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EXHIBIT 10.27
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT ("Pledge Agreement"), dated as of
October 1, 1999, is by those entities set forth on Exhibit A hereto (each a
"Pledgor" and, collectively, the "Pledgors"), each with its chief executive
office at the address specified on Schedule A hereto, to and in favor of The
Bank of New York, as collateral agent (in such capacity, "Collateral Agent"),
for the holders of the Notes in their capacity as such ("Holders") under the
Indenture referred to below, having an office at One State Street, 10th Floor,
New York, New York 10004 ("Pledgee"). Unless otherwise defined herein, terms
defined in the Indenture and used herein shall have the meanings given to them
in the Indenture.
W I T N E S S E T H:
WHEREAS, pursuant to an indenture dated as of October 1, 1999, as the
same may be amended, supplemented or otherwise modified from time to time (the
"Indenture"), among Anker Coal Group, Inc. (the "Company"), the Guarantors
signatory thereto and The Bank of New York, as trustee (the "Trustee"), the
Company has provided for, among other things, the authentication and delivery of
the Company's 14.25% Second Priority Senior Secured Notes due 2007 (PIK though
April 1, 2000) (the "Notes", as further defined in the Indenture) up to
$119,200,000 aggregate principal amount of which may be outstanding at any time
except for the issuance of Secondary Notes and Optional Notes; and
WHEREAS, each of the Pledgors is now the direct, legal and beneficial
owner of all of the issued and outstanding shares of capital stock of those
entities (each an "Issuer" and, collectively, the "Issuers") set forth opposite
such Pledgor's name on Exhibit A hereto and made a part hereof (with respect to
each Pledgor, the "Individual Pledged Securities", and with respect to all
Pledgors, collectively, the "Pledged Securities"); and
WHEREAS, in connection with a Loan and Security Agreement dated
November 21, 1998 (as heretofore amended and as it may hereafter be amended,
modified, supplemented, restated, replaced, renewed or refinanced, the "Loan
Agreement"), the Company and certain of its subsidiaries (collectively, the
"Borrowers") entered into several pledge and security agreements (as heretofore
amended and as they may hereafter be amended, modified, supplemented, restated,
replaced, renewed or refinanced, collectively, the "Senior Pledge Agreements")
pursuant to which the Pledged Securities and the Pledged Collateral (as
hereinafter defined) were pledged to Foothill Capital Corporation, as agent for
the Senior Secured Lenders and as pledgee under the Senior Pledge Agreements
(the "Senior Pledgee"); and
WHEREAS, simultaneously herewith Anker West Virginia Mining Company,
Inc., an indirect wholly owned subsidiary of the Company (the "LLC Pledgor") has
entered into a Pledge and Security Agreement (the "LLC Pledge Agreement"),
pursuant to which the LLC Pledgor has pledged certain membership interests and
the proceeds thereof (collectively, the "Pledged
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Collateral") as collateral security for the prompt performance, observance and
indefeasible payment in full of all of the Obligations (as hereinafter defined);
and
WHEREAS, the Pledged Securities and the Pledged Collateral secure the
payment and performance of the Borrowers' obligations under the Loan Agreement
and the other agreements, documents and instruments referred to therein and
executed and/or delivered in connection therewith; and
WHEREAS, the Pledged Securities and the Pledged Collateral also
constitute a portion of the Collateral under the Indenture, and it is a
condition precedent to the issuance of the Notes under the Indenture, that the
Pledgors and the LLC Pledgor shall have executed this Agreement and the LLC
Pledge Agreement, respectively, and made the pledge and assignment contemplated
hereby and thereby; and
WHEREAS, among other things, the relative rights of the Pledgee and the
Senior Pledgee with respect to the Pledged Securities and the Pledged Collateral
are set forth in that certain Intercreditor Agreement dated the date hereof
between the Pledgors, the LLC Pledgor, the Pledgee and the Senior Pledgee (the
"Intercreditor Agreement"); and
WHEREAS, the parties hereto acknowledge that the Pledgee's rights in
and to the Pledged Collateral and Pledged Securities hereunder shall rank in
priority after the Lien of the Senior Pledgee to the extent provided in the
Intercreditor Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgors hereby agree as follows:
1. GRANT OF SECURITY INTEREST
As collateral security for the prompt performance, observance and
indefeasible payment in full of all of the Obligations (as hereinafter defined),
each Pledgor hereby assigns, pledges, hypothecates, transfers and sets over to
Pledgee, for the benefit of Pledgee and the Holders, and grants to Pledgee, for
the benefit of Pledgee and the Holders to the extent of Pledgor's right, title
and interest therein, a security interest in and lien upon (a) the Individual
Pledged Securities, together with all cash dividends, stock dividends,
interests, profits, redemptions, warrants, subscription rights, stock,
securities options, substitutions, exchanges and other distributions now or
hereafter distributed by the relevant Issuer or which may hereafter be delivered
to the possession of such Pledgor or Pledgee with respect thereto, (b) such
Pledgor's records with respect to the foregoing, and (c) the proceeds of all of
the foregoing (all of the foregoing with respect to each Pledgor, the
"Individual Pledged Property", and with respect to all Pledgors, collectively,
the "Pledged Property").
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2. OBLIGATIONS SECURED
The security interest, lien and other interests granted to Pledgee, for
the benefit of Pledgee and the Holders, pursuant to this Pledge Agreement shall
secure the prompt performance and payment in full of any and all obligations,
liabilities and indebtedness of every kind, nature and description owing by
Pledgors to Pledgee in connection with its duties as Collateral Agent, the
Trustee in connection with the Indenture, the Notes and the Security Documents
and the Holders, including principal, premium, interest, charges, fees, costs
and expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether arising under the Indenture, this Pledge
Agreement, the LLC Pledge Agreement or the other Security Documents, whether now
existing or hereafter arising, or after the commencement of any case with
respect to Pledgors under the United States Bankruptcy Code or any similar
statute (including, without limitation, the payment of interest and other
amounts which would accrue and become due but for the commencement of such
case), whether direct or indirect, absolute or contingent, joint or several, due
or not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, (all of the foregoing being collectively referred to herein as the
"Obligations").
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
Each of the Pledgors hereby represents, warrants and covenants with and
to Pledgee, for the benefit of Pledgee and the Holders, the following (all of
such representations, warranties and covenants being continuing so long as any
of the Obligations are outstanding):
(a) The Individual Pledged Securities are duly authorized, validly
issued, fully paid and non-assessable capital stock of the respective Issuer and
constitute such Pledgor's entire interest in each such Issuer and are not
registered, nor has Pledgor authorized the registration thereof, in the name of
any Person or entity other than Pledgor, Pledgee or the Senior Pledgee under the
Senior Pledge Agreements.
(b) The Individual Pledged Property is directly, legally and
beneficially owned by such Pledgor, free and clear of all claims, liens, pledges
and encumbrances of any kind, nature or description, except for the pledge and
security interest created hereunder and Permitted Liens.
(c) The Individual Pledged Property is not subject to any restrictions
relative to the transfer thereof other than pursuant to the Senior Pledge
Agreements and such Pledgor has the right to transfer and hypothecate the
Individual Pledged Property free and clear of any liens, encumbrances or
restrictions other than the lien of the Senior Pledge Agreements.
(d) The Individual Pledged Property is duly and validly pledged to
Pledgee, for the benefit of Pledgee and the Holders and no consent or approval
of any governmental or regulatory authority or of any securities exchange or the
like, nor any consent or approval of any other third party other than the Senior
Pledgee, was or is necessary to the validity and enforceability of this Pledge
Agreement.
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(e) Such Pledgor authorizes Pledgee to: (i) subject to Section 5(e)
below, store, deposit and safeguard the Individual Pledged Property, (ii)
perform any and all other acts which Pledgee in good faith deems reasonable
and/or necessary for the protection and preservation of the Individual Pledged
Property or its value or the security interest therein, including, without
limitation, transferring, registering or arranging for the transfer or
registration of the Individual Pledged Property to or in Pledgee's own name and,
after an Event of Default (as hereinafter defined) has occurred and is
continuing, receiving the income therefrom as additional security for the
Obligations and (iii) pay any charges or expenses which Pledgee deems necessary
for the foregoing purpose, but without any obligation to do so. Any obligation
of Pledgee for reasonable care for the Individual Pledged Property in Pledgee's
possession shall be limited to the same degree of care which Pledgee uses for
similar property pledged to Pledgee by other Persons.
(f) If such Pledgor shall become entitled to receive or acquire, or
shall receive any stock certificate, or option or right with respect to the
stock of any Issuer (including without limitation, any certificate representing
a dividend or a distribution or exchange of or in connection with
reclassification of the Individual Pledged Securities) whether as an addition
to, in substitution of, or in exchange for any of the Individual Pledged
Property or otherwise, such Pledgor agrees, subject to Section 5(e) below, to
accept same as Pledgee's agent, to hold same in trust for Pledgee and to deliver
same forthwith to Pledgee or Pledgee's agent or bailee in the form received,
with the endorsement(s) of such Pledgor where necessary and/or appropriate
powers and/or assignments duly executed to be held by Pledgee or Pledgee's agent
or bailee subject to the terms hereof, as further security for the Obligations.
(g) Such Pledgor shall not, subject to Section 5(e) below, without the
prior consent of Pledgee directly or indirectly, sell, assign, transfer, or
otherwise dispose of, or grant any option with respect to the Individual Pledged
Property, nor shall such Pledgor create, incur or permit any further pledge,
hypothecation, encumbrance, lien, mortgage or security interest with respect to
the Individual Pledged Property other than the Senior Security Interest.
(h) So long as no Event of Default has occurred and is continuing, such
Pledgor shall have the right to vote and exercise all corporate rights with
respect to the Individual Pledged Securities, except as expressly prohibited
herein, and to receive any cash dividends payable in respect of the Individual
Pledged Securities.
(i) Such Pledgor shall not, subject to Section 5(e) below, without
Pledgee's consent, which shall not be unreasonably withheld or delayed so long
as no Event of Default has occurred and is continuing, permit an Issuer,
directly or indirectly, to issue, sell, grant, assign, transfer or otherwise
dispose of, any additional shares of capital stock of such Issuer or any option
or warrant with respect to, or other right or security convertible into, any
additional shares of capital stock of such Issuer, now or hereafter authorized,
unless all such additional shares, options, warrants, rights or other such
securities are made and shall remain part of the Individual Pledged Property
subject to the pledge and security interest granted herein.
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(j) Such Pledgor shall pay all charges and assessments of any nature
against the Individual Pledged Property or with respect thereto prior to said
charges and/or assessments being delinquent, subject to any right of such
Pledgor to protest any Lien (other than any such Lien that secures the
Obligations), tax (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (i) a reserve
with respect to such obligation is established on the books of such Pledgor in
an amount reasonably satisfactory to Pledgee, (ii) any such protest is
instituted and diligently prosecuted by such Pledgor in good faith, and (iii)
Pledgee is satisfied that, while any such protest is pending, there will be no
impairment of the enforceability, validity, or priority of any of the Pledgee's
Liens in and to the Individual Pledged Property.
(k) Such Pledgor shall promptly reimburse Pledgee on demand, for any
reasonable charges, assessments or expenses paid or incurred by Pledgee in its
reasonable discretion for the protection, preservation and maintenance of the
Individual Pledged Property and the enforcement of the Holders' rights
hereunder, including, without limitation, reasonable attorneys' fees and legal
expenses incurred by Pledgee in seeking to protect, collect or enforce Pledgee's
rights in the Individual Pledged Property or otherwise hereunder.
(l) Such Pledgor shall furnish, or cause to be furnished, to Pledgee
such information concerning the Issuers and the Individual Pledged Property as
Pledgee may from time to time reasonably request in good faith, including,
without limitation, current financial statements.
(m) Pledgee may notify Issuers or the appropriate transfer agent of the
Individual Pledged Securities to register the security interest and pledge
granted herein and honor the rights of Pledgee with respect thereto.
(n) Such Pledgor waives: (i) all rights to require Pledgee to proceed
against any other Person, entity or collateral or to exercise any remedy, (ii)
the defense of the statute of limitations in any action upon any of the
Obligations, (iii) any right of subrogation or interest in the Obligations or
Individual Pledged Property until all Obligations have been paid in full, (iv)
any rights to notice of any kind or nature whatsoever, unless specifically
required in this Pledge Agreement or non-waivable under any applicable law, and
(v) to the extent permissible, its rights under Section 9-112 and 9-207 of the
Uniform Commercial Code. Pledgor agrees that the Individual Pledged Property,
other collateral, or any other guarantor or endorser may be released,
substituted or added with respect to the Obligations, in whole or in part,
without releasing or otherwise affecting the liability of Pledgor, the pledge
and security interests granted hereunder, or this Pledge Agreement. Pledgee is
entitled to all of the benefits of a secured party set forth in Section 9-207 of
the New York Uniform Commercial Code.
4. EVENTS OF DEFAULT
The occurrence or existence of any Event of Default under the Indenture
shall be individually an "Event of Default," and collectively "Events of
Default" hereunder.
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5. RIGHTS AND REMEDIES
Subject to Section 5(e) below, at any time an Event of Default exists
or has occurred and is continuing, in addition to all other rights and remedies
of Pledgee, whether provided under this Pledge Agreement, the LLC Pledge
Agreement, the Indenture, the other Security Documents, applicable law or
otherwise, Pledgee shall have the following rights and remedies which may be
exercised without notice to, or consent by, Pledgors except as such notice or
consent is expressly provided for hereunder or required by applicable law:
(a) Pledgee, at its option, shall be empowered to exercise its
continuing right to instruct the Issuers (or the appropriate transfer agent of
the Pledged Securities) to register any or all of the Pledged Securities in the
name of Pledgee or in the name of Pledgee's nominee and Pledgee may complete, in
any manner Pledgee may deem expedient, any and all stock powers, assignments or
other documents heretofore or hereafter executed in blank by Pledgors and
delivered to Pledgee. After said instruction, and without further notice,
Pledgee shall have the exclusive right to exercise all voting and corporate
rights with respect to the Pledged Securities and other Pledged Property, and
exercise any and all rights of conversion, redemption, exchange, subscription or
any other rights, privileges, or options pertaining to any shares of the Pledged
Securities or other Pledged Property as if Pledgee were the absolute owner
thereof, including, without limitation, the right to exchange, in its
discretion, any and all of the Pledged Securities and other Pledged Property
upon any merger, consolidation, reorganization, recapitalization or other
readjustment with respect thereto. Upon the exercise of any such rights,
privileges or options by Pledgee, Pledgee shall have the right to deposit and
deliver any and all of the Pledged Securities and other Pledged Property to any
committee, depository, transfer agent, registrar or other designated agency upon
such terms and conditions as Pledgee may determine, all without liability but
subject to Pledgee's obligations under the Uniform Commercial Code, except to
account for property actually received by Pledgee. However, Pledgee shall have
no duty to exercise any of the aforesaid rights, privileges or options (all of
which are exercisable in the sole discretion of Pledgee) and shall not be
responsible for any failure to do so or delay in doing so.
(b) In addition to all the rights and remedies of a secured party under
the Uniform Commercial Code or other applicable law, Pledgee shall have the
right, at any time and without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon Pledgors or any other Person
(all and each of which demands, advertisements and/or notices are hereby
expressly waived to the extent permitted by applicable law), to proceed
forthwith to collect, redeem, recover, receive, appropriate, realize, sell, or
otherwise dispose of and deliver said Pledged Property or any part thereof in
one or more lots at public or private sale or sales at any exchange, broker's
board or at any of Pledgee's offices or elsewhere at such prices and on such
terms as Pledgee may deem best in the exercise of its business judgment. The
foregoing disposition(s) may be for cash or on credit or for future delivery
without assumption of any credit risk, with Pledgee having the right to purchase
all or any part of said Pledged Property so sold at any such sale or sales,
public or private, free of any right or equity of redemption in Pledgors, which
right or equity is hereby expressly waived or released by Pledgors, subject to
the terms of the
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immediately succeeding sentence. The proceeds of any such collection,
redemption, recovery, receipt, appropriation, realization, sale or other
disposition, after deducting all costs and expenses of every kind incurred
relative thereto or incidental to the care, safekeeping or otherwise of any and
all Pledged Property or in any way relating to the rights of Pledgee hereunder,
including reasonable attorneys' fees and legal expenses, shall be applied in
accordance with the terms of the Indenture with Pledgors to be and remain liable
for any deficiency, and Pledgors to receive any sums remaining after
indefeasible payment in full of the Obligations. Pledgors shall be liable to
Pledgee for the payment on demand of all such costs and expenses, and any
reasonable attorneys' fees and legal expenses. Pledgors agree that ten (10) days
prior written notice by Pledgee designating the place and time of any public
sale or of the time after which any private sale or other intended disposition
of any or all of the Pledged Property is to be made, is reasonable notification
of such matters.
(c) Each Pledgor recognizes that Pledgee may be unable to effect a
public sale of all or part of the Pledged Property by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, as now or
hereafter in effect or in applicable Blue Sky or other state securities law, as
now or hereafter in effect, but may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be obliged to agree,
among other things, to acquire such Pledged Property for their own account for
investment and not with a view to the distribution or resale thereof. If at the
time of any sale of the Pledged Property or any part thereof, the same shall
not, for any reason whatsoever, be effectively registered (if required) under
the Securities Act of 1933 (or other applicable state securities law), as then
in effect, Pledgee in its sole and absolute discretion is authorized to sell
such Pledged Property or such part thereof by private sale in such manner and
under such circumstances as Pledgee or its counsel may deem necessary or
advisable in order that such sale may legally be effected without registration.
Each Pledgor agrees that private sales so made may be at prices and other terms
less favorable to the seller than if such Pledged Property were sold at public
sale, and that Pledgee has no obligation to delay the sale of any such Pledged
Property for the period of time necessary to permit the Issuers, even if the
Issuers would agree, to register such Pledged Property for public sale under
such applicable securities laws. Each Pledgor agrees that any private sales made
in good faith under the foregoing circumstances shall be deemed to have been in
a commercially reasonable manner.
(d) All of the Pledgee's rights and remedies, including, but not
limited to, the foregoing and those otherwise arising under this Pledge
Agreement, the LLC Pledge Agreement, the Indenture and the other Security
Documents, the instruments comprising the Pledged Property, applicable law or
otherwise, shall be cumulative and not exclusive and shall be enforceable
alternatively, successively or concurrently as Pledgee may deem expedient, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by any of the Pledgors
of this Pledge Agreement, the LLC Pledge Agreement, the Indenture or any of the
other Security Documents. No failure or delay on the part of Pledgee in
exercising any of its respective options, powers or rights or partial or single
exercise thereof, shall constitute a waiver of such option, power or right.
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(e) The parties hereto agree that the Pledged Property has been pledged
to the Senior Pledgee to secure the Senior Secured Indebtedness. Notwithstanding
anything to the contrary contained in any agreement of the Pledgors or
otherwise, the parties hereto acknowledge and agree that, as more fully set
forth in the Intercreditor Agreement, the Senior Pledgee's rights in and to the
Pledged Property will be first and prior to the rights of the Pledgee on behalf
of the Holders in and to the Pledged Property, which rights of the Pledgee are
subject in all respects to the terms and conditions of the Intercreditor
Agreement. Pursuant to the Intercreditor Agreement, the Senior Pledgee will hold
the Pledged Property for itself and, as agent, for the Pledgee. To the extent
that deliveries of Pledged Property are required to be made to the Pledgee under
this Pledge Agreement, the prior delivery of such Pledged Property to the Senior
Pledgee to secure the Senior Secured Indebtedness shall be deemed to constitute
delivery of such Pledged Property to the Pledgee hereunder.
(f) The parties hereto agree that in the event the Foothill Loan
Agreement is substituted, replaced, or refinanced with any credit facility as
permitted by the Indenture (a "Replacement Credit Facility"), the Trustee shall
enter into an intercreditor agreement with the issuer of any such Replacement
Credit Facility on terms which taken as a whole are not materially less
favorable to the Holders than the terms of the Foothill Intercreditor Agreement.
6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
(a) The validity, interpretation and enforcement of this Pledge
Agreement, and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
laws of the State of New York.
(b) Each Pledgor irrevocably consents and submits to the non-exclusive
jurisdiction of Supreme Court of the State of New York in and for the County of
New York and the United States District Court for the Southern District of New
York and waives any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Pledge Agreement or
in any way connected with or related or incidental to the dealings of the
parties hereto in respect of this Pledge Agreement or the transactions related
hereto or thereto, in each case whether now existing or hereafter arising, and
whether in contract, tort, equity or otherwise, and agrees that any dispute with
respect to any such matters shall be heard only in the courts described above
(except that Pledgee shall have the right to bring any action or proceeding
against Pledgors or their respective property in the courts of any other
jurisdiction which Pledgee deems necessary or appropriate in order to realize on
the Pledged Property or to otherwise enforce its rights against Pledgors or
their respective property).
(c) Each Pledgor hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth herein and
service so made shall be deemed to be completed five (5) days after the same
shall have been so deposited in the U.S. mails, or, at Pledgee's option, by
service upon such Pledgor in any other manner provided under the rules of any
such courts. Within thirty (30) days after such service, such Pledgor shall
appear in answer to such process,
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failing which such Pledgor shall be deemed in default and judgment may be
entered by Pledgee against such Pledgor for the amount of the claim and other
relief requested.
(d) EACH PLEDGOR AND PLEDGEE HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS PLEDGE
AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF SUCH PLEDGOR, PLEDGEE, THE TRUSTEE AND THE HOLDERS IN RESPECT OF
THIS PLEDGE AGREEMENT OR THE TRANSACTIONS RELATED HERETO IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE. EACH PLEDGOR AND PLEDGEE HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT SUCH PLEDGOR OR PLEDGEE MAY FILE AN ORIGINAL COUNTERPART OF A
COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) None of Pledgee, the Trustee or any of the Holders shall have any
liability to Pledgors (whether in tort, contract, equity or otherwise) for
losses suffered by Pledgors in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Pledge
Agreement, or any act, omission or event occurring in connection herewith,
unless it is determined by a final and non-appealable judgment or court order
binding on Pledgee, that the losses were the result of acts or omissions
constituting gross negligence or willful misconduct of Pledgee. In any such
litigation, Pledgee shall be entitled to the benefit of the rebuttable
presumption that Pledgee acted in good faith and with the exercise of ordinary
care in the performance by it of the terms of this Pledge Agreement.
7. MISCELLANEOUS
(a) Each Pledgor agrees that at any time and from time to time upon the
written request of Pledgee, such Pledgor shall execute and deliver such further
documents, including, but not limited to, irrevocable proxies or stock powers,
in form satisfactory to counsel for Pledgee, and will take or cause to be taken
such further acts as Pledgee may reasonably request in order to effect the
purposes of this Pledge Agreement and perfect or continue the perfection of the
security interest in the Individual Pledged Property granted hereunder to
Pledgee, for the benefit of the Holders.
(b) Beyond the exercise of reasonable care to assure the safe custody
and preservation of the Pledged Property (whether such custody is exercised by
Pledgee, or Pledgee's nominee, agent or bailee) Pledgee or Pledgee's nominee,
agents or bailees shall have no duty or liability to protect or preserve any
rights pertaining thereto and shall be relieved of all responsibility for the
Pledged Property upon surrendering it to Pledgors or foreclosure with respect
thereto.
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(c) All notices, requests and demands to or upon the respective parties
hereto shall be in writing and shall be deemed to have been duly given or made:
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 by
registered or certified mail, return receipt requested, five (5) days after
mailing. All notices, requests and demands upon the parties are to be given to
the parties at the following addresses (or to such other address as any party
may designate by notice in accordance with this Section):
If to Pledgors:
Anker Coal Group, Inc.
2708 Cranberry Square
Morgantown, WV 26505
Attention:
Anker Group, Inc.
2708 Cranberry Square
Morgantown, WV 26505
Attention:
Heather Glen Resources, Inc.
2708 Cranberry Square
Morgantown, WV 26505
Attention:
Vantrans, Inc.
2708 Cranberry Square
Morgantown, WV 26505
Attention:
Vindex Energy Corporation
2708 Cranberry Square
Morgantown, WV 26505
Attention:
If to Pledgee:
The Bank of New York
101 Barclay Street
Corporate Finance Unit - 21st Floor
New York, NY 10286
Attention: Steve Giurlando
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(d) All references to the plural herein shall also mean the singular
and to the singular shall also mean the plural. All references to Pledgors, LLC
Pledgor, Pledgee, Trustee, Holders and Issuers pursuant to the definitions set
forth in the recitals hereto, or to any other Person herein, shall include their
respective successors and assigns. The words "hereof," "herein," "hereunder,"
"this Pledge Agreement" and words of similar import when used in this Pledge
Agreement shall refer to this Pledge Agreement as a whole and not any particular
provision of this Pledge Agreement and as this Pledge Agreement now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced. An Event of Default shall exist or continue or be continuing until
such Event of Default is waived in accordance with Section 7(g) hereof.
(e) This Pledge Agreement and any other document referred to herein
shall be binding upon Pledgors and their respective successors and assigns and
inure to the benefit of and be enforceable by Pledgee and its successors and
assigns.
(f) If any provision of this Pledge Agreement is held to be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate this
Pledge Agreement as a whole, but this Pledge Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
(g) Neither this Pledge Agreement nor any provision hereof shall be
amended, modified, waived or discharged orally or by course of conduct, but only
by a written agreement signed by an authorized officer of Pledgee and in
accordance with the amendment provisions of the Indenture. Pledgee shall not, by
any act, delay, omission or otherwise be deemed to have expressly or impliedly
waived any of its rights, powers and/or remedies unless such waiver shall be in
writing and signed by an authorized officer of Pledgee. Any such waiver shall be
enforceable only to the extent specifically set forth therein. A waiver by
Pledgee of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Pledgee would otherwise have on any future occasion, whether similar in kind or
otherwise.
(h) This Pledge Agreement and the security interest and pledge
hereunder shall automatically terminate upon full and final payment and
performance of all Obligations or release of all Collateral in accordance with
the provisions of the Indenture. At such time, the Pledgee shall reassign and
redeliver to Pledgors all of the Pledged Property hereunder which has not been
sold, disposed of, retained or applied by the Pledgee in accordance with the
terms hereof. Such reassignment and redelivery shall be without warranty by or
recourse to the Pledgee, and shall be at the expense of Pledgors. At such time,
this Pledge Agreement shall no longer constitute a lien upon or grant any
security interest in any of the Pledged Property, and the Pledgee shall, at
Pledgors' expense, deliver to Pledgors written acknowledgment thereof and
cancellation of this Pledge Agreement in a form reasonably requested by
Pledgors. Without limiting the generality of the foregoing, the security
interest and pledge hereunder shall not be terminated by the transfer of any of
the Pledged Property hereunder from the Pledgee to Pledgors, or any person
designated by Pledgors, for the purpose of ultimate sale, exchange,
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presentation, collection, renewal or registration of transfer or for any other
purpose. The Pledgee hereby appoints Pledgors as its attorneys-in-fact to
execute and record all documents necessary to acknowledge, memorialize or effect
cancellation of the security interests created hereby, effective as of the
termination of this Pledge Agreement.
(i) On demand of the Pledgee, each Pledgor agrees to pay or
satisfactorily provide for all expenses incurred by the Pledgee under this
Pledge Agreement. For the repayment of such advances the Pledgee shall have the
right to use and apply any Trust Moneys held by it in its capacity as Collateral
Agent under Article X of the Indenture as part of the Collateral.
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IN WITNESS WHEREOF, each of the Pledgors has executed this Pledge
Agreement as of the day and year first above written.
ANKER COAL GROUP, INC.
By: /s/ Bruce Sparks
-------------------------------------
Title: President
----------------------------------
ANKER GROUP, INC.
By: /s/ Bruce Sparks
-------------------------------------
Title: President
----------------------------------
VANTRANS, INC.
By: /s/ B. Judd Hartman
-------------------------------------
Title: Secretary
----------------------------------
HEATHER GLEN RESOURCES, INC.
By: /s/ B. Judd Hartman
-------------------------------------
Title: Secretary
----------------------------------
VINDEX ENERGY CORPORATION
By: /s/ B. Judd Hartman
-------------------------------------
Title: Secretary
----------------------------------
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================================================================================
EXHIBIT A
TO
PLEDGE AND SECURITY AGREEMENT
- --------------------------------------------------------------------------------
CERTIFICATE
PLEDGOR ISSUER NO. SHARES
- -------------------------------------------------------------------------------------------------------------------------
Anker Coal Group, Inc. Anker Group, Inc. 16 254 23/100
2708 Cranberry Square
Morgantown, WV 26505
- -------------------------------------------------------------------------------------------------------------------------
Vebe International, Inc. B3 250
(a/k/a Anker Group, Inc.)
- -------------------------------------------------------------------------------------------------------------------------
Simba Group, Inc. 1 1
- -------------------------------------------------------------------------------------------------------------------------
Anker Group, Inc. Vitol-Anker Holding, Inc. 5 10
1209 Orange Street (a/k/a Anker Energy
Wilmington, DE 19801 Corporation)
- -------------------------------------------------------------------------------------------------------------------------
Juliana Mining Company, Inc. 6 500
- -------------------------------------------------------------------------------------------------------------------------
Patriot Mining Company, Inc. 6 100
- -------------------------------------------------------------------------------------------------------------------------
Vindex Energy Corporation 1 100
- -------------------------------------------------------------------------------------------------------------------------
Anker Virginia Mining 1 100
Company, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Anker West Virginia Mining 1 100
Company, Inc.
- -------------------------------------------------------------------------------------------------------------------------
Anker Power Services, Inc. 1 100
- -------------------------------------------------------------------------------------------------------------------------
Bronco Mining Company, Inc. 7 100
- -------------------------------------------------------------------------------------------------------------------------
Heather Glen Resources, Inc. 1 100
- -------------------------------------------------------------------------------------------------------------------------
Melrose Coal Company, Inc. 1 100
- -------------------------------------------------------------------------------------------------------------------------
Vantrans, Inc. 5 1,000
- -------------------------------------------------------------------------------------------------------------------------
Hawthorne Coal Company, Inc. 1 100
- -------------------------------------------------------------------------------------------------------------------------
Marine Coal Sales Company 3 65
- -------------------------------------------------------------------------------------------------------------------------
Heather Glen Upshur Property, Inc. 2 1,000
Resources, Inc.
HC 36, Box 31
Tallmansville, WV 26237
- -------------------------------------------------------------------------------------------------------------------------
Vantrans, Inc. King Knob Coal Co., Inc. 14 2000
2708 Cranberry Square
Morgantown, WV 26505
- -------------------------------------------------------------------------------------------------------------------------
Vindex Energy New Allegheny Land Holding 2 10
Corporation Company, Inc.
2708 Cranberry Square
Morgantown, WV 26505
================================================================================
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