1
Exhibit 10.1
Execution Counterpart
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ANKER COAL GROUP, INC.
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 22, 1997
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THE CHASE MANHATTAN BANK,
as Administrative Agent
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
Section 1. Definitions and Accounting Matters............................. 2
1.01 Certain Defined Terms.......................................... 2
1.02 Accounting Terms and Determinations............................ 33
1.03 Types of Loans................................................. 35
Section 2. Commitments, Loans, Notes and Prepayments...................... 35
2.01 Loans.......................................................... 35
2.02 Borrowings..................................................... 36
2.03 Limit on Eurodollar Loans...................................... 36
2.04 Changes of Commitments......................................... 37
2.05 Commitment Fee................................................. 38
2.06 Lending Offices................................................ 39
2.07 Several Obligations; Remedies Independent...................... 39
2.08 Notes.......................................................... 39
2.09 Optional Prepayments and Conversions or
Continuations of Loans...................................... 40
2.10 Mandatory Prepayments and Reductions of
Commitments................................................. 40
Section 3. Payments of Principal and Interest............................. 46
3.01 Repayment of Loans............................................. 46
3.02 Interest....................................................... 46
Section 4. Payments; Pro Rata Treatment; Computations;
Etc......................................................... 47
4.01 Payments....................................................... 47
4.02 Pro Rata Treatment............................................. 48
4.03 Computations................................................... 49
4.04 Minimum Amounts................................................ 49
4.05 Certain Notices................................................ 49
4.06 Non-Receipt of Funds by the Administrative Agent............... 50
4.07 Sharing of Payments, Etc....................................... 52
Section 5. Yield Protection, Etc.......................................... 53
5.01 Additional Costs............................................... 53
5.02 Limitation on Types of Loans................................... 55
5.03 Illegality..................................................... 56
5.04 Treatment of Affected Loans.................................... 56
5.05 Compensation................................................... 57
5.06 U.S. Taxes..................................................... 58
5.07 Replacement of Banks........................................... 59
Section 6. Guarantee...................................................... 60
(i)
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Page
6.01 The Guarantee.................................................. 60
6.02 Obligations Unconditional...................................... 61
6.03 Reinstatement.................................................. 62
6.04 Subrogation.................................................... 62
6.05 Remedies....................................................... 63
6.06 Instrument for the Payment of Money............................ 63
6.07 Continuing Guarantee........................................... 63
6.08 Rights of Contribution......................................... 63
6.09 General Limitation on Guarantee Obligations.................... 64
Section 7. Conditions Precedent........................................... 65
7.01 Effectiveness.................................................. 65
7.02 Initial and Subsequent Extensions of Credit.................... 68
Section 8. Representations and Warranties................................. 68
8.01 Corporate Existence............................................ 68
8.02 Financial Condition............................................ 69
8.03 Litigation..................................................... 69
8.04 No Breach...................................................... 70
8.05 Action......................................................... 70
8.06 Approvals...................................................... 71
8.07 ERISA.......................................................... 71
8.08 Taxes.......................................................... 71
8.09 Investment Company Act......................................... 71
8.10 Public Utility Holding Company Act............................. 71
8.11 Material Agreements and Liens.................................. 72
8.12 Environmental Matters.......................................... 72
8.13 Capitalization................................................. 75
8.14 Subsidiaries, Etc.............................................. 77
8.15 True and Complete Disclosure................................... 77
8.16 Real Property.................................................. 78
8.17 Solvency Analyses.............................................. 78
8.18 Use of Credit.................................................. 78
8.19 Solvency....................................................... 78
8.20 Mobile Equipment............................................... 79
Section 9. Covenants of the Company....................................... 79
9.01 Financial Statements Etc....................................... 79
9.02 Litigation..................................................... 84
9.03 Existence, Etc................................................. 84
9.04 Insurance...................................................... 85
9.05 Prohibition of Fundamental Changes............................. 86
9.06 Limitation on Liens............................................ 88
9.07 Indebtedness................................................... 89
9.08 Investments.................................................... 91
9.09 Dividend Payments.............................................. 92
9.10 Certain Financial Covenants.................................... 93
9.11 Capital Expenditures........................................... 94
9.12 Interest Rate Protection Agreements............................ 94
9.13 Operating Leases............................................... 94
9.14 Lines of Business.............................................. 94
(ii)
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9.15 Transactions with Affiliates................................... 95
9.16 Use of Proceeds................................................ 95
9.17 Certain Obligations Respecting Restricted
Subsidiaries................................................ 95
9.18 Modifications of Certain Documents............................. 97
9.19 Holding Company................................................ 97
9.20 Newly-Acquired Real Property................................... 97
9.21 Certain Consents............................................... 98
9.22 Senior Notes................................................... 98
9.23 Certain Obligations Under Acquisition Documents................ 99
Section 10. Events of Default............................................. 99
Section 11. The Administrative Agent......................................102
11.01 Appointment, Powers and Immunities............................103
11.02 Reliance by Administrative Agent..............................104
11.03 Defaults......................................................104
11.04 Rights as a Bank..............................................104
11.05 Indemnification...............................................105
11.06 Non-Reliance on Administrative Agent and Other
Banks.......................................................105
11.07 Failure to Act................................................106
11.08 Resignation or Removal of Administrative Agent................106
Section 12. Miscellaneous.................................................106
12.01 Waiver........................................................107
12.02 Notices.......................................................107
12.03 Expenses, Etc.................................................107
12.04 Amendments, Etc...............................................109
12.05 Successors and Assigns........................................111
12.06 Assignments and Participations................................111
12.07 Survival......................................................113
12.08 Captions......................................................113
12.09 Counterparts..................................................113
12.10 Governing Law; Submission to Jurisdiction.....................113
12.11 Waiver of Jury Trial..........................................114
12.12 Treatment of Certain Information;
Confidentiality.............................................114
SCHEDULE I - Material Agreements and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries
SCHEDULE IV - Eligible Properties
(iii)
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EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Leverage Certificate
EXHIBIT D - Form of Amendment to Security Agreement
EXHIBIT E - [Intentionally Omitted]
EXHIBIT F - [Intentionally Omitted]
EXHIBIT G - [Intentionally Omitted]
EXHIBIT H - Form of Opinion of Special New York Counsel
to Chase
EXHIBIT I - Form of Confidentiality Agreement
EXHIBIT J - Form of Assignment and Acceptance
EXHIBIT K - Form of Intercompany Note
EXHIBIT L - Form of Joinder Agreement
(iv)
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 22,
1997, among: ANKER COAL GROUP, INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"); each Person
listed on the signature pages hereto under the caption "Subsidiary Guarantor"
and each Person that becomes a "Subsidiary Guarantor" pursuant to Section
9.17(a) hereof (individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors" and, together with the Company, the "Obligors"); each of
the lenders that is a signatory hereto identified under the caption "BANKS" on
the signature pages hereto and each lender that becomes a "Bank" after the date
hereof pursuant to Section 12.06(b) hereof (individually, a "Bank" and,
collectively, the "Banks"); and THE CHASE MANHATTAN BANK, a New York State
banking corporation, as agent for the Banks (in such capacity, together with its
successors in such capacity, the "Administrative Agent"). Capitalized terms used
and not otherwise defined in the caption and recitals of this Agreement have the
respective meanings assigned to them in Section 1.01 of this Agreement.
The Company, the Subsidiary Guarantors, certain of the Banks (the
"Existing Banks") and the Administrative Agent are party to a Credit Agreement
dated as of August 12, 1996 (as heretofore modified and supplemented and in
effect on the date hereof immediately before giving effect to the amendment and
restatement contemplated hereby, the "Existing Credit Agreement"). Pursuant to
the Existing Credit Agreement (a) certain of the Existing Banks committed to
make Revolving Credit Loans (as defined in the Existing Credit Agreement and
referred to herein as "Existing Revolving Credit Loans") in an original
aggregate principal amount not exceeding $25,000,000 at any one time outstanding
(the "Existing Revolving Credit Commitments") and (b) certain of the Existing
Banks committed to make Tranche A Term Loans and Tranche B Term Loans (as
defined in the Existing Credit Agreement and referred to herein as "Existing
Term Loans") to the Company in an original aggregate principal amount not
exceeding $110,000,000 (the "Existing Term Loan Commitments").
The Company intends to issue senior, unsecured notes due 2007 in an
aggregate principal amount equal to $125,000,000 (the "Senior Notes") on the
terms and conditions described in the Senior Note Preliminary Offering
Memorandum, the proceeds of which will be used to prepay in full the Existing
Term Loans and for general corporate purposes.
The Company has requested that the Existing Credit Agreement be
amended and restated in order to, among other things, (a) increase the aggregate
amount of the Existing Revolving Credit Commitments to $75,000,000 and (b)
terminate the Existing Term Loan Commitments.
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NOW, THEREFORE, the parties hereto hereby agree that the Existing
Credit Agreement shall be amended and restated as of the date hereof (but
subject to Section 7.01) to read in its entirety as follows:
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"ACGI Class A Preferred Stock" shall mean the Class A Preferred
Stock of the Company with a par value of $2,500 per share.
"ACGI Class B Preferred Stock" shall mean the Class B Preferred
Stock of the Company with a par value of $1,000 per share.
"ACGI Class C Preferred Stock" shall mean the Class C Preferred
Stock of the Company with a par value of $13,000 per share.
"ACGI Class D Preferred Stock" shall mean the Class D Preferred
Stock of the Company with a par value of $7,000 per share.
"Acquisition" shall mean the consummation of the following
transactions in accordance with the Acquisition Documents: (i) the exchange by
JJF Group Limited Liability Company of (A) 25 shares of the Class A common stock
of AGI and (B) $30.39 in cash for (C) 3,039 newly issued shares of the Company's
common stock; (ii) the exchange by PPK Group Limited Liability Company of (A)
4.23 shares of the Class A common stock of AGI and (B) $5.14 in cash for (C) 514
newly issued shares of the Company's common stock; (iii) the exchange by Anker
Holding of (A) 8.56 shares of the Class A common stock of AGI and (B) $10.40 in
cash for (C) 1,040 newly issued shares of the Company's common stock; (iv) the
exchange by Glenn Springs Holdings, Inc. of (A) 1,000 shares of AGI Class C
Preferred Stock for (B) 1,000 newly issued shares of ACGI Class C Preferred
Stock; (v) the exchange by Glenn Springs Holdings, Inc. of (A) 1,000 shares of
AGI Class D Preferred Stock for (B) 1,000 newly issued shares of ACGI Class D
Preferred Stock; (vi) the acquisition by the Company
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from Anker Holding of 466.44 shares of the common stock of AGI in exchange for
(A) consideration in cash and/or notes (the principal of which and interest on
which will be paid on the Closing Date) equal to the sum of (1) $62,000,000 and
(2) the product of (I) $15,725 multiplied by (II) the number of days by which
the consummation of the Acquisition follows May 31, 1996 and (B) 10,000 shares
of ACGI Class A Preferred Stock having an aggregate liquidation preference
(excluding accumulated dividends) equal to $25,000,000; (vii) the redemption by
AGI of all of the issued and outstanding AGI Class A Preferred Stock and AGI
Class B Preferred Stock for cash consideration to Anker Holding in the amount of
approximately $2,854,000, and the subsequent cancellation of such shares; (viii)
the issuance by the Company to one or more funds managed by First Reserve of (A)
5,407 shares of the Company's common stock and (B) a Stock Purchase Warrant
exercisable for shares of the Company's common stock in certain instances upon a
registered public offering of the Company's common stock in exchange for
consideration of $40,000,000 consisting of cash; and (ix) the issuance by the
Company to one or more funds managed by First Reserve of 10,000 shares of ACGI
Class B Preferred having an aggregate liquidation preference of $10,000,000 in
exchange for consideration of $10,000,000 consisting of cash.
"Acquisition Documents" shall mean (i) the Registration Rights
Agreement dated as of August 12, 1996 by and among the Company, JJF Group
Limited Liability Company, PPK Group Limited Liability Company, Anker Holding
and the Funds referred to therein; (ii) the Stockholders Agreement and (iii) the
Stock Purchase Warrant referred to in clause (viii)(B) of the definition of
"acquisition" in this Section 1.01, in each of the cases referred to in the
preceding clauses (i) through (iii) as the same shall, subject to Section 9.18
hereof, be modified and supplemented and in effect from time to time.
"Administrative Agent" shall have the meaning assigned thereto in
the caption of this Agreement.
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company and,
if such Person is an individual, any member of the immediate family (including
parents, spouse, children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or
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indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having 10% or more of the voting
power for the election of directors or other governing body of a corporation or
10% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person, and in all events
excluding securities and partnership and other ownership interests owned by
Anker Capital) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate solely by
reason of his or her being a director, officer or employee of the Company or any
of its Restricted Subsidiaries, (b) none of the Restricted Subsidiaries shall be
Affiliates, (c) neither the Administrative Agent, any Bank, Anker Holding, First
Reserve or any fund managed by First Reserve shall be an Affiliate.
"Agent's Account" shall mean Anker Coal Group, Inc. Clearing Account
number 323221831 maintained by the Administrative Agent at One Chase Manhattan
Plaza, 8th Floor, New York, NY 10081, Attention: Linda Hill, or such other bank
account as the Administrative Agent may specify from time to time by notice to
the other parties hereto as the account to which certain payments to the
Administrative Agent hereunder are to be made.
"AGI" shall mean Anker Group, Inc., a Delaware corporation.
this "Agreement" (and references such as "hereto" and "hereby" and
to similar effect) shall mean (or refer to) this Amended and Restated Credit
Agreement as renewed, replaced, extended or otherwise modified and supplemented
and in effect from time to time.
"Anker Capital" shall mean Anker Capital Corporation, a West
Virginia corporation.
"Anker Group, Inc. Subordinated Guaranty" shall mean a subordinated
guaranty of AGI, in form and substance satisfactory to the Administrative Agent
and the Banks, of all obligations, including advanced minimum production royalty
payments of approximately $1,600,000 per year, of Patriot Mining Company, Inc.
in favor of Mount Storm Company and Bakerstown Mining Limited Liability Company
with respect to the Stony River Project.
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"Anker Holding" shall mean Anker Holding B.V., a Netherlands
corporation.
"Applicable Lending Office" shall mean, for each Bank and for each
Type of Loan, the "Lending Office" of such Bank (or of an affiliate of such
Bank) designated for such Type of Loan on the signature pages hereof or such
other office of such Bank (or of an affiliate of such Bank) as such Bank may
from time to time specify to the Administrative Agent and the Company as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Percentage" shall mean: (a) with respect to Base Rate
Loans, (i) 1-1/2% per annum; and (b) with respect to Eurodollar Loans, (i)
2-1/2% per annum and (c) with respect to commitment fees, 1/2 of 1% per annum;
provided that (i) during the period commencing on the Effective Date and ending
on the first Rate Reset Date (as defined below), the Applicable Percentage for
Base Rate Loans, Eurodollar Loans and commitment fees shall be 3/4 of 1%, 1-3/4%
and 3/8 of 1%, respectively and (ii) subject to the foregoing clause (i), if the
Net Leverage Ratio as at the last day of any fiscal quarter of the Company shall
fall within any of the ranges set forth below then, upon the delivery to the
Administrative Agent of a certificate (a "Leverage Certificate") of a
Responsible Officer substantially in the form of Exhibit C hereto demonstrating
such fact prior to the end of the next succeeding fiscal quarter, the
"Applicable Percentage" for Revolving Credit Loans and commitment fees shall be
reduced to the rate for the respective Type of Loan and commitment fees set
forth below opposite such range during the period commencing on the third
Business Day after the date of receipt of such Leverage Certificate to but not
including the first Rate Reset Date thereafter (except that, notwithstanding the
foregoing, the Applicable Percentage for any such Loan or commitment fee shall
not as a consequence of this proviso be so reduced for any period during which
an Event of Default shall have occurred and be continuing following notice by
the Administrative Agent to the Company upon the instruction of the Majority
Banks that such reduction shall not be made):
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Range Applicable Percentage
of Base Rate Eurodollar Commitment
Net Leverage Ratio Loans Loans Fee
Greater than 5.50 to 1 1-1/2% 2-1/2% 1/2 of 1%
Greater than or
equal to 5.00 to 1 1-1/4% 2-1/4% 1/2 of 1%
but less than or
equal to 5.50 to 1
Greater than or
equal to 4.50 to 1 1% 2% 1/2 of 1%
but less than 5.00
to 1
Greater than or
equal to 3.75 to 1 3/4 of 1% 1-3/4% 3/8 of 1%
but less than 4.50
to 1
Greater than or
equal to 3.00 to 1 1/2 of 1% 1-1/2% 3/8 of 1%
but less than 3.75
to 1
Greater than or
equal to 1.50 to 1 1/4 of 1% 1-1/4% 3/10 of 1%
but less than 3.00
to 1
Less than 1.50 to 1 0% 1% 1/4 of 1%
For purposes hereof, (a) the first "Rate Reset Date" shall mean the earlier of
(i) the third Business Day after the date on which the Administrative Agent
receives a Leverage Certificate as at December 31, 1997, and (ii) March 31,
1998; and (b) each subsequent Rate Reset Date shall mean the earlier of (i) the
third Business Day after the date on which the Administrative Agent receives a
Leverage Certificate as at the last day of the fiscal quarter of the Company
then most recently ended, and (ii) the date falling 45 days after such last day.
"Appraisal" shall have the meaning assigned to such term in Section
9.01(h)(ii) hereof.
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"Ash" shall mean combustion by-product ash and by- products of flue
gas desulfurization.
"Available Supplemental Amount" shall mean, at any time, the sum of
(i) $17,750,000 plus (ii) the aggregate amount of cash theretofore received by
the Company in consideration for the issuance by the Company of its capital
stock after the Closing Date (a) to any Person that is a shareholder of the
Company on the Closing Date after giving effect to the Acquisition or (b) to any
fund managed by First Reserve plus (iii) the Net Available Proceeds of any
Equity Issuance in respect of which the Supermajority Banks have agreed not to
require a prepayment or reduction of Commitments under Section 2.10 hereof plus
(iv) the aggregate amount of Net Available Proceeds received in cash by the
Company or any of its Restricted Subsidiaries from the Permitted Joint Venture
in consideration for the sale by the Company or any of its Restricted
Subsidiaries to the Permitted Joint Venture of Eligible Properties in excess of
the respective Stipulated Values for such Eligible Properties minus (v)
Investments theretofore made by the Company or any of its Restricted
Subsidiaries out of the Available Supplemental Amount as permitted by Section
9.08(g) hereof.
"Bank" shall have the meaning assigned thereto in the caption of
this Agreement.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Basic Documents" shall mean, collectively, the Loan Documents and
the Intercompany Notes.
"Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
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"Big Creek" shall mean the reserves leased from Southern Regional
Development Company in Buchanan and Tazewell Counties, Virginia as of the
Effective Date.
"Borrowing Base" shall mean, as at any date, the sum of (a) 85% of
the aggregate amount of Eligible Receivables at the date (the "Base Date") of
the Borrowing Base Certificate received by the Administrative Agent on or most
recently prior to such date plus (b) the Eligible Inventory Amount (as defined
below) on the Base Date plus (c) 50% of the PP&E Value (such amount not to
exceed the lesser of such value or $50,000,000). For purposes of the preceding
sentence, "Eligible Inventory Amount" shall mean, on any date, the lesser of (i)
50% of the aggregate value of Eligible Inventory (calculated at the lower of
average cost or fair market value) on such date or (ii) 85% of the aggregate
amount of Eligible Receivables on such date.
"Borrowing Base Certificate" shall mean a certificate of a
Responsible Officer, substantially in the form of Exhibit B hereto and
appropriately completed.
"Business Day" shall mean any day (a) on which commercial banks are
not authorized or required to close in New York City and (b) if such day relates
to a borrowing of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice
by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Restricted Subsidiaries to acquire or construct fixed assets, plant and
equipment (including improvements and replacements, but excluding repairs and
maintenance in the ordinary course of business) during such period computed in
accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP;
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provided that the term "Capital Lease Obligations" shall not include leases for
coal reserves or Dividend Payments.
"Casualty Event" shall mean, with respect to any tangible Property
of the Company or any Restricted Subsidiary, any loss of or damage to, or any
condemnation or other taking of, such Property for which the Company or any of
its Restricted Subsidiaries receives insurance proceeds, or proceeds of a
condemnation award or other compensation.
"Change of Control" shall mean any of the following events:
(i) the failure by the Controlling Shareholders to own, directly or
indirectly, capital stock of the Company carrying at least 70% of the
Voting Power of all of the capital stock of the Company, other than in
connection with the liquidation of any one or more of funds managed by
First Reserve;
(ii) the failure by the Controlling Shareholders to own, directly or
indirectly, capital stock of the Company carrying at least 25% of the
Voting Power of all of the capital stock of the Company; and
(iii) any Person or group of related Persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) (other
than the Controlling Shareholders and Persons that, on the Closing Date,
are investors in funds managed by First Reserve which funds are
shareholders of the Company) shall own capital stock of the Company
carrying at least 25% of the Voting Power of all of the capital stock of
the Company.
"Chase" shall mean The Chase Manhattan Bank and its successors.
"Closing Date" shall mean August 12, 1996.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral Account" shall have the meaning assigned to such term in
Section 4.01 of the Security Agreement.
"Commitments" shall mean the Revolving Credit Commitments.
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"Company" shall have the meaning assigned thereto in the caption of
this Agreement.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.09 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Controlling Shareholders" shall mean John J. Faltis; P. Bruce
Sparks; any Person created and controlled by John J. Faltis of which the sole
beneficiaries, shareholders, members, partners or other equity holders are any
one or more of John J. Faltis, his family, his heirs and his legatees; any
Person created and controlled by P. Bruce Sparks of which the sole
beneficiaries, shareholders, members, partners or other equity holders are any
one or more of P. Bruce Sparks, his family, his heirs and his legatees; and
funds managed by First Reserve.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.09 hereof of one Type of Loans into another Type of Loans,
which may be accompanied by the transfer by a Bank (at its sole discretion) of a
Loan from one Applicable Lending Office to another.
"Credit Exposure" shall mean, with respect to any Bank, the
aggregate unutilized amount of the Commitments of such Bank and the aggregate
outstanding principal amount of all Loans made by such Bank.
"Debt Issuance" shall mean the creation, issuance or incurrence by
the Company or any of its Restricted Subsidiaries after the Closing Date of
obligations for borrowed money (whether by loan, the issuance and sale of debt
securities or the sale of Property to another Person subject to an understanding
or agreement, contingent or otherwise, to repurchase such Property from such
Person), other than (i) Indebtedness hereunder, (ii) Indebtedness of Restricted
Subsidiaries of the Company to the Company or to other Restricted Subsidiaries
of the Company, (iii) Capital Lease Obligations incurred as part of the Hillman
Sale-Leaseback, (iv) the Senior Notes and (v) Indebtedness permitted under
Sections 9.07(f), 9.07(g) and 9.07(j) hereof.
"Debt Service" shall mean, for any period, the sum, for the Company
and its Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all regularly
scheduled payments or prepayments of principal of Indebtedness (including,
without limitation, the principal component of any payments in respect of
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Capital Lease Obligations) made during such period plus (b) all Interest Expense
for such period.
"Deeds of Trust" shall mean one or more Credit Line Deeds of Trust,
Credit Line Leasehold Deeds of Trust, Assignments of Rents, Security Agreements
and Fixture Filings executed by the Obligors for the benefit of the
Administrative Agent and the Banks, executed and delivered prior to the date
hereof and covering the respective Properties and leasehold interests identified
therein, as the same shall be renewed, replaced, extended or otherwise modified
and supplemented and in effect from time to time (including without limitation
(in the case of a Deed of Trust executed and delivered pursuant to the Existing
Credit Agreement) by operation of the Deed of Trust Amendments) and any
mortgages, deeds of trust, or similar instruments executed and delivered after
the date hereof pursuant to Section 9.20 hereof.
"Deed of Trust Amendments" shall mean instruments satisfactory in
form and substance to the Administrative Agent amending those Deeds of Trust
that were executed and delivered to the Administrative Agent prior to the date
hereof pursuant to the Existing Credit Agreement.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both (to the extent referred to in Section 10 hereof)
would become an Event of Default.
"Designated Officer" shall mean any of John J. Faltis, P. Bruce
Sparks, James Walls, Richard Bolen, Kim Burke or Michael Matesic.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) by the
Company or any of its Restricted Subsidiaries to any Person, excluding (i) any
sale, assignment, transfer, exchanges or other disposition of any Inventory sold
or disposed of in the ordinary course of business and on ordinary business
terms, (ii) the trade-in or other disposition of machinery or equipment in
connection with the acquisition or lease of other similar machinery or
equipment, (iii) the sale or other disposition of obsolete, worn-out or other
non-productive Properties to the extent that such Properties have a value not
exceeding $1,500,000 in the aggregate in any fiscal year of the Company (any
sale or other disposition of such Properties that have an aggregate value in
excess of said amount being deemed to be a Disposition to the extent of such
excess), (iv) the exchange of interests in real property (including coal
reserves) to the
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extent that such interests have a value not exceeding $1,000,000 in the
aggregate in any fiscal year of the Company (any exchange of such interests that
have an aggregate value in excess of said amount being deemed to be a
Disposition hereunder), (v) the sale or other disposition to any Unrestricted
Subsidiary of capital stock of or other equity interests in any other
Unrestricted Subsidiary, (vi) the Hillman Sale-Leaseback, provided that the
Hillman Sale-Leaseback occurs prior to December 31, 1998, and (vii) the sale or
other disposition of Mobile Equipment the fair market value of which does not
exceed $100,000 per item (any sale or other disposition of any item of Mobile
Equipment that has a fair market value in excess of said amount being deemed to
be a Disposition to the extent of its full value).
"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Restricted Subsidiaries),
but excluding (i) dividends payable solely in shares of common stock of the
Company and (ii) the issuance by the Company of Subordinated Notes. Any such
dividends or other payments or distributions may cumulate or accrete, and such
cumulation or accretion shall not constitute a Dividend Payment so long as the
Company's obligation to pay the amount so cumulated or accreted continues to be
subject to declaration by the Board of Directors of the Company.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, for any period, the sum, for the Company and
its Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) net operating income
(calculated before taxes, Interest Expense, extraordinary items and (except to
the extent actually received in cash) income or loss attributable to equity in
Unrestricted Subsidiaries and other Affiliates) for such period plus (b)
depletion, depreciation and amortization (to the extent deducted in determining
net operating income) for such period, plus (c) transaction costs and expenses
incurred in connection with the Acquisition and the closing of the other
transactions contemplated hereby (to the extent deducted in determining net
operating income) for such period.
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"Effective Date" shall mean the date on which the conditions
specified in Section 7.01 are satisfied (or waived in accordance with Section
12.04 hereof).
"Eligible Inventory" shall mean, as at any date, all Inventory (i)
that is owned by (and in the possession or under the control of) the Company or
any Subsidiary Guarantor as at such date, (ii) that is located in a jurisdiction
in the United States of America, and (iii) as to which appropriate Uniform
Commercial Code financing statements have been filed naming such Obligor as
"debtor" and the Administrative Agent as "secured party" (excluding, however,
(x) coal purchased and not yet paid for by the Company or any Restricted
Subsidiary if the seller thereof has a Lien (whether or not perfected or covered
by a Uniform Commercial Code financing statement) on such coal and (y) except to
the extent that the Majority Banks otherwise agree with respect to any specific
customer, any such Inventory that has been shipped to a customer of such
Obligor, including processors referred to below, even if on a consignment or
"sale or return" basis); provided that the Majority Banks (through the
Administrative Agent) may at any time exclude from Eligible Inventory any
Inventory remaining unsold for one year or longer that the Majority Banks (in
their sole discretion) determine to be unmarketable.
"Eligible Properties" shall mean the Properties described on
Schedule IV hereto.
"Eligible Receivables" shall mean, as at any date, the aggregate
amount of all Receivables at such date payable to any Obligor other than the
following (determined without duplication):
(a) any Receivable not payable in Dollars,
(b) any Receivable owing from a Subsidiary or Affiliate of such
Obligor (other than, except in the case of Receivables owing by
Unrestricted Subsidiaries, Receivables owing by Affiliates arising from
transactions permitted by 9.15 hereof),
(c) any Receivable owing from an account debtor (other than Anker
Holding or an Affiliate of Anker Holding) whose principal place of
business is located outside of the United States of America, except to the
extent that the payment of such Receivable is supported by an Acceptable
LOC (as defined in the last sentence of this definition),
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(d) any Receivable owing from an account debtor that the Majority
Banks (through the Administrative Agent) have notified the Company does
not have a satisfactory credit standing (as determined in the sole
discretion of the Majority Banks), except to the extent that the payment
of such Receivable is supported by an Acceptable LOC (as defined in the
last sentence of this definition),
(e) any Receivable that remains unpaid for more than 90 days after
the date of the issuance of the original invoice therefor,
(f) all Receivables of any account debtor (except to the extent that
the payment of such Receivables is supported by an Acceptable LOC (as
defined in the last sentence of this definition)) if more than 25% of the
aggregate amount of the Receivables owing from such account debtor
(excluding Receivables as to which there are unresolved disputes) shall at
the time have remained unpaid for more than 90 days after the date of the
issuance of the original invoices therefor,
(g) the amount, if any, of Receivables owing from any account debtor
(other than independent power projects) as may be necessary such that the
Receivables owing from such account debtor and all other Persons whose
financial statements are consolidated with such account debtor's financial
statement in accordance with GAAP at the time would not exceed 20% of the
aggregate amount of all Eligible Receivables then payable to any or all of
the Obligors,
(h) any Receivable as to which there is any unresolved dispute with
the respective account debtor (but only to the extent of the amount
thereof in dispute),
(i) any Receivable evidenced by an Instrument (as defined in the
Security Agreement) not in the possession of the Administrative Agent, and
(j) any Receivable representing an obligation for goods sold on
consignment, approval or a sale-or-return basis or subject to any other
repurchase or return arrangement, until such time as such sale becomes
final.
As used in this definition, "Acceptable LOC" shall mean a documentary or standby
letter of credit payable in Dollars and issued or confirmed by a bank or trust
company, or by a branch or an agency of any foreign bank, organized or licensed
under the laws of the United States of America or any state thereof and
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having capital, surplus and undivided profits of at least $500,000,000.
"Employment Agreements" shall mean (i) the Employment Agreement
dated as of August 1, 1996 by and among John J. Faltis, Anker Energy Corporation
and the Company and (ii) the Employment Agreement dated as of August 1, 1996 by
and among P. Bruce Sparks, Anker Energy Corporation and the Company, in each of
the cases referred to in the foregoing clauses (i) and (ii) as the same shall,
subject to Section 9.18 hereof, be renewed, replaced, extended or otherwise
modified and supplemented and in effect from time to time.
"Environmental Laws" shall mean any and all present and future
Federal, state and local laws, rules or regulations, and any orders or decrees,
in each case as now or hereafter in effect, relating to the regulation or
protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or toxic or hazardous substances or wastes into the indoor or outdoor
environment, including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"Environmental Report" shall mean the July, 1996 Modified
Environmental Site Assessment and the August, 1997 Update thereto prepared by
Marshall, Miller & Associates, Inc.
"Equity Issuance" shall mean (a) any issuance or sale by the Company
or any of its Restricted Subsidiaries of (i) any capital stock, (ii) any
warrants or options exercisable in respect of capital stock or (iii) any other
security or instrument representing an equity interest (or the right to obtain
any equity interest) in the Company or any of its Restricted Subsidiaries or (b)
the receipt by the Company or any of its Restricted Subsidiaries after the
Closing Date of any capital contribution (whether or not evidenced by any equity
security issued by the recipient of such contribution); provided that Equity
Issuance shall not include (v) any such issuance or sale by the Company to any
of its employees in the ordinary course of business as compensation pursuant to
an employee equity incentive plan to be adopted by the Company after the Closing
Date so long as the aggregate amount of equity interests represented thereby
does not at any time exceed 3% of the equity interests in the Company calculated
on a fully-diluted basis,
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(w) any such issuance or sale by the Company (1) to any Person that is a
shareholder of the Company on the Closing Date after giving effect to the
Acquisition or (2) to any fund managed by First Reserve, (x) any such issuance
or sale by any Restricted Subsidiary of the Company to the Company or any
Restricted Subsidiary, (y) any capital contribution by the Company or any
Restricted Subsidiary to any Restricted Subsidiary of the Company or (z) any
such issuance or sale referred to in the definition of "Acquisition" in this
Section 1.01.
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Company or AGI is a member and (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which the Company is a member.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Loan for any Interest Period therefor, the arithmetic mean (rounded upwards, if
necessary, to the nearest 1/16 of 1%), as determined by the Administrative
Agent, of the rates per annum quoted by the respective Reference Banks at
approximately 11:00 a.m. London time (or as soon thereafter as practicable) on
the date two Business Days prior to the first day of such Interest Period for
the offering by the respective Reference Banks to leading banks in the London
interbank market of Dollar deposits having a term comparable to such Interest
Period and in an amount comparable to the principal amount of the Eurodollar
Loan to be made by the respective Reference Banks for such Interest Period. If
any Reference Bank is not participating in any Eurodollar Loans during any
Interest Period therefor, the Eurodollar Base Rate for such Loans for such
Interest Period shall be determined without reference to such Reference Bank.
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- 17 -
"Eurodollar Loans" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Base Rate" in this
Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the Eurodollar Base Rate for such Loan for such Interest Period divided by 1
minus the Reserve Requirement (if any) for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in
Section 10 hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate charged to Chase on such Business Day on such
transactions as determined by the Administrative Agent in good faith.
"First Amendment Effective Date" shall have the meaning assigned to
such term in Amendment No. 1 to the Existing Credit Agreement.
"First Reserve" shall mean First Reserve Corporation, a Delaware
corporation, and its successors and replacements as managers of the funds for
which it acts as manager on the date of determination.
"Fixed Charges Ratio" shall mean, as at any date, the ratio of (a)
EBITDA for the Relevant Period for such date to (b) the sum for such Relevant
Period (without duplication) of (i) Debt Service plus (ii) Capital Expenditures
(other than a Permitted Capital Expenditure) plus (iii) Dividend Payments paid
in cash.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America applied on a basis consistent with those that, in
accordance with the last sentence of Section 1.02(a) hereof, are to be used in
making the calculations for purposes of determining compliance with this
Agreement.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business and excluding guarantees by the Company of obligations of
Restricted Subsidiaries and by Restricted Subsidiaries of obligations of the
Company and other Restricted Subsidiaries entered into in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
"Hillman Acquisition" shall mean the acquisition of approximately
210,000,000 tons of coal reserves located in Taylor County, West Virginia, from
the Hillman Coal Company.
"Hillman Sale-Leaseback" shall mean the sale and leaseback of the
approximately 210,000,000 tons of coal reserves acquired in the Hillman
Acquisition.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCBs"), (b) any chemicals or other
materials or substances that are now or hereafter become defined as or included
in the definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (c) any other
24
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chemical or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"Inactive Subsidiary" shall mean, as at any date, any Subsidiary of
the Company that, as at the end of and for the quarterly accounting period
ending on or most recently ended prior to such date, shall have less than
$100,000 in assets and less than $25,000 in gross revenues.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; (f) Indebtedness of others Guaranteed
by such Person and (g) preferred stock issued by such Person; provided that the
term "Indebtedness" shall not include (x) preferred stock of such Person
(including, without limitation, the Preferred Stock) to the extent that (i)
there are no outstanding obligations of the Company or any of its Restricted
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of such
preferred stock (including, without limitation, the Preferred Stock) prior to
the date falling six months after the Revolving Credit Commitment Termination
Date and (ii) except in the case of the ACGI Class C Preferred Stock and the
ACGI Class D Preferred Stock (each as in effect on the date hereof), there are
no outstanding Guarantees by the Company or any of its Restricted Subsidiaries
to pay any dividends on such preferred stock (including, without limitation, the
Preferred Stock) or (y) advance and periodic royalties and rents payable under
leases of coal reserves or surface rights entered into in the ordinary course of
business. In calculating the amount of Indebtedness for any purpose hereunder
(A) there shall be no double-counting of obligations of the Company and its
Restricted Subsidiaries and Guarantees of such obligations by the
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Company and/or any of its Restricted Subsidiaries and (B) the amount of any
Indebtedness comprised of preferred stock shall be the highest amount that such
Person is required to pay for the repurchase or redemption of such shares of
preferred stock prior to the date falling six months after the Revolving Credit
Commitment Termination Date.
"Intercompany Note" shall mean a promissory note substantially in
the form of Exhibit K hereto executed and delivered by a Restricted Subsidiary
to evidence loans made to it by the Company or by another Restricted Subsidiary,
as the same shall, subject to Section 9.18 hereof, be renewed, replaced,
extended or otherwise modified and supplemented and in effect from time to time.
"Interest Expense" shall mean, for any period, the sum, for the
Company and its Restricted Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all interest
in respect of Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease Obligations and dividends
on preferred stock that constitutes Indebtedness) accrued, capitalized or
accumulated during such period (whether or not actually paid during such
period), excluding interest on Subordinated Notes paid by the issuance of
additional Subordinated Notes in accordance with the terms thereof, plus (b) the
net amount payable (or minus the net amount receivable) under Interest Rate
Protection Agreements during such period (whether or not actually paid or
received during such period).
"Interest Period" shall mean, with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or Converted
from a Base Rate Loan or (in the event of a Continuation) the last day of the
next preceding Interest Period for such Loan and (subject to the provisions of
Section 2.03 hereof) ending on the numerically corresponding day in the first,
second, third or sixth (or, with the consent of all the affected Banks at the
time of such request, ninth or twelfth) calendar month thereafter, as the
Company may select as provided in Section 4.05 hereof, except that each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Revolving Credit Loan would otherwise end after the Revolving Credit Commitment
Termination Date, such Interest
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Period shall end on the Revolving Credit Commitment Termination Date; (ii) no
Interest Period for any Revolving Credit Loan may commence before and end after
any Revolving Credit Commitment Reduction Date unless, after giving effect to
the reduction of the Revolving Credit Commitment to occur on such Revolving
Credit Commitment Reduction Date, the aggregate principal amount of the
Revolving Credit Loans having Interest Periods that end after the Revolving
Credit Commitment Reduction Date shall be equal to or less than the aggregate
amount of the Revolving Credit Commitments scheduled to be outstanding after
such Revolving Credit Commitment Reduction Date; (iii) each Interest Period that
would otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iv)
notwithstanding clause (i) and (ii) above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loan would otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Inventory" shall mean severed coal mined or purchased by the
Company or any Subsidiary Guarantor in the ordinary course of business.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 90 days arising
in connection with the sale of inventory or supplies by such Person in the
ordinary course of business; (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any
27
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amount committed to be advanced, lent or extended to such Person; or (d) the
entering into of any Interest Rate Protection Agreement.
"Joinder Agreement" shall mean an agreement in the form of Exhibit L
hereto.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Loan Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Loan Documents" shall mean, collectively, this Agreement, the
Notes, the Security Documents and the Joinder Agreements.
"Loans" shall mean the Revolving Credit Loans.
"Majority Banks" shall mean Banks holding at least 66- 2/3% of the
Credit Exposures of all of the Banks, as calculated at the time of
determination.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations G, T, U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the Property, business, operations, financial condition, prospects,
liabilities or capitalization of the Company and its Restricted Subsidiaries
taken as a whole, (b) the ability of the Obligors to perform their respective
obligations under the respective Loan Documents to which they are parties, (c)
the validity or enforceability of any material provision contained in any of the
Loan Documents, (d) any of the material rights and remedies of the Banks and the
Administrative Agent under any of the Loan Documents or (e) the timely payment
of the principal of or interest on the Loans or other amounts payable in
connection therewith.
"Material Properties" shall mean (a) those tracts or parcels of land
containing coal reserves which are either owned by or leased to any of the
following Restricted Subsidiaries (the "Relevant Companies") and which are
either currently being actively mined (and for which active mining is not
expected by
28
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the Company to be completed before December 31, 1997) or are part of AGI's
five-year or ten-year mining plans for AGI and its Restricted Subsidiaries:
Anker Energy Corporation, Juliana Mining Company, Inc., Patriot Mining Company,
Inc., Anker West Virginia Mining Company, Inc. and Vindex Energy Corporation;
and (b) those tracts or parcels of land either owned by or leased to any
Relevant Company and upon which are located loading facilities, preparation
plants, tipples, mine openings, or other surface operations of any Relevant
Company which are material to either the current or planned future mining
operations of the Relevant Companies as reflected in the five-year and ten-year
mining plans for AGI and its Restricted Subsidiaries.
"Mobile Equipment" shall mean all equipment which is (a) mobile, (b)
of a type normally used in more than one jurisdiction, and (c) which is used or
useful in connection with the coal mining, extraction, development, construction
or environmental remediation activities of any Obligor, and shall in any event
include any of the following, whether such equipment is on wheels, is track
mounted or is skid mounted: bulldozers, drills, pans, augers, high wall miners,
continuous miners, shuttle cars, roof bolters, mobile roof supporters, rock
dusters, man trips, scoops, backhoes, shovels, front end loaders, continuous
haulage units, underground locomotives, loaders, trailers, trucks, other motor
vehicles and other mining equipment of a similar nature.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been made by the Company,
AGI or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(a) in the case of any Disposition, an amount (not less than zero)
equal to the amount of Net Cash Payments received by the Company and its
Restricted Subsidiaries in connection with such Disposition; provided that
if the subject of such Disposition is Eligible Property and such
Disposition is made to a Permitted Joint Venture, the Net Available
Proceeds of such Disposition shall be the Stipulated Amount for such
Eligible Property;
(b) in the case of any Casualty Event, an amount (not less than
zero) equal to (i) the aggregate amount of proceeds of insurance,
condemnation awards and other compensation received by the Company and its
Restricted Subsidiaries in respect of such Casualty Event minus
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(ii) reasonable expenses incurred by the Company and its Restricted
Subsidiaries in connection therewith minus (iii) contractually required
repayments of Indebtedness to the extent secured by a Lien on the Property
to which such Casualty Event relates and any income and transfer taxes
payable by the Company or any of its Restricted Subsidiaries in respect of
such Casualty Event minus (iv) $10,000 (provided that the aggregate amount
subtracted pursuant to this clause (iv) in any fiscal year of the Company
shall not exceed $50,000); and
(c) in the case of any Debt Issuance or Equity Issuance, the
aggregate amount of all cash received by the Company and its Restricted
Subsidiaries in respect of such Debt Issuance or Equity Issuance, as the
case may be, net of reasonable expenses (including, without limitation,
underwriting spreads, commissions and discounts) incurred by the Company
and its Restricted Subsidiaries in connection therewith.
"Net Cash Payments" shall mean, with respect to any Disposition, the
aggregate amount of all cash payments (including, without limitation, all 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), and the
fair market value of any non-cash consideration, received by the Company or its
Restricted Subsidiaries directly or indirectly in connection with such
Disposition; provided that (a) Net Cash Payments shall be net of (i) the amount
of any legal, title and recording tax expenses, commissions and other customary
fees and expenses paid by the Company and its Restricted Subsidiaries in
connection with such Disposition and (ii) any Federal, state and local income or
other taxes estimated to be payable by the Company and its Restricted
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant governmental authority not
later than three months (in the case of Federal taxes) or nine months (in the
case of other taxes) after the date of such Disposition) and (b) Net Cash
Payments shall be net of any repayments by the Company or any of its Restricted
Subsidiaries of Indebtedness to the extent that such Indebtedness is secured by
a Lien on the Property that is the subject of such Disposition.
"Net Interest Coverage Ratio" shall mean, as at any date, the ratio
of (a) EBITDA for the Relevant Period for such date to (b) Interest Expense for
such Relevant Period minus
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interest income of the Company and its Restricted Subsidiaries for such Relevant
Period.
"Net Leverage Ratio" shall mean, as at any date, the ratio of (a) an
amount equal to Total Indebtedness on such date minus the aggregate amount of
cash and Permitted Investments of the Company and its Restricted Subsidiaries on
such date to (b) EBITDA for the Relevant Period for such date.
"New Allegheny Property" shall mean, collectively, approximately
40,350,000 tons of minable coal reserves, cleaning plant and coal blending
facility in Grant and Mineral Counties, West Virginia, together with a six-year
long term coal sales contract to deliver 456,000 tons of coal per year.
"Notes" shall mean the Revolving Credit Notes.
"Obligor" shall have the meaning assigned thereto in
the caption of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Capital Expenditure" shall have the meaning assigned to
such term in Section 9.11 hereof.
"Permitted Investments" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any bank or trust
company, or by a branch or an agency of any foreign bank, organized or licensed
under the laws of the United States of America or any state thereof and having
capital, surplus and undivided profits of at least $500,000,000, maturing not
more than 90 days from the date of acquisition thereof; (c) eurodollar time
deposits with any bank or trust company organized under the laws of the United
States of America or any state thereof and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days from the date
made; (d) commercial paper rated A-1 or better or P-1 by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Moody's Investors Services, Inc. ("Moody's"), respectively, maturing not more
than 90 days from the date of acquisition thereof; in each case so long as the
same (x) provide for the payment of principal and interest (and not principal
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alone or interest alone) and (y) are not subject to any contingency regarding
the payment of principal or interest; (e) investments in repurchase agreements
(or reverse repurchase agreements) covering other Permitted Investments with
financial institutions who are elected primary government securities dealers by
the Federal Reserve Board or whose securities are rated AA- or better by S&P or
Aa or better by Moody's; and (f) money-market funds or money-market mutual funds
which (i) seek to maintain a constant net asset value, (ii) maintain fund assets
under management having an aggregate market value of at least $500,000,000, and
(iii) invest primarily in Investments referred to in clauses (a) through (e)
above.
"Permitted Joint Venture" shall mean a joint venture formed by the
Company or any of its Subsidiaries with a Person that is not an Affiliate for
the purpose of mining, processing, distributing and selling coal and related
products, where (i) the Company and its Subsidiaries own in the aggregate less
than a majority of the economic interests in such joint venture, (ii) the
Company or any of its Subsidiaries manages or actively participates in the
management of such joint venture and (iii) if such joint venture is a
partnership, neither the Company nor any of its Restricted Subsidiaries is a
general partner in such joint venture.
"Permitted Purpose" shall mean leases of coal reserves and surface
entry rights in the ordinary course of business, Investments permitted by
Section 9.08 (f) or (g) hereof and Capital Expenditures not prohibited by
Section 9.11 hereof.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company, AGI or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean a rate per annum equal to 2% plus the
Base Rate as in effect from time to time plus the Applicable Percentage for Base
Rate Loans, provided that, with respect to principal of a Eurodollar Loan that
shall become due (whether at stated maturity, by acceleration, by optional or
mandatory prepayment or otherwise) on a day other than the last day of the
Interest Period therefor, the "Post-Default Rate"
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shall be, for the period from and including such due date to but excluding the
last day of such Interest Period, 2% plus the interest rate for such Loan as
provided in Section 3.02(b) hereof and, thereafter, the rate provided for above
in this definition.
"PP&E Value" shall mean, at any time, the value at which the
property, plant and equipment (excluding Mobile Equipment) is carried on the
consolidated balance sheet of the Company and its Restricted Subsidiaries;
provided that, in the event that an Appraisal of any Property included in such
property, plant and equipment has been performed, the "PP&E Value" of such
Property for the period commencing on the date of such Appraisal through and
including the first anniversary thereof shall be the fair market value of such
Property as determined by such Appraisal.
"Preferred Stock" shall mean the ACGI Class A Preferred Stock, the
ACGI Class B Preferred Stock, the ACGI Class C Preferred Stock and the ACGI
Class D Preferred Stock.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at its principal office as its prime commercial lending rate.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date hereof.
"Receivables" shall mean, as at any date, the unpaid portion of the
obligation, as stated on the respective invoice, of a customer of the Company or
any Subsidiary Guarantor in respect of Inventory sold and shipped by such
Obligor to such customer or Ash disposal services, net of any credits, rebates
or offsets owed to such customer and also net of any commissions payable to
third parties (and for purposes hereof, a credit or rebate paid by check or
draft of the Company or any Subsidiary Guarantor shall be deemed to be
outstanding until such check or draft shall have been debited to the account of
such Obligor on which such check or draft was drawn).
"Reference Banks" shall mean Chase, The First National
Bank of Chicago and Mellon Bank, N.A. (or their respective
Applicable Lending Offices, as the case may be).
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"Regulations A, D, G, T, U and X" shall mean, respectively,
Regulations A, D, G, T, U and X of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be renewed, replaced, extended or
otherwise modified and supplemented and in effect from time to time.
"Regulatory Change" shall mean, with respect to any Bank, any change
after the date hereof in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Bank of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment of any Hazardous Materials, including the
movement thereof through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Relevant Period" shall mean, with respect to any date, the period
of four fiscal quarters of the Company ending on or most recently ended prior to
such date, excluding any portion of such period falling before July 1, 1996.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Base Rate is to be
determined as provided in the definition of "Eurodollar Base Rate" in this
Section 1.01 or (ii) any category of extensions of credit or other assets that
includes Eurodollar Loans.
"Reserved Commitment Amount" shall have the meaning assigned to such
term in Section 2.01 of this Agreement.
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"Responsible Officer" shall mean the President, the Executive Vice
President, the Treasurer or a Controller of the Company.
"Restricted Subsidiary" shall mean, with respect to any Person, each
Subsidiary of such Person that is not an Unrestricted Subsidiary. References
herein to any Restricted Subsidiary that do not state the Person of which such
Restricted Subsidiary is a Subsidiary shall be deemed to mean a Restricted
Subsidiary of the Company.
"Revolving Credit Commitment" shall mean, as to each Bank, the
obligation of such Bank to make Revolving Credit Loans in an aggregate principal
amount at any one time outstanding up to but not exceeding the amount set
opposite the name of such Bank on the signature pages hereof under the caption
"Revolving Credit Commitment" or, in the case of a Person that becomes a Bank
pursuant to an assignment permitted under Section 12.06(b) hereof, as specified
in the respective instrument of assignment pursuant to which such assignment is
effected (as the same may be increased or reduced from time to time pursuant to
Section 2.04 or 2.10 hereof). The aggregate amount of the Revolving Credit
Commitments on the Effective Date is $75,000,000.
"Revolving Credit Commitment Percentage" shall mean, with respect to
any Bank, the ratio of (a) the amount of the Revolving Credit Commitment of such
Bank to (b) the aggregate amount of the Revolving Credit Commitments of all of
the Banks.
"Revolving Credit Commitment Reduction Date" shall mean the three
Business Days falling on or nearest to the dates specified in the table set
forth in Section 2.04(a) hereof.
"Revolving Credit Commitment Termination Date" shall mean the
Quarterly Date falling on or nearest to September 22, 2003.
"Revolving Credit Loans" shall mean the loans provided for in
Section 2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory notes provided
for by Section 2.08(a) hereof and all promissory notes delivered in substitution
or exchange therefor, in each case as the same shall be renewed, replaced,
extended or otherwise modified and supplemented and in effect from time to time.
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"Security Agreement" shall mean the Security Agreement dated as of
August 12, 1996 between the Company, the Subsidiary Guarantors and the
Administrative Agent (as heretofore modified and supplemented and in effect on
the date hereof and as the same shall be renewed, replaced, extended or
otherwise modified and supplemented and in effect from time to time).
"Security Documents" shall mean the Security Agreement, the Deeds of
Trust, the Deed of Trust Amendments and all Uniform Commercial Code financing
statements required by the Security Agreement, any Deed of Trust or any Deed of
Trust Amendment to be filed with respect to the security interests in personal
Property and fixtures created pursuant to the Security Agreement, any Deed of
Trust or any Deed of Trust Amendment.
"Senior Notes" shall have the meaning assigned thereto in the
caption of this Agreement.
"Senior Note Documents" shall mean, the Senior Notes
and the Senior Note Indenture.
"Senior Note Indenture" shall mean the Indenture under which the
Senior Notes shall be issued, which shall be on substantially the same terms as
those set forth in the Senior Note Preliminary Offering Memorandum.
"Senior Note Preliminary Offering Memorandum" shall mean the draft
dated as of September 5, 1997 of the Preliminary Offering Memorandum of the
Company in respect of its [ ]% Senior Notes due 2007, a copy of which has been
furnished to the Banks prior to the date hereof.
"Shareholders' Equity" shall mean, on any date, the sum for the
Company and its Restricted Subsidiaries as at such date (determined on a
consolidated basis in accordance with GAAP) of common and preferred stock (other
than preferred stock that constitutes Indebtedness) of the Company, but
excluding treasury shares plus surplus and retained earnings.
"Spruce Fork Development" shall mean the acquisition of
approximately 8,700,000 tons of low sulfur coal reserves (the "Spruce Fork
Reserves") and approximately 19,000,000 tons of low sulfur coal reserves (the
"Hawthorne Coal Company, Inc. Reserves") in Upshur County, West Virginia and the
refurbishment of the Hawthorne Coal Company, Inc. preparation plant in Upshur
County, West Virginia, for an aggregate acquisition and refurbishment cost of
approximately $16,200,000 during the period
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from the First Amendment Effective Date through December 31,
1999.
"Stipulated Amount" shall mean with respect to any Eligible
Property, the amount set forth in Schedule IV hereto opposite the description
that includes such Eligible Property.
"Stockholders Agreement" shall mean the Stockholders Agreement dated
August 12, 1996 among the Company, First Reserve, John J. Faltis, Bruce Sparks
and the Stockholders referred to therein, as the same shall, subject to Section
9.18 hereof, be modified and supplemented and in effect from time to time.
"Stony River Project" shall mean the lease of approximately
31,100,000 tons of low sulfur coal in Grant County, West Virginia and the
development of an underground mine to mine those reserves.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person; provided that the term "Subsidiary" shall
not include the Permitted Joint Venture or Subsidiary of the Permitted Joint
Venture.
"Subsidiary Guarantor" shall have the meaning assigned thereto in
the caption of this Agreement.
"Supermajority Banks" shall mean Banks holding at least 80% of the
Credit Exposures, as calculated at the time of determination.
"Summit" shall have the meaning assigned thereto in
Section 9.08(j) hereof.
"Sycamore" shall have the meaning assigned thereto in
Section 9.08(k) hereof.
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"Sycamore Partner" shall have the meaning assigned thereto in
Section 9.17(b) hereof.
"Total Indebtedness" shall mean, as at any date, all Indebtedness on
such date of the Company and its Restricted Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP).
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Unrestricted Subsidiaries" shall mean Anker Capital, Simba Group,
Inc., and U.S. Coal Sales Company, LLC, and their respective Subsidiaries
created or acquired after the Closing Date.
"U.S. Person" shall mean a citizen or resident of the United States
of America, a corporation, partnership or other entity created or organized in
or under any laws of the United States of America or any State thereof, or any
estate or trust that is subject to Federal income taxation regardless of the
source of its income.
"U.S. Taxes" shall mean any present or future tax, assessment or
other charge or levy imposed by or on behalf of the United States of America or
any taxing authority thereof.
"Vindex Project" shall mean the acquisition and development of the
New Allegheny Property and the Stony River Project for an aggregate acquisition
and development cost of approximately $15,300,000 during the period from the
First Amendment Effective Date through December 31, 1999.
"Voting Power" shall mean, with respect to any Person, the
percentage of voting power (excluding any such power arising by reason of an
unfulfilled contingency) possessed by the holders of capital stock of such
Person, to vote for the election of members of the board of directors of such
Person.
"Wholly Owned Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which all of the equity
securities or other ownership interests (other than, in the case of a
corporation, directors' qualifying shares) are directly or indirectly owned or
controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
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1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Administrative Agent or the Banks hereunder shall (unless otherwise disclosed to
the Banks in writing at the time of delivery thereof in the manner described in
subsection (b) below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the Administrative
Agent hereunder (which, prior to the delivery of the first financial statements
under Section 9.01 hereof, shall mean the financial statements as at June 30,
1997 referred to in Section 8.02 hereof. All calculations made for the purposes
of determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements furnished to
the Administrative Agent pursuant to Section 9.01 hereof (or, prior to the
delivery of the first financial statements under Section 9.01 hereof, used in
the preparation of the financial statements as at June 30, 1997 referred to in
Section 8.02 hereof) unless (i) the Company shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements or (ii) the Majority Banks shall so object in writing within 30 days
after delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 9.01 hereof, shall mean the
financial statements as at June 30, 1997 referred to in Section 8.02 hereof);
provided, that if calculations made on such basis would result in obligations
theretofore required to be classified and accounted for as an operating lease on
the consolidated balance sheet of the Company and its Restricted Subsidiaries
being required instead to be classified and accounted for as a capital lease on
such balance sheet, such calculations shall be made on a basis consistent with
those used in the preparation of the latest financial statements as to which
both (x) such objection shall not have been made and (y) such reclassification
shall not be required; provided, further, that in no event shall a lease of coal
reserves be classified and accounted for as a capital lease.
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- 34 -
(b) The Company shall deliver to the Administrative Agent (which
shall promptly deliver a copy thereof to each Bank) at the same time as the
delivery of any annual or quarterly financial statement under Section 9.01
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in Section 9 hereof, the Company will not change
the last day of its fiscal year from December 31, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
(d) Except as otherwise expressly provided herein, all financial
statements and certificates and reports as to financial matters required to be
delivered to the Administrative Agent or the Banks hereunder shall be prepared,
and all calculations made for purposes of determining compliance with the terms
hereof shall be made, as if the Unrestricted Subsidiaries were carried as equity
investments by the Company and its Restricted Subsidiaries; provided that:
(i) earnings and other increases in the value of Unrestricted
Subsidiaries shall not increase earnings of the Company and its
Restricted Subsidiaries for purposes of determining EBITDA until
received by the Company or a Restricted Subsidiary in cash;
(ii) earnings and other increases in the value of the
Unrestricted Subsidiaries (other than those that reflect the book
value of any assets subsequently contributed thereto by the Company
and its Restricted Subsidiaries, such book value in the case of any
asset to be determined as of the date of its contribution) shall not
increase the value of equity investments in Unrestricted
Subsidiaries except to the extent such increases offset losses and
other decreases of value of the respective Unrestricted Subsidiaries
that have occurred on or prior to the date of determination; and
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(iii) losses and other decreases of value of Unrestricted
Subsidiaries, when recognized by the respective Unrestricted
Subsidiaries, shall, at the time of such recognition (but subject to
the preceding clause (ii)), decrease the value of equity investments
in Unrestricted Subsidiaries held by the Company and its Restricted
Subsidiaries, but shall not decrease the earnings of the Company and
its Restricted Subsidiaries for purposes of determining EBITDA.
1.03 Types of Loans. Loans hereunder are distinguished by "Type".
The "Type" of a Loan refers to whether such Loan is a Base Rate Loan or a
Eurodollar Loan, each of which constitutes a Type.
1.04 References to Date. All references herein to "the date hereof"
and "the date of this Agreement", and similar references, shall mean September
22, 1997.
Section 2. Commitments, Loans, Notes and Prepayments.
2.01 Loans.
Revolving Credit Loans. Each Bank severally agrees, on the terms and
conditions of this Agreement, to make loans to the Company in Dollars during the
period from and including the August 12, 1996 to but not including the Revolving
Credit Commitment Termination Date in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount of the Revolving Credit
Commitment of such Bank as in effect from time to time, provided that in no
event shall the aggregate principal amount of all Revolving Credit Loans at any
time exceed the lesser of (i) the Borrowing Base at such time and (ii) the
aggregate amount of the Revolving Credit Commitments as in effect at such time.
Subject to the terms and conditions of this Agreement, during such period the
Company may borrow, repay and reborrow the amount of the Revolving Credit
Commitments by means of Base Rate Loans and Eurodollar Loans and may Convert
Revolving Credit Loans of one Type into Revolving Credit Loans of another Type
(as provided in Section 2.09 hereof) or Continue Eurodollar Loans from one
Interest Period to the next Interest Period.
Proceeds of Revolving Credit Loans shall be available for any use
permitted under the applicable provisions of Section 9.16 hereof, provided that,
in the event that, as contemplated by Section 2.10(d) hereof, the Company shall
prepay Revolving Credit Loans from the proceeds of a Disposition hereunder, then
an amount of Revolving Credit Commitments, as specified by the
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Company pursuant to the next sentence, equal to the amount of such prepayment
(herein the "Reserved Commitment Amount") shall be reserved and shall not be
available for borrowings hereunder except and to the extent that the proceeds of
such borrowings are used for a Permitted Purpose, or to make prepayments of
Loans under Section 2.10(d)(y)(B). The Company agrees, upon the occasion of any
borrowing of Revolving Credit Loans hereunder that is to constitute a
utilization of any Reserved Commitment Amount, to advise the Administrative
Agent in writing of such fact at the time of such borrowing, identifying the
amount of such borrowing that is to constitute such utilization, the Permitted
Purpose in respect of which the proceeds of such borrowing are to be applied and
the reduced Reserved Commitment Amount to be in effect after giving effect to
such borrowing.
2.02 Borrowings. The Company shall give the Administrative Agent
notice of each borrowing hereunder as provided in Section 4.05 hereof. Not later
than 1:00 p.m. New York time on the date specified for each borrowing hereunder,
each Bank shall make available the amount of the Loan or Loans to be made by it
on such date to the Administrative Agent, at the Agent's Account, in immediately
available funds, for account of the Company. The amount so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company on the date of the requested
borrowing by depositing the same, in immediately available funds, in an account
of the Company designated by the Company and maintained with Chase at its
principal office.
2.03 Limit on Eurodollar Loans. No more than five separate
Interest Periods in respect of Eurodollar Loans may be outstanding at any one
time.
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2.04 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit Commitments shall
be automatically reduced to zero on the Revolving Credit Commitment Termination
Date. In addition, the aggregate amount of the Revolving Credit Commitments
shall, subject to the proviso below, be automatically reduced at the close of
business on each Revolving Credit Commitment Reduction Date set forth in column
(A) below by the amount set forth in column (B) below opposite such Revolving
Credit Commitment Reduction Date:
(A) (B)
Revolving Credit Amount of Revolving
Commitment Reduction Credit Commitment
Date Falling on or Reduction:
Nearest to:
third Anniversary of the
Effective Date $ 7,500,000
fourth Anniversary of the
Effective Date $ 7,500,000
fifth Anniversary of the
Effective Date $10,000,000;
provided that, the Company may, by notice to each Bank not less than 30 and not
more than 60 days prior to any Revolving Credit Commitment Reduction Date
request that each Bank not require its pro rata share of any such reduction for
such Revolving Credit Commitment Reduction Date. Each Bank shall, by notice to
the Administrative Agent (which shall as promptly as practicable notify the
Company) given on the date not later than 7 days following its receipt of such
request advise the Administrative Agent whether such Bank (i) elects not to
require its pro rata share of any such reduction (an "Electing Bank") or (ii)
elects to require its pro rata share of any such reduction (a "Non-Electing
Bank")(and any Bank that fails to respond to such request shall be a
Non-Electing Bank). The Company and any Electing Bank may agree, prior to such
Revolving Credit Commitment Reduction Date, that the amount of such Electing
Bank's Revolving Credit Commitment shall be increased by an amount equal to all
or a portion of the aggregate amount of the reduction of the Revolving Credit
Commitment of the Non-Electing Banks to occur on such Revolving Credit
Commitment Reduction Date, such agreement to be set forth in a writing in form
and substance satisfactory to the Company, such Electing Bank and the
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Administrative Agent and delivered to the Administrative Agent not later than 5
Business days prior to such Revolving Credit Commitment Reduction Date.
Notwithstanding the first sentence of this Section 2.04(a), the
Revolving Credit Commitments shall not be reduced if and to the extent that any
Electing Bank elects not to require its pro rata share of such reduction and/or
increases its Revolving Credit Commitment by the amount of all or any portion of
the aggregate amount of the Revolving Credit Commitments of the Non-Electing
Banks that are so reduced.
(b) The Company shall have the right at any time or from time to
time (i) so long as no Revolving Credit Loans are outstanding, to terminate the
Revolving Credit Commitments and (ii) to reduce the aggregate unused amount of
the Revolving Credit Commitments; provided that (x) the Company shall give
notice of each such termination or reduction as provided in Section 4.05 hereof
and (y) each partial reduction shall be in an aggregate amount at least equal to
$1,000,000 (or a larger multiple of $1,000,000).
(c) Each reduction in the aggregate amount of the Revolving Credit
Commitments pursuant to paragraph (b) above on any date shall result in an
automatic and simultaneous reduction of the amounts set forth in Column (B) at
the end of paragraph (a) above for each Revolving Credit Commitment Reduction
Date after the date of such reduction (ratably in accordance with the respective
remaining amounts thereof, after giving effect to any prior reductions pursuant
to this paragraph (c)).
(d) The Commitments once terminated or reduced may not be
reinstated.
(e) Each Bank shall maintain in its records each reduction of its
Commitment(s) hereunder.
2.05 Commitment Fee. The Company shall pay to the Administrative
Agent for account of each Bank a commitment fee which shall accrue at a rate per
annum equal to the Applicable Percentage on the daily average unused amount of
such Bank's Revolving Credit Commitment, for the period from and including the
date hereof to but not including the earlier of the date such Commitment is
terminated and the Revolving Credit Commitment Termination Date. Accrued
commitment fee shall be payable on each Quarterly Date and on the earlier of the
date such Commitment is terminated and the Revolving Credit Commitment
Termination Date.
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2.06 Lending Offices. The Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable Lending Office for Loans
of such Type.
2.07 Several Obligations; Remedies Independent. The failure of any
Bank to make any Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but
neither any Bank nor the Administrative Agent shall be responsible for the
failure of any other Bank to make a Loan to be made by such other Bank, and
(except as otherwise provided in Section 4.06 hereof) no Bank shall have any
obligation to the Administrative Agent or any other Bank for the failure by such
Bank to make any Loan required to be made by such Bank. Without prejudice to any
provisions hereof that expressly require any action to be taken only by all of
the Banks or the Majority Banks, the amounts payable by the Company at any time
hereunder and under the Notes to each Bank shall be a separate and independent
debt and each Bank shall be entitled to protect and enforce its rights arising
out of this Agreement and the Notes, and it shall not be necessary for any other
Bank or the Administrative Agent to consent to, or be joined as an additional
party in, any proceedings for such purposes.
2.08 Notes.
(a) The Revolving Credit Loans made by each Bank shall be evidenced
by a single promissory note of the Company substantially in the form of Exhibit
A hereto, dated the date hereof, payable to such Bank in a principal amount
equal to the amount of its Revolving Credit Commitment as originally in effect
and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan made by each Bank to the Company, and each
payment made on account of the principal thereof, shall be recorded by such Bank
on its books and, prior to any transfer of any Note evidencing the Loans held by
it, endorsed by such Bank on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Bank to make any such
recordation or endorsement shall not affect the obligations of the Company to
make a payment when due of any amount owing hereunder or under such Note in
respect of such Loans in accordance with the terms hereof.
(c) No Bank shall be entitled to have its Notes substituted or
exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection
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with a permitted assignment of all or any portion of such Bank's relevant
Commitment, Loans and Notes pursuant to Section 12.06 hereof and except as
provided in clause (f) below (and, if requested by any Bank, the Company agrees
to so exchange any Note).
2.09 Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof, the Company shall have the right to prepay
Loans, or to Convert Loans of one Type into Loans of another Type or Continue
Loans of one Type as Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Administrative Agent notice (a
copy of which the Administrative shall promptly furnish to each Bank) of each
such prepayment, Conversion or Continuation as provided in Section 4.05 hereof
(and, upon the date specified in any such notice of prepayment, the amount to be
prepaid shall become due and payable hereunder); (b) if any Eurodollar Loan is
prepaid or Converted on any day other than the last day of the Interest Period
for such Loan, the Company shall pay any amount owing under Section 5.05 in
respect thereof on the date of such prepayment or Conversion; and (c) any
Conversion or Continuation of Eurodollar Loans shall be subject to the
provisions of Section 2.03 hereof. Notwithstanding the foregoing, and without
limiting the rights and remedies of the Banks under Section 10 hereof, in the
event that any Event of Default shall have occurred and be continuing, the
Administrative Agent may (and at the request of the Majority Banks shall)
suspend the right of the Company to Convert any Loan into a Eurodollar Loan, or
to Continue any Loan as a Eurodollar Loan, in which event all Loans shall be
Converted (on the last day(s) of the respective Interest Periods therefor) or
Continued, as the case may be, as Base Rate Loans.
2.10 Mandatory Prepayments and Reductions of Commitments.
(a) Casualty Events. Subject to clause (h) of this Section 2.10, not
less than 30 days following the receipt by the Company of proceeds in excess of
$1,000,000 in the aggregate after the date hereof of insurance, condemnation
award or other compensation in respect of any Casualty Event affecting any
tangible Property of the Company or any of its Restricted Subsidiaries (or upon
such earlier date as the Company or such Restricted Subsidiary, as the case may
be, shall have determined not to repair or replace the Property affected by such
Casualty Event), the Company shall prepay the Loans, and the Commitments shall
be subject to automatic reduction, in an aggregate amount, if any, equal to 100%
of the Net Available Proceeds of such
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Casualty Event not theretofore applied to the repair or replacement of such
Property, such prepayment and reduction to be effected in each case in the
manner and to the extent specified in clause (g) of this Section 2.10; provided
that if, on or before the 30th day following such receipt, the Company furnishes
to the Administrative Agent a plan for the repair or replacement of the Property
affected by such Casualty Event that the Administrative Agent approves in the
reasonable exercise of its discretion as appropriate in light of the nature of
such Property, the time by which such prepayment and reduction must occur shall
be extended to such later date as shall be set forth in such plan with respect
to the amount of the Net Available Proceeds referred to in such plan as will be
expended for such repair or replacement. Notwithstanding the foregoing, in the
event that a Casualty Event shall occur with respect to Property covered by the
Deeds of Trust or Deed of Trust Amendments, the Company shall prepay the Loans,
and the Commitments shall be subject to automatic reduction, on the dates, and
in the amounts of the required prepayments, specified in the Deeds of Trust or
Deed of Trust Amendments. Nothing in this clause (a) shall be deemed to limit
any obligation of the Company or any of its Restricted Subsidiaries pursuant to
any of the Security Documents to remit to a collateral or similar account
(including, without limitation, the Collateral Account) maintained by the
Administrative Agent pursuant to any of the Security Documents the proceeds of
insurance, condemnation award or other compensation received in respect of any
Casualty Event.
(b) Debt Issuance or Equity Issuance. Subject to clause (h) of this
Section 2.10, and without limiting the obligation of the Company to obtain the
consent of the Majority Banks to any Debt Issuance or Equity Issuance prohibited
hereby, upon any Debt Issuance or Equity Issuance after the Closing Date, the
Company shall prepay the Loans, and the Commitments shall be subject to
automatic reduction, in an aggregate amount equal to 100% of the Net Available
Proceeds thereof, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in clause (g) of this Section 2.10;
provided that no such prepayment or reduction shall be required by reason of any
Equity Issuance if, before giving effect thereto, the Net Leverage Ratio is not
greater than 3.00 to 1.
(c) Excess Cash Flow. [Intentionally omitted].
(d) Sale of Assets. Subject to clause (h) of this Section 2.10, and
without limiting the obligation of the Company to obtain the consent of the
Majority Banks to any Disposition not otherwise permitted hereunder, in the
event that the Net
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Available Proceeds of any Disposition (herein, the "Current Disposition"), and
of all prior Dispositions as to which a prepayment has not yet been made under
this Section 2.10(d), shall exceed $5,000,000 then, no later than five Business
Days prior to the occurrence of the Current Disposition, the Company will
deliver to the Administrative Agent a statement (which shall promptly forward a
copy thereof to each Bank), certified by a Responsible Officer, in form and
detail satisfactory to the Administrative Agent, of the amount of the Net
Available Proceeds of the Current Disposition and of all such prior Dispositions
and, upon the consummation of such Disposition, the Company will prepay the
Loans, and the Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 100% of the Net Available Proceeds of the Current
Disposition and such prior Dispositions, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in clause (g) of
this Section 2.10; provided that no prepayment of the Loans shall be required,
and the Commitments shall not be reduced by, any amount calculated by reference
to the first $7,000,000 of Net Available Proceeds from Dispositions of Mobile
Equipment except to the extent that the Company would otherwise be required to
make an offer to the holders of the Senior Notes to apply such Net Available
Proceeds to the purchase of Senior Notes.
Notwithstanding the foregoing, the Company shall not be required to
make a prepayment pursuant to this Section 2.10(d) with respect to the Net
Available Proceeds from any Disposition in the event that the Company advises
the Administrative Agent at the time a prepayment is otherwise required to be
made that it intends to use such Net Available Proceeds for a Permitted Purpose,
so long as:
(x) such Net Available Proceeds are either (A) placed by the Company
into a segregated deposit account with the Administrative Agent pending
such reinvestment or (B) applied by the Company to the prepayment of
Revolving Credit Loans hereunder (in which event the Company agrees to
advise the Administrative Agent in writing at the time of such prepayment
of Revolving Credit Loans that such prepayment is being made from the
proceeds of a Disposition and that, as contemplated by the second
paragraph of Section 2.01, a portion of the Revolving Credit Commitments
equal to the amount of such prepayment gives rise to a Reserved Commitment
Amount that shall be available hereunder only for a Permitted Purpose or
to make prepayments of Loans under clause 2.10(d)(y)(B) below),
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(y) the Net Available Proceeds from any Disposition are in fact used
for a Permitted Purpose within 269 days of such Disposition (it being
understood that, in the event Net Available Proceeds from more than one
Disposition are deposited into a segregated deposit account with the
Administrative Agent or applied to the prepayment of Revolving Credit
Loans as provided in clause (x) above, such Net Available Proceeds shall
be deemed to be applied (or, as the case may be, Revolving Credit Loans
utilizing the Reserved Commitment Amount shall be deemed to be made) in
the same order in which such Dispositions occurred and, accordingly, (A)
any such Net Available Proceeds so held for more than 269 days shall be
forthwith applied to the prepayment of Loans and reductions of Commitments
as provided in clause (g) of this Section 2.10 and (B) any Reserved
Commitment Amount that remains so unutilized for 269 days shall
automatically terminate; and
(z) at the time the Net Available Proceeds (or the borrowing of the
Reserved Commitment Amount) shall be used for a Permitted Purpose the
Administrative Agent shall have received financial projections prepared in
good faith and based on reasonable assumptions by a Responsible Officer,
satisfactory in scope and substance to the Banks, that on a pro forma
basis after giving effect to the use of such Net Available proceed for a
Permitted Purpose the Net Leverage Ratio shall not exceed 4.00 to 1 for
the period from such date through the Revolving Credit Commitment
Termination Date.
(e) Pension Fund Reversions. Subject to clause (h) of this Section
2.10, in the event that the Company or any of its Restricted Subsidiaries
receives any reversion from any pension fund and the amount of such reversion
(herein, the "Current Reversion"), and of all prior reversions from pension
funds as to which a prepayment has not yet been made under this Section 2.10(e)
(excluding in the case of the Current Reversion and all such prior reversions,
the first $100,000 in each fiscal year of the Company ("Excluded Reversions"),
shall exceed $1,000,000 then, no later than the date falling 30 days after the
Current Reversion, the Company will prepay the Loans, and the Commitments shall
be subject to automatic reduction, in an aggregate amount equal to 100% of the
amounts received from the Current Reversion and such prior reversions (other
than Excluded Reversions), such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (g) of this Section
2.10.
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(f) Contract Settlements. Subject to clause (h) of this Section
2.10, in the event that the Company or any of its Restricted Subsidiaries
receives any cash consideration for the termination (direct or indirect, in one
transaction or a series of transactions), of any agreement under which the
Company or any of its Subsidiaries is to sell coal, then, no later than the date
falling 30 days after such receipt, the Company will prepay the Loans, and the
Commitments shall be subject to automatic reduction, in an aggregate amount
equal to 65% of the aggregate amount of all cash payments, (including, without
limitation, all cash payments received by way of deferred payment pursuant to a
note or installment receivable or otherwise, but only as and when received) but
excluding (i) the amount of any legal expenses, commissions and other customary
fees and expenses paid by the Company and its Restricted Subsidiaries in
connection therewith and (ii) any Federal, state and local income or other taxes
estimated to be payable by the Company and its Restricted Subsidiaries as a
result thereof (but only to the extent that such estimated taxes are in fact
paid to the relevant governmental authority not later than three months (in the
case of Federal taxes) or nine months (in the case of other taxes) after receipt
of such cash payments), such prepayment and reduction to be effected in each
case in the manner and to the extent specified in clause (g) of this Section
2.10.
(g) Application. Prepayments and reductions of Commitments described
in the above clauses of this Section 2.10 shall be applied to reduce the
Revolving Credit Commitments (and to the extent that, after giving effect to
such reduction, the aggregate principal amount of Revolving Credit Loans would
exceed the Revolving Credit Commitments, the Company shall prepay Revolving
Credit Loans in an amount equal to such excess).
(h) Waiver. At the request of the Company prior to the last date on
which the Company is required to make a prepayment or any Commitment is required
to be reduced by reason of any event described in any of the foregoing clauses
(a) through (f) of this Section 2.10, the Supermajority Banks may waive such
requirement with respect to all or any portion of the amount to be prepaid or to
reduce the Commitments.
(i) Escrow Account.
(i) Notwithstanding the foregoing provisions of this Section 2.10,
if all or any portion of any Loan held by any Bank could not be prepaid as
required by Section 2.10 except as would result in an obligation of the
Company to make any payment to such Bank under Section 5.05 hereof, the
Company
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may deposit the amount of such portion in an account (the "Escrow
Account") with the Administrative Agent to be held by the Administrative
Agent for the benefit of such Bank until such time or times as such
prepayment may be made without resulting in such obligation (or, if
earlier upon the occurrence of an Event of Default), at which time such
amount shall be withdrawn and applied to make such prepayment.
(ii) As collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the
principal amount required to have been prepaid and interest thereon, the
Company hereby pledges and grants to the Administrative Agent, for the
benefit of the Bank to whom such amounts are owing, a security interest in
all of its right, title and interest in and to amounts deposited into the
Escrow Account for the benefit of such Bank, together with the earnings
thereon as provided herein. The balances from time to time in the Escrow
Account shall not constitute payment of any principal of or interest on
any Loans until applied by the Administrative Agent as provided herein.
Funds held in the Escrow Account shall be subject to withdrawal only as
provided in this Section 2.10(i).
(iii) Amounts on deposit in the Escrow Account shall be invested and
reinvested by the Administrative Agent in such Permitted Investments as
the Company shall determine in its sole discretion, provided that (i)
failing receipt by the Administrative Agent of instructions from the
Company, the Administrative Agent may invest and reinvest such amounts as
the Administrative Agent shall determine in its sole discretion and (ii)
the approval of the Administrative Agent shall be required for the
investments and reinvestments to be made during any period while a Default
has occurred and is continuing. All such investments and reinvestments
shall be held in the name and be under the control of the Administrative
Agent.
(iv) On the earlier to occur of (x) the last day of the Interest
Period for the Loan in respect of which a deposit was made by the Company
into the Escrow Account, (y) if an Event of Default shall have occurred
and be continuing, the date, if any, specified by the Bank for whose
benefit such deposit was made to the Administrative Agent by not less than
one Business Day's prior notice or (z) the date, if any, specified by the
Company to the Administrative Agent by not less than one Business Day's
prior notice, the
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Administrative Agent shall liquidate any such investments and
reinvestments and apply the proceeds thereof to the prepayment of the
principal of and interest on the Loans in respect of which such amount
was deposited into the Escrow Account.
(v) When the principal of and interest on the Loan in respect
of which a deposit was made by the Company into the Escrow Account have
been paid in full, the Administrative Agent shall deliver to the
Company, against receipt but without any recourse, warranty or
representation whatsoever, such of the balances in the Escrow Account
in respect of such deposit as remain.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Administrative
Agent for account of each Bank the entire outstanding principal amount of such
Bank's Revolving Credit Loans, and each Revolving Credit Loan shall mature, on
the Revolving Credit Commitment Termination Date. In addition, (i) in the event
that the aggregate principal amount of all Revolving Credit Loans on any date
exceeds the Borrowing Base on such date, the Company shall (x) immediately
prepay Revolving Credit Loans in an amount equal to such excess or (y) not later
than three Business Days after such date, furnish to the Administrative Agent a
new Borrowing Base Certificate as at such date (or a later date) demonstrating
that such excess did not exist or no longer exists and (ii) if following any
Revolving Credit Commitment Reduction Date (x) the aggregate principal amount of
the Revolving Credit Loans then outstanding shall exceed the Revolving Credit
Commitments in effect after the applicable reduction, the Company shall
immediately prepay Revolving Credit Loans in an amount equal to such excess and
(y) as a result of any Bank making the election referred to in the proviso of
the last sentence of Section 2.04(a) hereof, the aggregate principal amount of
the Loans held by the Banks is not held by them pro rata in accordance with
their respective Commitments, the Company shall immediately prepay Loans in such
amounts, of such Types and held by such Banks so that, after giving effect
thereto, the Loans shall be held by the Banks pro rata (as to principal amount,
Type and Interest Period) in accordance with their respective Commitments.
3.02 Interest. The Company hereby promises to pay to
the Administrative Agent for account of each Bank interest on the
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unpaid principal amount of each Loan made by such Bank for the period from and
including the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable
Percentage and
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such
Loan for such Interest Period plus the Applicable Percentage.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Bank interest at the applicable
Post-Default Rate on any principal of any Loan made by such Bank and on any
other amount payable by the Company hereunder or under the Notes held by such
Bank to or for account of such Bank, that shall not be paid in full when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest on each Loan shall
be payable (i) in the case of a Base Rate Loan, quarterly on the Quarterly
Dates, (ii) in the case of a Eurodollar Loan, on the last day of each Interest
Period therefor and, if such Interest Period is longer than three months, at
three-month intervals following the first day of such Interest Period, and (iii)
in the case of any Loan, upon the payment or prepayment thereof or the
Conversion of such Loan to a Loan of another Type (but only on the principal
amount so paid, prepaid or Converted), except that interest payable at the
Post-Default Rate shall be payable from time to time on demand. Promptly after
the determination of any interest rate provided for herein or any change
therein, the Administrative Agent shall give notice thereof to the Banks to
which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Company
under this Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by the Obligors under any other Loan Document,
shall be made in
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Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Administrative Agent at the Agent's Account, not later than
1:00 p.m. New York time on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day).
(b) Any Bank for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Company with such
Bank (with notice to the Company and the Administrative Agent), provided that
such Bank's failure to give such notice shall not affect the validity thereof.
(c) The Company shall, at the time of making each payment
under this Agreement or any Note for account of any Bank, specify to the
Administrative Agent (which shall so notify the intended recipient(s) thereof)
the Loans or other amounts payable by the Company hereunder to which such
payment is to be applied (and in the event that the Company fails to so specify,
or if an Event of Default has occurred and is continuing, the Administrative
Agent may distribute such payment to the Banks for application in such manner as
it or the Majority Banks, subject to Section 4.02 or 2.10(g) hereof, may
determine to be appropriate).
(d) Each payment received by the Administrative Agent under
this Agreement or any Note for account of any Bank shall be paid by the
Administrative Agent promptly to such Bank, in immediately available funds, for
account of such Bank's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be payable
for any principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing of Loans from the Banks under Section 2.01
hereof shall be made from the Banks, each payment of commitment fee under
Section 2.05 hereof shall be made for account of the Banks, and each termination
or reduction of the amount of the Commitments under Section 2.04 hereof shall be
applied to the respective Commitments of the Banks, pro rata according to the
amounts of their respective Commitments;
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(b) except as otherwise provided in Section 5.04 hereof, Eurodollar Loans having
the same Interest Period shall be allocated pro rata among the Banks according
to the amounts of their respective Commitments to make Loans (in the case of the
making of Loans) or their respective Loans (in the case of Conversions and
Continuations of Loans); (c) each payment or prepayment of principal of Loans by
the Company shall be made for account of the Banks pro rata in accordance with
the respective unpaid principal amounts of the Loans held by them; and (d) each
payment of interest on Loans by the Company shall be made for account of the
Banks pro rata in accordance with the amounts of interest on such Loans then due
and payable to the Banks.
4.03 Computations. Interest on Eurodollar Loans shall be
computed on the basis of a year of 360 days and actual days elapsed (including
the first day but excluding the last day) occurring in the period for which
payable, and commitment fee and interest on Base Rate Loans shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable. Notwithstanding the foregoing, for each day that the
Base Rate is calculated by reference to the Federal Funds Rate any interest on
Base Rate Loans shall be computed on the basis of a year of 360 days and actual
days elapsed.
4.04 Minimum Amounts. Except for mandatory prepayments made
pursuant to Section 2.10 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, each borrowing, Conversion and partial prepayment of
principal of Loans shall be in an aggregate amount at least equal to $100,000 or
a larger multiple of $100,000 (borrowings, Conversions or prepayments of or into
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one for each Type or
Interest Period), provided that the aggregate principal amount of Eurodollar
Loans having the same Interest Period shall be in an amount at least equal to
$1,000,000 or a larger multiple of $100,000 and, if any Eurodollar Loans would
otherwise be in a lesser principal amount for any period, such Loans shall be
Base Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the Commitments, of
borrowings, Conversions, Continuations and optional prepayments of Loans, of
Types of Loans and of the duration of Interest Periods shall be irrevocable
and shall be
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effective only if received by the Administrative Agent not later than 11:00 a.m.
New York time on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:
Number of
Business
Notice Days Prior
------ ----------
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the Type of each
Loan to be borrowed, Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or optional prepayment (which shall be a Business Day).
Each such notice of the duration of an Interest Period shall specify the Loans
to which such Interest Period is to relate. The Administrative Agent shall
promptly notify the Banks of the contents of each such notice. In the event that
the Company fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and otherwise as provided
in this Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Bank or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Bank) the proceeds of a Loan to be
made by such Bank hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Banks
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hereunder (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Administrative Agent, the Administrative Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Administrative Agent, the recipient(s) of such
payment shall, on demand, repay to the Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date (the "Advance Date") such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such day and, if such recipient(s) shall fail promptly to make such payment, the
Administrative Agent shall be entitled to recover such amount, on demand, from
the Payor, together with interest as aforesaid, provided that if neither the
recipient(s) nor the Payor shall return the Required Payment to the
Administrative Agent within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s) shall each be
obligated to pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment
to be made by the Company to the Banks, the Company and the
recipient(s) shall each be obligated retroactively to the Advance Date
to pay interest in respect of the Required Payment at the Post-Default
Rate (without duplication of the obligation of the Company under
Section 3.02 hereof to pay interest on the Required Payment at the
Post-Default Rate), it being understood that the return by the
recipient(s) of the Required Payment to the Administrative Agent shall
not limit such obligation of the Company under said Section 3.02 to pay
interest at the Post-Default Rate in respect of the Required Payment,
and
(ii) if the Required Payment shall represent proceeds of
a Loan to be made by the Banks to the Company, the Payor and the
Company shall each be obligated retroactively to the Advance Date to
pay interest (without duplication of the obligation of the Company
under Section 3.02 hereof to pay interest on the Required Payment), in
respect of the Required Payment pursuant to whichever of the rates
specified in Section 3.02 hereof is applicable to the Type of such
Loan, it being understood that the return by the Company of the
Required Payment to the Administrative
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Agent shall not limit any claim the Company may have against the Payor
in respect of such Required Payment.
4.07 Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Bank may
otherwise have, each Bank shall be entitled, at its option (to the fullest
extent permitted by law), to set off and apply any deposit (general or special,
time or demand, provisional or final), or other indebtedness, held by it for the
credit or account of such Obligor at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such Bank's Loans
or any other amount payable to such Bank hereunder, that is not paid when due
(regardless of whether such deposit or other indebtedness are then due to such
Obligor), in which case it shall promptly notify such Obligor and the
Administrative Agent thereof, provided that such Bank's failure to give such
notice shall not affect the validity thereof.
(b) If any Bank shall obtain from any Obligor payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any other Loan Document through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or otherwise
(other than from the Administrative Agent as provided herein), and, as a result
of such payment, such Bank shall have received a greater percentage of the
principal of or interest on the Loans or such other amounts then due hereunder
or thereunder by such Obligor to such Bank than the percentage received by any
other Bank, it shall promptly purchase from such other Banks participations in
(or, if and to the extent specified by such Bank, direct interests in) the Loans
or such other amounts, respectively, owing to such other Banks (or in interest
due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Banks shall share the benefit of such excess payment (net of any expenses that
may be incurred by such Bank in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal of and/or interest on the Loans or
such other amounts, respectively, owing to each of the Banks. To such end all
the Banks shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored.
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(c) The Company agrees that any Bank so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Bank were a direct holder of Loans or other amounts (as the case may
be) owing to such Bank in the amount of such participation.
(d) Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable bankruptcy,
insolvency or other similar law, any Bank receives a secured claim in lieu of a
set-off to which this Section 4.07 applies, such Bank shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to compensate such
Bank for any costs that such Bank determines are attributable to its making or
maintaining of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of any of such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change that:
(i) shall subject any Bank (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in
respect of such Loans or its Notes or changes the basis of taxation of
any amounts payable to such Bank under this Agreement or its Notes in
respect of any of such Loans (excluding changes in the rate of tax on
the overall net income of such Bank or of such Applicable Lending
Office by the jurisdiction in which such Bank has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized in
the determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or
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other assets of, or any deposits with or other liabilities of, such
Bank (including, without limitation, any of such Loans or any deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof), or any commitment of such Bank (including, without limitation,
the Commitments of such Bank hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Notes (or any of such extensions of credit or
liabilities) or its Commitments.
If any Bank requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Bank (with a copy to the Administrative
Agent), suspend the obligation of such Bank thereafter to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of Section 5.04 hereof shall be applicable), provided that
such suspension shall not affect the right of such Bank to receive the
compensation so requested.
(b) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall pay directly to
each Bank from time to time on request such amounts as such Bank may determine
to be necessary to compensate such Bank (or, without duplication, the bank
holding company of which such Bank is a subsidiary) for any costs that it
determines are attributable to the maintenance by such Bank (or any Applicable
Lending Office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) of any
court or governmental or monetary authority (i) following any Regulatory Change
or (ii) implementing any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to comply
therewith would be unlawful) hereafter issued by any government or governmental
or supervisory authority implementing at the national level the Basle Accord, of
capital in respect of its Commitments or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Bank (or any Applicable Lending Office or such bank
holding company) to a level below that which such Bank (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request).
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(c) Each Bank shall notify the Company of any event occurring
after the date hereof entitling such Bank to compensation under paragraph (a) or
(b) of this Section 5.01 as promptly as practicable, but in any event within 180
days, after such Bank obtains actual knowledge thereof; provided that (i) if any
Bank fails to give such notice within 180 days after it obtains actual knowledge
of such an event, such Bank shall, with respect to compensation payable pursuant
to this Section 5.01 in respect of any costs resulting from such event, only be
entitled to payment under this Section 5.01 for costs incurred from and after
the date 180 days prior to the date that such Bank does give such notice and
(ii) each Bank will designate a different Applicable Lending Office for the
Loans of such Bank affected by such event if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
opinion of such Bank, be disadvantageous to such Bank, except that such Bank
shall have no obligation to designate an Applicable Lending Office located in
the United States of America. Each Bank will furnish to the Company a
certificate setting forth in reasonable detail the basis and amount of each
request by such Bank signed by two officers of such Bank for compensation under
paragraph (a) or (b) of this Section 5.01. Determinations and allocations by any
Bank for purposes of this Section 5.01 of the effect of any Regulatory Change
pursuant to paragraph (a) of this Section 5.01, or of the effect of capital
maintained pursuant to paragraph (b) of this Section 5.01, on its costs or rate
of return of maintaining Loans or its obligation to make Loans, or on amounts
receivable by it in respect of Loans, and of the amounts required to compensate
such Bank under this Section 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Administrative Agent reasonably determines, which
determination shall be conclusive, that quotations of interest rates
for the relevant deposits referred to in the definition of "Eurodollar
Base Rate" in Section 1.01 hereof are not being provided in the
relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided herein;
or
(b) the Majority Banks reasonably determine, which
determination shall be conclusive, and notify the Administrative Agent
that the relevant rates of interest
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referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof upon the basis of which the rate of interest for Eurodollar
Loans for such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks of making or maintaining
Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Bank prompt notice
thereof and, so long as such condition remains in effect, the Banks shall be
under no obligation to make additional Eurodollar Loans, to Continue Eurodollar
Loans or to Convert Base Rate Loans into Eurodollar Loans, and the Company
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.09 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain Eurodollar Loans
hereunder (and, in the sole opinion of such Bank, the designation of a different
Applicable Lending Office would either not avoid such unlawfulness or would be
disadvantageous to such Bank), then such Bank shall promptly notify the Company
thereof (with a copy to the Administrative Agent), by a certificate signed by
two officers of such Bank describing such event in reasonable detail, and such
Bank's obligation to make or Continue, or to Convert Loans of any other Type
into, Eurodollar Loans shall be suspended until such time as such Bank may again
make and maintain Eurodollar Loans (in which case the provisions of Section 5.04
hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any
Bank to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans
into, Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03
hereof, such Bank's Eurodollar Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion resulting from a circumstance
described in Section 5.03 hereof, on such earlier date as such Bank may specify
to the Company with a copy to the Administrative Agent) and, unless and until
such Bank gives notice as provided below that the circumstances specified in
Section 5.01 or 5.03 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Bank's Eurodollar Loans
have been so Converted, all payments and prepayments of
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principal that would otherwise be applied to such Bank's Eurodollar
Loans shall be applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Bank as Eurodollar Loans shall be made or Continued instead as
Base Rate Loans, and all Base Rate Loans of such Bank that would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Bank gives notice to the Company with a copy to the Administrative Agent
that the circumstances specified in Section 5.01 or 5.03 hereof that gave rise
to the Conversion of such Bank's Eurodollar Loans pursuant to this Section 5.04
no longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Base Rate and Eurodollar Loans are allocated among the Banks ratably (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative
Agent for account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Bank) to compensate it for any loss, cost or expense
that such Bank determines is attributable to:
(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Bank for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Eurodollar
Loan from such Bank on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not
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borrowed for the period from the date of such payment, prepayment, Conversion or
failure to borrow to the last day of the then current Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
that would have commenced on the date specified for such borrowing) at the
applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest that otherwise would have accrued on such principal amount at
a rate per annum equal to the interest component of the amount such Bank would
have bid in the London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities comparable to
such period (as reasonably determined by such Bank).
5.06 U.S. Taxes.
(a) The Company agrees to pay to each Bank that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), will
not be less than the amount stated herein to be then due and payable, provided
that the foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to any Bank hereunder (x) unless such Bank
is, on the date hereof (or on the date it becomes a Bank hereunder as
provided in Section 12.06(b) hereof) and on the date of any change in
the Applicable Lending Office of such Bank, either entitled to submit a
Form 1001 (relating to such Bank and entitling it to a complete
exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Bank hereunder in respect of the
Loans), or (y) if such Bank has taken any voluntary action (or
undergone any merger, acquisition or similar transaction) resulting in
the loss of its entitlement, or that of any successor-in-interest or
assign, to submit either of such Forms 1001 or 4224,
(ii) [Intentionally omitted].
(iii) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person (or, if such non-U.S. Person is not the
beneficial owner of the relevant Loan, such beneficial owner) to comply
with applicable certification, information, documentation or other
reporting
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requirements concerning the nationality, residence, identity or
connections with the United States of America of such non-U.S. Person
(or beneficial owner, as the case may be) if such compliance is
required by statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Taxes, or
(iv) with respect to any U.S. Taxes which are imposed on net
income of the Bank and are payable otherwise than by withholding from a
payment on a Loan.
For the purposes of this Section 5.06(a), (A) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (B) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates) and (C) "Form W-8" shall mean Form W-8 (Certificate
of Foreign Status of the Department of Treasury of the United States of
America). Each of the Forms referred to in the foregoing clauses (A), (B) and
(C) shall include such successor and related forms as may from time to time be
adopted by the relevant taxing authorities of the United States of America to
document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the
Administrative Agent or any Bank from which it is required by law to make any
deduction or withholding, and within 30 days after it is required by law to
remit such deduction or withholding to any relevant taxing or other authority,
the Company shall deliver to the Administrative Agent for delivery to such
non-U.S. Person evidence satisfactory to such Person of such deduction,
withholding or payment (as the case may be).
5.07 Replacement of Banks. If any Bank requests compensation
pursuant to Section 5.01 or 5.06 hereof, or any Bank's obligation to make or
Continue, or to Convert Loans of any Type into, the other Type of Loan shall be
suspended pursuant to Section 5.01 or 5.03 hereof (any such Bank requesting such
compensation, or whose obligations are so suspended, being herein called a
"Requesting Bank"), and if no Event of Default shall have occurred and be
continuing, the Company, upon three Business Days notice, may (a) prepay in full
all outstanding Loans and all other amounts payable hereunder to such Requesting
Bank and
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terminate all outstanding Commitments of such Requesting Bank, or (b) require
that such Requesting Bank transfer all of its right, title and interest under
this Agreement and such Requesting Bank's Notes, if any, to any bank or other
financial institution (a "Proposed Bank") identified by the Company that is
satisfactory to the Administrative Agent (i) if such Proposed Bank agrees to
assume all of the obligations of such Requesting Bank hereunder, and to purchase
all of such Requesting Bank's Loans hereunder for consideration equal to the
aggregate outstanding principal amount of such Requesting Bank's Loans, together
with interest thereon to the date of such purchase, and satisfactory
arrangements are made for payment to such Requesting Bank of all other amounts
payable hereunder to such Requesting Bank on or prior to the date of such
transfer (including any fees accrued hereunder and any amounts that would be
payable under Section 5.05 hereof as if all of such Requesting Bank's Loans were
being prepaid in full on such date) and (ii) if such Requesting Bank has
requested compensation pursuant to Section 5.01 or 5.06 hereof, such Proposed
Bank's aggregate requested compensation, if any, pursuant to said Section 5.01
or 5.06 with respect to such Requesting Bank's Loans is lower than that of the
Requesting Bank. Subject to the provisions of Section 12.06(b) hereof, such
Proposed Bank shall be a "Bank" for all purposes hereunder. Without prejudice to
the survival of any other agreement of the Company hereunder the agreements of
the Company contained in Sections 5.01, 5.06 and 12.03 hereof (without
duplication of any payments made to such Requesting Bank by the Company or the
Proposed Bank) shall survive for the benefit of such Requesting Bank under this
Section 5.07 with respect to the time prior to such replacement.
Section 6. Guarantee.
6.01 The Guarantee. The Subsidiary Guarantors hereby jointly
and severally guarantee to each Bank and the Administrative Agent and their
respective successors and permitted assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest (including, without limitation, interest accruing after the Company
becomes the subject of a case under the Bankruptcy Code) on the Loans made by
the Banks to, and the Notes held by each Bank of, the Company and all other
amounts from time to time owing to the Banks or the Administrative Agent by the
Company under this Agreement and under the Notes and by any Obligor under any of
the other Loan Documents, and all obligations of the Company or any of its
Restricted Subsidiaries to any Bank in respect of any Interest Rate Protection
Agreement, in each case strictly in accordance with the terms thereof (such
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obligations being herein collectively called the "Guaranteed Obligations"). The
Subsidiary Guarantors hereby further jointly and severally agree that if the
Company shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 6.01 hereof are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity
or enforceability of the obligations of the Company under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to
the Subsidiary Guarantors, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be extended, or
such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions
of this Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
renewed, replaced, extended or otherwise modified, supplemented or
amended in any respect, or any right under this Agreement or the Notes
or any other
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agreement or instrument referred to herein or therein shall be waived
or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with; or
(iv) any lien or security interest granted to, or in
favor of, the Administrative Agent or any Bank or Banks as security for
any of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Bank exhaust any right, power or remedy or proceed
against the Company under this Agreement or the Notes or any other agreement or
instrument referred to herein or therein, or against any other Person under any
other guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Section 6 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in respect
of the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Bank on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Bank in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
6.04 Subrogation. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Banks under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 6.01
hereof, whether by subrogation or otherwise, against the Company or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
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6.05 Remedies. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors and the Banks, the obligations
of the Company under this Agreement and the Notes may be declared to be
forthwith due and payable as provided in Section 10 hereof (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 10) for purposes of Section 6.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Company and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Company) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of said Section 6.01.
6.06 Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6 constitutes
an instrument for the payment of money, and consents and agrees that any Bank or
the Administrative Agent, at its sole option, in the event of a dispute by such
Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the
right to bring motion-action under New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this Section 6
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
6.08 Rights of Contribution. The Subsidiary Guarantors hereby
agree, as between themselves, that if any Subsidiary Guarantor shall become an
Excess Funding Guarantor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence), pay to such Excess Funding Guarantor an amount equal to such
Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the Properties, debts and liabilities of such
Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of
such Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to
any Excess Funding Guarantor under this Section 6.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 6 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.
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For purposes of this Section 6.08, (i) "Excess Funding
Guarantor" shall mean, in respect of any Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "Excess Payment" shall mean, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share"
shall mean, for any Subsidiary Guarantor, the ratio (expressed as a percentage)
of (x) the Adjusted Net Worth (as defined in Section 6.09 hereof) of such
Subsidiary Guarantor to (y) an amount equal to the sum of the Adjusted Net
Worths of all of the Subsidiary Guarantors, determined as at the date of
determination of the Maximum Guaranty Liability of such Subsidiary Guarantor
pursuant to Section 6.09 hereof.
6.09 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.08 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the maximum liability of any Subsidiary
Guarantor under said Section 6.01 as of any date shall in no event exceed the
Maximum Guaranty Liability (as such term is hereinafter defined) of such
Subsidiary Guarantor as of such date. As used herein, the term "Maximum Guaranty
Liability" shall be that amount from time to time equal to the greatest of (a)
the Adjusted Net Worth (as such term is defined below) of such Subsidiary
Guarantor as of the end of the most recently concluded fiscal quarter of such
Subsidiary Guarantor ended on or prior to the date hereof, (b) the highest
Adjusted Net Worth (as such term is defined below) of such Subsidiary Guarantor
at the end of any fiscal quarter ending subsequent to the date hereof and prior
to the earlier of the date of the commencement of a case under the Bankruptcy
Code involving such Subsidiary Guarantor or the date enforcement of Section 6.01
is sought, (c) the Adjusted Net Worth (as such term is defined below) of such
Subsidiary Guarantor at the earlier of the date of the commencement of a case
under the Bankruptcy Code involving such Subsidiary Guarantor or the date
enforcement of Section 6.01 is sought, (d) the sum of any and all loans,
advances or capital contributions made by the Company to such Subsidiary
Guarantor, and all payments made by the Company to such Subsidiary Guarantor in
satisfaction of intercompany payables or other liabilities of the Company to
such Subsidiary
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Guarantor, in each case with the proceeds of any Loans made to the Company under
the Credit Agreement, and (e) the fair market value of any and all property
acquired with proceeds of any Loans made to the Company under the Credit
Agreement and transferred to such Subsidiary Guarantor. As used herein, the term
"Adjusted Net Worth" of any Subsidiary Guarantor as of any particular date shall
mean the excess of (i) the amount of the fair saleable value of the assets of
such Subsidiary Guarantor (including the value of any and all rights of
subrogation or contribution resulting from any payments by such Subsidiary
Guarantor under any other guaranty) as of such date determined in accordance
with applicable Federal and state laws affecting creditors' rights and governing
determinations of the insolvency of debtors, over (ii) the amount of all
liabilities of such Subsidiary Guarantor (including all liabilities of such
Subsidiary Guarantor under Section 6.01), contingent or otherwise, as of such
date, determined in accordance with the laws described in clause (i) above,
minus $1.00.
Section 7. Conditions Precedent.
7.01 Effectiveness. The effectiveness of the amendment and
restatement of the Existing Credit Agreement contemplated hereby is subject to
the conditions precedent that (i) this Amended and Restated Credit Agreement be
duly executed and delivered by the Company, the Subsidiary Guarantors and each
of the Banks; (ii) such conditions precedent shall be satisfied by September 30,
1997; and (iii) the Administrative Agent shall have received the following
documents (with, in the case of clauses (a), (b), (c) and (d) below, sufficient
copies for each Bank), each of which shall be satisfactory to the Administrative
Agent (and to the extent specified below, to each Bank) in form and substance:
(a) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
authority for each Obligor (including, without limitation, board of
director resolutions and evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution, delivery and
performance of such of the Basic Documents to which such Obligor is
intended to be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the extensions of
credit hereunder (and the Administrative Agent and each Bank may
conclusively rely on such certificate until it receives notice in
writing from such Obligor to the contrary).
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(b) Officer's Certificate. A certificate of a Responsible
Officer, dated the Effective Date, to the effect set forth in the first
sentence of Section 7.02 hereof.
(c) Opinions of Counsel to the Obligors. Opinions, dated the
Effective Date, of (i) Klett Lieber Rooney & Schorling, a Professional
Corporation, in form and substance satisfactory to the Banks and the
Administrative Agent (and each Obligor hereby instructs such counsel to
deliver such opinions to the Banks and the Administrative Agent) and
(ii) Spilman, Thomas & Battle, special West Virginia counsel to the
Obligors, in form and substance satisfactory to the Banks and the
Administrative Agent (and each Obligor hereby instructs such counsel to
deliver such opinions to the Banks and the Administrative Agent).
(d) Opinion of Special New York Counsel to Chase. An opinion,
dated the Effective Date, of Milbank, Tweed, Hadley & McCloy, special
New York counsel to Chase, substantially in the form of Exhibit H
hereto (and Chase hereby instructs such counsel to deliver such opinion
to the Banks).
(e) Notes. The Notes, duly completed and executed for each
Bank.
(f) Amendment to Security Agreement. An amendment to the
Security Agreement, substantially in the form of Exhibit D hereto, duly
executed and delivered by each Obligor and the Administrative Agent.
(g) Senior Notes. Evidence that the Senior Note Documents
shall have been duly authorized, executed and delivered, and that the
Senior Notes shall have been issued for cash in an aggregate amount not
less than 96% of the aggregate stated principal amount thereof, in each
case containing terms in form and substance satisfactory to the
Administrative Agent. In addition, the Administrative Agent shall have
received a certificate of a Responsible Officer to that effect (and
attaching thereto true and complete copies of the Senior Note
Documents, which shall be reasonably satisfactory to the Administrative
Agent in form and substance.
(h) Repayment of Existing Term Loans. Evidence that the
principal of and interest on, and all other amounts owing in respect
of, the Existing Term Loans shall have been (or shall be
simultaneously) paid in full.
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(i) Compliance Certificate. A Certificate of a Responsible
Officer of the Company evidencing, effective as of the Effective Date,
(i) pro forma compliance with the financial covenants (after giving
effect to the amendment and restatement contemplated hereby) and (ii)
financial projections prepared in good faith and based on reasonable
assumptions by a Responsible Officer, satisfactory in scope and
substance to the Banks, as to the consolidated EBITDA of the Company
and its Restricted Subsidiaries for the period from and including the
Effective Date through December 31, 2003.
(j) Financial Statements and Other Information. Consolidated
and consolidating balance sheets of the Company and its Restricted
Subsidiaries as at December 31, 1996 and the related consolidated and
consolidating statements of income, retained earnings and cash flows of
the Company and its Restricted Subsidiaries for the fiscal year ended
on said date, with the opinion thereon (in the case of said
consolidated balance sheet and statements) of Coopers & Lybrand L.L.P.,
and the unaudited consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as at June 30, 1997 and the
related consolidated and consolidating statements of income, retained
earnings and cash flows of the Company and its Restricted Subsidiaries
for the six-month period ended on such date.
(k) Deed of Trust Amendments. The Deed of Trust Amendments,
duly executed and delivered by the parties thereto.
(l) Consent of Existing Banks. Each of the parties to the
Existing Credit Agreement that is not a party to this Agreement shall
have consented to the amendment and restatement of the Existing Credit
Agreement that is contemplated hereby.
(m) Other Documents. Such other documents as the
Administrative Agent or any Bank or special New York counsel
to Chase may reasonably request.
The effectiveness of the amendment and restatement of the Existing Credit
Agreement contemplated hereby is also subject to the payment or delivery by the
Company of such fees as the Company shall have agreed to pay or deliver to any
Bank or an affiliate thereof or the Administrative Agent in connection herewith,
including, without limitation, the reasonable fees and
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expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase,
in connection with the negotiation, preparation, execution and delivery of this
Agreement and the Notes and the other Loan Documents and the extensions of
credit hereunder (to the extent that statements for such fees and expenses have
been delivered to the Company).
7.02 Initial and Subsequent Extensions of Credit. The
obligation of the Banks to make any Loan or otherwise extend any credit to the
Company upon the occasion of each borrowing or other extension of credit
hereunder is subject to the further conditions precedent that, both immediately
prior to the making of such Loan or other extension of credit and also after
giving effect thereto and to the intended use thereof:
(a) no Default shall have occurred and be continuing;
(b) the representations and warranties made by the Company in
Section 8 hereof, and by each Obligor in each of the other Loan
Documents to which it is a party, shall be true and complete on and as
of the date of the making of such Loan or other extension of credit
with the same force and effect as if made on and as of such date (or,
if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date); and
(c) the aggregate principal amount of the Revolving Credit
Loans shall not exceed the Borrowing Base reflected on the most recent
Borrowing Base Certificate delivered pursuant to Section 9.01(g)
hereof.
Each notice of borrowing by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the preceding sentence
(both as of the date of such notice and, unless the Company otherwise notifies
the Administrative Agent prior to the date of such borrowing, as of the date of
such borrowing).
Section 8. Representations and Warranties. The Company
represents and warrants to the Administrative Agent and the Banks that:
8.01 Corporate Existence. Each of the Company and its
respective Restricted Subsidiaries: (a) is a corporation, partnership or other
entity duly organized, validly existing and (to the extent such concept applies
to such entity) in good standing under the laws of the jurisdiction of its
organization;
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(b) has all requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
8.02 Financial Condition. The Company has heretofore furnished
to each of the Banks consolidated and consolidating balance sheets of the
Company and its Restricted Subsidiaries as at December 31, 1996 and the related
consolidated and consolidating statements of income, retained earnings and cash
flows of the Company and its Restricted Subsidiaries for the fiscal year ended
on said date, with the opinion thereon (in the case of said consolidated balance
sheet and statements) of Coopers & Lybrand L.L.P., and the unaudited
consolidated and consolidating balance sheets of the Company and its Restricted
Subsidiaries as at June 30, 1997 and the related consolidated and consolidating
statements of income, retained earnings and cash flows of the Company and its
Restricted Subsidiaries for the six-month period ended on such date. All such
financial statements are complete and correct and fairly present the
consolidated financial condition of the Company and its Restricted Subsidiaries
and (in the case of said consolidating financial statements) the respective
unconsolidated financial condition of each of the Company and its Restricted
Subsidiaries, as at said dates and the consolidated and unconsolidated results
of their operations for the fiscal year and six-month period ended on said dates
(subject, in the case of such financial statements as at March 31, 1997, to
normal year-end audit adjustments), all in accordance with generally accepted
accounting principles and practices applied on a consistent basis. None of the
Company and its Restricted Subsidiaries has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said balance
sheet as at said dates. Since December 31, 1996, there has been no material
adverse change in the consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Restricted Subsidiaries from
that set forth in said financial statements as at said date.
8.03 Litigation. There are no legal or arbitral
proceedings, or any proceedings by or before any governmental or
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regulatory authority or agency, now pending or (to the knowledge of the Company)
threatened against the Company or any of its Restricted Subsidiaries that, if
adversely determined could (either individually or in the aggregate) have a
Material Adverse Effect.
8.04 No Breach. None of the execution and delivery of this
Agreement and the Notes and the other Basic Documents, the consummation of the
transactions herein and therein contemplated or compliance with the terms and
provisions hereof and thereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of the Company or any of its
Restricted Subsidiaries, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
any material agreement or instrument to which the Company or any of its
Restricted Subsidiaries is a party or by which any of them or any of their
Property is bound or to which any of them is subject, or constitute a default
under any such agreement or instrument, or (except for the Liens created
pursuant to the Loan Documents) result in the creation or imposition of any Lien
upon any Property of the Company or any of its Restricted Subsidiaries pursuant
to the terms of any such agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate or other
power, authority and legal right to execute, deliver and perform its obligations
under each of the Basic Documents to which it is a party; the execution,
delivery and performance by each Obligor of each of the Basic Documents to which
it is a party have been duly authorized by all necessary corporate action on its
part (including, without limitation, any required shareholder approvals); and
this Agreement has been duly and validly executed and delivered by the Company
and constitutes, and each of the Notes and the other Basic Documents to which it
is a party when executed and delivered by the Company will constitute, and each
of the Basic Documents to which any other Obligor becomes a party will then
constitute, the legal, valid and binding obligation of the Company or such other
Obligor, as the case may be, enforceable against the Company or such other
Obligor, as the case may be, in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
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8.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange, are necessary for the execution, delivery
or performance by the Company or any of its Subsidiaries of this Agreement, or
any of the other Basic Documents to which it is a party or for the legality,
validity or enforceability hereof or thereof, except for filings and recordings
in respect of the Liens created pursuant to the Loan Documents.
8.07 ERISA. Each Plan, and, to the knowledge of the Company,
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law, and no event
or condition has occurred and is continuing as to which the Company would be
under an obligation to furnish a report to the Administrative Agent under
Section 9.01(f) hereof.
8.08 Taxes. The Company and its Subsidiaries are members of an
affiliated group of Persons filing consolidated returns for Federal income tax
purposes, of which the Company is, on the date hereof, the "common parent"
(within the meaning of Section 1504 of the Code) of such group. The Company and
its Subsidiaries have filed all Federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any final determination of
additional taxes owed by the Company or any of its Subsidiaries. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Company, adequate. The Company has not given nor been requested to give a waiver
of the statute of limitations relating to the payment of any Federal, state,
local and foreign taxes or other impositions.
8.09 Investment Company Act. Neither the Company nor
any of its Restricted Subsidiaries is an "investment company", or
a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
8.10 Public Utility Holding Company Act. Neither the Company
nor any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
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8.11 Material Agreements and Liens.
(a) Part A of Schedule I hereto is a complete and correct list
of (i) each credit agreement, loan agreement, indenture, note purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness (or commitment for any extension of
credit constituting Indebtedness) of the Company and each Restricted Subsidiary
outstanding on the date hereof the aggregate principal or face amount of which
equals or exceeds (or may equal or exceed) $1,000,000, and the aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement is correctly described in Part A of said Schedule I and (ii)
each Interest Rate Protection Agreement to which the Company or its Restricted
Subsidiaries is a party on the date hereof.
(b) Part B of Schedule I hereto is a complete and correct list
of each Lien (other than Liens that will be discharged on the Effective Date)
created by the Company or its Restricted Subsidiaries and securing Indebtedness
of any Person outstanding on the date hereof the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $1,000,000 and
covering any Property of the Company or its Restricted Subsidiaries, and the
aggregate Indebtedness secured (or that may be secured) by each such Lien and
the Property covered by each such Lien is correctly described in Part B of said
Schedule I. Except for the Liens listed in Part B of said Schedule I, the
Company has no notice or knowledge of the existence of any Lien securing
Indebtedness of any Person outstanding on the date hereof the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$1,000,000 and covering any Property of the Company or its Restricted
Subsidiaries.
8.12 Environmental Matters. Each of the Company and its
Restricted Subsidiaries has obtained all environmental, health and safety
permits, licenses and other authorizations required under all Environmental Laws
to carry on its business, except to the extent failure to have any such permit,
license or authorization would not (either individually or in the aggregate)
have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Company and its
Restricted Subsidiaries is in compliance with the terms and conditions thereof,
and is also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any
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regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply therewith would not (either individually or in the aggregate)
have a Material Adverse Effect.
In addition, except as set forth in Schedule II hereto or in
the Environmental Report, and except where the relevant underlying events or
circumstances could not be reasonably expected to result in (x) claims,
liabilities, costs or expenses exceeding $2,000,000 (excluding labor costs
relating to the treatment of AMD (as defined below)) in the aggregate for all
such events or circumstances or (y) any fine or penalty individually exceeding
$50,000:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is
pending or, to the knowledge of the Company, threatened by any
governmental or other entity with respect to any alleged failure by the
Company or its Restricted Subsidiaries to have any environmental,
health or safety permit, license or other authorization required under,
or to otherwise comply in any material respect with, any Environmental
Law in connection with the conduct of the business of the Company or
its Restricted Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal,
or any Release of any Hazardous Materials generated by the Company or
its Restricted Subsidiaries.
(b) Neither the Company nor its Restricted Subsidiaries owns,
operates or leases a treatment, storage or disposal facility that, on
the date of this Agreement, requires a permit under the Resource
Conservation and Recovery Act of 1976, as amended, or under any
comparable state or local statute; and
(i) no polychlorinated biphenyls (PCBs) is or has been
present at any site or facility now or previously owned,
operated or leased by the Company or its Restricted
Subsidiaries;
(ii) no asbestos or asbestos-containing materials is or
has been present at any site or facility now or previously
owned, operated or leased by the Company or its Restricted
Subsidiaries;
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(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials (except for ponds or
sediment control structures used to treat mine drainage
pursuant to, and in compliance with, NPDES permits), active or
abandoned, at any site or facility now or previously owned,
operated or leased by the Company or its Restricted
Subsidiaries;
(iv) no Hazardous Materials have been Released at, on or
under any site or facility now or previously owned, operated
or leased by the Company or its Restricted Subsidiaries in a
reportable quantity established by statute, ordinance, rule,
regulation or order; and
(v) no Hazardous Materials have been otherwise Released
at, on or under any site or facility now or previously owned,
operated or leased by the Company or its Restricted
Subsidiaries that would (either individually or in the
aggregate) have a Material Adverse Effect.
(c) Neither the Company nor any of its Restricted Subsidiaries
has transported or arranged for the transportation of any Hazardous
Material to any location that, on the date of this Agreement, is listed
on the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the NPL by the
Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or
that is the subject of Federal, state or local enforcement actions or
other investigations that may lead to Environmental Claims against the
Company, AGI or any of their respective Restricted Subsidiaries.
(d) Except for acid mine drainage ("AMD"), and the treatment
thereof, that is discharged pursuant to, and in compliance with, a
NPDES permit, no Hazardous Material generated by the Company or any of
its Restricted Subsidiaries has been recycled, treated, stored,
disposed of or Released by the Company or any of its Restricted
Subsidiaries at any location other than those listed in Schedule II
hereto or in the Environmental Report, and, to the knowledge of the
Company (and except as set forth on Schedule II hereto), any Hazardous
Material described on
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Schedule II hereto has been recycled, treated, stored, disposed of or
Released in accordance with all applicable Environmental Laws.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Company or any
of its Restricted Subsidiaries and no site or facility now or
previously owned, operated or leased by the Company or any of its
Restricted Subsidiaries is listed or proposed for listing on the NPL,
CERCLIS or any similar state list of sites requiring investigation or
clean-up.
(f) No Liens have arisen under or pursuant to any
Environmental Laws on any site or facility owned, operated or leased by
the Company or any of its Restricted Subsidiaries, and no government
action has been taken or is in process that could subject any such site
or facility to such Liens and neither the Company nor any of its
Restricted Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any site
or facility owned by it in any deed to the real property on which such
site or facility is located.
Prior to the date hereof, the AGI Companies cooperated fully with
representatives of the environmental consultant, Marshall Miller & Associates,
for the purpose of enabling said consultant to prepare the Environmental Report.
The documents provided, and the other statements made, to said consultant by
officers and employees of the AGI Companies in the course of the investigations
by said consultant resulting in such Environmental Report did not, to the
knowledge of the Company, include any untrue statements of material fact or omit
to state any material fact necessary to make the statements contained in such
documents, or such other statements, in light of the circumstances under which
they were made, not misleading at the time so furnished or made.
8.13 Capitalization. On the Effective Date:
(i) the authorized capital stock of the Company will consist
of an aggregate of 122,000 shares consisting of (v) 100,000 shares of
common stock, par value $.01 per share, of which 10,000 shares will be
duly and validly issued and outstanding, each of which issued and
outstanding shares will be fully paid and nonassessable, (w) 10,000
shares of ACGI Class A Preferred Stock, of which 10,000 shares will be
duly and validly issued and outstanding, each of which issued and
outstanding shares
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will be fully paid and nonassessable, (x) 10,000 shares of ACGI Class B
Preferred Stock, of which 10,000 shares will be duly and validly issued
and outstanding, each of which issued and outstanding shares will be
fully paid and nonassessable, (y) 1,000 shares of ACGI Class C
Preferred Stock, of which 1,000 shares will be duly and validly issued
and outstanding, each of which issued and outstanding shares will be
fully paid and nonassessable and (z) 1,000 shares of ACGI Class D
Preferred Stock, of which 1,000 shares will be duly and validly issued
and outstanding, each of which issued and outstanding shares will be
fully paid and nonassessable;
(ii) 54.07% of such issued and outstanding shares of common stock
of the Company will be owned beneficially and of record by funds
managed by First Reserve, 30.39% of such issued and outstanding shares
of common stock will be owned beneficially and of record by JJF Group
Limited Liability Company, 10.40% of such issued and outstanding shares
of common stock will be owned beneficially and of record by Anker
Holding, 5.14% of such issued and outstanding shares of common stock
will be owned beneficially and of record by PPK Group Limited Liability
Company, all of such issued and outstanding shares of ACGI Class A
Preferred Stock will be owned beneficially and of record by Anker
Holding, all of such issued and outstanding shares of ACGI Class B
Preferred Stock will be owned beneficially and of record by First
Reserve, all of such issued and outstanding shares of ACGI Class C
Preferred Stock will be owned beneficially and of record by Glenn
Springs Holdings, Inc., and all of such issued and outstanding shares
of ACGI Class D Preferred Stock will be owned beneficially and of
record by Glenn Springs Holdings, Inc.; and
(iii) (x) except for (1) the rights of the holders of the Company's
common stock as set forth in the Company's Certificate of Incorporation
and in the Stockholders Agreement, (2) the rights of the holders of
shares of ACGI's Class A Preferred Stock to convert such shares into
shares of the Company's common stock as set forth in the Certificate of
Designation and Preferences of such ACGI Class A Preferred Stock and in
the Stockholders Agreement, (3) rights to receive common stock of the
Company pursuant to the exercise of the Stock Purchase Warrant referred
to in clause (viii)(B) of the definition of "Acquisition" in Section
1.01 hereof and (4) rights of holders of the Company's common stock to
have such stock registered under the Securities Act of 1933, as
amended, pursuant to the
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Registration Rights Agreement referred to in clause (viii) of the
definition of "Acquisition Documents" in Section 1.01 hereof, there
will be no outstanding Equity Rights with respect to the Company and
(y) except for the obligations of the Company to redeem shares of ACGI
Class A Preferred Stock, ACGI Class B Preferred Stock and ACGI Class D
Preferred Stock, pursuant to the Certificate of Designation and
Preferences of each such class of preferred stock respectively and
pursuant to the Stockholders Agreement, there will be no outstanding
obligations of the Company or any of its Restricted Subsidiaries to
repurchase, redeem, or otherwise acquire any shares of capital stock of
the Company nor will there be any outstanding obligations of the
Company or any of its Restricted Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market value or equity value of
the Company or any of its Restricted Subsidiaries.
8.14 Subsidiaries, Etc.
(a) Set forth in Schedule III hereto is a complete and correct
list of all of the Subsidiaries of the Company as of the date hereof together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule III hereto, (x) each of the Company
and its Subsidiaries owns, free and clear of Liens (other than Liens created
pursuant to the Security Documents), and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it in
Schedule III hereto, (y) all of the issued and outstanding capital stock of each
such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect to
such Person.
(b) None of the Restricted Subsidiaries of the Company is, on
the date hereof, subject to any indenture, agreement, instrument or other
arrangement of the type described in Section 9.17(c) hereof.
8.15 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Company to the Administrative Agent or any Bank in connection with
the negotiation, preparation
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or delivery of this Agreement and the other Loan Documents or included herein or
therein or delivered pursuant hereto or thereto, when taken as a whole do not
contain any statement of material fact that is materially untrue or omit to
state any material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not materially
misleading. All written information furnished after the date hereof by the
Company and its Subsidiaries to the Administrative Agent and the Banks in
connection with this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on reasonable estimates,
on the date as of which such information is stated or certified. There is no
event or circumstance known to any Designated Officer the result of which could
be reasonably expected to have a Material Adverse Effect that has not been
disclosed herein, in the other Loan Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Banks for use in connection with the transactions contemplated hereby or
thereby.
8.16 Real Property. Schedules I and II of the Deeds of Trust
include legal descriptions of, or references to, all fee (Schedule I) and
leasehold (Schedule II) interests in real property located in the State of West
Virginia held by the Restricted Subsidiaries. The Company does not hereby
warrant, however, the adequacy of the legal descriptions of the fee and
leasehold interests set forth on Schedules I and II which are not included among
the Material Properties.
8.17 Solvency Analyses. The financial projections and
underlying assumptions contained in the analyses of Valuation Research
Corporation referred to in Section 7.01(l) of the Existing Credit Agreement were
at the time made, and on the Closing Date, fair and reasonable and accurately
computed.
8.18 Use of Credit. None of the Company nor any of its
Restricted Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether
immediate, incidental or ultimate, of buying or carrying Margin Stock, and no
part of the proceeds of the Loans hereunder will be used to buy or carry any
Margin Stock.
8.19 Solvency. As of the date hereof (and after giving effect
thereto and to the other transactions contemplated hereby), (i) the aggregate
value of all Properties of the Company and its Restricted Subsidiaries at their
present fair saleable
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value (i.e., the amount that may be realized within a reasonable time,
considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that could be
obtained for the Property in question within such period by a capable and
diligent businessman from an interested buyer who is willing to purchase under
ordinary selling conditions), exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of the Company and its Restricted Subsidiaries, (ii) the Company
and its Restricted Subsidiaries do not, on a consolidated basis, have
unreasonably small capital with which to conduct their business operations as
heretofore conducted and (iii) the Company and its Restricted Subsidiaries have,
on a consolidated basis, sufficient cash flow to enable them to pay their debts
as they mature.
8.20 Mobile Equipment. The value at which Mobile
Equipment is carried on the consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the Effective Date
is approximately $7,600,000.
Section 9. Covenants of the Company. The Company covenants and
agrees with the Banks and the Administrative Agent that, so long as any
Commitment or Loan is outstanding and until payment in full of all amounts
payable by the Company hereunder, and except to the extent that the Majority
Banks otherwise consent:
9.01 Financial Statements Etc. The Company shall
deliver to the Administrative Agent (which the Administrative
Agent shall promptly deliver to each of the Banks):
(a) as soon as available and in any event within 30 days after
the end of each calendar month, consolidated statements of income,
retained earnings and cash flows of the Company and its Restricted
Subsidiaries for such month and for the period from the beginning of
the respective fiscal year to the end of such month, and the related
consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such month, setting forth in each case in
comparative form the corresponding consolidated figures for the
corresponding months in the Company's budget for such fiscal year,
accompanied by a certificate of a Responsible Officer, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Company and its Restricted Subsidiaries in accordance
with generally accepted accounting principles, consistently
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applied, as at the end of, and for, such month (subject to
normal year-end audit adjustments);
(b) as soon as available and in any event within 45 days after
the end of each quarterly fiscal period of each fiscal year of the
Company, (i) a certificate of a Responsible Officer (x) to the effect
that no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail
and describing the action that the Company has taken or proposes to
take with respect thereto) and (y) setting forth in reasonable detail
the computations necessary to determine whether the Company is in
compliance with Sections 9.07(d), 9.08(h), 9.08(i), 9.09, 9.10, 9.11
and 9.13 hereof as of the end of the respective quarterly fiscal period
and (ii) a report as to the material changes to each coal sales
agreement, contract mining agreement and coal purchase agreement to
which the Company or any Restricted Subsidiary is a party, that has an
original term of at least three years and relates to at least 200,000
tons of coal per year;
(c) as soon as available and in any event within 120 days
after the end of each fiscal year of the Company, consolidated
statements of income, retained earnings and cash flows of the Company
and its Restricted Subsidiaries for such fiscal year and the related
consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding consolidated figures for the
Company's budget for such fiscal year, and accompanied by an opinion
thereon of independent certified public accountants of recognized
national standing, which opinion shall state that said consolidated
financial statements fairly present the consolidated financial
condition and results of operations of the Company and its Restricted
Subsidiaries as at the end of, and for, such fiscal year in accordance
with generally accepted accounting principles;
(d) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Securities and Exchange Commission
(or any governmental agency substituted therefor) or any national
securities exchange;
(e) at the request of each Bank through the Administrative
Agent (which in the cases of each of the following paragraphs (ii) and
(iii) may not be made more than once in any fiscal year of the
Company):
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(i) promptly upon the mailing thereof to the
shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so
mailed;
(ii) promptly, a report in reasonable detail of the
measured recoverable coal reserves of the mines of the Company
and its Restricted Subsidiaries as at the last day of the most
recently ended fiscal quarter of the Company; and
(iii) promptly, a plan for each mine of the Company and its
Restricted Subsidiaries for each of the then next following
five years (or, the then remaining life of such mine, if
shorter);
(f) as soon as possible, and in any event within ten days
after the Company knows or has reason to believe that any of the events
or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a Responsible
Officer setting forth details respecting such event or condition and
the action, if any, that the Company or its ERISA Affiliate proposes to
take with respect thereto (and a copy of any report or notice required
to be filed with or given to the PBGC by the Company or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(c) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which the PBGC has
not by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of
such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of
ERISA, including, without limitation, the failure to make on
or before its due date a required installment under Section
412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code); and any request
for a waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of
ERISA of a notice of intent to terminate any Plan or any
action taken by the Company or an ERISA Affiliate to terminate
any Plan;
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(iii) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Company or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Company
or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Company or any
ERISA Affiliate to enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA, would result in the loss of tax-exempt status of
the trust of which such Plan is a part if the Company or an
ERISA Affiliate fails to timely provide security to the Plan
in accordance with the provisions of said Sections;
(g) as soon as available and in any event within 15 Business
Days after the end of each monthly accounting period (ending on the
last day of each calendar month), a Borrowing Base Certificate as at
the last day of such accounting period (it being understood and agreed
that the Company may from time to time at its option furnish Borrowing
Base Certificates more frequently for purposes of the last sentence of
Section 3.01(a) hereof and clause (c) of the first sentence of Section
7.02 hereof);
(h) (i) periodically at the request of the Majority Banks
(which may not be made more than once in any fiscal year of the
Company), a report of an independent collateral auditor (which may be,
or be affiliated with, one of the Banks) with respect to the
Receivables and Inventory components included in the Borrowing Base as
at the end of
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any monthly accounting period which report shall indicate that, based
upon a review by such auditors of the Receivables (including, without
limitation, verification with respect to the amount, aging, identity
and credit of the respective account debtors and the billing practices
of the Company and its Restricted Subsidiaries) and Inventory
(including, without limitation, verification as to the value, location
and respective types), the information set forth in the Borrowing Base
Certificate delivered by the Company as at the end of such accounting
period is accurate and complete in all material respects and (ii) at
the request of the Majority Banks (which may not be made more than
twice during the life of this Agreement, and not more than once during
any twenty-four month period), a report prepared at the expense of the
Company (the "Appraisal"), of an independent appraiser (which appraiser
shall be mutually acceptable to the Company and the Administrative
Agent) as to the aggregate value of all material portions of the
property, plant and equipment of the Company and its Restricted
Subsidiaries at their present fair saleable value as at such date.
(i) (i) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such Default
describing the same in reasonable detail and, together with such notice
or as soon thereafter as possible, a description of the action that the
Company has taken or proposes to take with respect thereto; and (ii)
promptly after the Company knows or has reason to believe that any
representation, warranty or certification made or deemed made herein or
in any other Loan Document (or in any modification or supplement hereto
or thereto) by any Obligor, or any certificate furnished to any Bank or
the Administrative Agent pursuant to the provisions hereof or thereof,
was false or misleading as of the time made or furnished in any
material respect, a notice thereof describing the same in reasonable
detail and, together with such notice or as soon thereafter as
possible, a description of the action that the Company has taken or
proposes to take with respect thereto;
(j) not later than 45 days prior to the first day of each
fiscal year of the Company, a draft budget for such fiscal year; and
(k) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company
or any of its Subsidiaries (including,
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without limitation, any Plan or Multiemployer Plan and any reports or
other information required to be filed under ERISA) as any Bank may
reasonably request through the Administrative Agent.
9.02 Litigation. The Company will promptly give to the
Administrative Agent (which shall promptly furnish a copy thereof to each Bank)
notice of all legal or arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Restricted Subsidiaries, except proceedings that, if adversely determined,
would not (either individually or in the aggregate) have a Material Adverse
Effect. Without limiting the generality of the foregoing, the Company will give
to the Administrative Agent (which shall promptly furnish a copy thereof to each
Bank) notice of the assertion of any environmental matter by any Person against,
or with respect to the activities of, the Company or any of its Restricted
Subsidiaries and notice of any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than any
environmental matter or alleged violation that, if adversely determined, would
not (either individually or in the aggregate) have a Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause each of
its Restricted Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises (provided that
nothing in this Section 9.03 shall prohibit any transaction expressly
permitted under Section 9.05 hereof);
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements could (either individually
or in the aggregate) have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings or
against which adequate reserves are being maintained;
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provided that the Company shall maintain such reserves if and to the
extent required by GAAP and in accordance with prudent and customary
practices in the coal industry;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary
wear and tear excepted;
(e) keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted
accounting principles consistently applied; and
(f) permit representatives of any Bank or the Administrative
Agent, upon not less than two Business Days' prior notice, during
normal business hours, to examine, copy and make extracts from its
books and records, to inspect any of its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such Bank or the Administrative Agent (as the case may
be).
9.04 Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain insurance with financially sound and
reputable insurance companies, and with respect to Property and risks of a
character usually maintained by corporations engaged in the same or similar
business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such corporations.
Such insurance shall be written by financially responsible
companies selected by the Company and having an A. M. Best rating of "A" or
better and being in a financial size category of XIV or larger, or by other
companies acceptable to the Majority Banks, and (to the extent covering risk of
loss or damage to tangible property that constitutes collateral under any
Security Document) shall name the Administrative Agent as loss payee or as an
additional named insured as its interests may appear for the benefit of itself
and the Banks. Each policy referred to in this Section 9.04 shall provide that
it will not be canceled or reduced, or allowed to lapse without renewal, except
after not less than 30 days' notice to the Administrative Agent and shall also
provide that the interests of the Administrative Agent and the Banks shall not
be invalidated by any act or negligence of the Company or any Person having an
interest in any Property covered by a Deed of Trust or Deed of Trust Amendment
nor by occupancy or use of any such Property for purposes more hazardous than
permitted by such policy nor by any foreclosure or other proceedings relating to
such Property. The
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Company will advise the Administrative Agent promptly of any policy
cancellation, reduction or amendment.
On or before the Effective Date, the Company will deliver to
the Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Company hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage (and
attaching copies of any policies or binders with respect to casualty insurance).
Thereafter, the Company will deliver to the Administrative Agent prompt notice
of the entering into of any binder for any new or renewal insurance policy. In
addition, the Company will not make any material modification to any of the
provisions of any policy with respect to casualty insurance without delivering
the original copy of the endorsement reflecting such modification to the
Administrative Agent. The Company will not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by
this Section 9.04 unless the Administrative Agent is the named insured
thereunder or the loss payee as provided herein. The Company will immediately
notify the Administrative Agent whenever any such separate insurance is obtained
and shall deliver to the Administrative Agent the certificates evidencing the
same.
Without limiting the obligations of the Company under the
foregoing provisions of this Section 9.04, in the event the Company shall fail
to maintain in full force and effect insurance as required by the foregoing
provisions of this Section 9.04, then the Administrative Agent may, but shall
have no obligation so to do, after not less than five Business Days' prior
notice to the Company procure insurance covering the interests of the Banks and
the Administrative Agent in such amounts and against such risks as the
Administrative Agent (or the Majority Banks) shall deem appropriate, and the
Company shall reimburse the Administrative Agent in respect of any premiums paid
by the Administrative Agent in respect thereof.
9.05 Prohibition of Fundamental Changes. The Company will not,
nor will it permit any of its Restricted Subsidiaries to, consummate any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution).
The Company will not, nor will it permit any of its Restricted
Subsidiaries to, acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person except for purchases of inventory
and other Property
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to be sold or used in the ordinary course of business, leases of coal reserves
and surface entry rights in the ordinary course of business, Investments
permitted under Section 9.08 hereof and Capital Expenditures not prohibited
under Section 9.11 hereof and a Permitted Capital Expenditure.
The Company will not, nor will it permit any of its Restricted
Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, any part of its business or Property,
whether now owned or hereafter acquired (including, without limitation,
receivables and leasehold interests, but excluding any transaction referred to
in any of clauses (i), (ii), (iii), (iv), (v) and (vi) of the definition of
"Disposition" in Section 1.01 hereof. Notwithstanding the foregoing provisions
of this Section 9.05:
(a) any Restricted Subsidiary of the Company may be merged or
consolidated with or into: (i) the Company if the Company shall be the
continuing or surviving corporation or (ii) any other such Restricted
Subsidiary; provided that (x) if any such transaction shall be between
a Restricted Subsidiary and a Wholly Owned Subsidiary that is a
Restricted Subsidiary, the Wholly Owned Subsidiary shall be the
continuing or surviving corporation and (y) if any such transaction
shall be between a Subsidiary Guarantor and a Subsidiary not a
Subsidiary Guarantor, and such Subsidiary Guarantor is not the
continuing or surviving corporation, then the continuing or surviving
corporation shall have assumed all of the obligations of such
Subsidiary Guarantor hereunder and under the other Loan Documents;
(b) any Restricted Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its Property (upon
voluntary liquidation or otherwise) to the Company or a Wholly Owned
Subsidiary of the Company that is a Restricted Subsidiary; provided
that if any such sale is by a Subsidiary Guarantor to a Restricted
Subsidiary of the Company not a Subsidiary Guarantor, then such
Restricted Subsidiary shall have assumed all of the obligations of such
Subsidiary Guarantor hereunder and under the other Loan Documents;
(c) the Company or any of its Restricted Subsidiaries may
transfer Eligible Properties to the Permitted Joint Venture; provided
that:
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(i) such transfer is made before the first
anniversary of the Effective Date;
(ii) simultaneous with such transfer, the Company will
make the prepayments (and the Commitments will be reduced) as
provided by Section 2.10(d) hereof; and
(iii) no Event of Default exists at the time of
such transfer or would result therefrom; and
(d) the Company or any of its Restricted Subsidiaries may
consummate (i) the Hillman Acquisition, (ii) the Spruce Fork
Development and (iii) the Vindex Project.
9.06 Limitation on Liens. The Company will not, nor will it
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except:
(a) Liens created pursuant to the Loan Documents;
(b) Liens in existence on the date hereof and listed
in Part B of Schedule I hereto;
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings or against which adequate reserves
are being maintained on the books of the Company or the affected
Restricted Subsidiaries; provided that the Company shall, and, if
applicable, shall cause such Restricted Subsidiaries to, maintain such
reserves if and to the extent required by GAAP and in accordance with
prudent and customary practices in the coal industry;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith and by appropriate proceedings or
against which adequate reserves are being maintained on the books of
the Company or the affected Restricted Subsidiaries; provided that the
Company shall, and, if applicable, shall cause such Restricted
Subsidiaries to, maintain such reserves if and to the extent required
by GAAP and in accordance with prudent and customary practices in the
coal industry; and Liens securing judgments but only to the extent for
an amount and
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for a period not resulting in an Event of Default under Section 10(h)
hereof;
(e) pledges or deposits into the West Virginia Pneumoconiosis
Fund or under worker's compensation, unemployment insurance and other
social security legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries;
(h) Liens on Property of any corporation that becomes a
Restricted Subsidiary of the Company after the Closing Date, provided
that such Liens are in existence at the time such corporation becomes a
Restricted Subsidiary of the Company and were not created in
anticipation thereof; and
(i) Liens upon real and/or tangible personal Property acquired
after the Closing Date (by purchase, construction, lease or otherwise)
by the Company or any of its Restricted Subsidiaries, each of which
Liens was created solely for the purpose of securing Indebtedness or
royalty obligations representing, or incurred to finance, refinance or
refund, the cost (including the cost of construction or lease) of such
Property.
9.07 Indebtedness. The Company will not, nor will it permit
any of its Restricted Subsidiaries to, create, incur or suffer to exist any
Indebtedness except:
(a) Indebtedness to the Banks hereunder;
(b) Indebtedness outstanding on the date hereof and
listed in Part A of Schedule I hereto (excluding, however,
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following the making of the initial Loans hereunder, the Indebtedness
to be repaid with the proceeds of such Loans, as indicated on said
Schedule I);
(c) obligations of the Company, contingent or otherwise, to
make reimbursements under letters of credit in an aggregate principal
or face amount not exceeding $1,000,000 at any time;
(d) Indebtedness of Restricted Subsidiaries of the Company to
the Company or to other Restricted Subsidiaries of the Company
evidenced by Intercompany Notes pledged to the Administrative Agent for
the benefit of the Banks under the Security Agreement (provided that
the aggregate principal amount of such Indebtedness owing by any one
Restricted Subsidiary shall not exceed $200,000,000 at any one time
outstanding, and the face amount of each Intercompany Note shall be
equal to $200,000,000);
(e) loans made by Restricted Subsidiaries of the Company to
the Company in the ordinary course of business that are short-term
advances that arise incidental to the cash management operations of the
Company and the Restricted Subsidiaries in the ordinary course of
business substantially as heretofore conducted;
(f) Indebtedness of the Company and its Restricted
Subsidiaries incurred solely in order to finance the acquisition of any
fixed or capital assets and any Indebtedness assumed in connection with
the acquisition of any such assets or secured by a Lien on such assets
prior to the acquisition thereof, and any extensions, renewals and
replacements of such indebtedness that do not increase the outstanding
principal amount thereof, in an amount not exceeding, as to the Company
and its Restricted Subsidiaries taken as a whole, $10,000,000 at any
one time outstanding; provided that the recourse of the holder of such
Indebtedness shall be expressly limited solely to the assets financed
with such Indebtedness and the holder of such Indebtedness shall have
expressly waived the benefit of Section 1111(b) of the Bankruptcy Code
in respect of such Indebtedness;
(g) Indebtedness of Spruce Fork Coal Company, Inc. to
Elkay Mining Co. outstanding on the First Amendment
Effective Date in the amount of approximately $1,900,000
incurred as a result of the acquisition of the Spruce Fork
Reserves;
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(h) the Senior Notes;
(i) the Anker Group, Inc. Subordinated Guaranty; and
(j) additional Indebtedness not exceeding $1,000,000 at any
one time outstanding.
9.08 Investments. The Company will not, nor will it permit any
of its Restricted Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments outstanding on the Closing Date;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company and its Restricted Subsidiaries
in the Company and its Restricted Subsidiaries, except that neither the
Company nor any of its Restricted Subsidiaries may make Investments in
Anker Capital after the date hereof (it being understood and agreed
that nothing contained in this Section 9.08 shall be deemed to limit
Anker Capital from using its capital in its business operations);
(e) Interest Rate Protection Agreements entered into as bona
fide hedges against fluctuations in interest rates applicable to
Indebtedness of the Company and its Restricted Subsidiaries and not for
speculative purposes;
(f) an equity interest in the Permitted Joint Venture
in exchange for a transfer of some or all of the Eligible
Properties permitted by Section 9.05(c) hereof;
(g) Investments made in cash in Unrestricted Subsidiaries and
in the Permitted Joint Venture, provided that the amount thereof made
at any time may not exceed the Available Supplemental Amount at such
time;
(h) loans made in the ordinary course of business in
an aggregate amount not exceeding $3,000,000 at any one time
outstanding;
(i) Guarantees constituting agreements to perform reclamation
obligations of Unrestricted Subsidiaries and to reimburse or indemnify
the issuers of reclamation bonds covering reclamation obligations of
Unrestricted
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Subsidiaries for expenditures thereunder; provided that the aggregate
amount payable under all such Guarantees may not at any one time exceed
$2,500,000;
(j) a contribution to Summit Energy Group, LLC ("Summit") of
$500,000 made by Patriot Mining Company, Inc. prior to September 1,
1997 in the form of a prepaid advance minimum royalty on a lease that
was subleased to Summit, and loans to Summit in an aggregate principal
amount not exceeding $400,000 at any one time outstanding; and
(k) after such time, if any, that The Sycamore Group, LLC
("Sycamore") ceases to be a Subsidiary of the Company by reason of its
issuance of equity to the Sycamore Partner as permitted by Section
9.17(b) hereof, Investments in Sycamore in an aggregate amount
(including all Investments made prior to such time, but excluding
Sycamore Creek reserves held by Sycamore at such time) not exceeding
$2,500,000 to enable Sycamore to develop the Sycamore Creek reserves.
9.09 Dividend Payments. The Company will not, nor will it
permit any of its Restricted Subsidiaries to, declare or make any Dividend
Payment at any time, except for (i) Dividend Payments paid in cash on ACGI Class
C Preferred Stock and ACGI Class D Preferred Stock in accordance with the terms
thereof as in effect on the Effective Date; (ii) redemptions for cash of equity
interests of the Company referred to in clause (v) of the proviso contained in
the definition of "Equity Issuance" in Section 1.01 hereof made in connection
with the termination (for any reason) of employment by the Company of the
respective employees holding the same, provided that the aggregate amount of
Dividend Payments made pursuant to this clause (ii) shall not exceed $1,000,000
in any fiscal year of the Company; (iii) in the event of death of John J. Faltis
or P. Bruce Sparks, the repurchase or redemption of the decedent's capital stock
in the Company from the decedent's estate, heirs or legatees or any Person
controlled by the decedent immediately prior to his death and included in the
definition of "Controlling Shareholder" in Section 1.01 above provided that the
same is paid for solely with the proceeds of life insurance in excess of the
cash surrender value thereof immediately prior to his death and the premiums for
which were funded in the ordinary course of business; (iv) if no Event of
Default exists or would result therefrom, dividends paid in cash on the ACGI
Class A Preferred Stock after the fifth anniversary of the Closing Date in
accordance with the terms thereof as in effect on the Closing Date, provided
that the Fixed Charges Ratio (calculated as at the last day of the fiscal
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quarter of the Company ending on or most recently ended prior to the date of the
respective dividend on a pro forma basis taking into account the payment of such
dividend) shall be greater than 1.25 to 1 and (v) if no Event of Default exists
or would result therefrom, the purchase by the Company, in an amount not to
exceed $3,000,000 in the aggregate after the Effective Date, of its common stock
issued by the Company to employees of the Company pursuant to the Anker Coal
Group, Inc. 1997 Omnibus Stock Incentive Plan in accordance with the call and
right of first refusal rights set forth in (x) Article XI of the Anker Coal
Group, Inc. 1997 Omnibus Stock Incentive Plan, (y) Article 5 of the Anker Coal
Group, Inc. Stock Option Grant Agreement and (z) Section 5 and Section 6 of the
Anker Coal Group, Inc. Restricted Stock Award Agreement. Nothing herein shall be
deemed to prohibit the payment of dividends by any Restricted Subsidiary of the
Company to the Company or to any other Restricted Subsidiary of the Company.
9.10 Certain Financial Covenants.
(a) Net Leverage Ratio. The Company will not permit the Net
Leverage Ratio on any date to exceed the ratio set forth below opposite the
period during which such date falls:
Period Ratio
------ -----
From the Effective Date
through September 30, 1998 5.90 to 1
From October 1, 1998
through December 31, 1998 5.75 to 1
From January 1, 1999
through December 31, 1999 5.50 to 1
From January 1, 2000
through December 31, 2000 4.75 to 1
From January 1, 2001
through December 31, 2001 4.50 to 1
From January 1, 2002
through December 31, 2002 4.25 to 1
Thereafter 4.00 to 1
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(b) Net Interest Coverage Ratio. The Company will not permit
the Net Interest Coverage Ratio on any date to be less than the ratio set forth
below opposite the period during which such date falls:
Period Ratio
------ -----
From the Effective Date
through September 30, 1999 2.00 to 1
From October 1, 1999
through September 30, 2000 2.35 to 1
From October 1, 2000
through September 30, 2001 2.50 to 1
From October 1, 2001
through December 31, 2001 2.75 to 1
Thereafter 3.00 to 1
(c) Shareholders' Equity. The Company shall not permit
Shareholders' Equity on any date falling on or after the Effective Date to be
less than the sum of $70,000,000 plus 50% of consolidated net income for the
Company and its Restricted Subsidiaries (calculated on a consolidated basis in
accordance with GAAP) for each Relevant Quarter (as defined below) ending on or
most recently prior to such date. For purposes hereof, a "Relevant Quarter"
shall mean a fiscal quarter of the Company ending after the Closing Date for
which the consolidated net income for the Company and its Restricted
Subsidiaries (calculated on a consolidated basis in accordance with GAAP) is
greater than zero.
9.11 Capital Expenditures. The Company will not permit Capital
Expenditures for the purchase and development of any reserves acquired after the
Effective Date to exceed $15,000,000 in the aggregate for any single project
(other than Big Creek (a "Permitted Capital Expenditure")).
9.12 Interest Rate Protection Agreements.
[Intentionally omitted].
9.13 Operating Leases. [Intentionally omitted].
9.14 Lines of Business. The Company will not, nor
will it permit any of its Restricted Subsidiaries to, engage to
any substantial extent in any line or lines of business activity
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other than (i) coal producing, coal mining, coal brokering or mine development,
or (ii) any business that is reasonably similar thereto or a reasonable
extension, development or expansion thereof or ancillary thereto (including Ash
disposal, gas and power marketing, and/or environmental remediation), provided
that the businesses referred to in this clause (ii) shall not constitute a
material portion of the business of the Company and its Restricted Subsidiaries.
9.15 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Restricted
Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of an Affiliate);
provided that (x) any Affiliate who is an individual may serve as a director,
officer or employee of the Company or any of its Restricted Subsidiaries and
receive reasonable compensation for his or her services in such capacity, (y)
the Company and its Restricted Subsidiaries may enter into transactions (other
than extensions of credit by the Company or any of its Restricted Subsidiaries
to an Affiliate) providing for the leasing of Property, the rendering or receipt
of services or the purchase or sale of inventory and other Property in the
ordinary course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company and its
Restricted Subsidiaries as the monetary or business consideration that would
obtain in a comparable transaction with a Person not an Affiliate and (z) the
Company and its Restricted Subsidiaries may enter into or consummate any
transaction with an Affiliate to the extent expressly contemplated by the
Acquisition Documents.
9.16 Use of Proceeds. The Company will use the proceeds of the Loans
hereunder solely for working capital and for other general corporate purposes
(in compliance with all applicable legal and regulatory requirements); provided
that neither the Administrative Agent nor any Bank shall have any responsibility
as to the use of any of such proceeds.
9.17 Certain Obligations Respecting Restricted Subsidiaries.
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(a) Subsidiary Guarantors. In the event that the Company or any of
its Restricted Subsidiaries shall form or acquire any new Restricted Subsidiary
that the Company or the respective Restricted Subsidiary anticipates will not be
an Inactive Subsidiary (or, in the event that any Inactive Subsidiary shall
cease to be an Inactive Subsidiary), the Company will cause such new Restricted
Subsidiary (or such Inactive Subsidiary that ceases to be an Inactive
Subsidiary) to become a "Subsidiary Guarantor" (and, thereby, an "Obligor")
hereunder, and to pledge and grant a security interest in its Property to the
Administrative Agent for the benefit of the Banks pursuant to a Joinder
Agreement and to deliver such proof of corporate action, incumbency of officers,
opinions of counsel and other documents as is consistent with those delivered by
each "Obligor" pursuant to Section 7.01 of the Existing Credit Agreement upon
the Closing Date or as the Administrative Agent shall have requested.
(b) Ownership of Restricted Subsidiaries. The Company will, and will
cause each of its Restricted Subsidiaries to, take such action from time to time
as shall be necessary to ensure that the Company and each of its Restricted
Subsidiaries at all times owns (subject only to the Lien of the Security
Agreement) at least the same percentage of the issued and outstanding shares of
each class of stock of each of its Restricted Subsidiaries as is owned on the
date hereof, except that Sycamore may issue up to 50% of its equity to Emily
Gibson Coal Company, Inc. or an Affiliate of David Maynard (the "Sycamore
Partner"), provided that, at the time of such issuance, (i) such Sycamore
Partner agrees to pay or contribute at least 50% of the development costs for
the Sycamore Creek reserves, including, without limitation, the provision of
mining equipment necessary to mine the Sycamore Creek reserves, (ii) the sole
Properties of Sycamore are a portion of the Sycamore Creek reserves containing
approximately 6,000,000 tons of Pittsburgh seam coal reserves, and improvements,
machinery and equipment incidental to the development and mining of such
reserves, and (iii) Investments in Sycamore made by the Company and its
Restricted Subsidiaries (excluding such reserves) do not exceed $2,500,000. In
the event that any additional shares of stock shall be issued by any Restricted
Subsidiary to any Obligor, the respective Obligor agrees forthwith to deliver to
the Administrative Agent pursuant to the Security Agreement the certificates
evidencing such shares of stock, accompanied by undated stock powers executed in
blank and to take such other action as the Administrative Agent shall request to
perfect the security interest created therein pursuant to the Security
Agreement.
(c) Certain Restrictions. The Company will not permit any of its
Restricted Subsidiaries to enter into, after the date hereof, any indenture,
agreement, instrument or other arrangement
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that, directly or indirectly, prohibits or restrains, or has the effect of
prohibiting or restraining, or imposes materially adverse conditions upon, the
incurrence or payment of Indebtedness, the granting of Liens, the declaration or
payment of dividends, the making of loans, advances or Investments or the sale,
assignment, transfer or other disposition of Property, except for any
prohibition or restraint as to the granting of Liens on, or sales, assignments,
transfers or other dispositions of, Property that is covered by a Lien in favor
of any other Person (except for the Company or any of its Subsidiaries or
Affiliates) permitted by Section 9.06 hereof or that is the subject of or
evidenced by a lease with any Person (except for the Company or any of its
Subsidiaries).
9.18 Modifications of Certain Documents. The Company will not, and
will not permit any of its Restricted Subsidiaries to, consent to any
modification, supplement or waiver of any of the provisions of any Employment
Agreement, the Acquisition Documents, the Senior Note Documents, the Preferred
Stock, the certificate of incorporation of the Company or its Restricted
Subsidiaries or any Intercompany Note without the prior consent of the
Administrative Agent (with the approval of the Majority Banks); provided, that
no such consent shall be required for modifications or supplements of a
technical or conforming nature so long as the Company gives the Administrative
Agent prior notice thereof.
9.19 Holding Company. Notwithstanding anything contained herein to
the contrary, the Company will conduct the material business of the Company and
its Restricted Subsidiaries through its Restricted Subsidiaries, will not itself
own any material Properties other than the capital stock of Unrestricted
Subsidiaries, and will not itself be a party to any material contract (other
than the Basic Documents, the Senior Note Documents, guarantees of obligations
of the Restricted Subsidiaries and indemnities on behalf of the Restricted
Subsidiaries) that is necessary or desirable for the operation of such business
or for the ownership by its Restricted Subsidiaries of their respective
Properties.
9.20 Newly-Acquired Real Property. The Company shall (i) notify the
Administrative Agent (which shall promptly notify each Bank) with respect to any
interest acquired by the Company or any of its Restricted Subsidiaries in any
real estate after the date hereof (including, without limitation, by the
acquisition of a Restricted Subsidiary that owns any such interest but excluding
the acquisition of any interest in coal reserves where the consideration paid or
delivered in exchange therefor is or has a value less than $250,000) not less
than three Business Days after such acquisition and (ii) not later
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than 60 days after any request by the Administrative Agent or the Majority
Banks:
(w) cause such interest to be mortgaged to the Administrative Agent
by the owner thereof (as security for their respective obligations under
the Loan Documents) pursuant to a mortgage, deed of trust or similar
instrument in form and substance satisfactory to the Administrative Agent
in its reasonable judgment, provided that any such interest consisting of
a leasehold shall not be required to be so mortgaged if such mortgage
would be prohibited by the terms of the relevant lease and the landlord
shall not have consented to such mortgage;
(x) in the case of leases under which such owner is lessee, use its
commercially reasonable efforts to cause the respective landlords to
execute such estoppel agreements, cause memoranda of such leases to be
recorded in the appropriate county land offices and take such other action
as the Administrative Agent may reasonably request to ensure that such
leases are "mortgageable", as determined by the Administrative Agent in
its reasonable judgment, but excluding in all cases actions that would be
inconsistent with customary practices in the coal industry;
(y) cause to be prepared, and issued to the Administrative Agent, a
title report (which may be prepared by employees of the Company or any of
its Subsidiaries) as to such interest if and to the extent consistent with
prudent and customary industry standards; and
(z) cause to be executed and delivered to the Administrative Agent
such other documentation as the Administrative Agent may reasonably
request in connection therewith, including, without limitation, Uniform
Commercial Code financing statements, environmental assessments (which may
be prepared by employees of the Company or any of its Subsidiaries),
certified corporate resolutions and other corporate documents of the
mortgagor and favorable opinions of counsel to the mortgagor (which may be
rendered by in-house counsel of the Company and shall cover, among other
things, the legality, validity, binding effect and enforceability of such
mortgage, subject to customary exceptions) reasonably satisfactory to the
Administrative Agent.
9.21 Certain Consents. [Intentionally omitted].
9.22 Senior Notes. The Company will not, and will not permit any of
its Subsidiaries to pay, prepay, purchase or redeem any principal of or interest
on the Senior Notes except that the
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Company may make any required payment or required prepayment of the Senior
Notes.
9.23 Certain Obligations Under Acquisition Documents. The Company
will not pay in cash (or by the delivery of other Property or obligations, other
than common stock of the Company) any obligation under any Acquisition Document
if such obligation may be satisfied by the issuance by the Company of common
stock.
Section 10. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any principal
of any Loan when due (whether at stated maturity or at mandatory or
optional prepayment); or (ii) default in the payment of any interest on
any Loan, any fee or any other amount payable by it hereunder or under any
other Loan Document when due and such default shall have continued
unremedied for three Business Days; or
(b) Any Obligor shall default in the payment when due of any
principal of or interest on any of its other Indebtedness aggregating
$1,000,000 or more, and any grace period with respect thereto (as
originally in effect, with regard to any extension thereof) shall have
expired; or any event specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness (including,
without limitation, a "Change of Control" under and as defined in the
Senior Note Indenture) shall occur if the effect of such event is to
cause, or to permit the holder or holders of such Indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause, such
Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its stated
maturity, and any grace period with respect thereto (as originally in
effect, with regard to any extension thereof) shall have expired; or any
Obligor shall default in the payment when due of any amount aggregating
$100,000 or more under any Interest Rate Protection Agreement, and any
grace period with respect thereto (as originally in effect, with regard to
any extension thereof) shall have expired; or any event specified in any
Interest Rate Protection Agreement shall occur if the effect of such event
is to cause, or to permit, termination or liquidation payment or payments
aggregating $1,000,000 or more to become due, and any grace period with
respect thereto (as originally in effect, with regard to any extension
thereof) shall have expired; or
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(c) Any representation, warranty or certification made or deemed
made herein or in any other Loan Document (or in any modification or
supplement hereto or thereto) by any Obligor, or any certificate furnished
to any Bank or the Administrative Agent pursuant to the provisions hereof
or thereof, shall prove to have been false or misleading as of the time
made or furnished in any material respect, and the underlying event or
circumstances causing such representation, warranty, certification or
certificate to be so false or misleading shall continue unremedied for a
period of thirty or more days after notice thereof to the Company by the
Administrative Agent or any Bank (through the Administrative Agent) (it
being understood and agreed that the correction of such representation,
warranty, certification or certificate, or the correction of any
misstatement or omission made in connection with Section 8.15 hereof shall
not be deemed to constitute a remedy of such underlying event or
circumstances); or
(d) The Company shall default in the performance of its obligations
under Section 9.01(i); or any Obligor shall default in the performance of
any of its other obligations in this Agreement or any other Loan Document
and such default shall continue unremedied for a period of thirty or more
days after notice thereof to the Company by the Administrative Agent or
any Bank (through the Administrative Agent); or
(e) Any Obligor shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(f) Any Obligor shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner or liquidator of itself or of all or a substantial part of its
Property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Bankruptcy Code, (iv) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Bankruptcy Code or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without the application
or consent of any Obligor, in any court of competent jurisdiction, seeking
(i) its reorganization, liquidation, dissolution, arrangement or
winding-up, or the
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composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of such
Obligor or of all or any substantial part of its Property or (iii) similar
relief in respect of such Obligor under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 or more
days; or an order for relief against such Obligor shall be entered in an
involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money of
$1,000,000 or more in the aggregate shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against any Obligor and the same shall not be discharged (or provision
shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within 60 days from the date of entry thereof and
the relevant Obligor shall not, within said period of 60 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) An event or condition specified in Section 9.01(f) hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, any Obligor or any ERISA Affiliate shall incur or in the
opinion of the Majority Banks shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination
of the foregoing) that, in the determination of the Majority Banks, would
(either individually or in the aggregate) have a Material Adverse Effect;
or
(j) An assertion shall be made by any Person in any court proceeding
or by any governmental authority or agency against any Obligor, or any
predecessor in interest of any Obligor or Affiliates, of (or there shall
have been asserted against any Obligor) any claims or liabilities, whether
accrued, absolute or contingent, based on or arising from the generation,
storage, transport, handling or disposal of Hazardous Materials by any
Obligor, Affiliates or predecessors that is reasonably likely to be
determined adversely to any Obligor, and the amount thereof (either
individually or in the aggregate) is reasonably likely to have a Material
Adverse Effect (insofar as such amount is
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payable by any Obligor but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons jointly and
severally liable therefor); or
(k) A Change of Control shall occur and, if the same is the result
of the death or incapacity of John J. Faltis or P. Bruce Sparks, an
individual with equivalent knowledge, experience and reputation in the
coal industry is not appointed to replace him in his position with the
Company within 180 days; or
(l) The Liens created by the Security Documents shall at any time
not constitute a valid and perfected Lien on any material portion of the
collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or
therein) in favor of the Administrative Agent, free and clear of all other
Liens (other than Liens permitted under Section 9.06 hereof or under the
respective Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents, or the Guarantee by any
Subsidiary Guarantor set forth in Section 6 hereof, shall for whatever
reason be terminated or cease to be in full force and effect in any
material respect, or the enforceability thereof shall be contested by any
Obligor;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 10 with respect to any Obligor, the
Administrative Agent shall, if so requested by the Majority Banks, by notice to
the Company, terminate the Commitments and/or declare the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) to be forthwith due
and payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by each Obligor; and (2) in the case of the occurrence
of an Event of Default referred to in clause (f) or (g) of this Section 10 with
respect to any Obligor, the Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Obligors hereunder and under the Notes
(including, without limitation, any amounts payable under Section 5.05 hereof)
shall automatically become immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by each Obligor.
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Section 11. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Bank hereby appoints
and authorizes the Administrative Agent to act as its agent hereunder and under
the other Loan Documents with such powers as are specifically delegated to the
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence and in Section
11.05 and the first sentence of Section 11.06 hereof shall include reference to
its affiliates and its own and its affiliates' officers, directors, employees
and agents):
(a) shall have no duties or responsibilities except those expressly
set forth in this Agreement and in the other Loan Documents, and shall not
by reason of this Agreement or any other Loan Document be a trustee for
any Bank;
(b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or
in any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement or any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by the
Company or any other Person to perform any of its obligations hereunder or
thereunder;
(c) shall not, except to the extent expressly instructed by the
Majority Banks with respect to collateral security under the Security
Documents, be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document; and
(d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other Loan Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or
willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee of a Note as the holder thereof for all purposes hereof
unless and until a notice of the assignment or transfer thereof shall have
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been filed with the Administrative Agent, together with the consent of the
Company to such assignment or transfer (to the extent required by Section
12.06(b) hereof).
11.02 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Administrative Agent. As to any matters not expressly provided
for by this Agreement or any other Loan Document, the Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by the Majority
Banks or all of the Banks as is required in such circumstance, and such
instructions of such Banks and any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.
11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received notice from a Bank or the Company specifying such Default and
stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give prompt notice thereof to the Banks. The
Administrative Agent shall (subject to Section 11.07 hereof) take such action
with respect to such Default as shall be directed by the Majority Banks,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Banks except to
the extent that this Agreement expressly requires that such action be taken, or
not be taken, only with the consent or upon the authorization of the Majority
Banks or all of the Banks.
11.04 Rights as a Bank. With respect to its Commitments and the
Loans made by it, Chase (and any successor acting as Administrative Agent) in
its capacity as a Bank hereunder shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Administrative Agent in its individual
capacity. Chase (and any successor acting as Administrative Agent) and its
affiliates may (without having to account therefor to any Bank) accept deposits
from, lend money to, make investments in and generally engage in
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any kind of banking, trust or other business with the Obligors (and any of their
Subsidiaries or Affiliates) as if it were not acting as the Administrative
Agent, and Chase (and any such successor) and its affiliates may accept fees and
other consideration from the Obligors for services in connection with this
Agreement or otherwise without having to account for the same to the Banks.
11.05 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 12.03 hereof,
but without limiting the obligations of the Company under said Section 12.03)
ratably in accordance with the aggregate principal amount of the Loans held by
the Banks (or, if no Loans are at the time outstanding, ratably in accordance
with their respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be imposed on, incurred
by or asserted against the Administrative Agent in its capacity as such
(including by any Bank) arising out of or by reason of any investigation in or
in any way relating to or arising out of this Agreement or any other Loan
Document or any other documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses that the Company is obligated to pay under
Section 12.03 hereof, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Banks. Each
Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or under any other Loan
Document. The Administrative Agent shall not be required to keep itself informed
as to the performance or observance by any Obligor of this Agreement or any of
the other Loan Documents or any other document referred to or provided for
herein or therein or to inspect the Properties or books of the Company or any of
its Subsidiaries. Except for notices, reports and other documents and
information expressly
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required to be furnished to the Banks by the Administrative Agent hereunder or
under the Security Documents, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Company or any of
its Subsidiaries (or any of their affiliates) that may come into the possession
of the Administrative Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder and under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Banks of their indemnification
obligations under Section 11.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, (i) the Administrative Agent may resign at any time by giving not less
than thirty days' prior notice thereof to the Banks and the Company, (ii) the
Administrative Agent may be removed at any time with or without cause by the
Majority Banks and (iii) if the Person that serves as the Administrative Agent
is not, in its individual capacity a Bank, the Administrative Agent may be
removed by the Company. Upon any such resignation or removal, the Majority Banks
shall have the right to appoint a successor Administrative Agent; except that in
the case of clause (iii) of the preceding sentence, the Company shall have the
right to appoint a successor Administrative Agent that is acceptable to the
Majority Banks. If no successor Administrative Agent shall have been so
appointed and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Banks' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, that shall be a bank that has an office in New York, New
York. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 11 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Administrative Agent.
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Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent or
any Bank to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
12.02 Notices. All notices, requests and other communications
provided for herein and under the Security Documents (including, without
limitation, any modifications of, or waivers, requests or consents under, this
Agreement) shall be given or made in writing (including, without limitation, by
telecopy) or (in the case of notices of borrowings of Revolving Credit Loans) by
telephone confirmed promptly by telecopy, and delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof (below the name of the Company, in the case of any Subsidiary
Guarantor); or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or reimburse each of
the Banks and the Administrative Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Administrative Agent (including, without limitation,
the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special New
York counsel to Chase) in connection with (i) the negotiation, preparation,
execution and delivery of this Agreement and the other Loan Documents and the
extension of credit hereunder and any filing, registration, recording or
perfection of any security interest contemplated by any Security Document or any
other document referred to therein, (ii) the negotiation or preparation of any
modification, supplement or waiver of any of the terms of this Agreement or any
of the other Loan Documents (whether or not consummated) and (iii) the release
or termination of any filing, registration, recording or perfection of any
security interest contemplated by any Security Document or any other document
referred to therein; (b) all reasonable out-of-pocket costs and expenses of the
Banks and the Administrative Agent (including, without limitation, the fees and
expenses of legal counsel) in connection with (i) any Default and
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any enforcement or collection proceedings resulting therefrom, including,
without limitation, all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 12.03; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority (other than any such authority outside the United States of
America if such taxes, assessments or changes are levied solely by reason of the
status of any Bank that is not a U.S. Person) in respect of this Agreement or
any of the other Loan Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other charges incurred
in connection with any filing, registration, recording or perfection of any
security interest contemplated by any Security Document or any other document
referred to therein.
The Company hereby agrees to indemnify the Administrative Agent and
each Bank and their respective directors, officers, employees, attorneys and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them (including,
without limitation, any and all losses, liabilities, claims, damages or expenses
incurred by the Administrative Agent to any Bank, whether or not the
Administrative Agent or any Bank is a party thereto) arising out of or by reason
of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
extensions of credit hereunder or any actual or proposed use by the Company or
any of its Subsidiaries of the proceeds of any of the extensions of credit
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified). Without limiting the generality of the foregoing,
the Company will indemnify the Administrative Agent and each Bank from, and hold
the Administrative Agent and each Bank harmless against, any losses,
liabilities, claims, damages or expenses described in the preceding sentence
(including any Lien filed against any Property covered by a Deed of Trust(s) or
Deed of Trust Amendment(s) in favor of any governmental entity, but excluding,
as provided in the preceding sentence, any loss, liability, claim, damage or
expense incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified) arising under any Environmental Law as a result of the
past, present or future operations of the Company or any of
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its Subsidiaries (or any predecessor in interest to the Company or any of its
Subsidiaries), or the past, present or future condition of any site or facility
owned, operated or leased at any time by the Company or any of its Subsidiaries
(or any such predecessor in interest), or any Release or threatened Release of
any Hazardous Materials at or from any such site or facility, excluding any such
Release or threatened Release that shall occur during any period when the
Administrative Agent or any Bank or its or their agent or agents shall be in
possession of any such site or facility following the exercise by the
Administrative Agent or any Bank of any of its rights and remedies hereunder or
under any of the Security Documents, but including any such Release or
threatened Release occurring during such period that is a continuation of
conditions previously in existence, or of practices employed by the Company and
its Subsidiaries, at such site or facility.
12.04 Amendments, Etc.
(a) Except as otherwise expressly provided in this Agreement, any
provision of this Agreement may be modified or supplemented only by an
instrument in writing signed by the Company and the Majority Banks, or by the
Company and the Administrative Agent acting with the consent of the Majority
Banks, and any provision of this Agreement may be waived by the Majority Banks
or by the Administrative Agent acting with the consent of the Majority Banks;
provided that: (i) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Banks or by the Administrative Agent acting with
the consent of all of the Banks: (A) extend the time or waive any requirement
for the reduction or termination of any of the Commitments, (B) extend the date
fixed for the payment of principal of or interest on any Loan or any fee
hereunder, (C) forgive, reduce or defer the amount of any such payment of
principal, (D) reduce the rate at which interest is payable thereon or any fee
is payable hereunder, (E) alter the manner in which payments or prepayments of
principal, interest or other amounts hereunder shall be applied as between the
Banks or Types of Loans, (F) alter the terms of this Section 12.04, (G) modify
the definition of the term "Majority Banks" or "Supermajority Banks", or modify
in any other manner the number or percentage of the Banks required to make any
determinations or waive any rights hereunder or to modify any provision hereof,
(H) release any Subsidiary Guarantor from any of its guarantee obligations under
Section 6 hereof except as provided in Section 12.04(b) hereof, or (J) waive any
of the conditions precedent set forth in Section 7.01 hereof; (ii) any
modification or supplement of Section 11 hereof, or of any of the rights or
duties of the Administrative Agent hereunder, shall require the consent of the
Administrative Agent; (iii) any modification or supplement of Section 6 hereof
shall require the consent of each Subsidiary
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Guarantor; and (iv) no modification, supplement or waiver shall increase or
extend the term of any of the Commitments of any Bank without the consent of
such Bank.
(b) Except as otherwise provided in Section 12.04(a) hereof with
respect to this Agreement, the Administrative Agent may, with the prior consent
of the Majority Banks (but not otherwise), consent to any modification,
supplement or waiver under any of the Loan Documents, provided that, without the
prior consent of each Bank, the Administrative Agent shall not (except as
provided herein or in the Security Documents) release any collateral or
otherwise terminate any Lien under any Security Document providing for
collateral security, agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by such Security
Document, in which event the Administrative Agent may consent to such junior
Lien provided that it obtains the consent of the Majority Banks thereto), alter
the relative priorities of the obligations entitled to the benefits of the Liens
created under the Security Documents or release any guarantor under any Security
Document from its guarantee obligations thereunder, except that no such consent
shall be required, and the Administrative Agent is hereby authorized, (x) to
release any Collateral or otherwise terminate any Lien covering Property (and to
release any such guarantor) that is the subject of either a disposition of
Property permitted hereunder including, but not limited to, any dispositions
referred to in any of clauses (i) through (vii) of the definition of
"Disposition" in Section 1.01 hereof, or a disposition to which the Majority
Banks have consented and (y) to release any Collateral, and terminate any Lien
covering Property, provided by Sycamore (and to release Sycamore) at such time,
if any, that Sycamore ceases to be a Subsidiary of the Company by reason of its
issuance of equity to the Sycamore Partner as permitted by Section 9.17(b)
hereof.
(c) From time to time following reasonable prior notice by the
Company to the Administrative Agent, the Administrative shall execute and
deliver Uniform Commercial Code financing statement release forms and such other
documents as may be reasonably requested by the Company to evidence release of
any Lien covering Property that is the subject of either a disposition of
Property permitted hereunder or a disposition to which the Majority Banks have
consented, provided that, in connection therewith, the Administrative Agent
shall have received evidence reasonably satisfactory to it (i) that any
prepayment required by Section 2.10 hereof as a result of such prepayment shall
have been, or shall simultaneously be, made and (ii) that such disposition is
permitted hereunder or the Majority Banks have consented thereto.
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12.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or obligations hereunder
or under the Notes without the prior consent of all of the Banks and the
Administrative Agent.
(b) Each Bank may assign any of its Loans, its Notes, its
Commitments (but only with the consent of the Company and the Administrative
Agent, which consents shall not be unreasonably withheld or delayed); provided
that
(i) no such consent by the Company or the Administrative Agent
shall be required in the case of any assignment to another Bank or an
affiliate of another Bank;
(ii) except to the extent the Company and the Administrative
Agent shall otherwise consent, any such partial assignment (other than to
another Bank) shall be in an amount at least equal to $10,000,000;
(iii) each such assignment by a Bank of its Revolving Credit
Loans, Revolving Credit Note or Revolving Credit Commitment shall be made
in such manner so that the same portion of its Revolving Credit Loans,
Revolving Credit Note and Revolving Credit Commitment is assigned to the
respective assignee;
(iv) each such assignment shall be effected pursuant to an
Assignment and Acceptance in substantially the form of Exhibit J hereto
and the assignor and assignee shall deliver to the Company and the
Administrative Agent a fully executed copy thereof.
Upon execution and delivery by the assignor and the assignee to the Company and
the Administrative Agent of such Assignment and Acceptance, and upon consent
thereto by the Company and the Administrative Agent to the extent required
above, the assignee shall have, to the extent of such assignment (unless
otherwise consented to by the Company and the Administrative Agent), the
obligations, rights and benefits of a Bank hereunder holding the Commitment(s)
and Loans (or portions thereof) assigned to it and specified in such Assignment
and Acceptance (in addition to the Commitment(s) and Loans theretofore held by
such assignee) and the assigning Bank shall, to the extent of such assignment,
be released from the Commitment(s) (or portion(s) thereof) so assigned. Upon
each such assignment the assigning Bank shall pay the Administrative Agent a
recordation fee of $3,000.
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(c) A Bank may sell or agree to sell to one or more other Persons
(each a "Participant") a participation in all or any part of any Loans held by
it, or in its Commitments, provided that such Participant shall not have any
rights or obligations under this Agreement or any Note or any other Loan
Document (the Participant's rights against such Bank in respect of such
participation to be those set forth in the agreements executed by such Bank in
favor of the Participant). All amounts payable by the Company to any Bank under
Section 5 hereof in respect of Loans held by it, and its Commitments, shall be
determined as if such Bank had not sold or agreed to sell any participations in
such Loans and Commitments, and as if such Bank were funding each of such Loan
and Commitments in the same way that it is funding the portion of such Loan and
Commitments in which no participations have been sold. In no event shall a Bank
that sells a participation agree with the Participant to take or refrain from
taking any action hereunder or under any other Loan Document except that such
Bank may agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term of such Bank's related
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable thereon, or any fee
hereunder payable to the Participant, to a level below the rate at which the
Participant is entitled to receive such interest or fee or (v) consent to any
modification, supplement or waiver hereof or of any of the other Loan Documents
to the extent that the same, under Section 12.04 hereof, requires the consent of
each Bank.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.06, any Bank may (without
notice to the Company, the Administrative Agent or any other Bank and without
payment of any fee) (i) assign and pledge all or any portion of its Loans and
its Notes to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank and
(ii) assign all or any portion of its rights under this Agreement and its Loans
and its Notes to an affiliate (provided that, in the case of this clause (ii),
any assignment of less than all of any Revolving Credit Loans and Revolving
Credit Note shall require the consent of the Company (which shall not be
unreasonably withheld). No such pledge or assignment referred to in the
preceding clause (i) shall release the assigning Bank from its obligations
hereunder.
(e) A Bank may furnish any information concerning the Company or any
of its Subsidiaries in the possession of such Bank from time to time to
assignees and participants (including
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prospective assignees and participants), subject, however, to the provisions of
Section 12.12(b) hereof.
(f) Anything in this Section 12.06 to the contrary notwithstanding,
no Bank may assign or participate any interest in any Loan held by it hereunder
to the Company or any of its Affiliates or Subsidiaries without the prior
consent of each Bank.
12.07 Survival. The obligations of the Company under Sections 5.01,
5.05, 5.06 and 12.03 hereof, the obligations of each Subsidiary Guarantor under
Section 6.03 hereof, the obligations of the Banks under Section 11.05 hereof,
and the obligations of the Administrative Agent and the Banks under Section
12.12(b) hereof, shall survive the repayment of the Loans and the termination of
the Commitments and, in the case of any Bank that may assign any interest in its
Commitments or Loans hereunder, shall survive the making of such assignment,
notwithstanding that such assigning Bank may cease to be a "Bank" hereunder. In
addition, each representation and warranty made, or deemed to be made by a
notice of any extension of credit herein or pursuant hereto shall survive the
making of such representation and warranty, and no Bank shall be deemed to have
waived, by reason of making any extension of credit hereunder, any Default that
may arise by reason of such representation or warranty proving to have been
false or misleading, notwithstanding that such Bank or the Administrative Agent
may have had notice or knowledge or reason to believe that such representation
or warranty was false or misleading at the time such extension of credit was
made.
12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
12.10 Governing Law; Submission to Jurisdiction. This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. Each Obligor hereby submits to the nonexclusive jurisdiction
of the United States District Court for the Southern District of New York and of
the Supreme Court of the State of New York sitting in New York County (including
its Appellate Division), and of any other appellate court in the State of New
York, for the purposes of all legal proceedings arising out of or relating to
this Agreement or
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the transactions contemplated hereby. Each Obligor hereby irrevocably waives, to
the fullest extent permitted by applicable law, any objection that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE ADMINISTRATIVE
AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
12.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Bank or by one or more Subsidiaries or affiliates
of such Bank and the Company hereby authorizes each Bank to share any
information delivered to such Bank by the Company and its Subsidiaries pursuant
to this Agreement, or in connection with the decision of such Bank to enter into
this Agreement, to any such subsidiary or affiliate, it being understood that
any such subsidiary or affiliate receiving such information shall be bound by
the provisions of paragraph (b) below as if it were a Bank hereunder. Such
authorization shall survive the repayment of the Loans and the termination of
the Commitments.
(b) Each Bank and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company pursuant to this Agreement
that is identified by the Company as being confidential at the time the same is
delivered to the Banks or the Administrative Agent, provided that nothing herein
shall limit the disclosure of any such information (i) after such information
shall have become public (other than through a violation of this Section 12.12),
(ii) to the extent required by statute, rule, regulation or judicial process,
(iii) to counsel for any of the Banks or the Administrative Agent, (iv) to bank
examiners (or any other regulatory authority having jurisdiction over any Bank
or the Administrative Agent), or to auditors or accountants, (v) to the
Administrative Agent or any other Bank (or to Chase Securities, Inc.), (vi) in
connection with any litigation to
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which any one or more of the Banks or the Administrative Agent is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (vii) to a subsidiary or affiliate of such Bank as provided
in paragraph (a) above or (viii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to the respective Bank a
Confidentiality Agreement substantially in the form of Exhibit I hereto (or
executes and delivers to such Bank an acknowledgement to the effect that it is
bound by the provisions of this Section 12.12(b), which acknowledgement may be
included as part of the respective assignment or participation agreement
pursuant to which such assignee or participant acquires an interest in the Loans
hereunder); provided, further, that in no event shall any Bank or the
Administrative Agent be obligated or required to return any materials furnished
by the Company. The obligations of each Bank under this Section 12.12 shall
supersede and replace the obligations of such Bank under the confidentiality
letter in respect of this financing signed and delivered by such Bank to the
Company prior to the date hereof; in addition, the obligations of any assignee
that has executed a Confidentiality Agreement in the form of Exhibit I hereto
shall be superseded by this Section 12.12 upon the date upon which such assignee
becomes a Bank hereunder pursuant to Section 12.06(b) hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
ANKER COAL GROUP, INC.
By /s/ BRUCE SPARKS
-------------------------------
Title: Executive Vice President
Address for Notices:
2708 Cranberry Square
Morgantown, West Virginia 26505
Attention: Bruce Sparks
Telecopier No.: (3 04) 594-1685
Telephone No.: (304) 594-4216
SUBSIDIARY GUARANTORS
ANKER ENERGY CORPORATION
By /s/ BRUCE SPARKS
-------------------------------
Title: Executive Vice President
ANKER GROUP, INC.
By /s/ BRUCE SPARKS
-------------------------------
Title: Executive Vice President
ANKER POWER SERVICES, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
ANKER WEST VIRGINIA MINING COMPANY,
INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
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BRONCO MINING COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
HAWTHORNE COAL COMPANY, INC.
(formerly known as Anker
Development, Inc.)
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
HEATHER GLEN RESOURCES, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
JULIANA MINING COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
KING KNOB COAL CO., INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
MARINE COAL SALES COMPANY
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
PATRIOT MINING COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
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VANTRANS, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
MELROSE COAL COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
NEW ALLEGHENY LAND HOLDING COMPANY,
INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
UPSHUR PROPERTY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
VINDEX ENERGY CORPORATION
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
ANKER VIRGINIA MINING COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
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BANKS
Revolving Credit Commitment THE CHASE MANHATTAN BANK
$15,000,000.00
By /s/ LAWRENCE PALUMBO, JR.
-------------------------------
Title: Vice President
Lending Office for all Loans:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Address for Notices:
The Chase Manhattan Bank
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Attention: Mining and Metals Group
Telecopier No.: (212) 552-7773
Telephone No.: (212) 552-2189
with a notice to:
The Loan and Agency Services Group
One Chase Manhattan Plaza
8th Floor
New York, NY 10081
Attention: Linda Hill
Telecopier No.: (212) 552-7490
Telephone No.: (212) 552-7935
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Revolving Credit Commitment BANK OF MONTREAL
$15,000,000.00
By /s/ MICHAEL P. SASSOS
-------------------------------
Title: Director
Lending Office for all Loans:
Bank of Montreal
115 South LaSalle Street
Chicago, Illinois 60603
Address for Notices:
Bank of Montreal
430 Park Avenue, 14th Floor
New York, New York 10022
Attention: Mr. Michael P. Sassos
Telecopier No.: (212) 605-1451
Telephone No.: (212) 605-1645
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Revolving Credit Commitment THE FIRST NATIONAL BANK OF CHICAGO
$15,000,000.00
By /s/ WILLIAM V. CLIFFORD
-------------------------------
Title: Vice President
Lending Office for all Loans:
The First National Bank of
Chicago
One First National Plaza
Chicago, Illinois 60670
Address for Notices:
The First National Bank of
Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Ms. Namita Solanki-Patel
Telecopier No.: (312) 732-3055
Telephone No.: (312) 732-7610
127
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Revolving Credit Commitment MELLON BANK, N.A.
$15,000,000.00
By /s/ ROBERT E. HEULER
-------------------------------
Title: Vice President
Lending Office for all Loans:
Mellon Bank, N.A.
Three Mellon Bank Center
23rd Floor, Loan Administration
Pittsburgh, Pennsylvania 15259
Address for Notices:
Mellon Bank, N.A.
Two Mellon Bank Center
Room 230, Middle Market
Banking Department
Pittsburgh, Pennsylvania 15259-0001
Attention: Robert E. Heuler
Telecopier No.: (412) 234-9010
Telephone No.: (412) 234-5927
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Revolving Credit Commitment THE BANK OF NOVA SCOTIA
$15,000,000.00
By /s/ J. ALAN EDWARDS
-------------------------------
Title: Authorized Signatory
Lending Office for all Loans:
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Address for Notices:
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Attention: Ms. Tilsa Cora
Telecopier No.: (212) 225-5145
Telephone No.: (212) 225-5044
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THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ LAWRENCE PALUMBO, JR.
-------------------------------
Title: Vice President