the Notes and this Indenture
SECTION 7.06. Reports by Trustee to Holders. Within 60
days after January 1 of each year commencing with the first January 1 after the
Issue Date, the Trustee shall transmit to the Holders, in the manner and to the
extent provided in TIA Section 313(c), a brief report dated as of such date that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b) and (c).
The Issuer shall promptly notify the Trustee whenever the Notes become
listed on any securities exchange and of any delisting thereof and the Trustee
shall comply with TIA Section 313(d).
SECTION 7.07. Compensation and Indemnity. The Issuer,
failing which each Guarantor, shall pay to the Trustee such compensation as
shall be agreed in writing for its services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer, failing which each Guarantor, shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
out-of-pocket expenses of the Trustee's agents and counsel.
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The Issuer, failing which each Guarantor, shall indemnify the Trustee
(in any of its capacities in connection with any of the transactions
contemplated hereby, including, without limitation, under this Indenture or
under the Note Pledge Agreement) and its officers, directors, employees and
agents for, and hold it and them harmless from and against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it or
any of them without willful misconduct or negligence on its part arising out of
or in connection with the administration of this trust and the performance of
its duties hereunder (including the costs and expenses of enforcing this
Indenture including this Section 7.07 and of defending itself against any claim,
whether asserted by the Issuer, the Guarantors, any Holder or any other Person).
The Trustee shall notify the Issuer promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Issuer shall not relieve the
Issuer or the Guarantors of their obligations hereunder or under the Note Pledge
Agreement. The Issuer shall defend the claim and the Trustee shall cooperate in
such defense. The Trustee may have separate counsel and the Issuer shall pay the
fees and expenses of such counsel. The Issuer need not pay for any settlement
made without its consent, which consent may not be unreasonably withheld. The
Issuer shall not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own willful misconduct
or negligence.
To secure the Issuer's and each of the Guarantor's payment obligations
in this Section 7.07, the Trustee shall have a Lien prior to the Notes upon the
Collateral and on all money or property held or collected by the Trustee,
hereunder or under the Note Pledge Agreement, in its capacity as Trustee, except
money or property held in trust to pay principal of, premium, if any, and
interest on particular Notes.
When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(a)(vii) or (viii) with respect to the Issuer, the
Guarantors, or any Restricted Subsidiary, the expenses are intended to
constitute expenses of administration under Bankruptcy Law.
The Issuer's and each of the Guarantor's obligations under this Section
7.07, including the Lien and claim of the Trustee, and any claim arising
hereunder shall survive the resignation or removal of any Trustee, the
satisfaction and discharge of the Issuer's or Guarantor's obligations pursuant
to Article Eight and any rejection or termination under any Bankruptcy Law, and
the termination of this Indenture for any reason, and shall apply with equal
force and effect to the Trustee in each of its capacities hereunder and each
agent, custodian and other Person employed to act hereunder.
"Trustee" for purposes of this Section 7.07 shall include any
predecessor Trustee; provided, however, that the negligence or willful
misconduct of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
SECTION 7.08. Replacement of Trustee. A resignation or
removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section 7.08.
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The Trustee may resign at any time by so notifying the Issuer. The
Holders of a majority in outstanding principal amount of the outstanding Notes
may remove the Trustee by so notifying the Trustee and the Issuer. The Issuer
shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuer. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Issuer or the Holders
of a majority in principal amount of the outstanding Notes may, at the expense
of the Issuer, petition any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 25% in outstanding principal amount of the Notes may, at the
Issuer's expense, petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Issuer.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, provided that all sums owing to the retiring
Trustee hereunder have been paid and subject to the lien provided for in Section
7.07. Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, the Issuer's and the Guarantors' obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be
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otherwise qualified and eligible under this Article Seven, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto. In case any Notes shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Trustee had
itself authenticated such Notes. In case at that time any of the Notes shall not
have been authenticated, any successor Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
Trustee. In all such cases such certificates shall have the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
SECTION 7.10. Eligibility: Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a)(1) and (5).
The Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. No obligor
upon the Notes or Person directly controlling, controlled by, or under common
control with such obligor shall serve as trustee upon the Notes. The Trustee
shall comply with TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities or certificates of interest or participation in
other notes of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
For purposes of Section 310(b)(1) of the TIA and to the extent
permitted thereby, the Trustee, in its capacity as trustee in respect of the
Securities of any series, shall not be deemed to have a conflict of interest
arising from its capacity as trustee in respect of the Securities of any other
series.
Nothing herein shall prevent the Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 310(b) of the TIA.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the TIA, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.]
SECTION 7.11. Preferential Collection of Claims Against
Issuer. The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
SECTION 7.12. Appointment of Co-Trustee. (a) It is the
purpose of this Indenture that there shall be no violation of any law of any
jurisdiction denying or restricting the right of banking corporations or
associations to transact business as trustee in such jurisdiction. It is
recognized that in case of litigation under this Indenture or the Agreement, and
in particular in case of the enforcement thereof on default, or in the case the
Trustee deems that by reason of any present or future law of any jurisdiction it
may not exercise any of the powers, rights or remedies herein granted to the
Trustee or hold title to the properties, in trust, as herein granted or take any
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action which may be desirable or necessary in connection therewith, it may be
necessary that the Trustee appoint an individual or institution as a separate or
co-trustee. The following provisions of this Section 7.12 are adopted to these
ends.
(b) In the event that the Trustee appoints an additional
individual or institution as a separate or co-trustee, each and every remedy,
power, right, claim, demand, cause of action, immunity, estate, title, interest
and Lien expressed or intended by this Indenture to be exercised by or vested in
or conveyed to the Trustee with respect thereto shall be exercisable by and vest
in such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and only to
the extent that the Trustee by the laws of any jurisdiction is incapable of
exercising such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate or co-trustee shall run to
and be enforceable by either of them.
(c) Should any instrument in writing from the Issuer be required
by the separate or co-trustee so appointed by the Trustee for more fully and
certainly vesting in and confirming to him or it such properties, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Issuer;
provided, however, that if an Event of Default shall have occurred and be
continuing, if the Issuer does not execute any such instrument within 15 days
after request therefor, the Trustees shall be empowered as an attorney-in-fact
for the Issuer to execute any such instrument in the Issuer's name and stead. In
case any separate or co-trustee or a successor to either shall die, become
incapable or acting, resign or be removed, all the estates, properties, rights,
powers, trusts, duties and obligations of such separate or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new trustee or successor to such separate or co-trustee.
(d) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights and powers, conferred or imposed upon the
Trustee shall be conferred or imposed upon and may be exercised or
performed by such separate trustee or co-trustee; and
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder.
(e) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article Seven.
(f) Any separate trustee or co-trustee may at any time appoint the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Indenture on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
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properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successors trustee.
ARTICLE EIGHT
DEFEASANCE; SATISFACTION AND DISCHARGE
SECTION 8.01. Arch Western and the Issuer's Option to
Effect Defeasance or Covenant Defeasance. Arch Western and the Issuer may, at
their option by a resolution of the Boards of Directors, at any time, with
respect to the Notes, elect to have either Section 8.02 or Section 8.03 be
applied to all outstanding Notes upon compliance with the conditions set forth
below in this Article Eight.
SECTION 8.02. Defeasance and Discharge. Upon Arch
Western's and the Issuer's exercise under Section 8.01 of the option applicable
to this Section 8.02, Arch Western and the Issuer shall be deemed to have been
discharged from its obligations with respect to the Notes on the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "legal
defeasance"). For this purpose, such legal defeasance means that Arch Western
and the Issuer shall be deemed to have paid and discharged the entire
indebtedness represented by the Notes and to have satisfied all its other
obligations under the Notes and this Indenture (and the Trustee, at the expense
of Arch Western and the Issuer, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Notes to
receive, solely from the trust fund described in Section 8.08 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any, on) and interest on such Notes when such payments are due, (b) the
provisions set forth at Section 8.06 below and (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder. Subject to compliance with this
Article Eight, Arch Western and the Issuer may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
below with respect to the Notes. If Arch Western and the Issuer exercise their
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default.
SECTION 8.03. Covenant Defeasance. Upon Arch Western's and
the Issuer's exercise under Section 8.01 of the option applicable to this
Section 8.03, Arch Western and the Issuer shall be released from their
respective obligations under any covenant contained in Sections 4.04 through
4.15, 4.17 (other than the covenant to comply with TIA Section 314(a) to the
extent that such obligations thereunder cannot be terminated), 5.01(b)(iv) and
6.01((iv),(v),(vi) and (vii) (only with respect to Significant Subsidiaries))
with respect to the Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, the Issuer may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby.
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SECTION 8.04. Conditions to Defeasance. The legal
defeasance option or the covenant defeasance option may be exercised only if:
(a) Arch Western or the Issuer irrevocably deposit in trust with
the Trustee money or U.S. Government Obligations for the payment of principal
of, premium, if any, and interest on the Notes to maturity or redemption, as the
case may be;
(b) Arch Western or the Issuer delivers to the Trustee a
certificate from a nationally recognized firm of independent certified public
accountants expressing their opinion that the payments of principal, premium, if
any, and interest when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without investment will provide
cash at such times and in such amounts as will be sufficient to pay principal,
premium, if any, and interest when due on all the Notes to be defeased to
maturity or redemption, as the case may be;
(c) 123 days pass after the deposit is made, and during the
123-day period, no Default described in Section 6.01(vii) and (viii) occurs with
respect to Arch Western or the Issuer or any other Person making such deposit
which is continuing at the end of the period;
(d) no Default or Event of Default has occurred and is continuing
on the date of such deposit and after giving effect thereto;
(e) such deposit does not constitute a default under any other
agreement or instrument binding on Arch Western or any of its Restricted
Subsidiaries;
(f) Arch Western or the Issuer delivers to the Trustee an Opinion
of Counsel to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(g) in the case of the legal defeasance option, Arch Western or
the Issuer delivers to the Trustee an Opinion of Counsel stating that:
(i) Arch Western or the Issuer has received from the
Internal Revenue Service a ruling, or
(ii) since the date of this Indenture there has been a
change in the applicable Federal income tax law, to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same time
as would have been the case if such defeasance has not occurred;
(h) in the case of the covenant defeasance option, Arch Western or
the Issuer delivers to the Trustee 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 such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
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(i) Arch Western or the Issuer delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Notes have been
complied with as required by this Article Eight.
SECTION 8.05. Satisfaction and Discharge of Indenture.
This Indenture shall be discharged and shall cease to be of further effect as to
all Notes issued thereunder when either:
(a) all such Notes previously authenticated and delivered (other
than lost, stolen or destroyed Notes that have been replaced or paid and Notes
for whose payment money or securities has theretofore been deposited in trust
and thereafter repaid to the Issuer, as provided in Section 8.07) have been
delivered to the Trustee for cancellation; or
(b) (i) all such Notes not theretofore delivered to the Trustee
for cancellation (A) have become due and payable by reason of the making of a
notice of redemption or otherwise or (B) will become due and payable within one
year, (ii) the Issuer has irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose an amount of U.S. Dollars
or U.S. Government Obligations sufficient (in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued and unpaid interest, to
the date of Stated Maturity or redemption, as the case may be and (iii) the
Issuer has delivered an Officers' Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have
been complied with.
SECTION 8.06. Survival of Certain Obligations.
Notwithstanding Sections 8.01 and 8.03, any obligations of the Issuer and the
Guarantors in Sections 2.02 through 2.14, 6.07, 7.07, 7.08, and 8.07 through
8.09 shall survive until the Notes have been paid in full. Thereafter, any
obligations of the Issuer and the Guarantors in Sections 7.07, 8.07 and 8.08
shall survive such satisfaction and discharge. Nothing contained in this Article
Eight shall abrogate any of the obligations or duties of the Trustee under this
Indenture.
SECTION 8.07. Acknowledgment of Discharge by Trustee.
Subject to Section 8.09, after the conditions of Section 8.02 or 8.03 have been
satisfied, the Trustee upon written request shall acknowledge in writing the
discharge of all of the Issuer's obligations under this Indenture except for
those surviving obligations specified in this Article Eight.
SECTION 8.08. Application of Trust Money. Subject to
Section 8.09, the Trustee shall hold in trust cash in U.S. Dollars or U.S.
Government Obligations deposited with it pursuant to this Article Eight. It
shall apply the deposited cash or U.S. Dollars or U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of, premium, if any, interest, on the Notes; but such money need not
be segregated from other funds except to the extent required by law.
SECTION 8.09. Repayment to Issuer. Subject to Sections
7.07, and 8.01 through 8.04, the Trustee and the Paying Agent shall promptly pay
to the Issuer upon request set
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forth in an Officers' Certificate any excess money held by them at any time and
thereupon shall be relieved from all liability with respect to such money. The
Trustee and the Paying Agent shall pay to the Issuer upon request any money held
by them for the payment of principal, premium, if any, that remains unclaimed
for two years; provided that the Trustee or Paying Agent before being required
to make any payment may cause to be published (a) in The Wall Street Journal or
another leading newspaper in New York, New York, (b) through the newswire
service of Bloomberg or, if Bloomberg does not then operate, any similar agency
or mail to each Holder entitled to such money at such Holder's address (as set
forth in the Security Register) notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of such publication or mailing) any unclaimed balance of such money then
remaining will be repaid to the Issuer. After payment to the Issuer, Holders
entitled to such money must look to the Issuer for payment as general creditors
unless an applicable law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
SECTION 8.10. Indemnity for Government Securities. The
Issuer shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal, premium, if any, interest, if any, received on such U.S.
Government Obligations.
SECTION 8.11. Reinstatement. If the Trustee or Paying
Agent is unable to apply cash in U.S. Dollars or U.S. Government Obligations in
accordance with this Article Eight by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuer's
and the Guarantors' obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article Eight until such time as the Trustee or any such Paying Agent is
permitted to apply all such U.S. Government Obligations in accordance with this
Article Eight; provided, however, that, if the Issuer has made any payment of
principal of, premium, if any, and interest, if any, on any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the cash in U.S.
Dollars or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. Arch Western and
the Issuer, when authorized by a resolution of the Board of Directors (as
evidenced by the delivery of such resolution to the Trustee), any Guarantor and
the Trustee may modify, amend or supplement this Indenture, any Guarantee or the
Notes without notice to or consent of any Holder to:
(a) cure any ambiguity, omission, defect or inconsistency in any
manner that is not adverse in any material respect to any holder of the Notes,
(b) provide for the assumption by a Surviving Person of the
obligations of Arch Western under this Indenture,
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(c) 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),
(d) add Note Guarantees with respect to the Notes or confirm and
evidence the release, termination or discharge of any security or Note Guarantee
when such release, termination or discharge is permitted by this Indenture,
(e) secure the Notes, add to the covenants of the Issuer or Arch
Western for the benefit of the Holders or surrender any right or power conferred
upon the Issuer,
(f) make any change that does not adversely affect the rights of
any holder of the Notes,
(g) comply with any requirement of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act, or
(h) provide for the issuance of Additional Notes in accordance
with this Indenture.
SECTION 9.02. With Consent of Holders. (a) Except as
provided in Section 9.02(b) below and Section 6.04 and without prejudice to
Section 9.01, Arch Western, the Issuer and the Trustee may:
(i) amend this Indenture or the Notes, the Note
Guarantees or the Security Documents, or
(ii) waive compliance by Arch Western and the Issuer with
any provision of this Indenture or the Notes,
with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding including consents obtained in
connection with a tender offer or in exchange for the Notes.
(b) Without the consent of each Holder affected thereby, no
amendment, modification, supplement or waiver, including a waiver pursuant to
Section 6.04 and an amendment, modification or supplement pursuant to Section
9.01, may:
(i) reduce the amount of Notes whose Holders must consent
to an amendment or waiver,
(ii) reduce the rate of, or extend the time for payment
of, interest on any Note,
(iii) reduce the principal of, or extend the Stated
Maturity of, any Note,
(iv) make any Note payable in money other than that stated
in the Note,
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(v) impair the right of any Holder to receive payment of
principal of, premium, if any, and interest, on, such holder's Notes on
or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's Notes,
(vi) release any security interest that may have been
granted in favor of the Holders other than pursuant to the terms of
such security interest,
(vii) reduce the premium payable upon the redemption of any
Note or change the time at which any Note may be redeemed, pursuant to
Section 3.01 of this Indenture
(viii) reduce the premium payable upon a Change of Control
or, at any time after a Change of Control has occurred, change the time
at which the Change of Control Offer relating thereto must be made or
at which the Notes must be repurchased pursuant to such Change of
Control Offer,
(ix) at any time after the Issuer is obligated to make a
Prepayment Offer with the Excess Proceeds from Asset Sales, change the
time at which such Prepayment Offer must be made or at which the Notes
must be repurchased pursuant thereto,
(x) modify or change any provision of this Indenture
affecting the ranking of the Notes or the Note Guarantees in a manner
adverse to the Trustee or the Holders (it being understood that
amendments or waivers of Security Documents or releases of Liens on the
Arch Coal Notes do not relate to ranking), or
(xi) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture other than in accordance
with the provisions of this Indenture, or amend or modify any provision
relating to such release.
The consent of the Holders is not necessary to approve the particular
form of any proposed amendment. It is sufficient if such consent approves the
substance of the proposed amendment. After an amendment becomes effective, the
Issuer shall mail to each registered holder of the Notes at such holder's
address appearing in the Security Register a notice briefly describing such
amendment. However, the failure to give such notice to all Holders, or any
defect therein, will not impair or affect the validity of the amendment.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment, modification or supplement to this Indenture or the Notes shall
be set forth in a supplemental indenture that complies with the TIA as then in
effect.
SECTION 9.04. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article Nine, this Indenture
shall be modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every Holder theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Notation on or Exchange of Notes. If an
amendment, modification or supplement changes the terms of a Note, the Issuer or
Trustee may require the
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Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note and on any Note subsequently authenticated regarding the
changed terms and return it to the Holder. Alternatively, if the Issuer so
determines, the Issuer in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Note shall not affect the validity of
such amendment, modification or supplement.
SECTION 9.06. Payment for Consent. Arch Western will not,
and will not permit any of its Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any holder of any Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid or is paid to all Holders
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
SECTION 9.07. Notice of Amendment or Waiver. Promptly
after the execution by Arch Western, the Issuer and the Trustee of any
supplemental indenture or waiver pursuant to the provisions of Section 9.02,
Arch Western and the Issuer shall give notice thereof to the Holders of each
outstanding Note affected, in the manner provided for in Section 13.02(b),
setting forth in general terms the substance of such supplemental indenture or
waiver.
SECTION 9.08. Trustee to Sign Supplemental Indentures. In
executing any supplemental indenture, the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive and shall be fully
protected in relying upon, in addition to the documents required by Section
13.04, an Officers' Certificate and an Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this Indenture and that all
conditions precedent to the execution, delivery and performance of such
supplemental indenture have been satisfied.
The Trustee shall sign all supplemental indentures that comply with the
requirements of this Indenture, except that the Trustee may, but need not, sign
any supplemental indenture that adversely affects its rights.
ARTICLE TEN
GUARANTEE
SECTION 10.01. Note Guarantee. (a) Each Guarantor hereby
fully and unconditionally guarantees, on an unsecured, senior, joint and several
basis with each other Note Guarantee, to each Holder and to the Trustee and its
successors and assigns on behalf of each Holder, the full payment of principal
of, premium, if any, interest, if any, and all other monetary obligations of the
Issuer under this Indenture and the Notes (including obligations to the Trustee)
with respect to each Note authenticated and delivered by the Trustee or its
agent pursuant to and in accordance with this Indenture, in accordance with the
terms of this Indenture (all the foregoing being hereinafter collectively called
the "Obligations"). Each Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
such Guarantor and that such Guarantor will remain bound under this Article Ten
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notwithstanding any extension or renewal of any Obligation. All payments under
such Guarantee will be made in U.S. Dollars.
(b) Each Guarantor hereby agrees that its obligations hereunder
shall be as if they were the principal debtor and not merely surety, unaffected
by, and irrespective of, any validity, irregularity or unenforceability of any
Note or this Indenture, any failure to enforce the provisions of any Note or
this Indenture, any waiver, modification or indulgence granted to the Issuer
with respect thereto by the Holders or the Trustee, or any other circumstance
which may otherwise constitute a legal or equitable discharge of a surety or
guarantor (except payment in full); provided, however, that, notwithstanding the
foregoing, no such waiver, modification, indulgence or circumstance shall
without the written consent of the Guarantor increase the principal amount of a
Note or the interest rate thereon or change the currency of payment with respect
to any Note, or alter the Stated Maturity thereof. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of the Issuer, any right to require that the
Trustee pursue or exhaust its legal or equitable remedies against the Issuer
prior to exercising its rights under the Guarantee (including, for the avoidance
of doubt, any right which the Guarantor may have to require the seizure and sale
of the assets of the Issuer to satisfy the outstanding principal of, interest on
or any other amount payable under each Note prior to recourse against the
Guarantor or its assets), protest or notice with respect to any Note or the Debt
evidenced thereby and all demands whatsoever, and covenants that the Guarantee
will not be discharged with respect to any Note except by payment in full of the
principal thereof and interest thereon or as otherwise provided in this
Indenture, including Section 10.03. If at any time any payment of principal of,
premium, if any, and interest, if any, on such Note is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Issuer, the Guarantor's obligations hereunder with respect to such
payment shall be reinstated as of the date of such rescission, restoration or
returns as though such payment had become due but had not been made at such
times.
(c) The Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section 10.01.
SECTION 10.02. Subrogation. (a) The Guarantor shall be
subrogated to all rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor pursuant to the provisions of its
Guarantee.
(b) The Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of all Obligations. The Guarantor
further agrees that, as between themselves, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Section 6.02 for the purposes of their
Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as
provided in Section 6.02, such Obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantor for the purposes of this
Section 10.02 subject to Section 10.01(c) above.
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SECTION 10.03. Release of Subsidiary Guarantors. The
Guarantee of any Subsidiary Guarantor will be automatically and unconditionally
released and discharged upon any of the following:
(a) in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all the Capital Stock of any Subsidiary Guarantor
to any Person that is not an Affiliate of Arch Western, such Subsidiary
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Available Cash from such sale or other
disposition is applied in accordance with the applicable provisions of Section
4.09 of this Indenture;
(b) upon the release or discharge of another Guarantee of a
Subsidiary Guarantor that resulted in the creation of the Subsidiary Guarantee
of such Subsidiary Guarantor, except a discharge or release by or as a result of
payment under such other Guarantee pursuant to Section 4.13, such Subsidiary
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee; or
(c) upon the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the terms of this Indenture, such
Subsidiary Guarantor will be released and relieved of any obligations under its
Subsidiary Guarantee;
and in each such case, prior to release and discharge or such Guarantee, Arch
Western will have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to such transactions have been complied with and that such release
is authorized and permitted hereunder.
The Trustee shall execute any documents reasonably requested by either
Arch Western or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee
endorsed on the Notes and under this Article Ten.
SECTION 10.04. Additional Guarantors. Arch Western
covenants and agrees that it shall cause any Person which becomes obligated to
Guarantee the Notes, pursuant to the terms of Section 4.13, to execute a
supplemental indenture and any other documentation requested by the Trustee
satisfactory in form and substance to the Trustee in accordance with Section
4.13 pursuant to which such Restricted Subsidiary shall Guarantee the
obligations of Arch Western under the Notes and this Indenture in accordance
with this Article Ten with the same effect and to the same extent as if such
Person had been named herein as a Subsidiary Guarantor.
SECTION 10.05. Limitation of Guarantee. The Guarantee is
limited in an amount not to exceed the maximum amount that can be guaranteed by
the Guarantor without rendering such Guarantee, as it relates to the Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer of similar laws affecting the rights of the creditors generally.
SECTION 10.06. Notation Not Required. Neither the Issuer
nor the Guarantor shall be required to make a notation on the Notes to reflect
any Guarantee or any release, termination or discharge thereof.
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SECTION 10.07. Successors and Assigns. This Article Ten
shall be binding upon the Guarantor and each of their successors and assigns and
shall inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assigns, all subject to the terms and conditions of this
Indenture.
SECTION 10.08. No Waiver. Neither a failure nor a delay on
the part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article Ten shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and are not exclusive of
any other rights, remedies or benefits which either may have under this Article
Ten at law, in equity, by statute or otherwise.
SECTION 10.09. Modification. No modification, amendment or
waiver of any provision of this Article Ten, nor the consent to any departure by
the Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on the Guarantor in any case shall entitle the Guarantor
to any other or further notice or demand in the same, similar or other
circumstance.
ARTICLE ELEVEN
SECURITY DOCUMENTS
SECTION 11.01. Security Documents. The due and punctual
payment of the principal of and interest on the Notes when and as the same shall
be due and payable, whether on an Interest Payment Date, at maturity, by
acceleration, repurchase, redemption, special redemption or otherwise, and
interest on the overdue principal of and interest on the Notes and performance
of all other obligations of the Issuer and the Guarantors to the Holders or the
Trustee under this Indenture and the Notes and the Subsidiary Guarantees,
according to the terms hereunder or thereunder, shall be secured as provided in
the Security Documents. Each Holder, by its acceptance of the Notes and the Note
Guarantees, consents and agrees to the terms of the Security Documents
(including, without limitation, the provisions for foreclosure and release of
Collateral) as the same may be in effect or may be amended from time to time in
accordance with their terms and authorizes and directs the Trustee (and, if the
Trustee is not the Collateral Trustee, the Collateral Trustee) to enter into
such Security Documents and to perform its obligations and exercise its rights
thereunder in accordance therewith. Arch Western shall do or cause to be done
all such acts and things as may be necessary or proper, or as may be required by
the provisions of the Security Documents, to assure and confirm to the Trustee
and any Collateral Trustee the security interest in the Collateral contemplated
hereby, by the Security Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Notes and the Subsidiary Guarantees secured thereby,
according to the intent and purposes herein and therein expressed. Arch Western
shall take, and shall cause the Issuer and the Subsidiary Guarantors to take,
any and all actions reasonably required to cause the Security Documents to
create and maintain, as security for the obligations of the Issuer and the
Guarantors hereunder, (x) a valid and
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enforceable Lien on and security interest in all the Collateral in favor of the
Trustee for the benefit of itself and of the Holders, and (y) such Lien as a
perfected Lien. Each of Arch Western and the Subsidiary Guarantors covenants and
agrees that it shall execute, acknowledge and deliver to the Trustee (and, if
the Trustee is not the Collateral Trustee, the Collateral Trustee) such further
assignments, transfers, assurances or other instruments and shall do or cause to
be done all such acts and things as may be necessary or proper to assure and
confirm to the Trustee (and, if the Trustee is not the Collateral Trustee, the
Collateral Trustee) its interest in the Collateral, or any part thereof, as from
time to time constituted, and the right, title and interest in and to the
Security Documents so as to render the same available for the security and
benefit of this Indenture and of the Notes.
SECTION 11.02. Recording and Opinions. (a) Arch Western
and, if applicable, the Issuer and the Subsidiary Guarantors shall take or cause
to be taken all action required to perfect, maintain, preserve and protect the
Lien on and security interest in the Collateral granted by the Security
Documents (subject only to Liens permitted by the applicable Security
Documents), including, without limitation, the filing of financing statements,
continuation statements, mortgages and any instruments of further assurance, in
such manner and in such places as may be required by law fully to preserve and
protect the rights of the Holders, the Trustee (and, if the Trustee is not the
Collateral Trustee, the Collateral Trustee) under this Indenture and the
Security Documents to all property comprising the Collateral. The Issuer and the
Guarantors shall from time to time promptly pay all financing, continuation
statement and mortgage recording, registration and/or filing fees, charges and
taxes relating to this Indenture and the Security Documents, any amendments
thereto and any other instruments of further assurance required hereunder or
pursuant to the Security Documents. The Trustee shall have no obligation to, nor
shall it be responsible for any failure to, so register, file or record or
otherwise perfect.
(b) Arch Western shall at all times comply with the provisions of
Section 314(b) of the TIA (including with respect to the Security Documents),
whether or not the TIA is then applicable to the obligations of Arch Western
and, if applicable, the Issuer and the Subsidiary Guarantors under this
Indenture.
SECTION 11.03. Release of Collateral. (a) Collateral may
(and, as applicable, shall) be released or substituted only in accordance with
the terms of the Security Documents.
(b) The release of any Collateral from the terms of this Indenture
and the Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Documents.
SECTION 11.04. Authorization of Actions To Be Taken by the
Collateral Trustee Under the Security Documents. Subject to the provisions of
Sections 7.01 and 7.02, the Trustee (and, if the Trustee is not the Collateral
Trustee, the Collateral Trustee) may, in its sole discretion and without the
consent of the Holders, on behalf of the Trustee and the Holders, take all
actions it deems necessary or appropriate, and, if the Trustee is not the
Collateral Trustee, the Trustee may, in its sole discretion and without the
consent of the Holders, direct, on behalf of
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itself and the Holders, the Collateral Trustee to take all actions it deems
necessary or appropriate, in order to, (a) enforce any of the terms of the
Security Documents and (b) collect and receive any and all amounts payable in
respect of the Obligations (as defined in the Note Pledge Agreement). Subject to
the terms and conditions of the Security Documents, the Trustee (and, if the
Trustee is not the Collateral Trustee, the Collateral Trustee) shall have power
to institute and maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts that may be unlawful or in
violation of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee (and, if the Trustee is not the Collateral Trustee,
the Collateral Trustee) may deem expedient to preserve or protect its interests
and the interests of the Holders in the Collateral (including power to institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders or to the Trustee or Collateral
Trustee).
SECTION 11.05. Authorization of Receipt of Funds and
Possessory Collateral Under the Security Documents. The Collateral Trustee is
authorized to take custody of any instruments, including, without limitation,
the Arch Coal Notes and other Possessory Collateral and to receive any funds for
the benefit of the Holders distributed under the Security Documents, and to make
further distributions of such funds to the Holders according to the provisions
of this Indenture and the Security Documents.
SECTION 11.06. Termination of Security Interest. Upon the
payment in full of all obligations of the Issuer under this Indenture, the Notes
and the Security Documents, or upon legal or covenant defeasance, if the Trustee
is not the Collateral Trustee, the Trustee shall, at the request of the Issuer,
deliver a certificate to the Collateral Trustee stating that such obligations
have been paid in full.
SECTION 11.07. Limitation on Duty of Trustee in respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Trustee shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to preservation of rights against prior parties or any other rights pertaining
thereto and the Trustee shall not be responsible for recording or filing or
re-recording or re-filing any mortgage or financing or continuation statements
or recording or re-recording any documents or instruments in any public office
at any time or times or otherwise perfecting or maintaining the perfection of
any Lien or security interest in any of the Collateral. The Trustee shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which it accords its own property and shall not be liable or responsible for any
loss or diminution in the value of any of the Collateral by reason of the act or
omission of any carrier, forwarding agency or other agent or bailee selected by
the Trustee in good faith.
The Trustee makes no representations as to and shall not be responsible
for the existence, genuineness, value or condition of any of the Collateral or
as to the security afforded or intended to be afforded thereby, hereby or by any
security agreement, or for the validity, perfection, priority or enforceability
of the Liens or security interests in any of the Collateral created or
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intended to be created by any of the security agreements, whether impaired by
operation of law or by reason of any action or omission to act on its part
hereunder, except to the extent such action or omission constitutes gross
negligence or willful misconduct on the part of the Trustee, for the validity or
sufficiency of the Collateral, any security agreement or any agreement or
assignment contained in any thereof, for the validity of the title of the Issuer
or any of the Subsidiaries to the Collateral, for insuring the Collateral or for
the payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise as to the maintenance of the Collateral. The Trustee shall have no
duty to ascertain or inquire as to the performance or observance of any of the
terms of this Indenture or the Note Pledge Agreement.
ARTICLE TWELVE
HOLDERS' MEETINGS
SECTION 12.01. Purposes of Meetings. A meeting of the
Holders may be called at any time pursuant to this Article Twelve for any of the
following purposes:
(a) to give any notice to Arch Western, the Issuer or any
Guarantor or to the Trustee, or to give any directions to the Trustee, or to
consent to the waiving of any Default hereunder and its consequences, or to take
any other action authorized to be taken by Holders pursuant to Article Nine;
(b) to remove the Trustee and appoint a successor trustee pursuant
to Article Seven; or
(c) to consent to the execution of an indenture supplement
pursuant to Section 9.02.
SECTION 12.02. Place of Meetings. Meetings of Holders may
be held at such place or places as the Trustee or, in case of its failure to
act, the Issuer, any Guarantor or the Holders calling the meeting, shall from
time to time determine.
SECTION 12.03. Call and Notice of Meetings. (a) The Trustee
may at any time (upon not less than 21 days' notice) call a meeting of Holders
to be held at such time and at such place in New York, New York or in such other
city as determined by the Trustee pursuant to Section 12.02. Notice of every
meeting of Holders, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
to each Holder and published in the manner contemplated by Section 13.02(b).
(b) In case at any time the Issuer, pursuant to a resolution of
the Board of Directors, or the Holders of at least 10% in aggregate principal
amount at maturity of the Notes then outstanding, shall have requested the
Trustee to call a meeting of the Holders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first giving of the notice of such meeting
within 20 days after receipt of such request, then the Issuer or the Holders of
Notes in the amount above specified may determine the time (not less than 21
days after notice is given) and the place in New York, New York or in such other
city as determined by the Issuer or the Holders pursuant to Section 12.02 for
such meeting and may call such meeting to take any action authorized in Section
12.01 by giving notice thereof as provided in Section 12.01(a).
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SECTION 12.04. Voting at Meetings. To be entitled to vote
at any meeting of Holders, a Person shall be (i) a Holder at the relevant Record
Date set in accordance with Section 6.15 or (ii) a Person appointed by an
instrument in writing as proxy for a Holder or Holders by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Person so entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Issuer and any Guarantor and their counsel.
SECTION 12.05. Voting Rights, Conduct and Adjournment. (a)
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders
in regard to proof of the holding of Notes and of the appointment of proxies and
in regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall
deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Notes shall be proved in the manner specified in
Section 2.03 and the appointment of any proxy shall be proved in such manner as
is deemed appropriate by the Trustee or by having the signature of the Person
executing the proxy witnessed or guaranteed by any bank, banker or trust company
customarily authorized to certify to the holding of a Note such as a Global
Note.
(b) At any meeting of Holders, the presence of Persons holding or
representing Notes in an aggregate principal amount at Stated Maturity
sufficient under the appropriate provision of this Indenture to take action upon
the business for the transaction of which such meeting was called shall
constitute a quorum. Subject to any required aggregate principal amount at
Stated Maturity of Notes required for the taking of any action pursuant to
Article Nine, in no event shall less than a majority of the votes given by
Persons holding or representing Notes at any meeting of Holders be sufficient to
approve an action. Any meeting of Holders duly called pursuant to Section 11.03
may be adjourned from time to time by vote of the Holders (or proxies for the
Holders) of a majority of the Notes represented at the meeting and entitled to
vote, whether or not a quorum shall be present; and the meeting may be held as
so adjourned without further notice. No action at a meeting of Holders shall be
effective unless approved by Persons holding or representing Notes in the
aggregate principal amount at Stated Maturity required by the provision of this
Indenture pursuant to which such action is being taken.
(c) At any meeting of Holders, each Holder or proxy shall be
entitled to one vote for each $1,000 aggregate principal amount at Stated
Maturity of outstanding Notes held or represented.
SECTION 12.06. Revocation of Consent by Holders at
Meetings. At any time prior to (but not after) the evidencing to the Trustee of
the taking of any action at a meeting of Holders by the Holders of the
percentage in aggregate principal amount at maturity of the Notes specified in
this Indenture in connection with such action, any Holder of a Note the serial
number of which is included in the Notes the Holders of which have consented to
such action may, by filing written notice with the Trustee at its principal
Corporate Trust Office and upon proof of holding as provided herein, revoke such
consent so far as concerns such Note. Except as aforesaid, any such consent
given by the Holder of any Note shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Note and of any Note issued in
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exchange therefor, in lieu thereof or upon transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon such Note. Any action
taken by the Holders of the percentage in aggregate principal amount at maturity
of the Notes specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Guarantors, the Trustee and the
Holders. This Section 11.06 shall not apply to revocations of consents to
amendments, supplements or waivers, which shall be governed by the provisions of
Section 9.04.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, Sections 310 to 318, inclusive, of
the TIA incorporated hereto in accordance with Section 1.03 hereto, such imposed
duties or incorporated provision shall control.
SECTION 13.02. Notices. (a) Any notice or communication
shall be in writing and delivered in person or mailed by first class mail or
sent by facsimile transmission addressed as follows:
if to Arch Western, the Issuer or any Subsidiary Guarantor:
Arch Western Resources, LLC
Xxx XxxxXxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telephone: 0-000-000-0000
Facsimile: 000-000-0000
Attention: General Counsel
With copies to:
Xxxxxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx 00000
Xxxxxxxxxx, XX
Attention: Xxxxxx Xxxx
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, XX 00000
Telephone: -
Facsimile: (000) 000-0000
Attention: Corporate Trust Division-Corporate Finance Unit
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The Issuer, the Guarantors or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications. All communications delivered to the Trustee shall be deemed
effective when received.
(b) Notices to the Holders regarding the Notes shall be mailed to
each Holder by first-class mail at such Holder's respective address as it
appears on the registration books of the Registrar.
Notices given by first-class mail shall be deemed given five calendar
days after mailing. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
(c) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 13.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuer, any
Guarantor, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Issuer or any Guarantor to the
Trustee to take or refrain from taking any action under this Indenture (except
in connection with the original issuance of the Notes on the date hereof), the
Issuer or any Guarantor, as the case may be, shall furnish upon request to the
Trustee:
(a) an Officers' Certificate in form reasonably satisfactory to
the Trustee stating that, in the opinion of the signer, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel in form reasonably satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless the officer signing such certificate
knows, or in the exercise of reasonable care should know, that such Opinion of
Counsel with respect to the matters upon which such Officers' Certificate is
based are erroneous. Any Opinion of Counsel may be based and may state that it
is so based, insofar as it relates to factual matters, upon an Officers'
Certificate stating that the information with respect to such factual matters is
in the possession of the Issuer, unless the counsel signing such Opinion of
Counsel knows, or in the exercise of reasonable care should know, that the
Officers' Certificate with respect to the matters upon which such Opinion of
Counsel is based are erroneous.
94
SECTION 13.05. Statements Required in Certificate or
Opinion. Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar and the Paying Agent may make reasonable rules for
their functions.
SECTION 13.07. Legal Holidays. If an Interest Payment Date
or other payment date is not a Business Day, payment shall be made on the next
succeeding day that is a Business Day, and no interest shall accrue for the
intervening period. If a Record Date is not a Business Day, the Record Date
shall not be affected.
SECTION 13.08. Governing Law. THIS INDENTURE AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 13.09. No Recourse Against Others. A director,
officer, employee or shareholder, as such, of the Issuer or any Guarantor shall
not have any liability for any obligations of the Issuer or any Guarantor under
the Notes, this Indenture or any Guarantee or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a Note, each
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Notes.
SECTION 13.10. Successors. All agreements of the Issuer and
any Guarantor in this Indenture and the Notes shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.11. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.12. Table of Contents, Cross-Reference Sheet and
Headings. The table of contents, cross-reference sheet and headings of the
Articles and Sections of this
95
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.13. Severability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
96
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
Arch Western Finance, LLC
as Issuer
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
Arch Western Resources, LLC
As Guarantor
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
Thunder Basin Coal Company, L.L.C.
As Guarantor
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
Mountain Coal Company, L.L.C.
As Guarantor
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
Arch of Wyoming, LLC
As Guarantor
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurer
00
XXX XXXX XX XXX XXXX,
as Trustee
By: /s/ XXXXXX X. XXXXXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
98
EXHIBIT A
[FORM OF FACE OF NOTE]
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY GLOBAL
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NOMINEE AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR
OR RESALES AND OTHER TRANSFERS OF THIS GLOBAL NOTE TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER OF THIS GLOBAL NOTE SHALL BE DEEMED, BY THE ACCEPTANCE HEREOF, TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE
ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO
THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE
FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHTS PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT AN ASSIGNMENT FORM IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE AND
ANY OTHER CERTIFICATE REQUIRED UNDER THE INDENTURE ARE COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE.
EACH PURCHASER OF THIS GLOBAL NOTE OR ANY INTEREST HEREIN IS HEREBY
NOTIFIED THAT THE SELLER OF THIS GLOBAL NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS GLOBAL NOTE IS SUBJECT TO, AND ENTITLED TO THE
BENEFITS OF, THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF JUNE 25, 2003 AMONG
THE ISSUER, THE GUARANTORS AND THE OTHER PARTIES REFERRED TO THEREIN.
UNTIL 40 DAYS AFTER THE COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE
OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE U.S.
SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES
ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A
UNDER THE U.S. SECURITIES ACT.
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[If Restricted Global Note - CUSIP Number -/Common Code -/ISIN Number -]
[If Regulation S Global Note - CUSIP Number -/Common Code -/ISIN Number -]
[If Exchange Note - CUSIP Number -/Common Code -/ISIN Number -]
No. _____
6 3/4% SENIOR NOTE DUE 2013
Arch Western Finance LLC, a limited liability company under the laws of
the State of Delaware, for value received promises to pay to Cede & Co. or
registered assigns the principal sum of $_____________ ( ) on July 1, 2013.
From June 25, 2003, or from the most recent interest payment date to
which interest has been paid or provided for, cash interest on this Note will
accrue at 6.75%, payable semiannually on January 1 and July 1 of each year,
beginning on January 1, 2004, to the Person in whose name this Note (or any
predecessor Note) is registered at the close of business on the preceding June
15 or December 15, as the case may be.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature of an
authorized signatory, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and to the provisions of the Indenture, which
provisions shall for all purposes have the same effect as if set forth at this
place.
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IN WITNESS WHEREOF, Arch Western Finance, LLC has caused this Note to
be signed manually or by facsimile by its duly authorized signatory.
Dated:_________, 2003
Arch Western Finance, LLC
By:_____________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Notes referred to in the
Indenture.
By:__________________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF NOTE]
6 3/4% Senior Note Due 2013
1. Interest
Arch Western Finance, LLC, a limited liability company organized under
the laws of the State of Delaware, (such limited liability company, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Issuer"), for value received promises to pay interest on the
principal amount of this Note from June 25, 2003 at the rate per annum shown
above. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Issuer will pay interest on overdue principal at the interest rate
borne by the Notes compounded semiannually, and it shall pay interest on overdue
installments of interest at the same rate compounded semiannually to the extent
lawful. Any interest paid on this Note shall be increased to the extent
necessary to pay Special Interest as set forth in this Note.
2. Special Interest
The Holder is entitled to the benefits of the Registration Rights
Agreement dated June 25, 2003, among the Issuer, Arch Coal, Inc., a corporation
organized under the laws of Delaware (the "Company"), Arch Western Resources,
LLC, a limited liability company organized under the laws of Delaware ("Arch
Western") and each of Arch Western's wholly owned subsidiaries, namely; Arch of
Wyoming, LLC, Mountain Coal Company, L.L.C., and Thunder Basin Coal Company,
L.L.C. (each a Guarantor, and together with Arch Western, (the "Guarantors"),
and the Initial Purchasers (the "Registration Rights Agreement").
In the event that (a) the Exchange Offer Registration Statement (as
defined in the Registration Rights Agreement) is not filed with the U.S.
Securities and Exchange Commission on or prior to the 90th calendar day
following the date of the Indenture, (b) the Exchange Offer Registration
Statement is not declared effective on or prior to the 180th day following the
date of the Indenture, (c) the Exchange Offer (as defined in the Registration
Rights Agreement) is not consummated on or prior to the 225th day following the
date of the Indenture, or (id) if required, a Shelf Registration Statement (as
defined in the Registration Rights Agreement) with respect to the Notes is not
on or prior to the 60th day following the date the obligation to file the Shelf
Registration Statement arises, the Shelf Registration Statement has not filed
with the U.S. Securities and Exchange Commission (each event referred to in
clauses (a) through (d) above, a "Registration Deadline Event"), then the Issuer
will be required to pay additional interest ("Special Interest") in cash on
January 1 and July 1 of each year, commencing on the first such date following
any Registration Deadline Event, at a rate per annum equal to 0.25% of the
principal amount of the Notes (determined daily) with respect to the first
90-day period following such Registration Deadline Event. Such amount of Special
Interest shall increase by an additional 0.25% per annum to a maximum of 1.00%
per annum for each subsequent 90-day period until such Registration Deadline
Event has been cured. Upon the cure of any Registration Deadline Event, Special
Interest with respect to such event shall cease to accrue from the date of the
filing, effectiveness or consummation that cured such event, as the case may be,
if the Issuer and the Guarantors are otherwise in compliance with this
paragraph. However, if, after any such
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Special Interest ceases to accrue, a different Registration Deadline Event
occurs, Special Interest will again accrue as described.
3. Method of Payment
The Issuer shall pay interest on this Note (except defaulted interest)
to the persons who are registered Holders of this Note at the close of business
on the Record Date for the next Interest Payment Date even if this Note is
cancelled after the Record Date and on or before the Interest Payment Date. The
Issuer shall pay principal and interest in U.S. Dollars in immediately available
funds that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Issuer by check mailed to the Holder.
The amount of payments in respect of interest on each Interest Payment
Date shall correspond to the aggregate principal amount of Notes represented by
the Restricted Global Note and the Regulation S Global Note, as established by
the Registrar at the close of business on the relevant Record Date. Payments of
principal shall be made upon surrender of the Restricted Global Note and
Regulation S Global Note to the Paying Agent.
4. Paying Agent and Registrar
Initially, The Bank of New York or one of its affiliates will act as
Paying Agent and Registrar. The Issuer or any of its Affiliates incorporated in
the United States may act as Paying Agent, Registrar or co-Registrar, subject to
the provisions of the Indenture.
5. Indenture
The Issuer issued the Notes under an indenture dated as of June 25,
2003 (the "Indenture"), among the Issuer, the Guarantors and The Bank of New
York, as trustee (the "Trustee"). 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 as in effect on the date of the Indenture and, to the
extent required by any amendment after such date, as so amended (the "Trust
Indenture Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act for
a statement of those terms.
The Notes are unsecured senior guaranteed obligations of the Issuer and
are issued in an initial aggregate principal amount $700,000,000. The Indenture
imposes certain limitations on the Issuer, the Guarantors and their affiliates,
including, without limitation, limitations on the incurrence of indebtedness and
issuance of stock, the payment of dividends and other payment restrictions
affecting the Issuer and its subsidiaries, the sale of assets, transactions with
and among affiliates of the Issuer and the Restricted Subsidiaries, change of
control and Liens.
6. Optional Redemption
Except pursuant to the next paragraph, the Notes will not be redeemable at the
option of the Issuer prior to July 1, 2008. Starting on that date, the Issuer
may redeem all or any portion of the Notes, at once or over time, after giving
the required notice under this Indenture at the
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redemption prices set forth below, plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant interest payment date). The
following prices are for Notes redeemed during the 12-month period commencing on
July 1, 2008 of the years set forth below, and are expressed as percentages of
principal amount:
REDEMPTION
YEAR PRICE
---- -----
2008................................ 103.375%
2009................................ 102.250%
2010................................ 101.125%
2011 and thereafter................. 100.000%
In addition, at any time and from time to time, prior to July 1, 2006,
the Issuer may redeem up to a maximum of 35% of the original aggregate principal
amount of the Notes (calculated giving effect to any issuance of Additional
Notes) with the proceeds of one or more Public Equity Offerings, at a redemption
price equal to 106.750% of the principal amount thereof, plus accrued and unpaid
interest to the redemption date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the relevant interest
payment date); provided, however, that after giving effect to any such
redemption, at least 65% of the original aggregate principal amount of the Notes
(calculated giving effect to any issuance of Additional Notes) remains
outstanding (excluding Notes held by Arch Coal or any of its Subsidiaries). Any
such redemption shall be made within 75 days of such Public Equity Offering upon
not less than 30 nor more than 60 days' prior notice.
Any redemption pursuant to this Section 3.01 shall be made pursuant to
the provisions of this Article Three.
7. Notice of Redemption
Notice of redemption will be mailed first-class postage prepaid at
least 30 days but not more than 60 days before the Redemption Date to the Holder
of this Note to be redeemed at the addresses contained in the Security Register.
If this Note is in a denomination larger than $1,000 of principal amount it may
be redeemed in part but only in integral multiples of $1,000. In the event of a
redemption of less than all of the Notes, the Notes for redemption will be
chosen by the Trustee in accordance with the Indenture. If this Note is redeemed
subsequent to a Record Date with respect to any Interest Payment Date specified
above, then any accrued interest will be paid to the Holder at the close of
business on such Record Date. If money sufficient to pay the Redemption Price of
and accrued interest on all Notes (or portions thereof) to be redeemed on the
Redemption Date is deposited with the applicable Paying Agent on or before the
Redemption Date and certain other conditions are satisfied, interest ceases to
accrue on such Notes (or such portions thereof) called for redemption on or
after such date.
8. Repurchase at the Option of Holders
Upon the occurrence of a Change of Control, each holder of Notes shall
have the right to require the Issuer to repurchase all or any part of such
holder's Notes pursuant to the offer
A-7
described below (the "Change of Control Offer") at a purchase price (the "Change
of Control Purchase Price") equal to 101% of the principal amount thereof, plus
accrued and unpaid interest to the repurchase date (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 repurchase date is after a Record Date
and on or before the relevant interest payment date, the accrued and unpaid
interest, if any, will be paid to the person or entity in whose name the Note is
registered at the close of business on that Record Date, and no additional
interest will be payable to holders whose Notes shall be subject to redemption.
Within 30 days following any Change of Control, the Issuer shall:
(a) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Xxxxx News Service or similar business
news service in the United States; and
(b) send, by first-class mail, with a copy to the Trustee, to each
holder of Notes, at such holder's address appearing in the
Security Register, a notice stating:
(1) that a Change of Control has occurred and a
Change of Control Offer is being made pursuant to Section 4.11
of the Indenture and that all Notes timely tendered will be
accepted for payment;
(2) the Change of Control Purchase Price and the
repurchase date, which shall be, subject to any contrary
requirements of applicable law, a business day no earlier than
30 days nor later than 60 days from the date such notice is
mailed;
(3) the circumstances and relevant facts
regarding the Change of Control (including information with
respect to pro forma historical income, cash flow and
capitalization after giving effect to the Change of Control);
and
(4) the procedures that holders of Notes must
follow in order to tender their Notes (or portions thereof)
for payment, and the procedures that holders of Notes must
follow in order to withdraw an election to tender Notes (or
portions thereof) for payment.
The Issuer will not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in the Indenture applicable to a Change of Control Offer made by the
Issuer and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
The Issuer shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to a Change
of Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this covenant, the Issuer will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this covenant by virtue of such
compliance.
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9. Denominations
The Notes are in denominations of $1,000 and integral multiples of
$1,000 of principal amount. The transfer of Notes may be registered, and Notes
may be exchanged, as provided in the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture.
10. Unclaimed Money
All moneys paid by the Issuer or the Guarantors to the Trustee or a
Paying Agent for the payment of the principal of, or premium, if any, or
interest on, any Notes that remain unclaimed at the end of three years after
such principal, premium or interest has become due and payable may be repaid to
the Issuer or the Guarantors, subject to applicable law, and the Holder of such
Note thereafter may look only to the Issuer or the Guarantors for payment
thereof.
11. Discharge and Defeasance
Subject to certain conditions, the Issuer at any time may terminate
some or all of its obligations and the obligations of the Guarantors under the
Notes, the Guarantees and the Indenture if the Issuer irrevocably deposits with
the Trustee U.S. Dollars or U.S. Government Obligations for the payment of
principal and interest on the Notes to redemption or maturity, as the case may
be.
12. Amendment, Supplement and Waiver
Subject to certain exceptions set forth in the Indenture, the Indenture
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the relevant Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Notes) and any existing default or compliance with any
provisions may be waived with the consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding. However, without
the consent of the Holder of each outstanding Note affected thereby, an
amendment may not:
(a) reduce the amount of Notes whose Holders must consent to an
amendment or waiver,
(b) reduce the rate of, or extend the time for payment of,
interest on any Note,
(c) reduce the principal of, or extend the Stated Maturity of, any
Note,
(d) make any Note payable in money other than that stated in the
Note,
(e) impair the right of any Holder to receive payment of principal
of, premium, if any, and interest, on, such holder's Notes on
or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's
Notes,
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(f) release any security interest that may have been granted in
favor of the Holders other than pursuant to the terms of such
security interest,
(g) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed, pursuant to
Section 3.01 of the Indenture
(h) reduce the premium payable upon a Change of Control or, at any
time after a Change of Control has occurred, change the time
at which the Change of Control Offer relating thereto must be
made or at which the Notes must be repurchased pursuant to
such Change of Control Offer,
(i) at any time after the Issuer is obligated to make a Prepayment
Offer with the Excess Proceeds from Asset Sales, change the
time at which such Prepayment Offer must be made or at which
the Notes must be repurchased pursuant thereto,
(j) modify or change any provision of the Indenture affecting the
ranking of the Notes or the Note Guarantees in a manner
adverse to the Holders (it being understood that amendments or
waivers of Security Documents or releases of Liens on the Arch
Coal Notes do not relate to ranking), or
(k) release any Guarantor from any of its obligations under its
Note Guarantee or the Indenture other than in accordance with
the provisions of the Indenture, or amend or modify any
provision relating to such release.
The consent of the Holders is not necessary under the Indenture to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.
Notwithstanding the foregoing, without notice to or the consent of any
Holder of the Notes, the Issuer, the Guarantors and the Trustee may, among other
things, modify, amend or supplement the Indenture:
(a) cure any ambiguity, omission, defect or inconsistency in any
manner that is not adverse in any material respect to any holder of the Notes,
(b) provide for the assumption by a Surviving Person of the
obligations of Arch Western under the Indenture,
(c) 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),
(d) add Note Guarantees with respect to the Notes or confirm and
evidence the release, termination or discharge of any security or Note Guarantee
when such release, termination or discharge is permitted by the Indenture,
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(e) secure the Notes, add to the covenants of the Issuer for the
benefit of the Holders or surrender any right or power conferred upon the
Issuer,
(f) make any change that does not adversely affect the rights of
any holder of the Notes,
(g) comply with any requirement of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act, or
(h) provide for the issuance of Additional Notes in accordance
with the Indenture.
After an amendment becomes effective in accordance with the above
position, the Issuer shall mail to each Holder at such Holder's address
appearing in the Security Register a notice briefly describing such amendment.
However, the failure to give such notice to all Holders, or any defect therein,
will not impair or affect the validity of the amendment.
13. Defaults and Remedies
The Notes have the Events of Default as set forth in Section 6.01 of
the Indenture. If an Event of Default occurs and is continuing, the Trustee, by
notice to the Issuer, or the registered Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding by notice to the Issuer
and the Trustee, subject to certain limitations, may declare all the Notes to be
due and payable immediately. Certain events of bankruptcy or insolvency are
Events of Default and shall result in the Notes being due and payable
immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives an indemnity satisfactory to it. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes
may direct the Trustee in its exercise of any trust or power. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by written
notice to the Trustee may rescind any acceleration and its consequence if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal,
premium, if any, or interest that has become due solely because of such
acceleration. The above description of Events of Default and remedies is
qualified by reference, and subject in its entirety, to the more complete
description thereof contained in the Indenture.
14. Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Issuer, the Guarantor or any of their Affiliates
with the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-Registrar or co-Paying Agent may do the same with like rights.
15. No Recourse Against Others
A-11
A director, officer, employee, or stockholder, as such, of the Issuer
or the Guarantor shall not have any liability for any obligations of the Issuer
or the Guarantor under the Notes, the Guarantees or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. By accepting a Note, each Holder shall waive and release all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
16. Authentication
This Note shall not be valid until an authorized officer of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Note.
17. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Issuer or a Guarantor shall furnish to any Holder upon written
request and without charge to the Holder a copy of the Indenture. Requests may
be made to:
Arch Western Finance, LLC
Xxx XxxxXxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
A-12
GUARANTEE
For value received, each Guarantor hereby fully and unconditionally
guarantees, as principal obligor and not merely as surety, on an unsecured,
senior, joint and several basis, to each Holder and to the Trustee and its
successors and assigns on behalf of each Holder, the full payment of principal
of, premium, if any, and interest on, and all other monetary obligations of the
Issuer under the Indenture and this Note (including obligations to the Trustee
and the obligations to pay Special Interest, if any) with respect to each Note
authenticated and delivered by the Trustee or its agent pursuant to and in
accordance with the Indenture, in accordance with the terms of the Indenture
(all the foregoing being hereinafter collectively called the "Obligations").
Each Guarantor further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice or further assent from the Guarantor and
that the Guarantor will remain bound by Article Ten of the Indenture
notwithstanding any extension or renewal of any Obligation. All payments under
this Guarantee shall be made in U.S. Dollars.
These and other additional obligations of the Guarantors to the Holder
and to the Trustee pursuant to this Guarantee and the Indenture (including,
without limitation, the provisions relating to submission to jurisdiction and
appointment of the Authorized Agent set forth in the Indenture) are expressly
set forth in the Indenture to which reference is hereby made for the precise
terms of such obligations.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED WITH, THE LAWS OF
THE STATE OF NEW YORK.
This Guarantee is dated the date of the Note upon which it is endorsed.
A-13
IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly
executed.
Arch Western Resources, LLC
As Guarantor
By:__________________________________
Name:
Title:
Thunder Basin Coal Company, L.L.C.
As Guarantor
By:__________________________________
Name:
Title:
Mountain Coal Company, L.L.C.
As Guarantor
By:__________________________________
Name:
Title:
Arch of Wyoming, LLC
As Guarantor
By:__________________________________
Name:
Title:
A-14
ASSIGNMENT FORM
To assign and transfer this Note, fill in the form below:
(I) or (the Issuer) assign and transfer this Note to
____________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
____________________________________________________________________
(Print or type assignee's name, address and postal code)
and irrevocably appoint ______________________________________ agent to transfer
this Note on the books of the Issuer. The agent may substitute another to act
for him.
Your Signature: ________________________________________________________________
Sign exactly as your name appears on the other side of this
Note)
Signature Guarantee: ___________________________________________________________
(Participant in a recognized signature guarantee medallion
program)
Date:_______________________________________________________
Certifying Signature: ______________________________________
[Include only if Original Note and delete if Exchange Note -- In
connection with any transfer of any Notes evidenced by this certificate
occurring prior to the date that is two years after the later of the date of
original issuance of such Notes and the last date, if any, on which the Notes
were owned by the Issuer or any Affiliate of the Issuer, the undersigned
confirms that such Notes are being transferred in accordance with the transfer
restrictions set forth in such Notes and:
CHECK ONE BOX BELOW
(1) [X] to the Issuer; or
(2) [X] pursuant to and in compliance with Rule 144A under the U.S.
Securities Act of 1933; or
(3) [X] pursuant to and in compliance with Regulation S under the U.S.
Securities Act of 1933; or
(4) [X] pursuant to another available exemption from the registration
requirements of the U.S. Securities Act of 1933; or
(5) [X] pursuant to an effective registration statement under the U.S.
Securities Act of 1933.
A-15
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (2) is
checked, by executing this form, the Transferor is deemed to have certified that
such Notes are being transferred to a person it reasonably believes is a
"qualified institutional buyer" as defined in Rule 144A under the U.S.
Securities Act of 1933 who has received notice that such transfer is being made
in reliance on Rule 144A; if box (3) is checked, by executing this form, the
Transferor is deemed to have certified that such transfer is made pursuant to an
offer and sale that occurred outside the United States in compliance with
Regulation S under the U.S. Securities Act; and if box (4) is checked, the
Trustee may require, prior to registering any such transfer of the Notes, such
legal opinions, certifications and other information as the Issuer reasonably
requests to confirm that such transfer is being made pursuant to an exemption
from or in a transaction not subject to, the registration requirements of the
U.S. Securities Act of 1933.
Signature: _________________________________
Signature Guarantee:
____________________________________________
(Participant in a recognized signature guarantee medallion program)
Certifying Signature: __________________ Date:______________________
Signature Guarantee: ___________________________________
(Participant in a recognized signature guarantee medallion program)]
A-16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof repurchased
pursuant to Section 4.09 or 4.11 of the Indenture, check the box: [ ]
If the purchase is in part, indicate the portion (in denominations of
$1,000 or any integral multiple thereof) to be purchased:
Your signature:
(Sign exactly as your name appears on the other side of this Note)
Date:
Certifying Signature: ______________________________________
A-17
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The following decreases/increases in the principal amount of this
Security have been made:
Principal
Amount
Date of Decrease in Increase in Following such Notation Made
Decrease/ Principal Principal Decrease/ by or on Behalf
Increase Amount Amount Increase of Registrar
---------- ----------- ------------ -------------- ---------------
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
__________ ___________ ____________ ______________ _______________
A-18
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO REGULATION S GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(ii) of the Indenture)
The Bank of New York, as Transfer Agent
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, XX 00000
Attn: Corporate Trust Division-Corporate Finance Unit
Re: 6 3/4% Senior Notes Due 2013 (the "Notes")
Reference is hereby made to the Indenture dated as of June 25, 2003,
(the "Indenture") among Arch Western Finance, LLC, as Issuer, Arch Western
Resources, LLC, a limited liability company organized under the laws of Delaware
("Arch Western") and each of Arch Western's wholly owned subsidiaries, namely;
Arch of Wyoming, LLC, Mountain Coal Company L.L.C., and Thunder Basin Coal
Company, L.L.C. (each a Guarantor, and together with Arch Western, (the
"Guarantors")) and The Bank of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given them in the Indenture.
This letter relates to ____________ aggregate principal amount of Notes
that are held as a beneficial interest in the form of the Restricted Global Note
(CUSIP No. ________; ISIN No: _____________) with the Depositary in the name of
[name of transferor](the "Transferor"). The Transferor has requested an exchange
or transfer of such beneficial interest for an equivalent beneficial interest in
the Regulation S Global Note (Common Code No. ________; ISIN No. ________).
In connection with such request, the Transferor does hereby certify
that such transfer has been effected in accordance with the transfer
restrictions set forth in the Notes and:
(a) with respect to transfers made in reliance on Regulation S
("Regulation S") under the United States Securities Act of
1933, as amended (the "U.S. Securities Act"), does certify
that:
(i) the offer of the Notes was not made to a person in
the United States;
(ii) either (1) at the time the buy order is originated
the transferee is outside the United States or the Transferor and any
person acting on its behalf reasonably believe that the transferee is
outside the United States or; (2) the transaction was executed in, on
or through the facilities of a designated offshore securities market
described in paragraph (b) of Rule 902 of Regulation S and neither the
Transferor nor any person acting on its behalf knows that the
transaction was pre-arranged with a buyer in the United States
(iii) no directed selling efforts have been made in the
United States by the Transferor, an affiliate thereof or any person
their behalf in contravention of the requirements of Rule 903 or 904 of
Regulation S, as applicable;
(iv) the transaction is not part of a plan or scheme to
evade the registration requirements of the U.S. Securities Act; and
(v) the Transferor is not the Issuer, a distributor of
the Notes, an affiliate of the Issuer or any such distributor (except
any officer or director who is an affiliate solely by virtue of holding
such position) or a person acting on behalf of any of the foregoing.
(b) with respect to transfers made in reliance on Rule 144 the
Transferor certifies that the Notes are being transferred in a
transaction permitted by Rule 144 under the U.S. Securities
Act.
You, the Issuer, the Guarantors and the Trustee are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
[Name of Transferor]
By: _____________________
Name:
Title:
Date:
cc:
Attn:
B-2
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER FROM REGULATION S GLOBAL NOTE TO
RESTRICTED GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(iii) of the Indenture)
The Bank of New York, as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust Office
Re: 6 3/4% Senior Notes Due 2013 (the "Notes")
Reference is hereby made to the Indenture dated as of June 25, 2003,
(the "Indenture") among Arch Western Finance, LLC, as Issuer, Arch Western
Resources, LLC, a limited liability company organized under the laws of Delaware
("Arch Western") and each of Arch Western's wholly owned subsidiaries, namely;
Arch of Wyoming, LLC, Mountain Coal Company L.L.C., and Thunder Basin Coal
Company, L.L.C. (each a Guarantor, and together with Arch Western, (the
"Guarantors")) and The Bank of New York, as Trustee. Capitalized terms used but
not defined herein shall have the meanings given them in the Indenture.
This letter relates to $__________ aggregate principal amount at
maturity of Notes that are held in the form of the Regulation S Global Note with
the Depositary (Common Code No. _______; ISIN No. _______) in the name of Cede &
Co. (the "Transferor") to effect the transfer of the Notes in exchange for an
equivalent beneficial interest in the Restricted Global Note (CUSIP No.
________, ISIN No. ________).
In connection with such request, and in respect of such Notes the
Transferor does hereby certify that such Notes are being transferred in
accordance with the transfer restrictions set forth in the Notes and that:
CHECK ONE BOX BELOW:
[X][ ] the Transferor is relying on Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act") for
exemption from such Act's registration requirements; it is
transferring such Notes to a person it reasonably believes is
a "qualified institutional buyer" as defined in Rule 144A that
purchases for its own account, or for the account of a
qualified institutional buyer, and to whom the Transferor has
given notice that the transfer is made in reliance on Rule
144A and the transfer is being made in accordance with any
applicable securities laws of any state of the United States;
or
[X]: the Transferor is relying on an exemption other than Rule 144A
from the registration requirements of the Securities Act,
subject to the Issuer's and the Trustee's right prior to any
such offer, sale or transfer to require the
delivery of an Opinion of Counsel, certification and/or other
information satisfactory to each of them.
You, the Issuer, the Guarantors and the Trustee are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
[Name of Transferor]
By: _____________________
Name:
Title:
Dated:
cc:
Attn:
Appendix-2
