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EXHIBIT 10.2
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 12, 1996 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 GUARANTORS" or that becomes a "Subsidiary
Guarantor" pursuant to Section 9.17(a) of the Credit Agreement referred to below
(individually, a "Subsidiary Guarantor" and, collectively, the "Subsidiary
Guarantors" and, together with the Company, the "Obligors"); and THE CHASE
MANHATTAN BANK, as agent for the lenders or other financial institutions or
entities party, as lenders, to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
The Company, the Subsidiary Guarantors, certain lenders and the
Administrative Agent are parties to a Credit Agreement dated as of August 12,
1996 (as modified and supplemented and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for loans
to be made by said lenders to the Company in an aggregate principal amount not
exceeding $115,000,000 at any one time outstanding. In addition, the Company may
from time to time be obligated to various of said lenders in respect of Interest
Rate Protection Agreements (such indebtedness being herein referred to as the
"Other Indebtedness").
To induce said lenders to enter into the Credit Agreement and to
extend credit thereunder, and to induce said lenders to enter into Interest Rate
Protection Agreements, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Obligor has
agreed to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined). Accordingly,
the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as
used herein:
"Accounts" shall have the meaning ascribed thereto in
Section 3(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed
thereto in Section 4.01 hereof.
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"Documents" shall have the meaning ascribed thereto in
Section 3(j) hereof.
"Equipment" shall have the meaning ascribed thereto in
Section 3(h) hereof.
"Instruments" shall have the meaning ascribed thereto
in Section 3(e) hereof.
"Inventory" shall have the meaning ascribed thereto in
Section 3(f) hereof.
"Issuers" shall mean, collectively, the respective corporations
identified beneath the names of the Obligors on Annex 1 hereto under the
caption "Issuer".
"Motor Vehicles" shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title thereto is governed by a
certificate of title or ownership.
"Pledged Stock" shall have the meaning ascribed thereto
in Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) in the case of
the Company, the principal of and interest on the Loans made by the Banks
to, and the Note(s) 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 the Loan Documents, and all obligations of the
Company constituting Other Indebtedness, (b) in the case of the Subsidiary
Guarantors, all obligations of the Subsidiary Guarantors under the Credit
Agreement and the other Loan Documents (including, without limitation, in
respect of their Guarantee under Section 6 of the Credit Agreement) and
(c) all obligations of the Obligors to the Banks and the Administrative
Agent hereunder.
"Specified Rights" shall mean, collectively, (a) all inventions,
processes, production methods, proprietary information, know-how and trade
secrets; (b) all licenses or user or other agreements granted to any
Obligor with respect to any of the foregoing, in each case whether now or
hereafter owned or used; (c) all information, customer lists,
identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, recorded knowledge, surveys, engineering reports, test
reports, manuals, materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery software and
programs; (d) all field repair data, sales data
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and other information relating to sales or service of products now or
hereafter manufactured; (e) all accounting information and all media in
which or on which any information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data; and (f) all
licenses, consents, permits, variances, certifications and approvals of
governmental agencies now or hereafter held by any Obligor.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the proceeds
of and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as
in effect from time to time in the State of New York.
Section 2. Representations and Warranties. Each Obligor represents
and warrants to the Banks and the Administrative Agent that:
(a) Such Obligor is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Section 3
hereof and no Lien exists or will exist upon such Collateral at any time
(and no right or option to acquire the same exists in favor of any other
Person), except for Liens permitted under Section 9.06 of the Credit
Agreement and except for the pledge and security interest in favor of the
Administrative Agent for the benefit of the Banks created or provided for
herein, which pledge and security interest constitute a first priority
perfected pledge and security interest in and to all of such Collateral
other than (i) Specified Rights registered or otherwise located outside of
the United States of America, (ii) any property comprising Collateral
excluded pursuant to Section 9-104 of the Uniform Commercial Code except
as to Section 9-104(j) to the extent the property is a certificated
security or an uncertificated security under Section 8-102 of the Uniform
Commercial Code, (iii) any contract or other agreement referred to in
Section 3(i) which contain prohibitions against transfer, assignment or
hypothecation, to the extent that any necessary consent to any such
transfer, assignment or hypothecation has not been obtained, (iv) any
Motor Vehicles comprising Collateral
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registered under any certificate of title statue, and (v) Specified Rights
described in clause (f) of its definition.
(b) The Pledged Stock represented by the certificates identified
under the name of such Obligor in Annex 1 hereto is, and all other Pledged
Stock in which such Obligor shall hereafter grant a security interest
pursuant to Section 3 hereof will be, duly authorized, validly existing,
fully paid and non-assessable and none of such Pledged Stock is or will be
subject to any contractual restriction, or any restriction under the
charter or by-laws of the respective Issuer of such Pledged Stock, upon
the transfer of such Pledged Stock (except for any such restriction
contained herein or in the Credit Agreement).
(c) The Pledged Stock represented by the certificates identified
under the name of such Obligor in Annex 1 hereto constitutes all of the
issued and outstanding shares of capital stock of any class of the Issuers
beneficially owned by such Obligor on the date hereof after giving effect
to the consummation of the Acquisition (whether or not registered in the
name of such Obligor) (other than, in the case of the Company, the
Remaining Preferred Stock) and said Annex 1 correctly identifies, as at
the date hereof, the respective Issuers of such Pledged Stock, the
respective class and par value of the shares comprising such Pledged Stock
and the respective number of shares (and registered owners thereof)
represented by each such certificate.
(d) Any goods now or hereafter produced by such Obligor or any of
its Subsidiaries included in the Collateral have been and will be produced
in compliance with the requirements of the Fair Labor Standards Act, as
amended.
Section 3. Collateral. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, each Obligor hereby pledges and grants to the
Administrative Agent, for the benefit of the Banks as hereinafter provided, a
security interest in all of such Obligor's right, title and interest in the
following property, whether now owned by such Obligor or hereafter acquired and
whether now existing or hereafter coming into existence (all being collectively
referred to herein as "Collateral"):
(a) the shares of capital stock of the Issuers represented by the
certificates identified in Annex 1 hereto
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under the name of such Obligor and all other shares of capital stock of
whatever class of the Issuers, now or hereafter owned by such Obligor, in
each case together with the certificates evidencing the same
(collectively, the "Pledged Stock");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of such Obligor under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which an Issuer is not the
surviving corporation, all shares of each class of the capital stock of
the successor corporation (unless such successor corporation is such
Obligor itself) formed by or resulting from such consolidation or merger
(the Pledged Stock, together with all other certificates, shares,
securities, properties or moneys as may from time to time be pledged
hereunder pursuant to clause (a) or (b) above and this clause (c) being
herein collectively called the "Stock Collateral");
(d) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of such Obligor constituting any right to the
payment of money, including (but not limited to) all moneys due and to
become due to such Obligor in respect of any loans or advances or for
Inventory or Equipment or other goods sold or leased or for services
rendered, all moneys due and to become due to such Obligor under any
guarantee (including a letter of credit) of the purchase price of
Inventory or Equipment sold by such Obligor and all tax refunds (such
accounts, general intangibles and moneys due and to become due being
herein called collectively "Accounts");
(e) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of such Obligor evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of
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exchange and trade acceptances (herein collectively called
"Instruments");
(f) all inventory (as defined in the Uniform Commercial Code) of
such Obligor, including coal and other minerals, Ash, fuel, tires and
other spare parts, all goods obtained by such Obligor in exchange for such
inventory, any products made or processed from such inventory including
all substances, if any, commingled therewith or added thereto and shall
include all goods owned by such Obligor, whenever acquired and wherever
located, held for sale or lease or furnished or to be furnished under
contracts of service, including, without limitation, all coal inventories
and inventories of other minerals, and all raw materials, including, but
not limited to, raw coal, work in process and materials owned by such
Obligor and used or consumed in such Obligor's business (herein
collectively called "Inventory");
(g) all Specified Rights and all other accounts or general
intangibles not constituting Specified Rights or Accounts;
(h) all equipment (as defined in the Uniform Commercial Code) of
such Obligor, including all Motor Vehicles (herein collectively called
"Equipment");
(i) each contract and other agreement of such Obligor relating to
the sale or other disposition of Inventory or Equipment, and each contract
mining agreement and coal purchase agreement;
(j) all documents of title (as defined in the Uniform Commercial
Code) or other receipts of such Obligor covering, evidencing or
representing Inventory or Equipment (herein collectively called
"Documents");
(k) all rights, claims and benefits of such Obligor against any
Person arising out of, relating to or in connection with Inventory or
Equipment purchased by such Obligor, including, without limitation, any
such rights, claims or benefits against any Person storing or transporting
such Inventory or Equipment;
(l) the balance from time to time in the Collateral Account;
(m) all interests in any limited or general partnerships and
limited liability companies;
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(n) all Intercompany Notes; and
(o) all other tangible and intangible personal property and fixtures
of such Obligor, including, without limitation, all proceeds, products,
offspring, accessions, rents, profits, income, benefits, substitutions and
replacements of and to any of the property of such Obligor described in
the preceding clauses of this Section 3 (including, without limitation,
any proceeds of insurance thereon and all causes of action, claims and
warranties now or hereafter held by any Obligor in respect of any of the
items listed above) and, to the extent related to any property described
in said clauses or such proceeds, products and accessions, all books,
correspondence, credit files, records, invoices and other papers,
including without limitation all tapes, cards, computer runs and other
papers and documents in the possession or under the control of such
Obligor or any computer bureau or service company from time to time acting
for such Obligor.
Notwithstanding the foregoing, the Collateral does not and shall not
include the Remaining Preferred Stock or any shares of capital stock of or other
equity interests in any Unrestricted Subsidiary.
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. There is hereby established with the
Administrative Agent a cash collateral account (the "Collateral Account") in the
name and under the control of the Administrative Agent into which there shall be
deposited from time to time the cash proceeds of any of the Collateral
(including proceeds of insurance thereon), but only to the extent required to be
delivered to the Administrative Agent pursuant hereto at a time when an Event of
Default exists, or into which the Obligors may from time to time deposit any
additional amounts that any of them wishes to pledge to the Administrative Agent
for the benefit of the Banks as additional collateral security hereunder. The
balance from time to time in the Collateral Account shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied as hereinafter provided. Except as expressly provided in the next
sentence, the Administrative Agent shall remit the collected balance outstanding
to the credit of the Collateral Account to or upon the order of the respective
Obligor as such Obligor through the Company shall from time to time instruct.
However, at any time following the occurrence and during the continuance of an
Event of Default, the Administrative Agent may
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(and, if instructed by the Banks as specified in Section 11.03 of the Credit
Agreement, shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time outstanding to the credit
of the Collateral Account to the payment of the Secured Obligations in the
manner specified in Section 5.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only as provided herein.
4.02 Proceeds of Accounts. Each Obligor shall, upon the instruction
of the Administrative Agent given at any time that an Event of Default exists,
instruct all account debtors and other Persons obligated in respect of all
Accounts to make all payments in respect of the Accounts either (a) directly to
the Administrative Agent (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control of the
Administrative Agent) or (b) to one or more other banks in the United States of
America (by instructing that such payments be remitted to a post office box
which shall be in the name and under the control of the Administrative Agent)
under arrangements, in form and substance satisfactory to the Administrative
Agent pursuant to which such Obligor shall have irrevocably instructed such
other bank (and such other bank shall have agreed) to remit all proceeds of such
payments directly to the Administrative Agent for deposit into the Collateral
Account. All payments made to the Administrative Agent, as provided in the
preceding sentence, shall be immediately deposited in the Collateral Account. In
addition to the foregoing, each Obligor agrees that if the proceeds of any
Collateral hereunder (including the payments made in respect of Accounts) shall
be received by it at any time after the Administrative Agent shall have provided
the instruction provided in the preceding sentence and while such instruction
shall continue to be in effect, such Obligor shall as promptly as possible
deposit such proceeds into the Collateral Account. Until so deposited, all such
proceeds shall be held in trust by such Obligor for and as the property of the
Administrative Agent and shall not be commingled with any other funds or
property of such Obligor.
4.03 Investment of Balance in Collateral Account. Amounts on deposit
in the Collateral Account shall be invested from time to time in such Permitted
Investments as the respective Obligor through the Company (or, after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent) shall determine, which Permitted Investments shall be held in the name
and be under the control of the Administrative Agent, provided that at any time
after the occurrence and during the continuance of an Event of Default, the
Administrative Agent may (and, if instructed by the Banks as specified in
Section 11.03 of
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the Credit Agreement, shall) in its (or their) discretion at any time and from
time to time elect to liquidate any such Permitted Investments and to apply or
cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof.
Section 5. Further Assurances; Remedies. In furtherance of the grant
of the pledge and security interest pursuant to Section 3 hereof, the Obligors
hereby jointly and severally agree with each Bank and the Administrative Agent
as follows:
5.01 Delivery and Other Perfection. Each Obligor shall:
(a) if any of the shares, securities, moneys or property required to
be pledged by such Obligor under clauses (a), (b) and (c) of Section 3
hereof are received by such Obligor, forthwith either (x) transfer and
deliver to the Administrative Agent such shares or securities so received
by such Obligor (together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock powers
duly executed in blank), all of which thereafter shall be held by the
Administrative Agent, pursuant to the terms of this Agreement, as part of
the Collateral or (y) take such other action as the Administrative Agent
shall deem necessary or appropriate to duly record the Lien created
hereunder in such shares, securities, moneys or property in said clauses
(a), (b) and (c);
(b) deliver and pledge to the Administrative Agent any and all
Instruments, endorsed and/or accompanied by such instruments of assignment
and transfer in such form and substance as the Administrative Agent may
reasonably request; provided, that so long as no Event of Default shall
have occurred and be continuing, such Obligor may retain for collection in
the ordinary course any Instruments received by such Obligor in the
ordinary course of business and the Administrative Agent shall, promptly
upon request of such Obligor through the Company, make appropriate
arrangements for making any Instrument pledged by such Obligor available
to such Obligor for purposes of presentation, collection or renewal (any
such arrangement to be effected, to the extent deemed appropriate by the
Administrative Agent, against trust receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement
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or other papers that may be necessary or desirable (in the reasonable
judgment of the Administrative Agent) to create, preserve, perfect or
validate the security interest granted pursuant hereto or to enable the
Administrative Agent to exercise and enforce its rights hereunder with
respect to such pledge and security interest, including, without
limitation, causing any or all of the Stock Collateral to be transferred
of record into the name of the Administrative Agent or its nominee (and
the Administrative Agent agrees that if any Stock Collateral is
transferred into its name or the name of its nominee, the Administrative
Agent will thereafter promptly give to the respective Obligor copies of
any notices and communications received by it with respect to the Stock
Collateral pledged by such Obligor hereunder), provided that notices to
account debtors in respect of any Accounts or Instruments shall be subject
to the provisions of clause (i) below;
(d) without limiting the obligations of such Obligor under Section
5.04(c) hereof, upon the acquisition after the date hereof by such Obligor
of any Equipment (other than Motor Vehicles) covered by a certificate of
title or ownership, cause the Administrative Agent to be listed as the
lienholder on such certificate of title and within 120 days of the
acquisition thereof deliver evidence of the same to the Administrative
Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Administrative Agent may reasonably require in order to
reflect the security interests granted by this Agreement;
(f) permit representatives of the Administrative Agent, upon
reasonable notice, at any time during normal business hours to inspect and
make abstracts from its books and records pertaining to the Collateral,
and permit representatives of the Administrative Agent to be present at
such Obligor's place of business to receive copies of all communications
and remittances relating to the Collateral, and forward copies of any
notices or communications received by such Obligor with respect to the
Collateral, all in such manner as the Administrative Agent may reasonably
require; and
(g) upon the occurrence and during the continuance of any Event of
Default, upon request of the Administrative Agent, promptly notify (and
such Obligor hereby authorizes the Administrative Agent so to notify) each
account debtor
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in respect of any Accounts or Instruments that such Collateral has been
assigned to the Administrative Agent hereunder, and that any payments due
or to become due in respect of such Collateral are to be made directly to
the Administrative Agent.
5.02 Other Financing Statements and Liens. Except as otherwise
permitted under Section 9.06 of the Credit Agreement, without the prior written
consent of the Administrative Agent (granted with the authorization of the Banks
as specified in Section 11.09 of the Credit Agreement), no Obligor shall file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Administrative Agent is not named as the sole secured
party for the benefit of the Banks, other than financing statements filed for
precautionary purposes only covering equipment subject to an operating lease
under which an Obligor is the lessee.
5.03 Preservation of Rights. The Administrative Agent shall not be
required to take steps necessary to preserve any rights against prior parties to
any of the Collateral.
5.04 Special Provisions Relating to Certain Collateral.
(a) Stock Collateral.
(1) The Obligors will cause the Stock Collateral to constitute at
all times 100% of the total number of shares of each class of capital stock of
each Issuer then outstanding (other than, with respect to AGI as Issuer, the
Remaining Preferred Stock).
(2) So long as no Event of Default shall have occurred and be
continuing, the Obligors shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Stock Collateral for all
purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other instrument or agreement referred to herein or
therein, provided that the Obligors jointly and severally agree that they will
not vote the Stock Collateral in any manner that is inconsistent with the terms
of this Agreement, the Credit Agreement, the Notes or any such other instrument
or agreement; and the Administrative Agent shall execute and deliver to the
Obligors or cause to be executed and delivered to the Obligors all such proxies,
powers of attorney, dividend and other orders, and all such instruments, without
recourse, as the Obligors may reasonably request for the purpose of enabling the
Obligors to
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exercise the rights and powers that they are entitled to exercise pursuant to
this Section 5.04(a)(2).
(3) Unless and until an Event of Default has occurred and is
continuing, the Obligors shall be entitled to receive and retain any dividends
on the Stock Collateral paid in cash out of earned surplus.
(4) If any Event of Default shall have occurred, then so long as
such Event of Default shall continue, and whether or not the Administrative
Agent or any Bank exercises any available right to declare any Secured
Obligation due and payable or seeks or pursues any other relief or remedy
available to it under applicable law or under this Agreement, the Credit
Agreement, the Notes or any other agreement relating to such Secured Obligation,
all dividends and other distributions on the Stock Collateral shall be paid
directly to the Administrative Agent and retained by it in the Collateral
Account as part of the Stock Collateral, subject to the terms of this Agreement,
and, if the Administrative Agent shall so request in writing, the Obligors
jointly and severally agree to execute and deliver to the Administrative Agent
appropriate additional dividend, distribution and other orders and documents to
that end, provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Administrative Agent shall, upon request of
the Obligors (except to the extent theretofore applied to the Secured
Obligations), be returned by the Administrative Agent to the Obligors.
(b) Intercompany Notes. The Company shall from time to time at the
request of the Administrative Agent notify the Administrative Agent as to the
information to be inserted referred to in the Schedule to each Intercompany Note
as of the last day of the month most recently ended, provided, that if the
Administrative Agent shall have made such request at a time when an Event of
Default has occurred and is continuing, the Company shall forthwith notify the
Administrative Agent as to such information as of the date of such request. The
Administrative Agent may, but shall not be required to, record such information
on such Schedule.
(c) Motor Vehicles. At any time after the occurrence and during the
continuance of an Event of Default, each Obligor shall, upon the request of the
Administrative Agent, deliver to the Administrative Agent originals of the
certificates of title or ownership for the Motor Vehicles owned by it and cause
the Administrative Agent to be listed as lienholder and take such other action
as the Administrative Agent shall deem appropriate
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to perfect the security interest created hereunder in all such Motor Vehicles.
5.05 Events of Default, Etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) each Obligor shall, at the request of the Administrative Agent,
assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Administrative Agent and such Obligor, designated
in its request;
(b) the Administrative Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the Administrative Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the
Uniform Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation, the right, to
the maximum extent permitted by law, to exercise all voting, consensual
and other powers of ownership pertaining to the Collateral as if the
Administrative Agent were the sole and absolute owner thereof (and each
Obligor agrees to take all such action as may be appropriate to give
effect to such right);
(d) the Administrative Agent in its discretion may, in its name or
in the name of the Obligors or otherwise, demand, sue for, collect or
receive any money or property at any time payable or receivable on account
of or in exchange for any of the Collateral, but shall be under no
obligation to do so; and
(e) the Administrative Agent may, upon ten business days' prior
written notice to the Obligors of the time and place, with respect to the
Collateral or any part thereof that shall then be or shall thereafter come
into the possession, custody or control of the Administrative Agent, the
Banks or any of their respective agents, sell, lease, assign or otherwise
dispose of all or any part of such Collateral, at such place or places as
the Administrative Agent deems best, and for cash or for credit or for
future
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delivery (without thereby assuming any credit risk), at public or private
sale, without demand of performance or notice of intention to effect any
such disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the
Administrative Agent or any Bank or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so disposed
of at any public sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any claim or
right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of the Obligors, any such demand, notice and
right or equity being hereby expressly waived and released. The
Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05, including by virtue of the exercise of the license granted to the
Administrative Agent in Section 5.04(b) hereof, shall be applied in accordance
with Section 5.09 hereof.
The Obligors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Administrative Agent may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Obligors acknowledge that any such private sales may be at prices and on terms
less favorable to the Administrative Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances,
agree that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Administrative Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the respective Issuer or
issuer thereof to register it for public sale.
5.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the
15
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Secured Obligations, the Obligors shall remain liable for any deficiency.
5.07 Removals, Etc. Without at least 30 days' prior written notice
to the Administrative Agent, no Obligor shall (i) maintain any of its books and
records with respect to the Collateral at any office or maintain its principal
place of business at any place, or permit any Inventory or Equipment to be
located anywhere, other than at the address indicated beneath the signature of
the Company to the Credit Agreement or at one of the locations identified in
Annex 2 hereto under its name or in transit from one of such locations to
another such location or (in the case of Inventory or Equipment located in the
State of West Virginia) elsewhere in the State of West Virginia or (ii) change
its name, or the name under which it does business, from the name shown on the
signature pages hereto provided, that (x) no such notice shall be required upon
the removal from such address or any of such locations of Inventory pursuant to
a contract for the sale thereof and (y) any Restricted Subsidiary (the "Lendor")
may lend Equipment to another Restricted Subsidiary (the "Lendee") provided that
the Company shall give written notice to the Administrative Agent not later than
90 days after the date such Equipment was so lent (unless such Equipment shall
theretofore have been returned to the Lendor) specifying (A) the Lendor, (B) the
Lendee, (C) the location or locations at which such Equipment is being used by
the Lendee and (D) the date upon which such Equipment was so lent.
5.08 Private Sale. The Administrative Agent and the Banks shall
incur no liability as a result of the sale of the Collateral, or any part
thereof, at any private sale pursuant to Section 5.05 hereof conducted in a
commercially reasonable manner. Each Obligor hereby waives any claims against
the Administrative Agent or any Bank arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or was less than
the aggregate amount of the Secured Obligations, even if the Administrative
Agent accepts the first offer received and does not offer the Collateral to more
than one offeree.
5.09 Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time held
by the Administrative Agent under Section 4 hereof or this Section 5, shall be
applied by the Administrative Agent:
16
-16-
First, to the payment of the costs and expenses of such collection,
sale or other realization, including reasonable out-of-pocket costs and
expenses of the Administrative Agent and the fees and expenses of its
agents and counsel, and all expenses incurred and advances made by the
Administrative Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Banks holding the same may otherwise agree;
and
Finally, to the payment to the respective Obligor, or their
respective successors or assigns, or as a court of competent jurisdiction
may direct, of any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral shall mean cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Obligors or any issuer of or obligor on
any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or powers granted
by this Agreement to the Administrative Agent while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default the Administrative Agent is hereby appointed the
attorney-in-fact of each Obligor for the purpose of carrying out the provisions
of this Section 5 and taking any action and executing any instruments that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Administrative Agent shall be entitled under this Section 5 to make collections
in respect of the Collateral, the Administrative Agent shall have the right and
power to receive, endorse and collect all checks made payable to the order of
any Obligor representing any dividend, payment or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution and
delivery of this Agreement, each Obligor shall (i) file such financing
statements and other documents in such offices as the Administrative Agent may
request to perfect the security interests granted by Section 3 of this Agreement
and (ii) deliver to the Administrative Agent all certificates
17
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identified in Annex 1 hereto, accompanied by undated stock powers duly executed
in blank.
5.12 Termination. When all Secured Obligations shall have been paid
in full, the Commitments of the Banks under the Credit Agreement shall have
expired or been terminated, and all Interest Rate Protection Agreements between
the Company and any Bank the obligations of the Company under which constitute
Other Indebtedness shall have expired or terminated, this Agreement shall
terminate, and the Administrative Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the respective Obligor and to be released
and canceled all licenses and rights referred to in Section 5.04(b) hereof. The
Administrative Agent shall also execute and deliver to the respective Obligor
upon such termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the respective Obligor to
effect the termination and release of the Liens on the Collateral. In addition
to the foregoing, the Administrative Agent shall comply with Section 12.04(c) of
the Credit Agreement.
5.13 Further Assurances. Each Obligor agrees that, from time to time
upon the written request of the Administrative Agent, such Obligor will execute
and deliver such further documents and do such other acts and things as the
Administrative Agent may reasonably request in order fully to effect the
purposes of this Agreement.
5.14 Release of Motor Vehicles. So long as no Event of Default shall
have occurred and be continuing, upon the request of any Obligor, the
Administrative Agent shall execute and deliver to such Obligor such instruments
as such Obligor shall reasonably request to remove the notation of the
Administrative Agent as lienholder on any certificate of title for any Motor
Vehicle if such notation has previously been made; provided that any such
instruments shall be delivered, and the release effective only upon receipt by
the Administrative Agent of a certificate from such Obligor stating that the
Motor Vehicle the lien on which is to be released is to be sold or has suffered
a casualty loss (with title thereto passing to the casualty insurance company
therefor in settlement of the claim for such loss).
5.15 Certain Releases. The parties hereto agree that upon the sale
of any Inventory in the ordinary course of business
18
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and on ordinary business terms, the Lien created hereunder on such Inventory
shall be automatically released; provided, that nothing in this Section 5.15
shall be construed to affect the Lien created hereunder on, or limit the rights
or remedies of the Administrative Agent hereunder with respect to, Collateral
(including, without limitation, the proceeds resulting from the sale of such
Inventory) other than the Inventory so sold.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Administrative Agent
or any Bank to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Administrative Agent or
any Bank of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.
6.02 Notices. All notices, requests, consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
"Address for Notices" specified pursuant to Section 12.02 of the Credit
Agreement and shall be deemed to have been given at the times specified in said
Section 12.02.
6.03 Expenses. The Obligors jointly and severally agree to reimburse
each of the Banks and the Administrative Agent for all reasonable costs and
expenses of the Banks and the Administrative Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in connection
with (i) any Default and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (w) performance by the Administrative Agent of any
obligations of the Obligors in respect of the Collateral that the Obligors have
failed or refused to perform, (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Administrative Agent in respect
thereof, by litigation or otherwise, including expenses of insurance, (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 6.03, and all such costs and expenses shall be Secured Obligations
entitled to the
19
-19-
benefits of the collateral security provided pursuant to Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by each
Obligor and the Administrative Agent (with the consent of the Banks as specified
in Section 11.09 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Administrate Agent and each Bank, each holder of any of the
Secured Obligations and each Obligor.
6.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and permitted assigns of
each Obligor, the Administrative Agent, the Banks and each permitted holder of
any of the Secured Obligations (provided, however, that no Obligor shall assign
or transfer its rights hereunder without the prior written consent of the
Administrative Agent).
6.06 Captions. The 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.
6.07 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.
6.08 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
6.09 Administrative Agents and Attorneys-in-Fact. The Administrative
Agent may employ agents and attorneys-in-fact in connection herewith and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
6.10 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Administrative
Agent and the Banks in order to carry out the intentions of the parties hereto
as nearly as may be possible and (ii) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
20
-20-
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.
COMPANY
ANKER COAL GROUP, INC.
By /s/ John Faltis
----------------------------------
Name: John Faltis
Title: President
SUBSIDIARY GUARANTORS
ANKER GROUP, INC.
By /s/ John Faltis
----------------------------------
Name: John Faltis
Title: President
ANKER ENERGY CORPORATION
By /s/ John Faltis
----------------------------------
Name: John Faltis
Title: President
VANTRANS, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Vice President
KING KNOB COAL CO., INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Vice President
BRONCO MINING COMPANY, INC.
By /s/ John Faltis
----------------------------------
Name: John Faltis
Title: President
21
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PATRIOT MINING COMPANY, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
JULIANA MINING COMPANY, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
PHILIPPI DEVELOPMENT, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
ANKER POWER SERVICES, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Executive Vice President
ADVANTAGE ENERGY CORPORATION
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Vice President
MARINE COAL SALES COMPANY
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
PINE VALLEY COAL COMPANY, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
22
-22-
ANKER DEVELOPMENT, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Vice President
HEATHER GLEN RESOURCES, INC.
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Treasurer
BECKLEY SMOKELESS LIMITED LIABILITY
COMPANY
By /s/ Bruce Sparks
----------------------------------
Name: Bruce Sparks
Title: Manager
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK,
as Administrative Agent
By /s/ Peter M. Ling
----------------------------------
Title: Vice President
23
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of April 30, 1997, between 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" (individually, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors" and, together with the
Company, the "Obligors"); each of the lenders that is a party to the Credit
Agreement referred to below (individually, a "Bank" and, collectively, the
"Banks"); and THE CHASE MANHATTAN BANK, as agent for the Banks (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
The Company, the Subsidiary Guarantors, the Banks and the
Administrative Agent are parties to a Credit Agreement dated as of August 12,
1996 (the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by said Banks to the Company in an aggregate
principal amount not exceeding $115,000,000. The Company and the Subsidiary
Guarantors have requested that the Credit Agreement be amended to increase the
aggregate amount of the Commitments thereunder from $115,000,000 to
$135,000,000, and in certain other respects, and the Banks and the
Administrative Agent have agreed so to amend the Credit Agreement as hereinafter
set forth. Accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement (as amended hereby) are
used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 5 below, but effective as of the date hereof (the
"First Amendment Effective Date"), the Loan Documents shall be amended as
follows:
2.01. References in the Credit Agreement (including references to
the Credit Agreement as amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed
to be references to the Credit Agreement as amended hereby. References in the
Security Agreement (including references to the Security Agreement as amended
hereby) to "this Agreement" (and indirect references such as "hereunder",
"hereby", "herein" and "hereof") shall be deemed to be references to the
Security Agreement as amended hereby. References in the Security Agreement to
the Credit Agreement shall be deemed to be references to the Credit Agreement as
amended hereby. References in the Security
24
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Agreement to the Loan Documents (or any one of the Loan Documents) shall be
deemed to be references to the Loan Documents as amended hereby. References in
the Joinder Agreement to the Credit Agreement and to the Security Agreement
shall be deemed to be references to the Credit Agreement and Security Agreement
as amended hereby. References in the Deeds of Trust to the Credit Agreement
shall be deemed to be references to the Credit Agreement as amended hereby.
References in the Deeds of Trust to the Loan Documents (or any one of the Loan
Documents) shall be deemed to be references to the Loan Documents as amended
hereby. References in the Loan Documents to "the Notes" shall be deemed to
include reference to the New Notes under and as defined in Section 5.02 hereof.
2.02. The reference in the second paragraph of the preamble of the
Credit Agreement to "$115,000,000" is amended to read "$135,000,000".
2.03. Section 1.01 of the Credit Agreement shall be amended by
adding the following new definitions (to the extent not already included in said
Section 1.01) and inserting the same in the appropriate alphabetical locations
and amending the following definitions (to the extent already included in said
Section 1.01), as follows:
"First Amendment Effective Date" shall have the meaning
assigned to such term in Amendment No. 1 to this Agreement.
"Hillman Sale-Leaseback" shall mean the sale and leaseback of the
approximately 200,000,000 tons of coal reserves acquired in the Hillman
Acquisition.
"Hillman Acquisition" shall mean the acquisition of approximately
200,000,000 tons of coal reserves located in Taylor County, West Virginia,
from the Hillman Coal Company, for a purchase price of approximately
$6,700,000.
"Initial Tranche B Term Loan Commitment" shall mean, as to each
Tranche B Term Loan Bank, the obligation of such Tranche B Term Loan Bank
to make a single disbursement of a Tranche B Term Loan on the date that
the initial Tranche A Term Loans are made hereunder in a principal amount
up to but not exceeding the amount set opposite the name of such Tranche B
Term Loan Bank on the signature page of this Agreement (as the same may be
reduced from time to time pursuant to Section 2.04).
25
- 3 -
"New Allegheny Property" shall mean, collectively, approximately
23,000,000 million 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, and a five-year long term coal sales contract to deliver
300,000 tons of coal per year to the Mt. Storm Station.
"Spruce Fork Development" shall mean the acquisition of
approximately 10,000,000 tons of low sulfur coal reserves (the "Spruce
Fork Reserves") and approximately 21,000,000 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 $14,100,000 during the
period from the First Amendment Effective Date through December 31, 1999.
"Stony River Project" shall mean the lease of approximately
54,000,000 tons of low sulfur coal in Grant County, West Virginia and the
development of an underground mine to mine those reserves.
"Supplemental Tranche B Term Loan Commitment" shall mean, as to each
Tranche B Term Loan Bank, the obligation of such Tranche B Term Loan Bank
to make a single disbursement of a Tranche B Term Loan on the First
Amendment Effective Date in a principal amount up to but not exceeding the
amount set opposite the name of such Tranche B Term Loan Bank on Schedule
1 of Amendment No. 1 hereto (as the same may be reduced from time to time
pursuant to Section 2.04).
"Tranche A Term Loan Commitment" shall mean, as to each Tranche A
Term Loan Bank, the obligation of such Tranche A Term Loan Bank to make
Tranche A Term Loans, in an aggregate principal amount up to but not
exceeding the amount set opposite the name of such Tranche A Term Loan
Bank on Schedule 1 of Amendment No. 1 hereto (as the same may be reduced
from time to time pursuant to Section 2.04).
"Tranche A Term Loan Commitment Termination Date" shall
mean August 15, 1997.
"Tranche B Principal Payment Dates" shall mean (a) the twenty -nine
consecutive Quarterly Dates beginning on the Quarterly Date falling on or
nearest to June 30, 1997 and
26
- 4 -
ending on the Quarterly Date falling on or nearest to June 30, 2004.
"Tranche B Term Loan Banks" shall mean, (a) the Banks having Initial
Tranche B Term Loan Commitments and Supplemental Tranche B Term Loan
Commitments and (b) thereafter, the Banks from time to time holding
Tranche B Term Loans after giving effect to any assignments thereof
permitted by Section 12.06(b) hereof.
"Tranche B Term Loan Commitment" shall mean, as to each Tranche B
Term Loan Bank, collectively, the Initial Tranche B Term Loan Commitment
of such Bank and the Supplemental Tranche B Term Loan Commitment of such
Bank.
"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."
"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 $13,100,000 during the
period from the First Amendment Effective Date through December 31, 1999.
2.04. The definition of "Available Supplemental Amount" in Section
1.01 of the Credit Agreement is hereby amended by replacing "$20,000,000" with
"$17,750,000".
2.05. The definition of "Available Supplemental Amount" in Section
1.01 of the Credit Agreement is hereby amended by adding at the end thereof:
"plus (vii) in the event that the purchase by the Company or by any
Subsidiary of Simba Group, Inc. of Oak Mountain Energy LLC is not
consummated, the aggregate amount (not exceeding the lesser of
$5,000,000 or the amount theretofore deducted pursuant to the
preceding clause (v) in connection with the anticipated purchase of
Oak Mountain Energy LLC) received by the Company and its Restricted
Subsidiaries in cash by reason thereof"
2.06. The definition of "Debt Issuance" in Section 1.01 of the
Credit Agreement is hereby amended by deleting "and" at the end of clause (i)
thereof, inserting "and" at the end of
27
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clause (ii) thereof and inserting a new clause (iii) thereto reading as
follows:
"(iii) Capital Lease Obligations incurred as part of the Hillman
Sale-Leaseback"
2.07. The definition of "Disposition" in Section 1.01 of the Credit
Agreement is hereby amended by inserting after clause (v) thereof "and (vi) the
Hillman Sale-Leaseback, provided that the Hillman Sale-Leaseback occurs prior to
December 31, 1998".
2.08. The definition of "Tranche B Term Loans" in Section 1.01 is
hereby amended by adding the following at the end thereof:
"The "Tranche B Term Loan" of each Bank shall mean, collectively,
both disbursements of the loan made by such Bank provided for by
Section 2.01(c) hereof."
2.09. Section 2.01(c) of the Credit Agreement is hereby amended to
read as follows:
"(c) Tranche B Term Loans. Each Tranche B Term Loan Bank
severally agrees, on the terms and conditions of this Agreement, to
make a term loan to the Company in Dollars in two disbursements, the
first of which shall be made on the date that the initial Tranche A
Term Loans are made hereunder in an amount equal to the Initial
Tranche B Term Loan Commitment of such Bank as then in effect and
the second of which shall be made on the First Amendment Effective
Date in an amount equal to the Supplemental Tranche B Term Loan
Commitment of such Bank as then in effect. Subject to the terms and
conditions of this Agreement, the Company may Convert Tranche B Term
Loans of one Type into Tranche B Term Loans of another Type (as
provided in Section 2.09 hereof) or Continue Tranche B Term Loans of
one Type as Tranche B Term Loans of the same Type (as provided in
Section 2.08 hereof). Tranche B Term Loans that are prepaid or
repaid may not be reborrowed.
2.10. Section 2.04(c) of the Credit Agreement is hereby amended by
deleting the first two sentences thereof.
2.11. Section 2.04(d) of the Credit Agreement is hereby amended to
read as follows:
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"(d) Any portion of the Initial Tranche B Term Loan Commitments not
used on the Closing Date shall be automatically terminated. Any
portion of the Supplemental Tranche B Term Loan Commitments not used
on the First Amendment Effective Date shall be automatically
terminated."
2.12. Section 3.01(b) of the Credit Agreement is hereby amended to
read as follows:
"(b) The Company hereby promises to pay to the Administrative Agent
for account of each Tranche A Term Loan Bank the principal of such Bank's
Tranche A Term Loans in twenty-four installments payable on the Tranche A
Principal Payment Dates as follows:
Tranche A Principal Payment Date
falling on or nearest to: Amount of
------------------------- ---------
Installment ($)
---------------
September 30, 1997 1,750,000
December 31, 1997 1,750,000
March 31, 1998 1,881,579
June 30, 1998 1,881,579
September 30, 1998 2,150,376
December 31, 1998 2,150,376
March 31, 1999 2,150,376
June 30, 1999 2,150,376
September 30, 1999 2,687,970
December 31, 1999 2,687,970
March 31, 2000 2,687,970
June 30, 2000 2,687,970
September 30, 2000 3,225,564
December 31, 2000 3,225,564
March 31, 2001 3,225,564
June 30, 2001 3,225,564
September 30, 2001 3,494,361
December 31, 2001 3,494,361
March 31, 2002 3,494,361
June 30, 2002 3,494,361
September 30, 2002 5,375,940
December 31, 2002 5,375,940
March 31, 2003 5,375,940
June 30, 2003 5,375,938
If the aggregate principal amount of the Tranche A Term Loans outstanding
at the close of business on the Tranche A Term Loan Commitment Termination
Date is less than
29
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$75,000,000, the shortfall shall be applied to reduce the foregoing
installments ratably."
2.13. Section 3.01(c) of the Credit Agreement is hereby amended to
read as follows:
"(c) The Company hereby promises to pay to the Administrative Agent
for account of each Tranche B Term Loan Bank the principal of such Bank's
Tranche B Term Loan in twenty-nine installments payable on the Tranche B
Principal Payment Dates as follows:
Tranche B Principal Payment Date
falling on or nearest to: Amount of
------------------------- ---------
Installment ($)
---------------
June 30, 1997 50,000
September 30, 1997 50,000
December 31, 1997 50,000
March 31, 1998 88,071
June 30, 1998 88,071
September 30, 1998 88,071
December 31, 1998 88,071
March 31, 1999 88,071
June 30, 1999 88,071
September 30, 1999 88,071
December 31, 1999 88,071
March 31, 2000 88,071
June 30, 2000 88,071
September 30, 2000 88,071
December 31, 2000 88,071
March 31, 2001 88,071
June 30, 2001 88,071
September 30, 2001 88,071
December 31, 2001 88,071
March 31, 2002 88,071
June 30, 2002 88,071
September 30, 2002 88,071
December 31, 2002 88,071
March 31, 2003 88,071
June 30, 2003 88,071
September 30, 2003 8,190,609
December 31, 2003 8,190,609
March 31, 2004 8,190,609
June 30, 2004 8,190,611
If the aggregate principal amount of the Tranche B Term Loans on the First
Amendment Effective Date is less than
30
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$35,000,000, the shortfall shall be applied to reduce the foregoing
installments ratably."
2.14. Section 4.04 of the Credit Agreement is hereby amended by
replacing "$2,000,000" with "$1,000,000" and by replacing "a larger multiple of
$1,000,000" with "a larger multiple of $100,000".
2.15. Section 9.05 of the Credit Agreement is hereby amended by
replacing "and (v)" in the third paragraph thereof with ", (v) and (vi)".
2.16. Section 9.05 of the Credit Agreement is hereby amended by (i)
deleting "and" at the end of clause 9.05(c)(iii) thereof, (ii) inserting "and"
at the end of clause (d) thereof and (iii) inserting a new clause (e) thereto
reading as follows:
"(e) the Company or any of its Restricted Subsidiaries may
consummate (i) the Hillman Acquisition, (ii) the Spruce Fork
Development and (iii) the Vindex Project."
2.17. Section 9.07 of the Credit Agreement is hereby amended by
deleting clauses (f) and (g) (said clause (g) having been erroneously designated
as clause (f)) thereof and inserting in place thereof the following:
"(f) Subordinated Notes of the Company;
(g) Indebtedness of Spruce Fork Coal Corporation, 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; and
(h) additional Indebtedness not exceeding $1,000,000 at any one time
outstanding."
2.18. Section 9.07(d) of the Credit Agreement is hereby amended by
replacing each occurrence of "$115,000,000" with "$135,000,000".
2.19. Section 9.08(i) of the Credit Agreement is hereby amended by
deleting each occurrence of "reclamation" therein and replacing "$4,500,000"
with "$2,500,000".
2.20. Section 9.10(a) of the Credit Agreement is hereby amended to
read as follows:
31
- 9 -
"(a) Leverage Ratio. The Company will not permit the Leverage Ratio
on any date to exceed the ratio set forth below opposite the period during
which such date falls:
Period Ratio
------ -----
From March 31, 1997
through June 30, 1997 4.65 to 1
From July 1, 1997
through December 31, 1997 4.25 to 1
From January 1, 1998
through June 30, 1998 4.00 to 1
From July 1, 1998
through December 31, 1998 3.50 to 1
From January 1, 1999
through December 31, 1999 3.00 to 1
Thereafter 2.50 to 1"
2.21. Section 9.10(b) of the Credit Agreement is hereby amended to
read as follows:
"(b) Fixed Charges Ratio. The Company will not permit the Fixed
Charges Ratio on any date to be less than the ratio set forth below
opposite the period during which such date falls:
From the First Amendment Effective
Date through June 30, 1998 0.50 to 1
From July 1, 1998
through December 31, 1999 0.80 to 1
Thereafter 1.00 to 1
2.22. Section 9.10(c) of the Credit Agreement is hereby amended to
read as follows:
"(c) Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio on any date to be less than the ratio set forth
below opposite the period during which such date falls:
From the First Amendment Effective
32
- 10 -
Date through June 30, 1998 2.50 to 1
From July 1, 1998
through December 31, 1998 3.00 to 1
Thereafter 3.50 to 1
2.23. Section 9.11 of the Credit Agreement is hereby amended by
amending the schedule therein to read as follows:
"Fiscal Year Ending Amount
------------------- ------
1996 $12,000,000
1997 $37,000,000
1998 $13,000,000
1999 $20,000,000
2000 and each $14,000,000
fiscal year thereafter"
2.24. Section 9.13 of the Credit Agreement is hereby amended by
replacing "$14,000,000" with "$20,000,000".
2.25. Section 9.16(b) of the Credit Agreement is hereby amended by
inserting "the Hillman Acquisition, the Spruce Fork Development and the Vindex
Project" after "Acquisition".
2.26. Section 9.12 of the Credit Agreement is hereby amended by
inserting "the lesser of $50,000,000 or" before "50%".
2.27. Section 12.04(a)(i)(A) of the Credit Agreement is hereby
amended to read as follows:
"extend the time or waive any requirement for the reduction or
termination of any of the Commitments,"
2.28. Section 12.04 of the Credit Agreement is hereby amended by (i)
deleting "and" at the end of clause (a)(ii) thereof and (ii) inserting after
clause (a)(iii) a new clause reading as follows:
"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."
2.29 Section 12.04(b) of the Credit Agreement is hereby amended by
inserting "including, but not limited to, any dispositions referred to in any of
clauses (i) through (vi) of
33
- 11 -
the definition of "Disposition" in Section 1.01 hereof," after "Property
permitted hereunder".
2.30. Exhibit K to the Credit Agreement is hereby amended by
replacing "$115,000,000" with "$135,000,000" and by replacing "One Hundred
Fifteen Million Dollars" with "One Hundred Thirty-Five Million Dollars".
2.31. The last paragraph of Section 3 of the Security Agreement is
hereby amended to read as follows:
"Notwithstanding the foregoing, the Collateral does not and shall
not include the Remaining Preferred Stock, any shares of capital
stock of or other equity interests in any Unrestricted Subsidiary or
the rights of any Obligor under any equipment lease.
Section 3. Joinder. Each Person listed on the signature pages hereto under
the caption "New Subsidiary Guarantors" (each a "New Subsidiary Guarantor")
hereby:
(a) becomes a party to the Credit Agreement and the Security
Agreement as a Subsidiary Guarantor fully and completely the same as if
its signature were affixed to the Credit Agreement and the Security
Agreement;
(b) becomes a Subsidiary Guarantor under the Credit Agreement and
the Security Agreement with all of the rights and obligations of a
Subsidiary Guarantor thereunder and, without limiting the generality of
the foregoing, guarantees payment of the Secured Obligations as provided
in Section 6 of the Credit Agreement and hereby grants, ratifies and
confirms the security interest provided for by Section 3 of the Security
Agreement in all of its right, title and interest in, to and under the
Collateral (as defined in the Security Agreement) to secure the Secured
Obligations (as defined in the Security Agreement) owing by it, and the
terms and conditions of the Credit Agreement and the Security Agreement
are hereby incorporated by reference herein;
(c) represents and warrants that the representations and warranties
set forth in Section 8 of the Credit Agreement and in Section 2 of the
Security Agreement, to the extent relating to such New Subsidiary
Guarantor, are correct on and as of the date hereof.
34
- 12 -
Section 4. Representations and Warranties. The Company represents
and warrants to the Banks that the representations and warranties set forth in
Section 8 of the Credit Agreement are true and complete on the First Amendment
Effective Date as if made on and as of the date hereof and as if each reference
in said Section 8 to "this Agreement" and "the Notes" includes reference to this
Amendment No. 1 and to the New Notes. The aggregate amount of Investments made
by the Company and its Restricted Subsidiaries on the date hereof referred to in
clause (v) of the definition of "Available Supplemental Amount" in Section 1.01
of the Credit Agreement is $17,250,000.
Section 5. Conditions Precedent. As provided in Section 2 above, the
amendments to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date hereof (or in the case of the amendment set forth in
Section 2.20 hereof, as of March 31, 1997), upon the satisfaction of the
following conditions precedent:
5.01. Execution by All Parties. This Amendment No. 1 shall have been
executed and delivered by each of the parties hereto.
5.02. Notes and Loans. The Company shall have delivered to the
Administrative Agent for each Bank with a Commitment that is increasing as a
result hereof (an "Increasing Bank"), in exchange for the related Note
heretofore delivered to such Bank pursuant to Section 2.08 of the Credit
Agreement, a new promissory note of the Company in substantially the form of
Exhibits A-2 or A-3 to the Credit Agreement, dated the date of the Note being
exchanged, payable to such Bank in a principal amount equal to its relevant
Commitment (as increased hereby) and otherwise duly completed, and each of such
promissory notes (a "New Note") delivered to the Increasing Banks shall
constitute a "Note" under the Credit Agreement as amended hereby. In addition,
the Company shall have borrowed from, and each of the Increasing Banks shall
have made Loans to, the Company, and (notwithstanding the provisions of Section
2.09 of the Credit Agreement requiring that prepayments be made ratably in
accordance with the principal amounts of the Loans held by the Banks) the
Company shall have prepaid Loans made by the other Banks in such amounts as
shall be necessary, together with accrued interest and any amounts payable under
Section 5.05 of the Credit Agreement, so that after giving effect to such Loans
and prepayments, the Loans shall be held by the Banks pro rata (by reference to
Class, Type and (if applicable) Interest Periods) in accordance with the
respective amounts of their related Commitments (as increased hereby).
35
- 13 -
5.03 Intercompany Notes. Each Restricted Subsidiary shall have
delivered to the Company (and the Company shall have delivered to the
Administrative Agent in pledge under the Security Agreement), in exchange for
the Intercompany Note heretofore delivered by such Restricted Subsidiary to the
Company, a new Intercompany Note of such Restricted Subsidiary in substantially
the form of Exhibit K to the Credit Agreement as amended hereby, dated the date
of the Intercompany Note being exchanged, payable to the Company and otherwise
duly completed, and each such new Intercompany Note shall constitute an
"Intercompany Note" under the Loan Documents as amended hereby.
5.04 Documents. The Administrative Agent shall have received the
following items, each of which shall be satisfactory to the Administrative Agent
in form and substance:
(1) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor (or, in the alternative,
a certification to the effect that none of such documents has been
modified since delivery thereof on the Closing Date pursuant to the Credit
Agreement) and of all corporate authority for each Obligor (including,
without limitation, board of director resolutions and evidence of the
incumbency of officers for each Obligor) with respect to the execution,
delivery and performance of this Amendment No. 1 and the Credit Agreement
as amended hereby and the loans under the Credit Agreement as amended
hereby, the New Notes and each other document to be delivered by each
Obligor from time to time in connection with the Credit Agreement as
amended hereby (and the Administrative Agent and each Bank may
conclusively rely on such certificate until it receives notice in writing
from each Obligor to the contrary).
(2) Officer's Certificate. A certificate of a Responsible Officer,
dated the First Amendment Effective Date, to the effect that, after giving
effect to this Amendment No. 1, no defaults shall have occurred and be
continuing.
(3) Security. Each Obligor shall have taken such action
(including, without limitation, delivery to the Administrative Agent
appropriately completed and duly executed copies of amended Security
Documents) as the Administrative Agent shall have requested in order to
perfect the security interests (subject to obtaining required consents on
a best efforts basis) created pursuant
36
- 14 -
to the Security Documents after giving effect to the amendments
contemplated hereby.
(4) Opinion of Special Pennsylvania Counsel to the Obligors. An
opinion of Klett, Lieber, Rooney & Schorling, special Pennsylvania counsel
to the Obligors, substantially in the form of Exhibit A hereto (and each
Obligor hereby instructs such counsel to deliver such opinion to the Banks
and the Administrative Agent).
(5) Opinion of Special West Virginia Counsel to the Obligors. An
opinion of Spilman, Thomas & Battle, special West Virginia counsel to the
Obligors, substantially in the form of Exhibit B hereto (and each Obligor
hereby instructs such counsel to deliver such opinion to the Banks and the
Administrative Agent).
(6) Compliance Certificate. A certificate of a Responsible Officer
of the Company evidencing, effective as of March 31, 1997, pro forma
compliance with the financial covenants.
(7) Borrowing Base Certificate. A Borrowing Base certificate
evidencing, effective as of March 31, 1997, the Company's ability to
borrow under the Credit Agreement.
(8) Fees. Evidence of 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 with this
Amendment No. 1 or the Loan Documents, including, without limitation, the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special
New York counsel to Chase, in connection with the negotiation,
preparation, execution and delivery of this Amendment No. 1 or the Loan
Documents and the extensions of credit thereunder (to the extent that
statements for such fees and expenses shall have been delivered to the
Company.)
(9) Assignment of Demand Note and Deed of Trust. Execution and
delivery of the Assignment of Demand Note and Deed of Trust dated as of
April 30, 1997 by the Company and the Administrative Agent; in addition
the Company and Simba Group, Inc. shall have taken such other action
(including delivery to the Agent of that certain Demand Note (the "Demand
Note") dated as of February 28, 1997, executed and delivered by Simba
Group, Inc. to the Company and that certain Deed of Trust dated April 30,
1997 executed and
37
- 15 -
delivered by Simba Group, Inc. to the Company to secure repayment of the
Demand Note) as the Agent shall reasonably request in order to perfect,
protect or continue such assignment.
(10) Other Documents. Such other documents as the Administrative
Agent or any Bank or special New York counsel to Chase may reasonably
request.
Section 6. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 1 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 1 by signing any such counterpart. This
Amendment No. 1 shall be governed by, and construed in accordance with, the law
of the State of New York.
38
- 16 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 1 to be duly executed and delivered as of the day and year first above
written.
ANKER COAL GROUP, INC.
By _________________________
Title:
SUBSIDIARY GUARANTORS
ADVANTAGE ENERGY CORPORATION
By _________________________
Title:
ANKER ENERGY CORPORATION
By _________________________
Title:
ANKER GROUP, INC.
By _________________________
Title:
ANKER POWER SERVICES, INC.
By _________________________
Title:
BECKLEY SMOKELESS LIMITED
LIABILITY COMPANY
By _________________________
Title:
39
- 17 -
BRONCO MINING COMPANY, INC.
By _________________________
Title:
HAWTHORNE COAL COMPANY, INC.
(formerly known as Anker
Development, Inc.)
By _________________________
Title:
HEATHER GLEN RESOURCES, INC.
By _________________________
Title:
JULIANA MINING COMPANY, INC.
By _________________________
Title:
KING KNOB COAL CO., INC.
By _________________________
Title:
MARINE COAL SALES COMPANY
By _________________________
Title:
40
- 18 -
PATRIOT MINING COMPANY, INC.
By _________________________
Title:
PHILIPPI DEVELOPMENT, INC.
By _________________________
Title:
PINE VALLEY COAL COMPANY, INC.
By _________________________
Title:
VANTRANS, INC.
By _________________________
Title:
NEW SUBSIDIARY GUARANTORS
MELROSE COAL COMPANY, INC.
By _________________________
Title:
NEW ALLEGHENY LAND HOLDING COMPANY,
INC.
By _________________________
Title:
41
- 19 -
SPRUCE FORK COAL COMPANY, INC.
By _________________________
Title:
UPSHUR PROPERTY, INC.
By _________________________
Title:
VINDEX ENERGY CORPORATION
By _________________________
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as
Lender
By ________________________
Title:
BANK OF MONTREAL
By _________________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By _________________________
Title:
42
- 20 -
MELLON BANK, N.A.
By _________________________
Title:
THE BANK OF NOVA SCOTIA
By _________________________
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By _________________________
Title:
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By _________________________
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By _________________________
Title:
43
Schedule 1
Supplemental
Tranche A Term Initial Tranche Tranche B Term
Loan B Term Loan Loan
Lender Commitment Commitment Commitment
______ ______________ _______________ _______________
The Chase
Manhattan Bank $20,921,052.62 $ 5,000,000.00 $11,500,000.00
Bank of Montreal $14,736,842.11 $0
The First National
Bank of Chicago $14,736,842.11 $0 $0
Mellon Bank, N.A. $14,736,842.11 $0 $0
The Bank of Nova
Scotia $ 9,868,421.05 $0 $0
Van Kampen American
Capital Prime Rate $ 3,500,000.00
Income Trust $0 $10,000,000.00
Merrill Lynch $0 $ 5,000,000.00 $0
Senior Floating
Rate Fund, Inc.
44
EXHIBIT A
[Form of Opinion of Special New York
Counsel to the Obligors]
45
EXHIBIT B
[Form of Opinion of Special West Virginia
Counsel to the Obligors]
46
AMENDMENT NO. 2 TO SECURITY AGREEMENT
AMENDMENT NO. 2 dated as of September 22, 1997 to the Security Agreement
dated as of August 12, 1996, as amended by Amendment No. 1 dated as of April
30, 1997 (the "Security Agreement"), between Anker Coal Group, Inc. (the
"Company"), each Person listed on the signature pages hereto under the caption
"Subsidiary Guarantors" (individually, a "Subsidiary Guarantor" and,
collectively the "Subsidiary Guarantors" and, together with the Company, the
"Obligors") and The Chase Manhattan Bank, as agent for the lenders party to the
"Credit Agreement" referred to below (the "Administrative Agent").
The Company, the Subsidiary Guarantors, certain lenders and the
Administrative Agent are parties to a Credit Agreement dated as of August 12,
1996, as amended and restated by operation of the Amended and Restated Credit
Agreement dated as of September 22, 1997 (as so amended and restated, and as
the same may be further supplemented and otherwise modified and in effect from
time to time, the "Credit Agreement").
The Company, the Subsidiary Guarantors and the Administrative Agent wish
to amend the Security Agreement in certain respects, and accordingly, the
parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment No.
2, terms defined in the Security Agreement (as amended hereby) are used herein
as defined therein.
Section 2. Amendments to the Security Agreement. Upon the execution and
delivery by each of the parties hereto the Security Agreement shall be amended
as follows:
(a) References in the Security Agreement (including references to the
Security Agreement as amended hereby) to "this Agreement" (and indirect
references such as "hereunder", "hereby", "herein" and "hereof") shall be
deemed to be references to the Security Agreement as amended hereby.
(b) The definition of "Motor Vehicles" in Section 1 of the Security
Agreement is hereby amended by adding at the end thereof ", but excluding Mobile
Equipment".
(c) Section 3(h) of the Security Agreement is hereby amended to read as
follows:
47
"(h) all equipment (as defined in the Uniform Commercial Code), other
than Mobile Equipment, of such Obligor, including all Motor Vehicles
(herein collectively called "Equipment");"
(d) The last paragraph of Section 3 of the Security Agreement is
hereby amended to read as follows:
"Notwithstanding the foregoing, the Collateral does not and shall not
include (a) any shares of capital stock of or other equity interests in any
Unrestricted Subsidiary, (b) the rights of any Obligor under any equipment
lease, (c) Mobile Equipment or (d) any rights (other than rights to
payment) under any contract or other agreement relating to the sale or
other disposition of Inventory or Equipment, or to any contract mining
agreement or coal purchase or sales agreement, if and to the extent that
their inclusion in the Collateral hereunder would permit any party thereto
(other than the Obligors or Affiliates of the Obligors) to terminate same."
Section 3. Representation and Warranties. Each Obligor represents and
warrants to the Banks and the Administrative Agent that the representations and
warranties set forth in Section 2 of the Security Agreement are true and
complete as if made on the date hereof (or, if any such representation and
warranty is expressly stated to have been made as of a specific date, as of
such specific date).
Section 4. Ratification. By its signature below, each Obligor hereby
grants, ratifies and confirms the security interest provided for by Section 3
of the Security Agreement (as amended hereby) in all of its right, title and
interest in, to and under the Collateral (as defined in the Security Agreement
after giving effect to the amendments thereto contemplated by Section 2 hereof)
to secure the Secured Obligations owing by it.
Section 5. Miscellaneous. Except as herein provided, the Security
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 2 may be executed in any number of counterparts, all of which taken
together shall constitute one and the same amendatory instrument and any of the
parties hereto may execute this Amendment No. 2 by signing any such
counterpart. This Amendment No. 2 shall be governed by, and construed in
accordance with, the law of the State of New York.
48
- 3 -
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed and delivered as of the day and year first above written.
COMPANY
ANKER COAL GROUP, INC.
By /s/ BRUCE SPARKS
-------------------------------
Title: Executive Vice President
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
49
- 4 -
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
50
-5-
PATRIOT MINING COMPANY, INC.
By /s/ MICHAEL M. MATESIC
-------------------------------
Title: Treasurer
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
51
THE CHASE MANHATTAN BANK, as
Administrative Agent
By /s/ LAWRENCE PALUMBO, JR.
-------------------------------
Name: Lawrence Palumbo, Jr.
Title: Vice President
6