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EXHIBIT 10.23
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT ("Intercreditor Agreement") dated as of
October 1, 1999 is by and between FOOTHILL CAPITAL CORPORATION, a California
corporation, in its capacity as agent pursuant to the Loan Agreement (as
hereinafter defined) for and on behalf of the financial institutions from time
to time party thereto and in such capacity referred to herein as "Senior Agent"
(as hereinafter further defined) and THE BANK OF NEW YORK, a New York banking
corporation, in its capacity as collateral agent pursuant to the Note Indenture
(as hereinafter defined) for and on behalf of the Note Trustee (as hereinafter
defined) and the Noteholders (as hereinafter defined), and in such capacity
referred to herein as "Note Collateral Agent" (as hereinafter further defined).
W I T N E S S E T H:
WHEREAS, Anker Coal Group, Inc., a Delaware corporation ("ACG" as
hereinafter further defined), has issued or is about to issue the Notes (as
hereinafter defined) pursuant to the Note Indenture; and
WHEREAS, the indebtedness, liabilities and obligations of ACG evidenced
by or arising under the Notes and the Note Indenture have been guaranteed by
certain subsidiaries of ACG listed on Schedule 1 hereto (collectively, the "ACG
Subsidiaries" as hereinafter further defined, and together with ACG, "Debtors"),
and
WHEREAS, the indebtedness evidenced by the Notes is or will be secured by
certain assets and properties of Debtors; and
WHEREAS, Note Collateral Agent has been authorized and directed by ACG
and Note Trustee to enter into this Intercreditor Agreement pursuant to the Note
Indenture; and
WHEREAS, Senior Agent and the financial institutions party to the Loan
Agreement (collectively, "Lenders" as hereinafter further defined) have entered
into financing arrangements with certain ACG Subsidiaries pursuant to which
Lenders (and Senior Agent on behalf of Lenders) have made and will continue, on
certain terms and conditions, to make loans and provide other financial
accommodations to such ACG Subsidiaries; and
WHEREAS, the indebtedness, liabilities and obligations of such ACG
Subsidiaries under the Loan Agreement have been guaranteed by Debtors that are
not borrowers under the Loan Agreement; and
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WHEREAS, the indebtedness of Debtors under the Loan Agreement and the
instruments, documents and agreements executed and delivered in connection
therewith is secured by substantially all of the assets and properties of
Debtors; and
WHEREAS, Senior Agent and Note Collateral Agent desire to enter into this
Intercreditor Agreement to (i) confirm the relative priority of the security
interests of Senior Agent and Lenders and Note Collateral Agent and Note Trustee
on behalf of the Noteholders in the assets and properties of Debtors and (ii)
provide for the orderly sharing among them, in accordance with such priorities,
of proceeds of such assets and properties upon any foreclosure thereon or other
disposition thereof,
NOW THEREFORE, in consideration of the mutual benefits accruing to Senior
Agent and Lenders and Note Collateral Agent, Note Trustee and the Noteholders
hereunder and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto do hereby agree as follows:
1. DEFINITIONS
As used above and in this Intercreditor Agreement, the following terms
shall have the meanings ascribed to them below:
1.1 "Accounts" shall mean all currently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Debtors
arising out of the sale or lease of goods or the rendition of services by
Debtors, irrespective of whether earned by performance, and any and all credit
insurance, guaranties, or security thereof.
1.2 "ACG" shall mean Anker Coal Group, Inc., a Delaware corporation,
and its successors and assigns, including, without limitation, a receiver,
trustee or debtor-in-possession on behalf of such person or on behalf of any
such successor or assign.
1.3 "ACG Subsidiaries" shall mean, collectively, the subsidiaries of
ACG listed on Schedule 1 hereto, and their respective successors and assigns,
including, without limitation, a receiver, trustee or debtor-in-possession on
behalf of such person or on behalf of any such successor or assign.
1.4 "Affiliate" shall mean, as applied to any Person, any other Person
who directly or indirectly controls, is controlled by, is under common control
with or is a director or officer of such Person. For purposes of this definition
"control" means the possession, directly or indirectly, of the right to vote ten
(10%) percent or more of the securities having ordinary voting power for the
election of directors or other direct or indirect power to direct the management
and policies of a Person; provided that no Noteholders shall be deemed to be an
Affiliate of ACG or any of its
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subsidiaries solely by reason of its ownership of Warrants held or which may be
held by any Noteholder.
1.5 "Agents" shall mean, collectively, the Senior Agent and the Note
Collateral Agent, as agents, and their respective successors and assigns in such
capacity, being sometimes referred to herein individually as an "Agent".
1.6 "Agreements" shall mean, collectively, the Senior Creditor Agreements
and the Operative Note Agreements.
1.7 "Books" shall mean all of Debtors' books and records including:
ledgers, records indicating, summarizing, or evidencing Debtors' properties or
assets (including the Collateral) or liabilities; all information relating to
Debtors' business operations or financial condition; and all computer programs,
disk or tape files, printouts, runs, or other computer prepared information.
1.8 "Cash Collateral" mean United States legal tender or Cash Equivalents
which have been deposited with an Agent.
1.9 "Cash Equivalents" shall mean United States dollars, securities
issued or directly and fully guaranteed or insured by the full faith and credit
of the United States government or any agency or instrumentality thereof having
maturities of not more than six months from the date of acquisition,
certificates of deposit and eurodollar time deposits with maturities of six
months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any Lender or with any domestic commercial bank having capital and surplus
in excess of $500,000,000 and a Keefe Bank Watch Rating of "B" or better,
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, commercial paper having the highest rating obtainable from Moody's
Investors Services, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P")
and in each case maturing within six months after the date of acquisition,
investment funds investing substantially all of their assets in securities of
the types described in clauses (i)-(v) above and readily marketable direct
obligations issued by any state of the United States of America or any political
subdivision thereof having one of the two highest rating categories obtainable
from either Moody's or S&P.
1.10 "Collateral" shall mean, collectively, the Lender Collateral and the
Shared Collateral.
1.11 "Debtors" shall mean, collectively, ACG and ACG Subsidiaries,
sometimes being referred to herein individually as a "Debtor".
1.12 "Equipment" shall mean all of Debtors' present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
loading facilities, tipples, processing plants and like structures, fixtures,
tools, parts, goods (other than consumer goods, farm
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products, or inventory), wherever located, including, any interest of Debtors in
any of the foregoing; all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing; provided,
that, Equipment shall not include Mobile Equipment.
1.13 "Excluded Assets" shall mean Mobile Equipment, cash and Cash
Equivalents (other than Cash Collateral or proceeds of Shared Collateral) and
the coal reserves, fixtures, equipment and specified interests in Real Property
listed on Schedule 2 hereto, including, without limitation, the improvements,
fixtures, structures, buildings, water treatment facilities and other
appurtenances situated thereon or thereunto belonging.
1.14 "General Intangibles" shall mean all of Debtors' present and future
general intangibles and other personal property (including rights under coal
supply contracts, coal brokerage agreements and other contract rights, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, Permits, patents, trade names, trademarks, servicemarks, copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringements claims, computer programs,
information contained on computer disks or tapes, literature, reports, catalogs,
deposit accounts, insurance premium rebates, tax refunds, and tax refund
claims), other than goods, Accounts, and Negotiable Collateral.
1.15 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
1.16 "Inventory" shall mean all present and future inventory, wherever
located, including, without limitation, all raw materials, work-in-process, and
finished and semi-finished inventory of any kind, nature or description,
wherever located, including, without limitation, all minerals in whatever form,
and including, without limitation, coal, fly ash, bottom ash or other ash,
methane, sulfur, sulfur dioxide, and other by-products resulting from the
processing of the coal mined by Debtors and other minerals and chemicals
resulting from the mining or processing of coal, cast iron fittings, paint,
belts and hoses, bolts and nuts, wire and wire products, welding supplies,
tools, steel, rope, timber, railroad, spikes, railroad car parts and railroad
crane parts, baghouse parts, pump parts, compressor parts, electrical parts,
bearings, drills, bits and accessories and other parts and supplies, all
wrapping, packaging, advertising and shipping materials, and any other personal
property held for sale, exchange or lease or furnished or to be furnished or
used or consumed in the business or in connection with the manufacturing,
packaging, shipping, advertising, selling or finishing of such goods, inventory,
merchandise and other personal property, and all names or marks affixed to or to
be affixed thereto for purposes of selling same by Debtors and all right, title
and interests therein and thereto; and further including, without limitation,
all coal in which Debtors have any interest which has been extracted from the
Real
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Property, is in a coal stockpile and is held for sale by Debtors in the ordinary
course of business, together with all other present and future goods held for
sale by Debtors in the ordinary course of business, wherever located.
1.17 "Investment Property" shall mean "investment property" as that term
is defined in Section 9-115 of the Uniform Commercial Code of the State of New
York.
1.18 "Legal Requirements" shall mean all applicable international,
foreign, federal, state, and local laws, judgments, decrees, orders, statutes,
ordinances, rules, regulations, or Permits.
1.19 "Lender Collateral" shall mean all assets and properties of Debtors
now existing or hereafter acquired that are subject to the Lien of the Senior
Creditor Agreements, other than Shared Collateral.
1.20 "Lenders" shall mean, collectively, the financial institutions from
time to time party to the Loan Agreement and their respective successors and
assigns.
1.21 "Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights of way and the like), lien
(statutory or other), security agreement or transfer intended as security,
including without limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease or any financing lease
having substantially the same economic effect as any of the foregoing.
1.22 "Loan Agreement" shall mean the Loan and Security Agreement dated as
of November 21, 1998 by and among certain ACG Subsidiaries, Lenders and Senior
Agent, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.23 "Loan Agreement Default" or "Loan Agreement Event of Default" shall
have the respective meanings ascribed to the terms "Default" and "Event of
Default" in the Loan Agreement.
1.24 "Mobile Equipment" shall mean all equipment which is mobile, and
which is used or useful in connection with the coal mining, extraction,
development, construction or environmental remediation activities of Debtors 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, root 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, construction, earthmoving or
excavating equipment of a similar nature.
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1.25 "Negotiable Collateral" shall mean all of a Person's present and
future letters of credit, notes, drafts, instruments, Investment Property,
documents, personal property leases (wherein such Person is the lessor), chattel
paper, and the Books relating to any of the foregoing.
1.26 "Note Collateral Agent" shall mean The Bank of New York, a New York
banking corporation in its capacity as Collateral Agent pursuant to the Note
Indenture for and on behalf of Note Trustee and the Noteholders and its
successors and assigns in such capacity.
1.27 "Note Default" or "Note Event of Default " shall have the respective
meanings ascribed to the terms "Default" and "Event of Default" in the Note
Indenture.
1.28 "Noteholders" shall mean, collectively, the Persons from time to
time who are Holders (as defined in the Note Indenture) of any Notes and their
respective successors and assigns, being sometimes referred to herein
individually as a "Noteholder".
1.29 "Noteholder Security Documents" shall mean, collectively, the
Security Documents (as defined in the Note Indenture as in effect on the date
hereof) and all agreements, documents and instruments at any time executed
and/or delivered by any Debtor or any other person to, with or in favor of Note
Collateral Agent in connection therewith or related thereto, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.30 "Note Indenture" shall mean the Indenture dated as of October 1,
1999 relating to the Notes executed by ACG as Issuer, the other Debtors as
guarantors and The Bank of New York as trustee, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.31 "Note Obligations" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Debtor to Note
Collateral Agent, Note Trustee or any Noteholder including principal, interest,
charges, fees, premiums, liquidated damages, indemnities and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under the Operative Note Agreements, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
of the Operative Note Agreements or after the commencement of any case with
respect to any Debtor under the U.S. Bankruptcy Code or any similar statute (and
including, without limitation, any principal, interest, fees, costs, expenses
and other amounts, whether or not such amounts are allowed or allowable in whole
or in part, in any such case or similar proceeding), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and whether arising directly
or howsoever acquired by Note Collateral Agent, Note Trustee or such Noteholder.
1.32 "Notes" shall mean, collectively, the 14.25% Second Priority Senior
Secured Notes due 2007 (PIK until April 1, 2000) of any series issued under the
Note Indenture, including,
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without limitation, the 14.25% Second Priority Senior Secured Notes issued
pursuant to the Public Exchange Offer (as defined in the Note Indenture as in
effect on the date hereof), the Secondary Notes (as defined in the Note
Indenture as in effect on the date hereof) and the Optional Secured Notes (as
defined in the Note Indenture as in effect on the date hereof), and shall
include all Rule 144A Global Notes, Definitive Notes, Global Notes, RSTD Global
Notes, Regulation S Permanent Global Notes, Regulation S Temporary Global Notes,
Restricted Definitive Notes, Restructured Global Notes, Unrestricted Definitive
Notes and Unrestricted Global Notes (as each such term is defined in the Note
Indenture as in effect on the date hereof), in each case issued by ACG pursuant
to the Note Indenture, as the same now exist or may hereafter be modified,
supplemented, extended, renewed or replaced.
1.33 "Note Trustee" shall mean The Bank of New York, a New York banking
corporation in its capacity as trustee for and on behalf of the Noteholders
under the Note Indenture and its successors and assigns in such capacity.
1.34 "Operative Note Agreements" shall mean, collectively, the Notes, the
Note Indenture, the Noteholder Security Documents and all agreements, documents
and instruments at any time executed and/or delivered by any Debtor or any other
person to, with or in favor of Note Collateral Agent, Note Trustee or any
Noteholder in connection therewith or related thereto, as all of the foregoing
now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.35 "Permits" of a Person shall mean all rights, franchises, permits,
authorities, licenses, certificates of approval, consents, orders or
authorization, including licenses and other authorizations issuable by a
Governmental Authority, which purchase to applicable Legal Requirements are
necessary to permit such Person lawfully to conduct and operate its business as
currently conducted and to own and use its assets.
1.36 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock company, trust, joint venture, or other
entity or any government or any agency or instrumentality or political
subdivision thereof.
1.37 "Priority Amount" shall mean, in respect of Senior Debt, the
aggregate principal amount outstanding up to $55,000,000, plus interest thereon
and costs, expenses, fees and other charges related thereto (including, but not
limited to, attorneys' fees and legal expenses).
1.38 "Real Property" shall mean any estates or interests in real property
or mineral rights now owned or hereafter acquired by Debtors.
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1.39 "Real Property Collateral" shall have the meaning set forth in the
Note Indenture as in effect on the date hereof.
1.40 "Senior Agent" shall mean Foothill Capital Corporation, a California
corporation, in its capacity as Agent pursuant to the Loan Agreement for and on
behalf of Lenders and its successors and assigns in such capacity.
1.41 "Senior Creditor Agreements" shall mean, collectively, the Loan
Agreement and all agreements, documents and instruments at any time executed
and/or delivered by any Debtor or any other person to, with or in favor of
Senior Agent or any Lender in connection therewith or related thereto, as all of
the foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.42 "Senior Debt" shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Debtor to Senior
Agent and Lenders and/or their respective affiliates or participants, including
principal, interest, charges, fees, premiums, indemnities and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
arising under Senior Creditor Agreements, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
of the Senior Creditor Agreements or after the commencement of any case with
respect to any Debtor under the U.S. Bankruptcy Code or any similar statute
(including, without limitation, any principal, interest, fees, costs, expenses
and other amounts, whether or not such amounts are allowed or allowable in whole
or in part in any such case or similar proceeding), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and whether arising directly
or howsoever acquired by Senior Agent or any Lender.
1.43 "Shared Collateral" shall mean all of Debtors' right, title and
interest in and to each of the following: Accounts; Books; Equipment (other than
Mobile Equipment); General Intangibles; Inventory; Negotiable Collateral;
Investment Property (including, without limitation, all Stock in ACG
Subsidiaries); Cash Collateral; Real Property Collateral; any money or other
assets of any Debtor that now or hereafter comes into the possession, custody or
control of Note Collateral Agent, Note Trustee or any Noteholder; and the
proceeds and products, whether tangible or intangible, or any of the foregoing,
including proceeds of insurance covering any or all of the Shared Collateral,
and any and all Accounts, Books, Equipment, General Intangibles, Inventory,
Negotiable Collateral, Real Property, money, deposit accounts, or other tangible
or intangible property resulting from the sale, exchange, collection or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.
1.44 "Stock" shall mean all shares, options, warrants, interests,
participations, interests in limited liability companies or other equivalents
(regardless of how designated) of or in a corporation or equivalent entity,
whether voting or nonvoting, including common stock, preferred
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stock, or any other "equity security" (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended).
1.45 "Warrants" shall mean warrants to purchase an aggregate of 3,047
shares of common stock of ACG and issued pursuant to the Exchange and Purchase
Agreement, dated October 1, 1999 by and among ACG, ACG Subsidiaries and the
purchasers and exchanging noteholders party thereto, as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.46 Other Definitions; Construction. All terms defined in the Uniform
Commercial Code as in effect in the State of New York, unless otherwise defined
herein shall have the meanings set forth therein. All references to any term in
the plural shall include the singular and all references to any term in the
singular shall include the plural.
2. SECURITY INTERESTS; PRIORITIES; REMEDIES
2.1 Acknowledgment of Lien. Senior Agent hereby acknowledges that Note
Collateral Agent has been granted Liens upon all of the Shared Collateral
pursuant to the Noteholder Security Documents to secure the Note Obligations.
Note Collateral Agent, Note Trustee and each Noteholder by accepting a Note
hereby acknowledge that Senior Agent has been granted Liens upon all of the
Shared Collateral and the Lender Collateral pursuant to the Senior Creditor
Agreements to secure the Senior Debt and agree to all of the terms and
provisions of this Intercreditor Agreement as the same may be amended from time
to time pursuant to its terms. Note Collateral Agent, Note Trustee and the
Noteholders have not been granted any Lien upon the assets and properties of any
Debtor constituting the Lender Collateral.
2.2 Priority of Lien. Notwithstanding the order or time of attachment, or
the order, time or manner of perfection, or the order or time of filing or
recordation of any document or instrument, or other method of perfecting a
security interest in favor of each Agent in any Shared Collateral, and
notwithstanding any conflicting terms or conditions which may be contained in
any of the Agreements, the Liens upon the Shared Collateral of Senior Agent have
and shall have priority over the Liens upon the Shared Collateral of Note
Collateral Agent and such Liens of Note Collateral Agent are and shall be, in
all respects, subject and subordinate to the Liens of Senior Agent therein to
secure the Senior Debt up to the Priority Amount at any one time outstanding.
Notwithstanding the Lien subordination provided in this Intercreditor Agreement,
although the Note Obligations rank second in priority of security to the Senior
Debt, the Note Obligations are not subordinated in right of payment to any
indebtedness of Debtors, including the Senior Debt, and rank pari passu with all
unsubordinated indebtedness of Debtors.
2.3 Priority not Affected by Amendments, etc. The respective priorities
of the Liens provided in Section 2.2 shall not be altered or otherwise affected
by any amendment, modification, supplement, extension, renewal, restatement or
refinancing of either the Senior Debt
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or the Note Obligations, nor by any action or inaction which any Agent may take
or fail to take in respect of the Shared Collateral.
2.4 Perfection. Subject to Section 3.7 hereof, each Agent shall be solely
responsible for perfecting and maintaining the perfection of its Lien in and to
each item constituting the Collateral in which such Agent has been granted a
Lien. The foregoing provisions of this Agreement are intended solely to govern
the respective lien priorities as between the Agents and shall not impose on
either Agent any obligations in respect of the disposition of proceeds of
foreclosure on any Shared Collateral which would conflict with prior perfected
claims therein in favor of any other person or any order or decree of any court
or other Governmental Authority or any applicable law. None of Note Collateral
Agent, Note Trustee or any holder of Note Obligations shall contest the
validity, perfection, priority or enforceability of the Liens upon the Shared
Collateral of Senior Agent and as between Senior Agent and Note Collateral
Agent, Note Trustee and the holders of Note Obligations, the terms of Section
2.11 hereof shall govern the application of Proceeds (as hereinafter defined)
even if part or all of the Senior Debt or the Liens securing payment and
performance thereof are avoided, disallowed, set aside or otherwise invalidated
in any judicial proceeding or otherwise; provided, however, in the event of the
entry of a final non-appealable order, judgment or decree of a court of
competent jurisdiction that equitably subordinates all or any portion of the
Senior Debt to any unsecured indebtedness as result of any intentional act by
Senior Agent or the Lenders except for the making by Lenders of loans, advances
or other extensions of credit pursuant to the terms of the Senior Creditor
Agreements (a "Subordination Event"), Note Collateral Agent, Note Trustee and
Noteholders shall not be required to turn over to Senior Agent and Lenders
proceeds of Shared Collateral received by Note Collateral Agent, Note Trustee or
any Noteholder which, but for the terms of this proviso, would have been payable
to Senior Agent pursuant to the terms of this Intercreditor Agreement; provided,
further, that the amount of proceeds of Shared Collateral retained by Note
Collateral Agent, Note Trustee or any Noteholder shall not exceed the amount of
Senior Debt so subordinated. Senior Agent and Lenders shall not contest the
validity, perfection, priority or enforceability of the Note Obligations or
Liens upon the Shared Collateral of the Note Collateral Agent.
2.5 Books and Records of Debtors. In the event that either Agent shall,
in the exercise of its respective rights under its Agreements, receive
possession or control of any books and records of Debtors which contain
information identifying or pertaining to any of the property of Debtors in which
the other Agent has been granted a Lien, it shall, within a reasonable time,
notify the other Agent that it has received such books and records and shall,
upon such other Agent's request, make available to the other Agent such books
and records for inspection and duplication.
2.6 Right to Control Collateral. Senior Agent shall have the exclusive
right to manage, perform and enforce the terms of the Senior Creditor Agreements
with respect to the Shared Collateral and the Lender Collateral, to exercise and
enforce all privileges and rights thereunder according to its discretion and the
exercise of its business judgment, including, without limitation,
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the exclusive right to take or retake control or possession of such Collateral
and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate
such Collateral.
2.7 Sales of Shared Collateral. Note Collateral Agent, Note Trustee and
each Noteholder by accepting a Note agree that, subject only to the compliance
by Debtors with the requirements of the Trust Indenture Act of 1939, as amended
(and, prior to the occurrence of a Loan Agreement Event of Default, in
compliance with the requirements of the Note Indenture), decisions regarding the
sale, transfer or other disposition of Shared Collateral and the exercise of all
rights and the taking or refraining from taking of any actions with respect to
the Shared Collateral or the Security Documents shall be made by Senior Agent
pursuant to the Senior Creditor Agreements and applicable law and Note
Collateral Agent shall be deemed to have consented to each such sale, transfer
of other disposition by Senior Agent, Lender, any of their respective agents or
any Debtor with the consent of Senior Agent or Lenders and the exercise or
taking or refraining from taking of any such action and released or otherwise
terminated its Lien on such Shared Collateral so sold, transferred or disposed
of upon such sale, transfer or other disposition. Promptly upon written request
therefor from Senior Agent, Note Collateral Agent shall execute and deliver to
Senior Agent such instruments, agreements and documents (including, without
limitation, Uniform Commercial Code Form UCC-3 releases (or similar documents)
and releases or discharges of mortgages and deeds of trust) as may be necessary,
appropriate or desirable to evidence or effectuate such release, termination and
consent. Note Collateral Agent, Note Trustee and Noteholders by accepting the
Notes hereby agree that all such sales, transfers or other dispositions and all
such decisions shall be conclusive and binding on Note Collateral Agent and
Noteholders; provided, that Senior Agent's exercise of rights or such sale,
transfer of other disposition by Senior Agent of Shared Collateral is made in a
commercially reasonable manner. Any Proceeds received by Senior Agent or Lenders
in connection with any such sale, transfer or other disposition of Shared
Collateral shall be applied in accordance with the terms of Section 2.11 hereof.
Nothing in this Section 2.7 shall constitute a waiver of any Note Default or
Note Event of Default or shall restrict the right of Note Collateral Agent, Note
Trustee or Noteholders to give notice of any Note Event of Default or
acceleration under the Note Indenture as provided therein on account of any
breach of any of the Operative Note Agreements.
2.8 Exercise of Remedies by Note Collateral Agent. Note Collateral Agent,
Note Trustee and each Noteholder by accepting a Note agree that, unless all of
the Senior Debt is subject to a Subordination Event, until the Senior Debt has
been paid in full in cash and the Senior Creditor Agreements terminated, except
with the prior written consent of Senior Agent, notwithstanding any rights or
remedies available to Note Collateral Agent, Note Trustee or the Noteholders
under any of the Operative Note Agreements, applicable law or otherwise, none of
Note Collateral Agent, Note Trustee or Noteholders will, directly or indirectly,
seek to foreclose or realize upon (judicially or non-judicially) its Lien on any
Shared Collateral or assert any claim or interest therein (including, without
limitation, by setoff or notification of account debtors), prior to the
occurrence of a Note Event of Default based on the failure by Debtors to make
payment when due of any Note Obligations, commence any action or proceeding
against any Debtor or any of its property under the U.S. Bankruptcy Code or any
state insolvency law or similar present or future
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statute, law or regulation or proceeding for voluntary liquidation, dissolution
or other winding up of any Debtor's business, or appointment of any trustee,
receiver or liquidator for any Debtor or any part of any Debtor's property or
assets for the benefit of creditors or any marshaling of assets of any Debtor or
exercise any rights to setoff, recoupment, counterclaim or deduction against any
of the Lender Collateral or the Shared Collateral or any proceeds thereof;
provided, however, nothing herein shall prevent Note Collateral Agent, Note
Trustee or the Noteholders from taking any action that is necessary to preserve
their claims or priority of Liens or secured status, including the filing of a
proof of claim and appearing in any proceeding.
2.9 Collateral to be Held in Trust. In the event that for any reason Note
Collateral Agent, Note Trustee or any agent or representative of either of them
at any time receives any proceeds of Lender Collateral or Shared Collateral or
Senior Agent or any agent or representative of Senior Agent at any time receives
any proceeds of Shared Collateral, such proceeds shall be subject to the
priorities established in Section 2.2 hereof. In the event that Note Collateral
Agent, Note Trustee or any agent or representative of either of them at any time
receive any proceeds from the sale or other disposition of or realization upon
any of the Lender Collateral or Shared Collateral, such person shall hold the
same in trust, as trustee for the benefit of Senior Agent and Lenders,
segregated from other funds and property of such person and shall promptly
deliver or remit the same to Senior Agent (together with any endorsement or
assignment of such person where necessary). In the event that Senior Agent or
any agent or representative of Senior Agent at any time receives any proceeds
from the sale or other disposition of or realization upon any Shared Collateral
after the repayment and satisfaction in full of the Senior Debt and the
termination of the Senior Creditor Agreements, such person shall hold the same
in trust, as trustee for the benefit of Note Collateral Agent and Note Trustee,
segregated from other funds and property of such person and shall promptly
deliver or remit the same to Note Collateral Agent (together with any
endorsement or assignment of such person where necessary). Any Proceeds shall be
held by Senior Agent or any agent or representative of Senior Agent in trust and
shall be applied as set forth in Section 2.11 hereof.
2.10 Right to Cure. Senior Agent shall have the right, within any cure
period applicable thereto pursuant to the terms of the Operative Note
Agreements, but not any obligation, to cure any Event of Default under the
Operative Note Agreements for the account of Debtors. In no event shall Senior
Agent or Lenders, by virtue of the payment of amounts or performance of any
obligation required to be paid or performed by Debtors, be deemed to have
assumed any obligation of Debtors to Note Collateral Agent, Note Trustee or the
Noteholders or any other person.
2.11 Application of Proceeds.
(a) Except as otherwise expressly provided in Section 2.4, any and
all amounts actually received by Senior Agent or Note Collateral Agent in
connection with the enforcement of any of their respective rights in and to the
Shared Collateral, including the proceeds of any
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collection, sale or disposition of, or other realization upon, the Shared
Collateral or any portion thereof (collectively, the "Proceeds"), shall be
applied as follows:
First, to the payment and satisfaction in full of all outstanding
Senior Debt up to the Priority Amount in accordance with the terms of the Senior
Creditor Agreements, and
Second, ratably to the payment and satisfaction of the Senior Debt
and the Note Obligations in accordance with the respective terms of the Senior
Creditor Agreements and the Operative Note Agreements, and
Third, upon payment and satisfaction in full of the Senior Debt
and termination of the Senior Creditor Agreements, to Note Collateral Agent, in
respect of the obligations under the Note Indenture, the Notes and the other
Operative Note Agreements.
(b) At such time as any Proceeds are given over to Note Collateral
Agent by Senior Agent, Senior Agent shall deliver to Note Collateral Agent a
written accounting of the amount of Proceeds actually received by Senior Agent
as of the date of such statement and the application thereof.
2.12 No Liability for Loans. If Senior Agent or Lenders should honor a
request by Debtors for a loan, advance or other financial accommodation under
the Senior Creditor Agreements, whether or not Senior Agent or Lenders have
knowledge that honoring such request would result in a Note Default or Note
Event of Default under the Operative Note Agreements, in no event shall Senior
Agent or Lenders have any liability whatsoever to Note Collateral Agent, Note
Trustee or the Noteholders as a result of such breach, and without limiting the
generality of the foregoing, Note Collateral Agent agrees that Senior Agent and
Lenders shall not have any liability for tortious interference with contractual
relations or for inducement by Senior Agent or Lenders of Debtors to breach of
contract or otherwise. Nothing contained in this Section 2.12 shall limit or
waive any right that Note Collateral Agent or Note Trustee has to enforce any of
the provisions of the Operative Note Agreements against Debtors.
2.13. Effect of Repayment of Senior Debt. Upon the termination of
Lenders' commitments under the Senior Creditor Agreements and the payment in
full in cash of the then outstanding Senior Debt, (a) Note Collateral Agent and
the Noteholders shall be permitted to exercise and enforce all of their rights
and remedies as a creditor under the Operative Note Agreements, applicable law
or otherwise without regard to Sections 2.6, 2.7 or 2.8 hereof; provided, that,
(i) Senior Agent shall maintain its Lien upon the Shared Collateral and the
priority thereof as set forth in Section 2.2 hereof, (ii) all Proceeds received
by Note Collateral Agent shall be subject to the priorities established in
Section 2.2 hereof and shall be paid over to Senior Agent and held and applied
in accordance with Sections 2.9 and 2.11 hereof and (iii) Senior Agent may
retain the Proceeds received by it as cash collateral in such amount as it may
determine in its good faith judgment to be necessary to secure any unpaid Senior
Debt, including, without limitation, any contingent liabilities of Debtors to
Senior Agent or Lenders arising out of or relating to the
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Senior Creditor Agreements or the Senior Debt known to Senior Agent or any
Lender at the time of receipt of such Proceeds, and (b) Section 3.6 hereof shall
have no further force or effect.
3. MISCELLANEOUS
3.1 Representations and Warranties.
(a) Note Collateral Agent and Note Trustee represent and warrant
to Senior Agent that:
(i) the execution, delivery and performance of this
Intercreditor Agreement by Note Collateral Agent and Note Trustee are within the
powers of each of them, as to Note Collateral Agent in its capacity as
collateral agent for Note Trustee and the Noteholders and as to Note Trustee in
its capacity as trustee for the Noteholders, have been duly authorized by Note
Collateral Agent and Note Trustee and do not contravene any law, any provision
of the Note Indenture or any other Operative Note Agreements or any agreement to
which any of Note Collateral Agent or Note Trustee is a party or to which it is
bound;
(ii) Note Collateral Agent as collateral agent for and on
behalf of the Note Trustee and Noteholders has not been granted and does not
hold any Liens upon the assets and properties of Debtors, except to the extent
of Liens on the Shared Collateral granted by Debtors to Note Collateral Agent
pursuant to the Operative Note Agreements; and
(iii) this Intercreditor Agreement constitutes the legal,
valid and binding obligations of Note Collateral Agent and Note Trustee,
enforceable in accordance with its terms and binding upon each of them.
(b) Senior Agent hereby represents and warrants to each of Note
Collateral Agent and Note Trustee that:
(i) the execution, delivery and performance of this
Intercreditor Agreement by Senior Agent are within the powers of Senior Agent as
agent for Lenders, have been duly authorized by Senior Agent and do not
contravene any law, any provision of the Senior Creditor Agreements or any
agreement to which Senior Agent is a party or by which it is bound;
(ii) Senior Agent for and on behalf of Lenders has not been
granted and does not hold any Liens upon the assets and properties of Debtors,
except to the extent of Liens on the Collateral granted by Debtors to Agent and
Lenders pursuant to the Senior Creditor Agreements; and
(iii) this Intercreditor Agreement constitutes the legal,
valid and binding obligations of Senior Agent, enforceable in accordance with
its terms and shall be binding on it.
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3.2 No Marshaling. Note Collateral Agent hereby waives any and all rights
to have any Collateral or any part thereof granted to Senior Agent marshaled
upon any foreclosure or other disposition of such Collateral by Senior Agent or
Debtors with the consent of Senior Agent.
3.3 Amendments. Any waiver, permit, consent or approval by any Agent of
or under any provision, condition or covenant to this Intercreditor Agreement
must be in writing and shall be effective only to the extent it is set forth in
writing and as to the specific facts or circumstances covered thereby. Any
amendment of this Intercreditor Agreement must be in writing and signed by each
of the parties to be bound thereby.
3.4 Successors and Assigns.
(a) This Intercreditor Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of each Agent and their respective successors, and assigns.
(b) Senior Agent, on behalf of Lenders, reserves the right to
grant participations in, or otherwise sell, assign, transfer or negotiate all or
any part of, or any interest in, the Senior Debt, and the Collateral securing
the Senior Debt; provided, that, Note Collateral Agent shall not be obligated to
give any notices to or otherwise in any manner deal directly with any
participant in the Senior Debt and no participant shall be entitled to any
rights or benefits under this Intercreditor Agreement except through the Senior
Agent. In connection with any participation or other transfer or assignment,
Senior Agent (i) may disclose to such assignee, participant or other transferee
or assignee all documents and information which Senior Agent now or hereafter
may have relating to Debtors or the Collateral and (ii) shall disclose to such
participant or other transferee or assignee the existence and terms and
conditions of this Intercreditor Agreement.
(c) In connection with any assignment, transfer, refinancing,
replacement or substitution of any or all of the Senior Debt or Note
Obligations, as the case may be, or any or all rights of any Agent in the
property of Debtors (other than pursuant to a participation), each Agent agrees
to execute and deliver an agreement containing terms substantially identical to
those contained herein in favor of any such assignee or transferee and, in
addition, will execute and deliver an agreement containing terms substantially
identical to those contained herein in favor of any third person who succeeds to
or replaces any or all of Lenders' or the Noteholders' financing of Debtors,
whether such successor financing or replacement occurs by transfer, assignment,
"takeout" or any other means or vehicle.
3.5 Insolvency. This Intercreditor Agreement shall be applicable
both before and after the filing of any petition by or against any Debtor under
the U.S. Bankruptcy Code and all converted or succeeding cases in respect
thereof, and all references herein to any Debtor shall be deemed to apply to a
trustee or trustees for such Debtor as debtor-in-possession. The relative rights
of Senior Agent and Note Collateral Agent to repayment of the Senior Debt and
the Note Obligations, respectively, and in or to any distributions from or in
respect of Debtors or any
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Collateral or proceeds of Collateral, shall continue after the filing thereof on
the same basis as prior to the date of the petition, subject to any court order
approving the financing of, or use of cash collateral by, such Debtor as
debtor-in-possession.
3.6 Bankruptcy Financing. Subject to Section 2.13 hereof, if any Debtor
shall become subject to a proceeding under the U.S. Bankruptcy Code and if
Senior Agent or any Lender desires to permit the use of cash collateral or to
provide financing ("DIP Financing") to such Debtor under either Section 363 or
Section 364 of the U.S. Bankruptcy Code, Note Collateral Agent agrees no
objection will be raised by Note Collateral Agent or any of the Noteholders to
any such financing or use of cash collateral on the ground of a failure to
provide "adequate protection" for Note Collateral Agent's junior Liens on the
Shared Collateral, provided, that, Note Collateral Agent retains a Lien on the
post-petition Shared Collateral with the same priority as existed prior to the
commencement of the proceeding under the U.S. Bankruptcy Code and the aggregate
principal amount of such DIP Financing plus the aggregate principal amount of
all pre-petition Senior Debt shall not exceed $55,000,000. Nothing in this
Section 3.6 shall prohibit Note Collateral Agent from asserting its rights with
respect to a sale of Shared Collateral by Debtors pursuant to Section 363 of the
Bankruptcy Code outside of the ordinary course of business. Senior Agent shall
provide Note Collateral Agent notice in respect of any such proceeding under the
U.S. Bankruptcy Code in accordance with the requirements of the U.S. Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure or with such other notice as
is authorized by court order.
3.7 Notices of Default, Acceleration and Enforcement. Each Agent shall
give the other Agent concurrently with the giving thereof to Debtors, (a) a copy
of any written notice by such Agent (or the Note Trustee with respect to Note
Collateral Agent) of either a default or an event of default under its
Agreements, or written notice of acceleration or demand for payment from
Debtors, and (b) any written notice sent by an Agent (or Note Trustee with
respect to Collateral Note Trustee) to Debtors at any time an event of default
under such Agent's Agreements exists stating such Agent's intention to exercise
any of its enforcement rights or remedies, including written notice pertaining
to any foreclosure on any of the Shared Collateral or other judicial or
non-judicial remedy in respect thereof, and any legal process served or filed in
connection therewith; provided, that, the failure of any party to give notice as
required hereby shall not affect the relative priorities of Agents' respective
Liens as provided herein or the validity or effectiveness of any such notice as
against Debtors.
3.8 Bailee for Perfection. Each Agent hereby appoints the other as agent
and bailee for the purpose of protecting their respective Liens in and on any of
the Shared Collateral which may at any time be in its possession during the term
of this Intercreditor Agreement; provided, that, neither Senior Agent nor Note
Collateral Agent shall have any duty to protect or preserve any rights
pertaining to any of the Shared Collateral in its possession and each Agent and
Note Trustee hereby waives and releases the other Agent and Note Trustee from
all claims and liabilities at any time arising pursuant to the role of the other
Agent as agent and bailee with respect to the Shared Collateral in its actual
possession, except for the gross negligence or wilful
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misconduct of such other Agent as determined pursuant to a final non-appealable
order of a court of competent jurisdiction. Each Agent shall hold any Shared
Collateral in its possession segregated from other funds and property of such
person and shall promptly deliver or remit such Shared Collateral to the other
Agent (together with any endorsement or assignment of such person where
necessary) promptly upon request thereof from Debtors.
3.9 Notices. All notices, requests and demands to or upon the respective
parties hereto shall be in writing and shall be deemed duly given, made or
received: if delivered in person, immediately upon delivery; if by telex,
telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next business day, one (1) business day after
sending; and if mailed by certified mail, return receipt requested, five (5)
days after mailing to the parties at their addresses set forth below (or to such
other addresses as the parties may designate in accordance with the provisions
of this Section 3.9):
To Senior Agent: Foothill Capital Corporation
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, California 90025-3333
Attention: Business Finance
Division Manager
Fax No. (310) 470-9788
and to: Foothill Capital Corporation
60 State Street
Suite 1150
Boston, Massachusetts 02109
Attention: Loan Portfolio Manager
Fax No.: (617) 523-1697
To Note The Bank of New York
Collateral Agent: One State Street, 10th Floor
New York, New York 10004
Attention: Steve Giurlando
Fax No.: (212) 815-5915
Either Agent may change the address(es) to which all notices, requests and other
communications are to be sent by giving written notice of such address change to
the other Agent in conformity with this Section 3.9, but such change shall not
be effective until notice of such change has been received by the other Agent.
3.10 Legend on Notes. The Notes shall bear a conspicuous legend to the
following effect:
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THE LIENS AND SECURITY INTERESTS IN THE COLLATERAL SECURING THE
INDEBTEDNESS EVIDENCED BY THIS NOTE ARE SUBORDINATE TO THE LIENS
AND SECURITY INTERESTS SECURING THE SENIOR SECURED INDEBTEDNESS
(AS DEFINED BELOW), AS MORE FULLY SET FORTH IN THE INTERCREDITOR
AGREEMENT (AS DEFINED BELOW). ANY HOLDER OF THIS INSTRUMENT SHALL
BE DEEMED TO BE BOUND BY, AND SUBJECT TO, THE TERMS AND CONDITIONS
OF THE INTERCREDITOR AGREEMENT.
3.11 Counterparts. This Intercreditor Agreement may be executed in any
number of counterparts, each of which shall be an original with the same force
and effect as if the signatures thereto and hereto were upon the same
instrument.
3.12 Governing Law. The validity, construction and effect of this
Intercreditor Agreement shall be governed by the laws of the State of New York.
3.13 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS INTERCREDITOR AGREEMENT.
3.14 Complete Agreement. This written Intercreditor Agreement is intended
by the parties as a final expression of their agreement and is intended as a
complete statement of the terms and conditions of their agreement.
3.15 No Third Parties Benefitted. Except as expressly provided in Section
3.4, this Intercreditor Agreement is solely for the benefit of the Agents,
Lenders, Note Trustee and Noteholders and their respective successors,
participants and assigns, and no other person shall have any right, benefit,
priority or interest under, or because of the existence of, this Intercreditor
Agreement.
3.16 Disclosures; Non-Reliance. Each of Agents, Lenders, Note Trustee and
Noteholders have the means to be, and shall in the future remain, fully informed
as to the financial condition and other affairs of Debtors and no Agent shall
have any obligation or duty to disclose any such information to any other Agent.
Except as expressly set forth in this Intercreditor Agreement, the parties
hereto have not otherwise made to each other nor do they hereby make to each
other any warranties, express or implied, nor do they assume any liability to
each other with respect to: (a) the enforceability, validity, value or
collectability of any of the Note Obligations or
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Senior Debt or any guarantee or security which may have been granted to any of
them in connection therewith, (b) Debtors title to or right to transfer any of
the Collateral, or (c) any other matter except as expressly set forth in this
Intercreditor Agreement.
3.17 Term. This Intercreditor Agreement is a continuing agreement and
shall remain in full force and effect until the indefeasible satisfaction in
full of all Senior Debt and the termination of the Senior Creditor Agreements.
IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement
to be duly executed as of the day and year first above written.
FOOTHILL CAPITAL CORPORATION,
as Agent
By: /s/ Anthony Aloi
---------------------------
Title: Vice President
------------------------
THE BANK OF NEW YORK,
as Collateral Agent
By: /s/ JoAnn Manieri
---------------------------
Title: Assistant Vice President
------------------------
AGREED TO AND ACKNOWLEDGED:
THE BANK OF NEW YORK,
as Trustee
By: /s/ JoAnn Manieri
----------------------------
Title: Assistant Vice President
-------------------------
Each of the undersigned hereby acknowledges and agrees to the foregoing
terms and provisions. By its respective signature below, each of the undersigned
agrees that it will, together with its respective successors and assigns, be
bound by the provisions hereof.
Each of the undersigned agrees that any Agent holding Shared Collateral
does so as bailee (under the New York UCC) for the other and Note Collateral
Agent is hereby authorized to and
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may turn over to Senior Agent upon request therefor any such Shared Collateral.
Each of the undersigned further agrees that after all obligations and
indebtedness of the undersigned in respect of the Senior Debt to the Senior
Agent and Lenders have been fully paid and performed Senior Agent is hereby
authorized to and shall turn over to Note Collateral Agent upon written request
therefor any Shared Collateral held by it (except for any Shared Collateral that
may be subject to any Replacement Credit Facilities that may then be in
existence).
Each of the undersigned acknowledges and agrees that: (i) although it may
sign this Intercreditor Agreement it is not a party hereto and does not and will
not receive any right, benefit, priority or interest under or because of the
existence of the foregoing Intercreditor Agreement and nothing therein shall be
deemed a waiver or modification of any terms or conditions of the Operative Note
Agreements, (ii) in the event of a breach by any of the undersigned or Note
Collateral Agent of any of the terms and provisions contained in the foregoing
Intercreditor Agreement, such a breach shall constitute an "Event of Default" as
defined in and under the Senior Creditor Agreements and (iii) it will execute
and deliver such additional documents and take such additional action as may be
necessary or desirable in the opinion of any Agent to effectuate the provisions
and purposes of the foregoing Intercreditor Agreement. No provision of the
Intercreditor Agreement shall release the undersigned from any of their
obligations under any of the Operative Note Agreements.
ANKER COAL GROUP, INC.
By: /s/ BRUCE SPARKS
---------------------------
Title: President
------------------------
ANKER GROUP, INC.
By: /s/ BRUCE SPARKS
---------------------------
Title: President
------------------------
ANKER ENERGY CORPORATION
By: /s/ BRUCE SPARKS
---------------------------
Title: President
------------------------
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BRONCO MINING COMPANY, INC.
By: /s/ BRUCE SPARKS
---------------------------
Title: President
------------------------
ANKER POWER SERVICES, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
ANKER WEST VIRGINIA MINING COMPANY
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
JULIANA MINING COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
KING KNOB COAL CO., INC
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
VANTRANS, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
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MELROSE COAL COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
MARINE COAL SALES COMPANY
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
HAWTHORNE COAL COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
UPSHUR PROPERTY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
HEATHER GLEN RESOURCES, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
NEW ALLEGHENY LAND HOLDING
COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
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PATRIOT MINING COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
VINDEX ENERGY CORPORATION
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
ANKER VIRGINIA MINING COMPANY, INC.
By: /s/ B. JUDD HARTMAN
---------------------------
Title: Secretary
------------------------
SIMBA GROUP INC.
By: /s/ BRUCE SPARKS
---------------------------
Title: President
------------------------
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SCHEDULE 1
TO
INTERCREDITOR AGREEMENT
BETWEEN FOOTHILL CAPITAL CORPORATION, AS AGENT
AND
THE BANK OF NEW YORK, AS COLLATERAL AGENT
Subsidiaries of Anker Coal Group, Inc.
Anker Group, Inc.
Anker Energy Corporation
Bronco Mining Company, Inc.
Anker Power Services, Inc.
Anker West Virginia Mining Company
Juliana Mining Company, Inc.
King Knob Coal Co., Inc.
Vantrans, Inc.
Melrose Coal Company, Inc.
Marine Coal Sales Company
Hawthorne Coal Company, Inc.
Upshur Property, Inc.
Health Glen Resources, Inc.
New Allegheny Land Holding Company, Inc.
Patriot Mining Company, Inc.
Vindex Energy Corporation
Anker West Virginia Mining Company, Inc.
Simba Group Inc.