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Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 3, 1998,
by and among PEN HOLDINGS, INC., a Tennessee corporation ("Pen Holdings" or
"Borrower")
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XXXXXX BANK, N.A., a national banking association ("Mellon"), CIBC INC. and any
other "Banks" which are hereafter made a party to this Agreement in accordance
with the provisions of Section 9.15 of the Credit Agreement (individually a
"Bank" and collectively, the "Banks") and Mellon, as Agent for the Banks (in
such capacity, the "Agent")
RECITALS:
WHEREAS, the Agent, the Banks, the Borrower and certain subsidiaries of
the Borrower entered into a Credit Agreement dated as of August 16, 1994, as
amended (the "Original Credit Agreement"), pursuant to which the Banks agreed to
make certain loans to the Borrower and certain of its subsidiaries in accordance
with, and as provided for in, the Original Credit Agreement;
WHEREAS, the Borrower intends to issue senior, unsecured notes due 2008
in an aggregate principal amount equal to $100,000,000 (the "Senior Notes") on
the terms and conditions described in the Senior Note Offering Memorandum, the
proceeds of which will be used to prepay in full the term loans outstanding
pursuant to the Original Credit Agreement, to prepay in full certain other
indebtedness of the Borrower and its Subsidiaries, and for general corporate
purposes;
WHEREAS, the Borrower has requested that the Original Credit Agreement
be amended and restated in order to, among other things, (i) increase the
Revolving Credit Commitments of the Banks to the aggregate principal amount of
$40,000,000, (ii) terminate the commitments to make the Term Loans, and (iii)
amend and restate the Original Credit Agreement, as more particularly provided
herein; and
WHEREAS, the Banks and the Borrower have agreed to amend and restate
the Original Credit Agreement as set forth below.
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NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Agreement, and intending to be legally bound, the
parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms have the following
meanings, respectively, unless the context otherwise clearly requires:
"Active Subsidiaries" means any of the Borrower's Consolidated
Subsidiaries which either (i) own Property having a fair value in excess of
$100,000, or (ii) have revenue or income in excess of $100,000 in any fiscal
year during the term of this Agreement.
"Affiliate" means any Person which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a the Borrower or
entity, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Mellon Bank, N.A. with an office at Two Mellon Xxxx
Xxxxxx, Xxxx 000, Xxxxxxxxxx, XX 00000-0000.
"Agreement" means this Amended and Restated Credit Agreement as
amended, modified or supplemented from time to time.
"Applicable Basis Points" means the basis points added to the Prime
Rate with respect to the Prime Rate Option or the basis points added to the
Euro-Rate with respect to the Euro-Rate Option, as the case may be, as
determined by reference to the chart of Applicable Basis Points set forth in
Section 2.03(a) of this Agreement.
"Assignment of Leases and Royalties" means the Assignment of Royalties,
Rents and Coal Leases or the Amended and Restated Assignment of Royalties, Rents
and Coal Leases, as the case may be, dated as of the date of this Agreement, as
amended, modified or supplemented from time to time, executed and delivered by
each of Pen Coal and Elk Horn, respectively, to the Agent.
"Assignment of Intercompany Security Documents" means the Assignment of
Security Documents dated the date of this
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Agreement, as amended, modified or supplemented from time to time, executed and
delivered by Pen Holdings to the Agent.
"Banks" means, individually or collectively, Mellon Bank, N.A., a
national banking association, with an office at Two Mellon Xxxx Xxxxxx, Xxxx
000, Xxxxxxxxxx XX 00000-0000, CIBC Inc. with an office at Two Paces West, 0000
Xxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, XX 00000 ("CIBC") and any other "Banks"
which are hereafter made a party to this Agreement in accordance with the
provisions of Section 9.15 of the Credit Agreement and their successors and
assigns. With respect to consents of the Banks under this Agreement and the
other Loan Documents, please see Section 9.03 of this Agreement.
"Bankruptcy Code" means 11 U.S.C. Section 101 et. seq., as the same may
be modified or amended from time to time.
"Big Xxxxx River Terminal" means the real property, fixtures and other
property interests comprising the Big Xxxxx River Terminal owned by Pen Coal and
located in Xxxx County, Kentucky.
"Borrower" means Pen Holdings.
"Business Day" means any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania or other day on which
the Agent is not open for business in Pittsburgh, Pennsylvania.
"Camden Hardwood" means Camden Hardwood Company, a Tennessee general
partnership.
"Capitalized Lease Obligations" means any amount payable with respect
to any lease of any tangible or intangible property (whether real, personal or
mixed), however denoted, which is required by GAAP to be reflected as a
liability on the face of the balance sheet of the lessee.
"Cash Equivalents" means unrestricted cash and cash equivalents and
equity and debt securities which are marketable without restriction on a
nationally recognized securities exchange.
"Change of Control" means (a) the death of Xxxxxxx X. Xxxxxxx, or (b)
the failure, at any time, of Xxxxxxx X. Xxxxxxx to (i) own, free and clear of
all Liens at least 51% of the outstanding voting common stock (on a fully
diluted basis) of Borrower, and (ii) control the election of a majority of the
members of the board of directors of Borrower and each of the Eligible
Subsidiaries.
"Closing Date" means June 8, 1998, or such other date upon which the
parties may agree.
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"Coal Purchase Agreements" means any coal purchase agreements of any of
the Eligible Subsidiaries which are described in the Collateral Assignment of
Coal Purchase Agreements.
"Coal Supply Agreements" means the (i) Coal Supply Agreement between
Pen Coal Corporation and The Dayton Power and Light Company, dated as of July 1,
1992, as amended; (ii) Coal Contract between Pen Coal Corporation and East
Kentucky Power Cooperative Incorporated, dated as of July 12, 1994, as amended
by Coal Contract Amendment No. 1, dated as of November 25, 1996 and Coal
Contract Amendment No 2, dated as of November 15, 1997; (iii) Coal Supply
Agreement No. 00-00-00-000 between Pen Coal Corporation and Indiana Michigan
Power Company dated as of November 14, 1997; (iv) Agreement between Pen Coal
Corporation and Appalachian Power Company dated as of September 10, 1990; (v)
Coal Supply Agreement between P & C "Bituminous Coal" (now Pen Coal Corporation)
and Taiwan Power Company dated June 15, 1989; (vi) Agreement for the Sale and
Purchase of Coal between Electric Fuels Corporation and Pen Coal Corporation
dated as of February 28, 1991, as amended and restated by the Amended and
Restated Agreement for the Sale and Purchase of Coal, dated January 1, 1995 and
the Second Amended Agreement for the Sale and Purchase of Coal, effective April
1, 1998; (vii) Coal Purchase Order from Alleg-Xxxxxxxx Coal Co., Inc. to Pen
Coal dated August 30, 1996; and (viii) any other agreements of any of the
Eligible Subsidiaries which have a term of at least one (1) year and provide for
the supply of at least 250,000 tons per year of coal.
"Code" means the Uniform Commercial Code as in effect on the date of
this Agreement and as amended from time to time, of the state or states having
jurisdiction with respect to all or any portion of the collateral granted or
assigned to the Agent or the Banks from time to time under or in connection with
this Agreement.
"Collateral" has the meaning given to it in the Security Agreements and
the Subsidiary Security Agreements.
"Collateral Assignments of Coal Purchase and Supply Agreements" means
the Collateral Assignment of Coal Purchase and Sales Agreements dated the date
of this Agreement and delivered to Agent by the Eligible Subsidiaries which are
parties to Coal Purchase Agreements or Coal Supply Agreements, as each may be
amended, modified or supplemented from time to time, granting a security
interest in and assigning to the Agent the rights of the Eligible Subsidiaries
in and to the Coal Purchase Agreements and the Coal Supply Agreements.
"Collateral Assignments of Contract Mining Agreements" means the
Collateral Assignment of Contract Mining Agreements dated the date of this
Agreement by each of the Eligible Subsidiaries which
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are parties to Contract Mining Agreements, delivered to the Agent, as each may
be amended, modified or supplemented from time to time.
"Collateral Assignment of Operating Agreements" means the Collateral
Assignment of Operating Agreements dated the date of this Agreement, as amended,
modified or supplemented from time to time, executed and delivered by each
Eligible Subsidiary to the Agent.
"Columbia Lien" means the lien of [Pocahontas Land Holding Company, as
assignee of Columbia Coal Gasification Corporation] on the coal Inventory of Pen
Coal located on the Pen Coal Real Property located in the State of West
Virginia, equipment of Pen Coal used to mine such coal inventory and accounts
receivable relating to the sale of such coal inventory as provided in that
certain Security Agreement granted by Pen Coal to Columbia Coal Gasification
Corporation dated July 30, 1987 [and assigned to Pocahontas Land Holding Company
by ___________ dated _________.]
"Compliance Certificate" has the meaning given to it in
Section 5.01(d).
"Consolidated Capital Expenditures" for any period means, for the
Borrower and its Consolidated Subsidiaries, on a consolidated basis, all
amounts, including Capitalized Lease Obligations, which in accordance with GAAP
would be debited to fixed asset accounts on a consolidated balance sheet during
such period in respect of the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any
other fixed assets or leaseholds during such period.
"Consolidated Cash Taxes" means, with respect to the Borrower and its
Consolidated Subsidiaries, for any period, taxes actually paid during such
period, provided that any payment to the United States Internal Revenue Service
made in connection with a settlement of the Tax Petition shall be included in
the calculation of Consolidated Cash Taxes only to the extent that such payment
exceeds the amount identified as a liability on account of the Tax Petition on
the consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
at the time of determination.
"Consolidated Current Maturities of Long Term Debt" means, with respect
to the Borrower and its Consolidated Subsidiaries, for any period, current
maturities of Consolidated Funded Indebtedness actually paid during such period,
provided, however, that Consolidated Current Maturities of Long Term Debt shall
exclude (i) any repayments of any Indebtedness repaid with proceeds of the
Senior Notes and (ii) any payments made during such period on account of (A) the
credit facilities issued
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pursuant to the Original Credit Agreement, (B) the credit facilities provided by
Wachovia Bank to Pen Cotton, and (C) all other Debt which is paid with proceeds
of the Senior Notes, all for the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Debt to EBITDA Ratio" means, for any period, as of the
date of determination, the ratio of (i) Consolidated Funded Indebtedness, to
(ii) Consolidated EBITDA.
"Consolidated EBITDA" means, with respect to the Borrower and its
Consolidated Subsidiaries, for any period, as of the date of determination, an
amount equal to (a) the sum of (i) Consolidated Net Income for such period, plus
(ii) the provision for taxes for such period based on income or profits to the
extent such income or profits were included in computing Consolidated Net Income
and any provision for taxes utilized in computing net loss under clause (i)
hereof, plus, (iii) Consolidated Interest Expense for such period, plus (iv)
depreciation and depletion for such period on a consolidated basis, plus (v)
amortization of intangibles for such period on a consolidated basis, plus (vi)
any other non-cash items reducing Consolidated Net Income for such period, plus
(vii) charges resulting from fees and expenses (cash or non-cash) incurred in
connection with the offering of the Senior Notes, the termination of the credit
facilities offered under the Original Credit Agreement, including the redemption
of the warrants issued to the Banks in connection with the Original Credit
Agreement, and the establishment of the Revolving Credit Loans, and charges
resulting from prepayment penalties incurred in connection with the early
retirement of Indebtedness out of the net proceeds from the offering of the
Senior Notes, minus (b) all non-cash items increasing Consolidated Net Income
for such period, minus (c) to the extent not included above, interest income
accruing on restricted cash and Cash Equivalents that the Borrower has deposited
in escrow to fund guarantees of Indebtedness of International Marine Terminals,
minus (d) all cash payments during such period relating to non-cash charges that
were added back in determining Consolidated EBITDA in any prior period, all for
the Borrower and its Consolidated Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Borrower and its Consolidated Subsidiaries, for any period, the ratio of (i)
Consolidated EBITDA, to (ii)(A) Consolidated Current Maturities of Long Term
Debt, plus (B) Consolidated Interest Expense, plus (C) Consolidated Cash Taxes,
all for the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Consolidated Funded Indebtedness" for any accounting period means all
(i) Debt of Pen Holdings and its Consolidated
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Subsidiaries (including the current portion thereof) which would for such
accounting period be classified in whole or in part as a long-term liability of
Pen Holdings and its Consolidated Subsidiaries in accordance with GAAP and shall
also in any event include (A) any indebtedness having a final maturity more than
one year from the date of creation of such indebtedness and (B) any
indebtedness, regardless of its term, which is renewable or extendable by such
borrower (pursuant to the terms thereof or otherwise) to a date more than one
year from the date of creation of such indebtedness and (ii) Debt of Pen
Holdings and its Consolidated Subsidiaries (other than accrued expenses or
accrued payables for trade obligations which do not represent borrowed money)
which would for such accounting period be classified in whole or in part as a
current liability of Pen Holdings and its Consolidated Subsidiaries in
accordance with GAAP, less (iii) the value of Cash Equivalents in excess of the
aggregate sum of $3,000,000.
"Consolidated Interest Expense" means, with respect to the Borrower and
its Consolidated Subsidiaries, for any period, without duplication, (i) the
aggregate amount of interest charges, whether expensed or capitalized, incurred
or accrued by the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP for such period (including non-cash
interest payments), plus (ii) to the extent not included in clause (i) above, an
amount equal to the sum of: (A) imputed interest included in Capitalized Lease
Obligations, (B) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (C) the net
costs associated with Rate Protection Agreements and other hedging obligations,
(D) amortization of deferred financing costs and expenses, (E) the interest
portion of any deferred payment obligations, (F) amortization of discount or
premium on Indebtedness, if any, (G) all capitalized interest and all accrued
interest, (H) all non-cash interest expense and (I) all interest incurred or
paid under any guarantee of Indebtedness (including a guarantee of principal,
interest or any combination thereof) of any Person minus to the extent included
in clauses (i) or (ii) above, fees and expenses (cash or non-cash) incurred in
connection with the issuance of the Senior Notes, the termination of the
facilities issued in connection with the Original Credit Agreement, including
the redemption of the warrants issued to the Bank parties to the Original Credit
Agreement, and the establishment of the Revolving Credit Commitments). For
purposes of calculating Consolidated Interest Expense on a pro forma basis, the
interest on Indebtedness bearing a floating rate of interest shall be the
interest rate in effect at the time of determination, taking into account on a
pro forma basis any Rate Protection Agreement applicable to such Indebtedness if
such Rate Protection Agreement has a remaining term at the date of determination
of at least 12 months.
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"Consolidated Net Income" for any accounting period means the net
income after taxes of Pen Holdings and its Consolidated Subsidiaries for such
period determined in accordance with GAAP; provided, however, that Consolidated
Net Income shall not include any gain or loss attributable to extraordinary
items, determined in accordance with GAAP, or any taxes or tax savings as a
result thereof.
"Consolidated Net Worth" means the shareholders' equity of the Borrower
and its Consolidated Subsidiaries, including common stock, paid-in capital and
retained earnings, but excluding convertible preferred stock, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiaries" means and includes only those Subsidiaries
whose accounts are fully consolidated with the accounts of Pen Holdings in
accordance with GAAP and Pen Holdings' policy of consolidation as in effect from
time to time and as reflected in Pen Holdings' then most recent annual audited
financial statements, which in any event shall at all times include, Pen Coal,
River Marine and Elk Horn.
"Contract Mining Agreements" means those certain contract mining
agreements described in the Collateral Assignments of Contract Mining
Agreements.
"Corresponding Source of Funds" means in the case of any Rate Segment
of the Euro-Rate Portion of the Loans, the proceeds of hypothetical receipts by
a Notional Euro-Rate Funding Office or by the Agent through a Notional Euro-Rate
Funding Office of one or more dollar deposits in the interbank eurodollar market
at the beginning of the Euro-Rate Period corresponding to such Rate Segment,
having maturities approximately equal to such Euro-Rate Period and in aggregate
amount approximately equal to such Rate Segment.
"Credit Exposure" means, with respect to any Bank, the aggregate
unutilized amount of the Revolving Credit Commitments of such Bank and the
aggregate outstanding principal amount of all Loans made by such Bank.
"Debt" or "Indebtedness" means: (i) indebtedness or liability for
borrowed money, or for the deferred purchase price of property or services
(including trade obligations) whether such indebtedness or liability is matured
or unmatured, liquidated or unliquidated, direct or contingent, and joint or
several; (ii) Capitalized Lease Obligations; (iii) all liabilities in respect of
unfunded vested benefits under any Plan; (iv) obligations under letters of
credit; (v) all guaranties, endorsements (other than for collection or deposit
in the ordinary course of business), and other contingent
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obligations to purchase, to provide funds for payment, to supply funds to invest
in any Person, or otherwise to assure a creditor against loss; (vi) obligations
secured by any lien on property owned by such Person, whether or not the
obligations have been assumed and (vii) obligations under any Rate Protection
Agreements.
"Debt Issuance" means the creation, issuance or incurrence by the
Borrower or any of Eligible Subsidiaries after the Closing Date of obligations
for borrowed money (whether by loan, the issuance and sale of debt securities or
the sale of property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such property from the Borrower or an
Eligible Subsidiary), other than (i) Indebtedness incurred under this Agreement,
and (ii) Indebtedness permitted pursuant to Section 6.02 (d).
"Deeds of Trust" or "Mortgages" means the Pen Coal Deeds of Trust, the
Pen Coal Mortgage, the Elk Horn Mortgages, the Elk Horn Deed of Trust, the River
Marine Deed of Trust, and the Pen Cotton Mortgage.
"Defined Benefit Plan" means a defined benefit plan as defined at
Section 3(35) of ERISA.
"Disposition" means any sale, assignment, transfer or other disposition
of any Property (whether now owned or hereafter acquired) by the Borrower or any
of its Consolidated Subsidiaries to any Person, excluding any sale, assignment,
transfer, exchange or other disposition of (i) any inventory sold or disposed of
in the ordinary course of business and on ordinary business terms, (ii) any
machinery or equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use or no longer useful or productive in connection
with the business of the Borrower or its Consolidated Subsidiaries, (iii)
Property described in clause (i) of the definition of "Non-Core Assets", (iv)
any Property described in clause (ii) of the definition of "Non-Core Assets" to
the extent that the Net Available Proceeds of any Disposition of such Property
does not exceed $3,000,000 in the aggregate in any fiscal year of the Borrower
and its Consolidated Subsidiaries, and (v) any other Property sold, assigned,
transferred, exchanged or disposed of in a transaction or series of transactions
to the extent that Net Available Proceeds do not exceed $1,000,000 in the
aggregate in any fiscal year of the Borrower and its Consolidated Subsidiaries.
"Distributions" has the meaning given to it in Section 6.05 of this
Agreement.
"Eligible Subsidiary" means any of, and "Eligible Subsidiaries" means
all of, Pen Coal, Elk Horn, River Marine and
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Pen Cotton and such other Active Subsidiaries as are approved to be Eligible
Subsidiaries by the Banks, in their sole discretion, after the date of this
Agreement.
"Elk Horn" means The Elk Horn Coal Corporation, a West Virginia
corporation, with its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx
Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Elk Horn Deed of Trust" means, collectively, those certain Deeds of
Trust, Security Agreement, Assignment and Fixture Filing covering the Elk Horn
Real Property located in West Virginia, executed and delivered by Elk Horn to
the Agent, as the same may be amended, modified or supplemented from time to
time.
"Elk Horn Mortgages" means, collectively, those certain Open-End
Mortgages, Leasehold Mortgages, Security Agreement, Assignment and Fixture
Filing covering the Elk Horn Real Property located in Kentucky, executed and
delivered by Elk Horn to the Agent, as the same may be amended, modified or
supplemented from time to time.
"Elk Horn Real Property" means certain of Elk Horn's real property,
leasehold interests, mineral rights and coal reserves located in Floyd, Pike,
Magoffin, Johnson, Xxxxx, Xxxxxx and Xxxxxxx Counties, Kentucky and Xxxxx,
Lincoln and Kanawha Counties, West Virginia, as more particularly described in
the Elk Horn Mortgages and the Elk Horn Deeds of Trust, respectively.
"Elk Horn Security Agreement" means the Amended and Restated Security
Agreement dated as of the date of this Agreement, as amended, modified or
supplemented from time to time, executed and delivered by Elk Horn to the Agent.
"Elk Horn Suretyship Agreement" means the Amended and Restated
Suretyship Agreement dated as of the date of this Agreement, as amended,
modified or supplemented from time to time, executed and delivered by Elk Horn
to the Agent.
"Equity Issuance" means (a) any issuance or sale by the Borrower or any
of the Eligible Subsidiaries of (i) any capital stock, (ii) any warrants or
options exercisable in respect of capital stock, or (iii) any other security or
instrument representing an equity interest (or the right to obtain any equity
interest) in the Borrower or any of the Eligible Subsidiaries, or (b) the
receipt by the Borrower or any of the Eligible Subsidiaries after the Closing
Date of any capital contribution (whether or not evidenced by any equity
security issued by the recipient of such contribution).
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"ERISA" means the Employee Retirement Income Security Act of 1974 as in
effect as of the date of this Agreement and as amended from time to time in the
future.
"Euro-Rate" has the meaning given to it in Section 2.16 of
this Agreement.
"Euro-Rate Reserve Percentage" has the meaning given to it
in Section 2.16 of this Agreement.
"Event of Default" means any of the Events of Default described in
Section 7.01 of this Agreement.
"Expiration Date" means May 31, 2003, unless extended in writing by the
Agent in its sole and absolute discretion.
"Federal Funds Effective Rate" means for any day the weighted average
of the rates on overnight federal funds transactions arranged on such day by
Federal Funds Brokers computed and released by the Federal Reserve Bank of
Cleveland (Pittsburgh Branch)(or any successor) in substantially the same manner
as such Federal Reserve Bank currently computes and releases the weighted
average it refers to as the "Federal Funds Effective Rate."
"GAAP" means generally accepted accounting principles (as such
principles may change from time to time) applied on a consistent basis (except
for changes in application with which the Borrower's independent certified
public accountants concur).
"Hazardous Materials Certificate and Indemnification Agreement" means
the Amended and Restated Hazardous Materials Certificate and Indemnification
Agreement dated as of the date of this Agreement, as amended, modified or
supplemented from time to time, executed and delivered by the Borrower and the
Sureties to the Agent.
"Interest Rate Option" has the meaning given to it in Section 2.03.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"Lease Obligation" means an obligation of a lessee under a lease of any
tangible or intangible property (whether real, personal or mixed), including
without limitation, with respect to any period under any such lease, the
aggregate amounts payable by such lessee to or on behalf of the lessor for such
period, including, without limitation, property taxes, insurance, interest and
amortized charges which such lessee is required to pay pursuant to such lease.
Whenever it is necessary to
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determine the amount of Lease Obligations for any period with respect to which
any of the rentals under the relevant lease are not definitely determinable by
the terms of the lease, all such rentals will be estimated in a reasonable
amount for such period.
"Letters of Credit" has the meaning assigned to that term in Section
2.20 of this Agreement.
"Letter of Credit Commitment" has the meaning assigned to it
in Section 2.20 of this Agreement.
"Lien" means any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature,
including, but not limited to, any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loan Document" or "Loan Documents" means singularly or collectively,
as the context may require: (i) this Agreement, (ii) the Notes, (iii) the
Security Agreements, (iv) the UCC-1 financing statements filed in accordance
with the Security Agreements and the Deeds of Trust and the Mortgages, (v) the
Suretyship Agreements, (vi) the Deeds of Trust, (vii) the Mortgages, (viii) the
Hazardous Materials Certificate and Indemnity Agreement, (ix) the Subsidiary
Notes, (x) the Subsidiary Security Agreements and the Subsidiary Assignment of
Leases and Royalties, (xi) the Subsidiary Deeds of Trust and the Subsidiary
Mortgages, (xii) the Assignment of Subsidiary Security Documents, (xiii) the
Pledge Agreements, (xiv) the Collateral Assignments of Coal Purchase Agreements,
(xv) the Assignment of Leases and Royalties, (xvi) the Collateral Assignment of
Operating Agreements, (xvii) the Collateral Assignment of Contract Mining
Agreements and (xviii) any Rate Protection Agreements, and any and all other
documents, instruments, certificates and agreements executed and delivered in
connection with this Agreement, as any of them may be amended, modified,
extended or supplemented from time to time.
"Loan" or "Loans" means the Revolving Credit Loans and any other loan
or loans made by the Banks to the Borrower under this Agreement.
"London Business Day" has the meaning given to it in Section 2.16 of
this Agreement.
"Mandatory Prepayments" has the meaning given to it in Section 2.10(c).
"Marine Terminals" means Marine Terminals Incorporated, a Missouri
corporation with its chief executive offices at 5110
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Maryland Way, Third Xxxxx Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Marine Terminals Security Agreement" means the Security Agreement
dated as of the date of this Agreement, as amended, modified or supplemented
from time to time, executed and delivered by Marine Terminals to the Agent.
"Marine Terminals Suretyship Agreement" means the Suretyship Agreement
dated as of the date of this Agreement, as amended, modified or supplemented
from time to time, executed and delivered by Marine Terminals to the Agent.
"Material Adverse Effect" shall mean any matter, item, circumstance or
state of events which, in the discretion of the Banks, (i) results or is
reasonably likely to result in a material interruption, disturbance or
impediment to the operation of the business of the Borrower and its Consolidated
Subsidiaries in the ordinary course of their business, (ii) has or is reasonably
likely to have a material adverse effect on the business, financial condition,
prospects, operations or assets of the Borrower and its Consolidated
Subsidiaries, or (iii) has or is reasonably likely to have a material adverse
effect on the ability of the Borrower, the Eligible Subsidiaries or the Sureties
to perform their obligations under this Agreement or the other Loan Documents.
"Material Agreements" has the meaning given to it in Section 3.25 of
this Agreement.
"Mobile Equipment" means all equipment which is (a) mobile, (b) of a
type normally used in more than one jurisdiction, and (c) which is used or
useful in connection with the coal mining, extraction and development activities
or the cotton activities of the Borrower or any of the Eligible Subsidiaries.
"Net Available Proceeds" mean:
(a) in the case of any Disposition, an amount (not less than $0) equal
to the amount of Net Cash Payments received by the Borrower or any of its
Consolidated Subsidiaries in connection with such Disposition; and
(b) in the case of any Debt Issuance or Equity Issuance (other than
Debt Issuances or Equity Issuances which are purchase money transactions or
transactions undertaken in connection with the acquisition of Property [other
than cash or cash equivalents] which is used or useful in the business of the
Borrower and its Consolidated Subsidiaries and which do not result in the
receipt by the Borrower or its Consolidated Subsidiaries of cash or cash
equivalents), the aggregate amount of all cash received by the Borrower and its
Consolidated Subsidiaries in respect of such
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14
Debt Issuance or Equity Issuance, as the case may be, net of reasonable expenses
incurred by the Company and its Consolidated Subsidiaries in connection
therewith.
"Net Cash Payments" means, with respect to any Disposition, the
aggregate amount of all cash payments (including, without limitation, all cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when cash is received), and
the fair market value of any non-cash consideration (other than the fair market
value of any notes or receivables which represent deferred purchase price),
received by the Borrower or its Consolidated Subsidiaries directly or indirectly
in connection with such Disposition; provided that Net Cash Payments shall be
net of (a) the amount of any legal, title and recording tax expenses,
commissions and other customary fees and expenses paid by the Borrower and its
Consolidated Subsidiaries in connection with such Disposition, (b) any federal,
state and local income or other taxes reasonably estimated to be payable by the
Borrower and its Consolidated Subsidiaries as a result of such Disposition (but
only to the extent that such estimated taxes are actually paid during the 12
month period following the date of such Disposition), (c) any repayments by the
Borrower or its Consolidated Subsidiaries of Indebtedness to the extent that
such Indebtedness is secured by a Lien on the Property that is the subject of
such Disposition, (d) appropriate amounts provided as a reserve in accordance
with GAAP against liabilities associated with the property subject to the
Disposition, including without limitation indemnification or severance costs,
until such time as such amounts are no longer reserved, (e) all payments with
respect to liabilities associated with the property subject to the Disposition,
including without limitation trade payables and other accrued liabilities, and
(f) all distributions and other payments required to be made or made on a pro
rata basis to minority interest holders in the entity effecting the Disposition.
"Non-Core Assets" means (i)(A) the ownership interest of Marine
Terminals in or the international marine terminal owned by International Marine
Terminals, (B) the office building located at 0000 Xxxxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxxx owned by Pen Holdings, (C) assets associated with the cotton business
or the lumber business operated by Consolidated Subsidiaries of Pen Holdings,
(D) the Big Xxxxx River Terminal, (E) the stock of Pen Cotton, Pen Cotton
Company, Pen Hardwood or Marine Terminals, and (F) the ownership interest of Pen
Hardwood in or the assets of Camden Hardwood, and (ii) other Property which is
owned by the Borrower or its Consolidated Subsidiaries and which is not
generally accounted for or generally known to be included in the coal division
of Pen Holdings, provided that any such Property is not
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used or useful in the coal operations of Pen Holdings and its Consolidated
Subsidiaries.
"Note" or "Notes" means the Revolving Credit Notes, and any other note
or notes of the Borrower executed and delivered pursuant to this Agreement,
together with all extensions, renewals, refinancings or refundings in whole or
in part.
"Notice of Borrowing" has the meaning ascribed that term in
Section 2.01(c).
"Notional Euro Rate Funding Office" has the meaning ascribed to that
term in Section 2.12.
"Office", when used in connection with the Agent, means its office
located at Two Mellon Bank Center, Room 230, Pittsburgh Pennsylvania 15259-0001,
or such other office of the Agent as the Agent may designate in writing from
time to time.
"Official Body" means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Operating Agreements" means all rail agreements, transportation
agreements, operating agreements, mining agreements and any and all other
agreements of any Borrower or any Eligible Subsidiary with third parties which
are necessary or material to the operations of the Borrower or any of the
Eligible Subsidiaries which are described in the Collateral Assignment of
Operating Agreements.
"PBGC" means the Pension Benefit Guaranty Corporation established under
Title IV of ERISA or any successor to the PBGC.
"Pen Coal" means Pen Coal Corporation, a Tennessee corporation, with
its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Pen Coal Deeds of Trust" means, collectively, those certain Credit
Line Deeds of Trust, Leasehold Credit Line Deeds of Trust, Security Agreement,
Assignment and Fixture Filing covering the Pen Coal Real Property located in
West Virginia, executed and delivered by Pen Coal to the Agent, as amended,
modified or supplemented from time to time.
"Pen Coal Mortgage" means that certain Open-End Mortgage, Leasehold
Mortgage, Security Agreement, Assignment and Fixture Filing covering the Pen
Coal Real Property located in Kentucky,
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16
executed and delivered by Pen Coal to the Agent, as amended, modified or
supplemented from time to time.
"Pen Coal Real Property" means (i) Pen Coal's real property, leasehold
interests, mineral rights and coal reserves located in Xxxxx, Lincoln and Xxxxx
Counties, West Virginia, as more particularly described in the Pen Coal Deeds of
Trust, (ii) Pen Coal's real property, fixtures and other property interests
comprising the Devils Trace Preparation Plant located in Xxxxx County, West
Virginia, and (iii) the Big Xxxxx River Terminal.
"Pen Coal Security Agreement" means the Amended and Restated Security
Agreement dated as of the date of this Agreement, as amended, modified or
supplemented from time to time, executed and delivered by Pen Coal to the Agent.
"Pen Coal Suretyship Agreement" means the Amended and Restated
Suretyship Agreement dated as of the date of this Agreement, as amended,
modified or supplemented from time to time, executed and delivered by Pen Coal
to the Agent.
"Pen Cotton" means Pen Cotton Company of South Carolina, a South
Carolina corporation with its chief executive offices at 0000 Xxxxxxxx Xxx,
Xxxxx Xxxxx Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Pen Cotton Mortgage" means that certain Open-End Mortgage, Leasehold
Mortgage, Security Agreement, Assignment and Fixture Filing covering the Pen
Cotton Real Property located in South Carolina, executed and delivered by Pen
Cotton to the Agent, as amended, modified or supplemented from time to time.
"Pen Cotton Real Property" means (i) Pen Cotton's real property,
fixtures and improvements located in Xxxxxxx County, South Carolina, as more
particularly described in the Pen Cotton Mortgage.
"Pen Cotton Security Agreement" means the Security Agreement dated as
of the date of this Agreement, as amended, modified or supplemented from time to
time, executed and delivered by Pen Cotton to the Agent.
"Pen Cotton Suretyship Agreement" means the Suretyship Agreement dated
as of the date of this Agreement, as amended, modified or supplemented from time
to time, executed and delivered by Pen Cotton to the Agent.
"Pen Cotton Company" means Pen Cotton Company, a Tennessee corporation
with its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
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"Pen Cotton Company Security Agreement" means the Security Agreement
dated as of the date of this Agreement, as amended, modified or supplemented
from time to time, executed and delivered by Pen Cotton Company to the Agent.
"Pen Cotton Company Suretyship Agreement" means the Suretyship
Agreement dated as of the date of this Agreement, as amended, modified or
supplemented from time to time, executed and delivered by Pen Cotton Company to
the Agent.
"Pen Hardwood" means Pen Hardwood Company, a Tennessee corporation with
its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Pen Hardwood Security Agreement" means the Security Agreement dated as
of the date of this Agreement, as amended, modified or supplemented from time to
time, executed and delivered by Pen Hardwood to the Agent.
"Pen Hardwood Suretyship Agreement" means the Suretyship Agreement
dated as of the date of this Agreement, as amended, modified or supplemented
from time to time, executed and delivered by Pen Hardwood to the Agent.
"Pen Holdings" means Pen Holdings, Inc., a Tennessee corporation with
its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Pen Holdings Charter" means the Charter of Pen Holdings, Inc. filed of
record with the Secretary of State of Tennessee, as amended by amendment to
charter of Pen Holdings, Inc. dated as of, and filed with the Secretary of State
of Tennessee on, January 3, 1996.
"Pen Holdings Security Agreement" means the Amended and Restated
Security Agreement dated as of the date of this Agreement, as amended, modified
or supplemented from time to time, executed and delivered by Pen Holdings to the
Agent.
"Person" means any individual, corporation, company, voluntary
association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" means any deferred compensation program, including both single
and multi-employer plans, subject to Title IV of ERISA and established and
maintained for employees of either of the Borrowers or any Subsidiary or any
controlled group of trades or businesses under common control as defined
respectively in
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Sections 1563 and 414(c) of the Internal Revenue Code of 1986, as amended, of
which either of the Borrowers or any Subsidiary is or becomes a part.
"Plan Employer" means the appropriate Borrower or Surety or any other
Consolidated Subsidiary which is the sponsor or contributor to a Plan for the
benefit of some or all of its or their employees.
"Pledge Agreements" means the Pledge and Security Agreements dated as
of the date of this Agreement, as amended, modified or supplemented from time to
time, executed and delivered by Pen Holdings and any Subsidiary of Pen Holdings
which owns capital stock of an Active Subsidiary to the Agent, pledging all of
the issued and outstanding stock of (x) Pen Coal, Elk Horn, River Marine, Pen
Cotton, Pen Cotton Company, Pen Hardwood and Marine Terminals, and (y) any other
Active Subsidiaries, whether in existence at the Closing Date or thereafter.
"Portion" has the meaning given to it in Section 2.16 of this
Agreement.
"Potential Default" means any event or condition which with notice or
the passage of time would constitute an Event of Default.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by the Agent in Pittsburgh, Pennsylvania as its U.S. prime
lending rate, which may be greater or less than other interest rates charged by
the Agent to other borrowers and is not solely based or dependent upon the
interest rate which the Agent may charge any particular borrower or class of
borrowers. Such interest rate shall change automatically from time to time,
effective as of the effective date of each announced change.
"Prohibited Transaction" means a transaction which is prohibited under
Section 4975 of the Code or Sections 407 or 408 of ERISA.
"Property" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Qualified Acquisition" means any acquisition of Property (other than
Mobile Equipment) which is used or useful in connection with the coal industry
businesses operated by the Borrower and its Eligible Subsidiaries.
"Rate Period" has the meaning given to in Section 2.05 of this
Agreement.
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"Rate Protection Agreements" means any cap, swap, hedge or other
interest rate protection agreement entered into by any of the Borrowers with
Agent or any of the Banks.
"Rate Segment" has the meaning given to it in Section 2.16 of this
Agreement.
"Recapitalization Agreement" means that certain Agreement for the
Recapitalization and Acquisition of Pen Holdings, Inc. dated as of December 29,
1995, entered into by and among the Estate of Xxxxx P.S. Pen, as seller, Xxxxxxx
X. Xxxxxxx, as buyer, and Pen Holdings.
"Reportable Event" means any of the events set forth in Section 403(b)
of ERISA or the regulations thereunder, except for any such event as to which
the provision for 30 days' notice to the PBGC is waived under applicable
regulations.
"Required Banks" means Banks holding at least fifty-one percent (51%)
of the Credit Exposures of all of the Banks (provided that such 51% includes the
Agent and at least one other Bank), as calculated at the time of determination.
"Responsible Officer" of the Borrower or a Surety means the president,
any senior vice president, any vice president, the controller, the treasurer or
any assistant treasurer.
"Revolving Credit Commitment" has the meaning assigned to that term in
Section 2.01(a) of this Agreement.
"Revolving Credit Loans" has the meaning assigned to that term in
Section 2.01(a) of this Agreement.
"Revolving Credit Notes" means, individually or collectively, the
revolving credit notes of Pen Holdings executed and delivered pursuant to
Section 2.01(b) of this Agreement, together with all extensions, renewals,
refinancings or refundings in whole or in part.
"River Marine" means River Marine Terminals, Inc., a West Virginia
corporation with its chief executive offices at 0000 Xxxxxxxx Xxx, Xxxxx Xxxxx
Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"River Marine Deed of Trust" means that certain Credit Line Deed of
Trust, Security Agreement, Assignment and Fixture Filing covering the River
Marine Real Property, executed and delivered by River Marine to the Agent, as
amended, modified or supplemented from time to time.
"River Marine Real Property" means certain of River Marine's real
property, fixtures and other property interests comprising
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20
the Xxxxx County River Terminal owned by River Marine and located in Xxxxx
County, West Virginia, as more particularly described in the River Marine Deed
of Trust.
"River Marine Security Agreement" means the Amended and Restated
Security Agreement dated as of the date of this Agreement, as amended, modified
or supplemented from time to time, executed and delivered by River Marine to the
Agent.
"River Marine Suretyship Agreement" means the Amended and Restated
Suretyship Agreement dated as of the date of this Agreement, as amended,
modified or supplemented from time to time, executed and delivered by River
Marine to the Agent.
"Security Agreements" means individually or collectively the Elk Horn
Security Agreement, the Pen Coal Security Agreement, the River Marine Security
Agreement, the Pen Holdings Security Agreement, the Pen Cotton Security
Agreement, the Marine Terminals Security Agreement, the Pen Cotton Company
Security Agreement and the Pen Hardwood Security Agreement.
"Senior Notes" has the meaning given to it in the recitals of this
Agreement.
"Senior Note Documents" means the Senior Notes, the Senior Note
Indenture, Registration Rights Agreement and the Purchase Agreement (each as
defined in the Senior Note Offering Memorandum) executed and delivered in
connection with the Senior Note Indenture.
"Senior Note Indenture" means the Indenture under which the Senior
Notes shall be issued, which shall be on substantially the same terms as those
set forth in the Senior Note Offering Memorandum.
"Senior Note Offering Memorandum" means the Offering Memorandum dated
June 3, 1998, of the Borrower in respect of its 9.875% Senior Notes Due 2008, a
copy of which has been furnished to the Banks prior to the date hereof.
"Standard Notice" has the meaning given to it in Section 2.16 of this
Agreement.
"Subsidiary" of a Borrower at any time means any corporation of which a
majority of the outstanding capital stock entitled to vote for the election of
directors is at such time owned by the Borrower and/or one or more Subsidiaries.
"Subsidiary Deeds of Trust" means, individually or collectively, those
deeds of trust or mortgages, executed and delivered by each of the Eligible
Subsidiaries in favor of Pen Holdings and assigned by Pen Holdings to the Agent.
The lien of
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the Subsidiary Deeds of Trust shall be junior to the liens of the Deeds of
Trust.
"Subsidiary Notes" means, individually or collectively, those demand
notes, dated the date of this Agreement, executed and delivered by each of the
Eligible Subsidiaries in favor of Pen Holdings, and assigned by Pen Holdings to
the Agent.
"Subsidiary Security Agreements" means, individually or collectively,
those Amended and Restated Security Agreements or Security Agreements dated the
date of this Agreement, executed and delivered by each of the Eligible
Subsidiaries in favor of Pen Holdings, and assigned by Pen Holdings to the
Agent.
"Subsidiary Security Documents" means, individually or collectively,
the Subsidiary Deeds of Trust, the Subsidiary Notes, and the Subsidiary Security
Agreements.
"Sureties" mean all of, and "Surety" means any of, Elk Horn, Pen Coal,
Pen Cotton, River Marine, Pen Cotton Company, Pen Hardwood and Marine Terminals.
"Suretyship Agreements" means, individually or collectively, the Elk
Horn Suretyship Agreement, the Pen Coal Suretyship Agreement, the Pen Cotton
Suretyship Agreement, the River Marine Suretyship Agreement, the Pen Cotton
Company Suretyship Agreement, the Marine Terminals Suretyship Agreement and the
Pen Hardwood Suretyship Agreement.
"Tax Petition" means the Petition filed November 14, 1995 by the
Borrower with the United States Tax Court and captioned "Pen Holdings, Inc. and
Subsidiaries, Petitioner, v. Commissioner of Internal Revenue, Respondent."
"Termination Event" shall mean (i) a Reportable Event, (ii) a distress
termination of a Defined Benefit Plan, or the treatment of a Defined Benefit
Plan amendment as a distress termination of such Plan under Section 4041 of
ERISA, or the filing of a notice of intent to terminate a Defined Benefit Plan
as a distress termination under Section 4041 of ERISA, or (iii) the institution
of proceedings to terminate a single employer Plan by the PBGC under Section
4042 of ERISA.
"UCP" means the Uniform Customs and Practices for Documentary Credits
(1993 Rev.) International Chamber of Commerce CC Publication No. 500, or if such
publication is not published or is superseded or if the Administrative Agent in
its general practice of issuing documentary or standby letters of credit
determines that letters of credit issued by the Administrative Agent shall be
governed or interpreted by another convention, publication, statute or Law, such
successor or substitute
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convention or publication, statute or Law as the Administrative Agent shall
determine, in its sole discretion.
"Welfare Benefit Plan" means a plan providing health, welfare or other
benefits as defined in Section 3(1) of ERISA.
1.02. Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or". The words "hereof", "herein", "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
hereof in any respect. Section and subsection references are to this Agreement
unless otherwise specified.
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ARTICLE II
THE CREDIT
2.01 Revolving Credit Loans.
(a) Revolving Credit Loans. Subject to the terms and
conditions and relying upon the representations and warranties set forth in this
Agreement, the Security Agreements and the other Loan Documents, each Bank
severally agrees (such agreement is sometimes referred to in this Agreement as
the "Revolving Credit Commitment") to make loans (the "Revolving Credit Loans")
to the Borrower at any time or from time to time on or after the Closing Date
and to and including the day immediately preceding the Expiration Date in an
aggregate principal amount not exceeding at any one time outstanding during the
periods specified below the amount set forth opposite its name below:
Commitment
Name of from Closing
Bank % Share Date until Expiration Date
Mellon 50% $20,000,000.00
CIBC 50% $20,000,000.00
----------- ---- --------------
Total 100% $40,000,000.00
The aggregate face or stated amount of Letters of Credit at any time outstanding
(less any draws under the Letters of Credit which have been reimbursed by the
Borrower), any unreimbursed draws on Letters of Credit, plus the aggregate
principal amount of all Revolving Credit Loans made by the Banks at any time
outstanding shall not exceed at any time the aggregate of the Revolving Credit
Commitments. If without the consent of the Agent the sum of all Revolving Credit
Loans and the face amount of the Letters of Credit outstanding at any time
exceeds the Revolving Credit Commitment, the Borrower shall immediately repay to
the Agent for the account of the Banks, in funds immediately available, the
amount of such excess together with all accrued interest on the amount of such
repayment. The Borrower may use the proceeds of the Revolving Credit Loans for
(i) general working capital or general corporate purposes of the Borrower or the
Eligible Subsidiaries, (ii) Qualified Acquisitions up to the aggregate amount of
$5,000,000 in any fiscal year of Borrower and the Eligible Subsidiaries, and
(iii) to relend proceeds to Eligible Subsidiaries as permitted by Section
6.04(b), subject to the terms and conditions contained herein. Any relending by
the
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Borrower of proceeds of the Revolving Credit Loans to an Eligible Subsidiary
shall not be in amounts which would cause any Eligible Subsidiary to not be able
to make the representation set forth in Section 3.28 of this Agreement, after
giving effect to the relending of any such proceeds. In no event shall the
proceeds of the Revolving Credit Loans be used (x) for the purchase of coal
inventory produced outside of the United States or (y), except as permitted in
the immediately succeeding sentence, for any purposes other than to support the
coal related businesses of the Borrower and the Eligible Subsidiaries.
Notwithstanding anything to the contrary contained herein, the Borrower may
relend proceeds of the Revolving Credit Loans to (A) Pen Cotton for the general
working capital and general corporate purposes of Pen Cotton only up to the
aggregate amount of $1,100,000.
(b) Revolving Credit Notes. The obligations of the Borrower to
repay the unpaid principal amount of the Revolving Credit Loans made to the
Borrower by the Banks and to pay interest on the unpaid principal amount will be
evidenced in part by the Revolving Credit Notes of the Borrower dated the
Closing Date, in substantially the form attached as Exhibit "A" to this
Agreement, with the blanks appropriately filled.
(c) Making of Revolving Credit Loans. All Revolving Credit
Loans shall be made ratably by the Banks in proportion to their respective
commitments; provided, however, that the failure of any Bank to make a Revolving
Credit Loan shall not relieve any other Bank of its obligation to lend
hereunder. If any Bank fails to make a Revolving Credit Loan, the Agent will use
its best efforts to find another lender to make that Revolving Credit Loan on
the same terms and conditions. On any Business Day when the Borrower desires
that the Banks make a Revolving Credit Loan, Borrower shall provide to the Agent
at its Office Standard Notice of the date, which shall be a Business Day, on
which such Revolving Credit Loan is to be made. Each notice (a "Notice of
Borrowing") required pursuant to this Section shall be given no later than 11:00
a.m., Pittsburgh time, on the last date permitted for such Notice of Borrowing,
and, if in writing, shall be signed by a Responsible Officer of Borrower, and
shall state: (a) the date (which shall be a Business Day) on which the Revolving
Credit Loan is to be made; (b) the principal amount of the Revolving Credit Loan
which shall be the sum of the principal amounts selected pursuant to Section
2.03; and (c) the Interest Rate Option or Interest Rate Options and the
principal amount of Portions selected in accordance with Section 2.03 hereof
and, in the case of a Euro-Rate Portion, the Euro-Rate Period. Each Notice of
Borrowing shall be irrevocable (except as provided in Section 2.15 hereof) and
shall be sent to the Agent by (i) telecopier (which shall be effective when
received), or by (ii) telephone (which shall be effective when telephoned)
confirmed (in the case of Revolving Credit Loans to which the Euro-Rate Option
apply) by first class mail, or by (iii) hand
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delivery, first class or first class express mail (which shall be effective when
received), in all cases with charges prepaid. The Agent shall promptly give
telecopied or telexed notice or telephoned notice confirmed in writing to each
Bank of its Percentage Share and the date of such borrowings. On the date
specified in such Notice of Borrowing, each Bank shall make the proceeds of its
Revolving Credit Loan available at the Office of the Agent, no later than 12:00
noon, Pittsburgh time, in immediately available funds. On the date specified in
such Notice of Borrowing, the Agent shall make the proceeds of the Revolving
Credit Loan available at its office, no later than 4:00 p.m., Pittsburgh time,
in immediately available funds, and upon fulfillment of all applicable
conditions set forth herein, the Agent shall pay or deliver the proceeds of the
borrowing to or upon the order of Borrower. To the extent that any automatic
borrowing service agreement in effect between the Agent and Borrower makes
applicable any other notice or funding arrangements, the terms of such automatic
borrowing service agreement shall control.
(d) Revolving and Reducing Nature of Loans. Until the
Expiration Date, and subject to the limitations herein set forth (including
without limitation the restrictions on prepayments contained in Section 2.10),
Borrower may borrow and reborrow and repay funds under the Revolving Credit
Notes, provided, however, that without the prior written consent of the Agent,
as provided in Section 2.01(a) in this Agreement above, at no time shall the
aggregate unpaid principal balance outstanding under the Revolving Credit Notes
and the face amounts of the Letters of Credit exceed the Revolving Credit
Commitment as set forth in Section 2.01(a). Each repayment shall be made to the
Agent. Provided that no Bank has defaulted on its obligation to fund its
Commitments under this Agreement, the Agent shall apportion each repayment among
the Banks according to each Bank's Percentage Share of the Revolving Credit
Loans.
2.02 Intentionally Deleted.
2.03 Interest Rates.
Interest Rate Options. The unpaid principal amount of the
Loans shall bear interest for each day until due on one or more bases selected
by the Borrower from among the interest rate options (the "Interest Rate
Options") set forth below. The Borrower understands and agrees that subject to
the provisions of this Agreement, including, without limitation, Section 2.06 of
this Agreement, the Borrower may select any number of Interest Rate Options to
apply simultaneously to different parts of the unpaid principal amount of the
Loans made to the Borrower and may select any number of Rate Segments to apply
simultaneously to different parts of the Euro-Rate Portion.
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Available Interest Rate Options
Prime Rate Option: Loans shall bear interest at a rate per
annum (computed on the basis of a year of 365 or 366 days, as
the case may be) for each day equal to the Prime Rate for such
day plus the Applicable Basis Points, such interest rate to
change automatically from time to time effective as of the
effective date of each change in the Prime Rate.
Euro-Rate Option: For each Rate Segment of the Euro-Rate
Portion with respect to the Loans, Loans shall bear interest
at a rate per annum (computed on the basis of a year of 360
days and actual days elapsed) for each day equal to the
Euro-Rate for such Rate Segment for such day plus the
Applicable Basis Points.
Notwithstanding anything contained in this Agreement to the
contrary, prepayment of any Portion bearing interest at the Euro- Rate
Option shall not be permitted during a Rate Period or shall be subject
to payment of a prepayment fee as set forth in Section 2.11 hereof.
(2) Rates Based Upon Applicable Basis Points.
Applicable Basis Points. The Applicable Basis Points shall be
determined based upon the financial statements of the Borrower and its
Consolidated Subsidiaries submitted to the Banks by Borrower as of the
end of each fiscal quarter of the Borrower in accordance with Section
5.01(b) of this Agreement. The Applicable Basis Points shall be
adjusted effective as of the first day of each fiscal quarter of the
Borrower based upon the financial statements of the Borrower delivered
to the Banks for the immediately preceding fiscal quarter, as provided
in the preceding sentence. The Applicable Basis Points shall be
adjusted as follows based upon the Borrower's Consolidated Debt to
EBITDA Ratio, as calculated on a rolling four quarter basis.
Notwithstanding the foregoing, during the period from the Closing Date
through and including October 31, 1998, the Applicable Basis Points
shall be as set forth in subpart D of the chart set forth below,
regardless of the Borrower's actual
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Consolidated Debt to EBITDA Ratio for the fiscal quarters ended prior
thereto. The Applicable Basis Points for the period from November 1,
1998 through December 31, 1998 shall be based upon the Borrower's
Consolidated Debt to EBITDA Ratio for the period ending September 30,
1998 and thereafter shall be adjusted as provided above.
APPLICABLE
APPLICABLE BASIS BASIS POINTS TO
POINTS TO BE BE ADDED TO
ADDED TO PRIME EURO RATE CONSOLIDATED DEBT
RATE OPTION OPTION TO EBITDA RATIO
----------------------------------------------------------------------------------------
A 150 basis A 250 basis A Equal to or
points points greater than
REVOLVING 5.50 to 1
CREDIT LOANS ----------------------------------------------------------------------------------------
B 125 basis B 225 basis B Less than 5.50
points points to 1 and
greater than or
equal to 5.00
to 1
----------------------------------------------------------------------------------------
C 100 basis C 200 basis C Less than 5.00
points points to 1 and
greater than or
equal to 4.50
to 1
----------------------------------------------------------------------------------------
D 75 basis D 175 basis D Less than 4.50
points points to 1 and
greater than or
equal to 3.75
to 1
----------------------------------------------------------------------------------------
E 50 basis E 150 basis E Less than 3.75
points points to 1 and
greater than or
equal to 3.00
to 1
----------------------------------------------------------------------------------------
F 25 basis F 125 basis F Less than 3.00
points points to 1 and
greater than or
equal to 1.50
to 1
----------------------------------------------------------------------------------------
G 0 basis G 100 basis G Less than 1.50
points points to 1
----------------------------------------------------------------------------------------
2.04 Intentionally Deleted.
2.05 Rate Periods. At any time when the Borrower selects, converts to
or renews the Euro-Rate Option, the Borrower shall fix a period (the "Rate
Period") which shall be one, two, three or six months, during which the
Euro-Rate Option shall
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apply to the corresponding Rate Segment. In no event, however, shall the
Borrower select a Rate Period that extends beyond the Expiration Date. The
Agent's right to payment of principal and interest (on behalf of the Banks)
under the Loans and the Notes shall in no way be affected by the fact that one
or more Rate Periods may be in effect. The Borrower's selections shall apply pro
rata among the Notes evidencing the Loan with respect to which the Interest Rate
Option is being selected.
2.06 Amounts and Maximum Number of Segments.
(a) Amounts. Every selection of, conversion to or renewal of
the Euro-Rate Option for any Loan shall be in the principal amount of $1,000,000
or an integral multiple thereof, which amount shall be selected by the Borrower
and acceptable to Agent in Agent's sole discretion.
(b) Maximum Number of Rate Segments. Notwithstanding any other
provisions in this Agreement to the contrary, at no time shall more than eight
(8) Rate Segments be in existence at any time during the term of this Agreement
with respect to the Loans. If the Borrower attempts to give notice of selection
of the Euro-Rate Option for a Rate Segment on a Loan when five (5) Rate Segments
are in existence with respect to the Loans, such notification shall be deemed to
request the making of the Loan at the Prime Rate Option instead of the Euro-Rate
Option, unless the notice requesting the Euro-Rate Option was issued on account
of new Loans and the Borrower promptly elects to cancel the notice to make a
Rate Segment of new Loans by giving notice of cancellation to the Agent.
2.07 Interest After Default. After the occurrence of an Event of
Default and delivery of notice thereof to the Borrower by the Agent, the Prime
Rate Portion shall bear interest for each day until paid (before and after
judgment) at a rate per annum (based on a year of 365 or 366 days, as the case
may be) equal to two hundred (200) basis points greater than the Prime Rate
Option which would otherwise be in effect, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Prime Rate. After the occurrence of an Event of Default, the
Euro-Rate Portion shall bear interest for each day until paid (before and after
judgment) until the end of the applicable then-current Rate Period at a rate per
annum which shall be two hundred (200) basis points greater than the rate then
in effect. With respect to any Euro- Rate Portion, after the end of the then
applicable Rate Period, interest after an Event of Default shall accrue at a
rate equal to two hundred (200) basis points greater than the Prime Rate Option
which would otherwise be in effect, such interest rate to change automatically
from time to time effective as of the effective date of each change in the Prime
Rate.
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29
2.08 Selection, Conversion or Renewal of Rate Options. Subject to the
other provisions hereof, the Borrower may select any Interest Rate Option to
apply to the Loans. Subject to the other provisions hereof, the Borrower may
convert any part of the unpaid principal amount of the Loans from any Interest
Rate Option to any other Interest Rate Option and may renew the Euro-Rate Option
as to any Rate Segment: (a) at any time with respect to conversion from the
Prime Rate Option to the Euro-Rate Option and (b) at the expiration of any Rate
Period with respect to conversion from or renewals of the Euro-Rate Option as to
the Rate Segment corresponding to such expiring Rate Period. Whenever the
Borrower desires to select, convert or renew the Euro-Rate Option, the Borrower
shall give the Agent Standard Notice thereof (which shall be irrevocable, except
as provided in Section 2.15), specifying the date, amount and type of the
proposed new Interest Rate Option. If such notice has been duly given, on and
after the date specified in such notice, interest shall be calculated upon the
unpaid principal amount of the Loan or Loans in question taking into account
such selection, conversion or renewal.
2.09 Prime Rate Fallback. If any Rate Period expires, any part of the
Rate Segment corresponding to such Rate Period which has not been converted or
renewed in accordance with Section 2.08 hereof automatically shall be converted
to the Prime Rate Option.
2.10 Prepayments.
(a) Time of Prepayments. Borrower shall have the right at its
option from time to time to prepay the Prime Rate Portion of the Loans in whole
or in part at any time without penalty. The Borrower shall not have the right to
prepay any part of the Euro Rate Portion of the Loans at any time without the
prior written consent of the Agent except that the Borrower may prepay any part
of any Rate Segment at the expiration of the Rate Period corresponding to such
Rate Segment.
(b) Application of Prepayments. Prepayments shall be applied
first to accrued interest, other outstanding fees or expenses owing to the Agent
or the Banks and charges attributable to principal being prepaid, and then to
installments of principal in inverse order of maturity.
(c) Mandatory Prepayments.
(i) Debt Issuance. Subject to subpart (iv) of this
subsection (c) of Section 2.10, and without limiting the obligation of
the Borrower to obtain the consent of the Banks to any Debt Issuance
prohibited by the terms of this Agreement, upon any Debt Issuance after
the Closing Date, the Borrower shall prepay the Loans and the Revolving
Credit Commitments shall be
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30
subject to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds thereof, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in
subpart (v) of this subsection (c) of Section 2.10.
(ii) Equity Issuance. Subject to subpart (iv) of this
subsection (c) of Section 2.10, and without limiting the obligation of
the Borrower to obtain the consent of the Banks to any Equity Issuance
prohibited by the terms of this Agreement, upon any Equity Issuance
after the Closing Date, the Borrower shall prepay the Loans and the
Revolving Credit Commitments shall be subject to automatic reduction,
in an aggregate amount equal to 75% of the Net Available Proceeds
thereof, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in subpart (v) of this
subsection (c) of Section 2.10.
(iii) Sale of Assets. Subject to subpart (iv) of this
subsection (c) of Section 2.10, and without limiting the obligation of
the Borrower to obtain the consent of the Banks to any Disposition
prohibited by the terms of this Agreement, upon any Disposition after
the Closing Date, the Borrower shall prepay the Loans and the Revolving
Credit Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 100% of the Net Available Proceeds thereof,
such prepayment and reduction to be effected in each case in the manner
and to the extent specified in subpart (v) of this subsection (c) of
Section 2.10.
(iv) Waiver. At the request of the Borrower prior to
the last day on which the Borrower is required to make a prepayment or
reduction in the Revolving Credit Commitments by reason of any event
described in any of the foregoing clauses (i) through (iii) above in
this subsection (c) of Section 2.10 and notwithstanding anything to the
contrary contained in Section 9.03, the Required Banks may waive such
requirement with respect to all or any portion of the amount to be
prepaid or to reduce the Revolving Credit Commitments.
(v) Application. Prepayments and reductions of the
Revolving Credit Commitments described in this subsection (c) of
Section 2.10 shall be applied to reduce the Revolving Credit
Commitments (and to the extent that, after giving effect to such
reduction, the aggregate principal amount of Revolving Credit Loans and
the aggregate face or stated amount of Letters of Credit at any time
outstanding and any unreimbursed draws on Letters of Credit would
exceed the Revolving Credit Commitments, the Borrower shall prepay
Revolving Credit Loans in an amount equal to such excess).
(d) Voluntary Reduction of Commitments. The
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31
Borrower shall have the right at any time or from time to time (i) so long as no
Revolving Credit Loans or Letters of Credit are outstanding to terminate the
Revolving Credit Commitments and (ii) to reduce the aggregate unused amount of
the Revolving Credit Commitments of the Banks, pro-rata in accordance with their
respective Credit Exposures, provided that (x) the Borrower shall give notice of
each such termination or reduction as provided in Section 2.14 and (y) any
reduction in the Revolving Credit Commitments shall be made in multiples of
$1,000,000 and in no event shall reduce the aggregate amount of the Revolving
Credit Commitments below the sum of $20,000,000 without the prior written
consent of the Banks. The Revolving Credit Commitments once terminated or
reduced may not be reinstated without the consent of each Bank.
2.11 Additional Compensation in Certain Circumstances; Indemnity.
(a) Compensation for Taxes, Reserves and Expenses on
Outstanding Loans. If any Law or guideline or interpretation or application
thereof enacted, promulgated or effective by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or not having the force of law) after
the date of this Agreement:
(i) subjects the Agent, any of the Banks or any
Notional Euro-Rate Funding Office to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the Loans or
payments by the Borrower of principal, interest, commitment fee or
other amounts due from the Borrower hereunder or under the Notes
(except for taxes on the overall net income of the Agent, any of the
Banks or such Notional Euro-Rate Funding office imposed by the
jurisdiction in which the principal office of the Agent, any of the
Banks or Notional Euro-Rate Funding Office is located);
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or
commitments to extend credit by, or assets (funded or contingent) of,
deposits with or for the account of, or other acquisition of funds by,
the Agent, any of the Banks or any Notional Euro-Rate Funding Office
(other than requirements expressly included herein in the determination
of the Euro-Rate, as the case may be, hereunder); or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded or
contingent) of, deposits
31
32
with or for the account of, other acquisitions of funds by, the Agent,
any of the Banks or any Notional Euro-Rate Funding Office, or (B)
otherwise applicable to the obligations of the Agent, Banks or any
Notional Euro-Rate Funding office under this Agreement; or
(iv) imposes upon any of the Banks or any Notional
Euro-Rate Funding Office any other condition or expense with respect to
this Agreement, the Notes or its making, maintenance or funding of any
part of the Loans or any security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
of the Banks or any Notional Euro-Rate Funding office with respect to this
Agreement, the Notes or the making, maintenance or funding of any part of the
Loans by an amount which the Agent deems to be material (the Agent being deemed
for this purpose to have made, maintained or funded each Rate Segment of the
Euro-Rate Portion from a Corresponding Source of Funds), the Agent shall from
time to time notify the Borrower in writing of the amount determined in good
faith (using any averaging and attribution methods) by the Agent (which
determination shall be conclusive) to be necessary to compensate the Agent, any
of the Banks or such Notional Euro-Rate Funding Office for such increase in
cost, reduction in income or additional expense. Such amount shall be due and
payable by the Borrower to the Agent ten (10) Business Days after presentation
by the Agent of a statement setting forth a brief explanation of and the Agent's
calculation of such amount, which statement shall be conclusively deemed correct
absent manifest error. Any amount payable to the Agent under this Section
2.11(a) will bear interest (computed for the actual number of days elapsed on
the basis of a year of 360 days) from the due date until paid (before and after
judgment) at (x) the Prime Rate Option during the ten (10) Business Day period
which the Borrower has been given to pay any such amount and (y) the Prime Rate
Option plus two percent (2%) per year thereafter.
(b) Indemnity Regarding Euro-Rate Borrowing and Irrevocable
Notices. The Borrower shall indemnify the Agent, for the ratable benefit of the
Banks, against any loss or expense (including loss of margin) which the Agent or
any of the Banks has sustained or incurred as a consequence of:
(i) payment, prepayment or conversion of any part of
any Rate Segment of the Euro-Rate Portion on a day other than the last
day of the corresponding Rate Period or (whether or not any such
payment is made before or after Default or pursuant to demand or
acceleration by the Agent of the Loans (following occurrence of a
Default), and whether or not any such
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33
payment, prepayment of conversion is consented to by the Agent, unless
the Agent shall have expressly waived such indemnity in writing); or
(ii) the Borrower's treatment of any irrevocable
notice given pursuant to Section 2.01 or 2.02 hereof as a revocable
notice (except as provided in Section 2.15 hereof).
If the Agent or any of the Banks sustains any such loss or expense, the Agent
shall from time to time notify the Borrower of the amount determined in good
faith by the Agent (which determination shall be conclusive) to be necessary to
indemnify the Agent or any of the Banks for such loss or expense. Together with
such notice, the Agent shall furnish to the Borrower a certificate as to the
amount due setting forth in reasonable detail the reason for and the method of
calculating such loss or expense, such certificate to be conclusive absent
manifest error. Such amount shall be due and payable by the Borrower, ten (10)
Business Days after presentation by the Agent of a statement setting forth a
brief explanation of and the Agent's calculation of such amount, which statement
shall be conclusively deemed correct absent manifest error. Any amount payable
to the Agent under this Section 2.11(b) will bear interest (computed for the
actual number of days elapsed on the basis of a year of 360 days) from the due
date until paid (before and after judgment) at (x) the Prime Rate Option during
the ten (10) Business Day period which the Borrower has been given to pay any
such amount and (y) the Prime Rate Option plus two percent (2%) per year
thereafter.
(c) General Indemnity; Loss of Margin. The Borrower will
indemnify the Agent and the Banks against any loss, claim, damage or expense
which the Agent or any of the Banks sustain or incur as a consequence of an
Event of Default, including, without limitation, any failure of the Borrower to
pay when due (at maturity, by acceleration or otherwise) any principal,
interest, fee or any other amount due under this Agreement, the Notes or the
other Loan Documents, unless such loss, claim, damage or expense arises solely
from the Agent's or the Banks' gross negligence or willful misconduct. If the
Agent or any of the Banks sustain or incur any such loss, claim, damage or
expense it will from time to time notify the Borrower in writing of the amount
determined by the Agent and the Banks (which determination will be conclusive)
to be necessary to indemnify the Agent and the Banks for the loss, claim, damage
or expense. Such amount will be due and payable by the Borrower to the Agent,
for the account of the Agent and the Banks, within ten (10) days after
presentation by the Agent of a statement setting forth a brief explanation of
and the Agent's and the Banks' calculation of such amount, which statement shall
be conclusively deemed correct absent manifest error. Any amount payable to the
Agent under this Section 2.11(b) will bear interest (computed for
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34
the actual number of days elapsed on the basis of a year of 360 days) from the
due date until paid (before and after judgment) at (x) the Prime Rate Option
during the ten (10) Business Day period which the Borrower has been given to pay
any such amount and (y) the Prime Rate Option plus two percent (2%) per year
thereafter.
2.12 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. The Banks shall have the right from time
to time, prospectively or retrospectively, without notice to either of the
Borrower, to deem any branch, subsidiary or affiliate of any of the Banks to
have made, maintained or funded any part of the Euro-Rate Portion of the Loans
at any time. Any branch, subsidiary or affiliate so deemed shall be known as a
"Notional Euro-Rate Funding Office". The Banks shall deem any part of the
Euro-Rate Portion of the Loans or the funding therefore to have been transferred
to a different Notional Euro-Rate Funding Office if such transfer would avoid or
cure a situation in which any of the Banks declines to permit the Borrower to
select the Euro-Rate Option because it is unascertainable or impracticable for
the Agent to provide same or would lessen any compensation or indemnity payable
to the Banks under Section 2.11 hereof, and if any of the Banks determines in
its sole discretion that such transfer would be practicable and would not have a
material adverse effect on such part of the Loans, the Banks or any Notional
Euro-Rate Funding Office (it being assumed for purposes of such determination
that each part of the Euro-Rate Portion of the Loans is actually made or
maintained by or funded through the corresponding Notional Euro-Rate Funding
Office). Notional Euro-Rate Funding Offices may be selected by the Banks without
regard to the Banks' actual methods of making, maintaining or funding the Loans
or any sources of funding actually used by or available to the Banks.
(b) Actual Funding. The Banks shall have the right from time
to time to make or maintain any part of the Euro-Rate Portion of the Loans by
arranging for a branch, subsidiary or affiliate of any of the Banks to make or
maintain such part of the Euro-Rate Portion of the Loans. The Banks shall have
the right to (i) hold any applicable Note payable to its order for the benefit
and account of such branch, subsidiary or affiliate or (ii) request the Borrower
to issue one or more promissory notes in the principal amount of such part of
the Euro-Rate Portion of the Loans payable to such branch, subsidiary or
affiliate and with appropriate changes reflecting that the holder thereof is not
obligated to make any additional Loans to the Borrower. The Borrower agrees to
comply promptly with any request under clause (ii) of this Section 2.12(b). If
any Bank causes a branch, subsidiary or affiliate to make or maintain any part
of the Loans hereunder, all terms and conditions of this Agreement shall, except
where the context clearly requires otherwise, be applicable to such part of the
Loans and to any
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35
note payable to the order of such part of the Euro-Rate Portion of the Loans as
if the Loans were made or maintained by such Bank and such note were a Note
payable to such Bank's order.
2.13 Loan Accounts. Disbursements made, interest due, interest paid,
repayments on the Loans and all other charges billed to or paid by the Borrower
shall be recorded in one or more accounts on the Agent's books designated the
"Revolving Credit Loan Accounts" (the "Loan Accounts"). From time to time, upon
the Borrower's request, the Agent shall furnish the Borrower with a copy of the
Borrower's Loan Accounts. The Borrower agrees that the Loan Accounts shall be
sufficient evidence of the Borrower's obligations to the Agent and the Banks
incurred hereunder and that none other is necessary. All billing statements and
statements of account rendered by the Agent to the Borrower shall be derived
from the Borrower's Loan Accounts and shall be presumed to be correct and
accurate and, absent manifest error, shall constitute an account statement
binding on the Borrower.
2.14 Notices. All notices under Sections 2.08 or 2.10 hereof shall be
Standard Notices and shall be in writing. Section 9.05 hereof shall govern the
method and effective dates of such notices. Written notices by the Borrower
shall not be deemed records of the Agent within the meaning of Section 2.13
hereof whether or not received by the Agent. The Agent may conclusively rely
without inquiry on any notice purporting to be from a Responsible Officer of the
Borrower.
2.15 Euro-Rate Unascertainable; Impracticability.
If
(a) on any date on which a Euro-Rate would otherwise be set,
the Agent shall have in good faith determined (which determination shall be
conclusive) that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(ii) a contingency has occurred which materially and
adversely affects the interbank eurodollar market, or
(iii) the effective cost to the Agent of funding a
proposed Euro-Rate Segment of Loans from a Corresponding Source of
Funds shall exceed the Euro-Rate applicable to such Segment, or
(b) at any time the Agent shall have determined in good faith
(which determination shall be conclusive) that the making, maintenance or
funding of a particular Euro-Rate Loan has been made impracticable or unlawful
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36
by compliance by the Agent or a Notional Euro-Rate Funding Office in good faith
with any Law, regulation, order, guideline or interpretation or administration
thereof by any Official Body charged with the interpretation or administration
thereof or with any request or directive of any such Official Body (whether or
not having the force of law);
then, and in any such event, the Agent shall notify the Borrower of such
determination. Upon such date as shall be specified in such notice (which shall
not be earlier than the date such notice is given) the obligation of the Agent
to allow the Borrower to select the Euro-Rate Option for any Rate Segment of any
Loans, in any amount in case of a determination under Clause (a) above, or in
excess (in case of a determination under Clause (b) above) of the amount of such
Loans (if any) which is not determined to be impracticable or unlawful shall be
suspended until the Agent shall have notified the Borrower of its determination
in good faith (which determination shall be conclusive) that the circumstances
giving rise to such previous determination no longer exist.
If the Agent notifies the Borrower of a determination under
subsection (b) of this Section 2.15, the Euro-Rate Loan or Loans, if any, in
excess of the amount (if any) not determined to be impracticable or unlawful
shall be due and payable on the date specified in such notice. Absent contrary
notice from the Borrower to the Agent by 11:00 o'clock a.m., Pittsburgh time, on
such date, the Borrower shall be deemed to have given the Agent proper notice to
the effect that the Borrower requests that the Agent make Loans at such time at
the Prime Rate Option in principal amounts equal to the principal amounts
becoming due and payable pursuant to the preceding sentence.
If at any time the Agent makes a determination under
subsection (a) or (b) of this Section 2.15, the Borrower has previously notified
the Agent that it wishes to select the Euro-Rate Option for a Portion of new
Loans, including Loans being converted or renewed at the Euro-Rate Option, but
such Loans have not yet been made, such notification shall be deemed to request
the making of a Portion of the Loans at the Prime Rate Option instead of the
Euro-Rate Option, unless the Borrower promptly elects to cancel the notice to
make a Portion of new Loans by giving notice of cancellation to the Agent.
2.16 Definitions Applicable to Interest Rates. As used in this
Article II:
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (rounded upward to the nearest 1/100 of 1%), as determined in good
faith by the Agent (which determination shall be conclusive) as representing for
such day
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the maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for member banks of the
Federal Reserve System with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities") of any maturity. Each Euro-Rate shall be
adjusted automatically as of the effective date of any change in the Euro-Rate
Reserve Percentage.
"Euro-Rate" for any day for any proposed or existing Rate
Segment corresponding to a Rate Period shall mean the rate per annum determined
by the Agent to be the rate per annum obtained by dividing (the resulting
quotient to be rounded upward to the nearest 1/100 of 1%) (A) the rate of
interest (which shall be the same for each day in such Rate Period) estimated in
good faith by the Agent in accordance with its usual procedures (which
determination shall be conclusive) to be the average of the rates per annum for
deposits in United States dollars offered to major money center banks in the
London interbank market at approximately 11:00 a.m., London time, two London
Business Days prior to the first day of such Rate Period for delivery on the
first day of such Rate Period in amounts comparable to such Rate Segment (or, if
there are no such comparable amounts actively traded, the smallest amounts
actively traded) and having maturities comparable to such Rate Period by (B) a
number equal to 1.00 minus the Euro-Rate Reserve Percentage for such day.
The "Euro-Rate" may be expressed by the following formula:
[average of rates offered to major ]
[money banks in the London inter ]
[bank market estimated by the Agent ]
[pursuant to]
Euro Rate = [subsection (A) ]
-------------------------------------
[1.00 - Euro-Rate Reserve Percentage]
"London Business Day" shall mean a day for dealing in deposits
in United States dollars by and among banks in the London interbank market.
"Portion": "Prime Rate Portion" shall mean at any time the
part, including the whole, of the unpaid principal amount of the Loans bearing
interest at such time under the Prime Rate Option or in accordance with the
first sentence of Section 2.03. "Euro-Rate Portion" shall mean at any time the
part bearing interest at such time under the Euro-Rate Option or at a rate
determined by reference to the Euro-Rate Option pursuant to Section 2.03.
"Rate Segment" of the Euro-Rate Portion at any time shall be
the entire principal amount of such Portion to
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which at such time there is applicable a particular Rate Period beginning on a
particular day and ending on another particular day. (By definition, each
Portion is at all times composed of an integral number of discrete Rate
Segments, each corresponding to a particular Rate Period, and the sum of the
principal amounts of all Rate Segments of a particular portion at any time
equals the principal amount of such Portion at such time.)
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is:
(i) on the same Business Day in the case of selection
of, conversion to or renewal of the Prime Rate option or prepayment of
any Prime Rate Portion; and
(ii) at least three London Business Days in advance
in the case of selection of, conversion to or renewal of the Euro-Rate
Option or prepayment of any Euro-Rate Portion.
Standard Notice must be provided no later than 11:00 a.m., Pittsburgh time, on
the last day permitted for such notice.
2.17 Certain Fees. In addition to other fees and expenses described in
this Agreement, the Borrower shall pay the following fees:
(a) Fee Letter. On the Closing Date and as otherwise set forth
therein, the Borrower shall pay to the Agent the fees described in that certain
Fee Letter dated the date hereof entered into by and between the Agent and the
Borrower.
(b) Unutilized Line Fee. The Borrower shall pay to the Agent,
for the account of the Banks, quarterly, on the first (1st) day (or, if such day
is not a Business Day, the next succeeding Business Day) of each July, October,
January and April of each year during the term of this Agreement (or at the end
of the term of this Agreement), a fee with respect to the unused portion of the
Banks' Revolving Credit Commitment equal to the Applicable Unutilized Line Fee
Percentage per year (based on a 360 day year) of the average of the daily unused
portion of the Banks' Revolving Credit Commitment for the preceding three (3)
calendar month periods (or portion thereof). The unused portion of the Banks'
Revolving Credit Commitment shall, for the purpose of calculating the unutilized
line fee pursuant to this Section 2.17, be deemed to be, for any day during the
term of this Agreement, the difference between the Revolving Credit Commitment
and the principal amount of the Revolving Credit Loans outstanding plus the
aggregate face or stated amount of Letters of Credit at any time outstanding
(less any draws under the Letters of Credit which have been reimbursed by the
Borrower).
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Applicable Unutilized Line Fee Percentage. The Applicable
Unutilized Line Fee Percentage shall be determined based upon
the financial statements of the Borrower and its Consolidated
Subsidiaries submitted to the Banks by Borrower as of the end
of each fiscal quarter of the Borrower in accordance with
Section 5.01(b) of this Agreement. The Applicable Unutilized
Line Fee Percentage shall be adjusted effective as of the
first day of each fiscal quarter of the Borrower based upon
the financial statements of the Borrower delivered to the Bank
for the immediately preceding fiscal quarter, as provided in
the preceding sentence. The Applicable Unutilized Line Fee
Percentage shall be adjusted as follows based upon the
Borrower's Consolidated Debt to EBITDA Ratio as calculated on
a rolling four (4) quarter basis. Notwithstanding the
foregoing, during the period from the Closing Date through and
including October 31, 1998, the Applicable Unutilized Line Fee
Percentage shall be as set forth in subpart D of the chart set
forth below, regardless of the Borrower's actual ratio of
Consolidated Debt to EBITDA Ratio for the fiscal quarters
ended prior thereto. The Applicable Unutilized Line Fee
Percentage for the period from November 1, 1998 through
December 31, 1998 shall be based upon the Borrower's
Consolidated Debt to EBITDA Ratio for the period ending
September 30, 1998 and thereafter shall be adjusted as
provided above.
APPLICABLE
UNUTILIZED CONSOLIDATED
LINE FEE DEBT
PERCENTAGE TO EBITDA RATIO
--------------------------------------------------
A .50% A Equal to
or
UNUTILIZED greater
LINE FEE FOR than 5.50
REVOLVING to 1
CREDIT LOANS
--------------------------------------------------
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B .50% B Less than
5.50 to 1
and
greater
than or
equal to
5.00 to 1
--------------------------------------------------
C .50% C Less than
5.00 to 1
and
greater
than or
equal to
4.50 to 1
--------------------------------------------------
D .375% D Less than
4.50 to 1
and
greater
than or
equal to
3.75 to 1
--------------------------------------------------
E .375% E Less than
3.75 to 1
and
greater
than or
equal to
3.0 to 1
--------------------------------------------------
F .30% F Less than
3.00 to 1
and
greater
than or
equal to
1.50 to 1
--------------------------------------------------
G .25% G Less than
1.50 to 1
--------------------------------------------------
(c) Upfront Commitment Fee. On the Closing Date, the Borrower
shall pay to the Agent, for the account of the Banks (pro-rata in accordance
with their respective Credit Exposures), an upfront commitment fee in the amount
of $200,000.
(d) Computation of Interest. In computing interest on any
Loan, the date of the making of the Loan or the first day of a Rate Period, as
the case may be, shall be included
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and the date of payment or the expiration date of a Rate Period, as the case may
be, shall be excluded; provided, that if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
(f) Usury. In the event the rates of interest provided for in
Section 2.03 above or either of them are finally determined by any Official Body
to exceed the maximum rate of interest permitted by applicable usury or similar
Laws, their or its application will be suspended and there will be charged
instead the maximum rate of interest permitted by such Laws.
2.18 Interest Payment Dates. Accrued interest on any Prime Rate Portion
will be due and payable on the first Business Day of each month in arrears.
Interest on each Rate Segment of the Euro Rate Portion shall be due and payable
on the last day of the corresponding Rate Period, provided that if the Rate
Period is greater than 3 months, then interest shall be due and payable on the
first Business Day of the fourth month of such Rate Period and on the last day
of the Rate Period. After maturity of any part of the Loans (at maturity, by
acceleration or otherwise), interest on such part of the Loans will be due and
payable on demand.
2.19 Payments. All payments to be made in respect of principal,
interest, fees or other amounts due from the Borrower under this Agreement or
under the Notes are payable at or prior to 12:00 noon, Pittsburgh time, on the
day when due, without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action for the payments will accrue
immediately. All such payments must be made to the Agent at its Office in U.S.
dollars and in funds immediately available at such Office, without setoff,
counterclaim or other deduction of any nature. All such payments shall be
applied at the option of the Banks to accrued and unpaid interest, outstanding
principal and other sums due under this Agreement in such order as the Banks, in
their sole discretion, shall elect. On the day when any such payment shall be
due, the Agent may, but shall not be obligated to, deduct the amount of such
payment from any deposit account maintained by the Borrower from which such
payment is owed with the Agent.
2.20 Letters of Credit. Subject to the written request of the Borrower
(which shall be made at least three (3) Business Days prior to the date, which
shall be a Business Day, on which a Letter of Credit is proposed to be
issued)(each such request, being referred to herein as a "Request for Letter of
Credit Issuance") and pursuant to the Agent's standard form of letter of credit
application duly executed by the Borrower, the Agent shall issue (such agreement
being herein called the "Letter of Credit Commitment") one or more Letters of
Credit ("Letters of Credit") for the account of the Borrower or any Eligible
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Subsidiary at any time and from time to time prior to the Expiration Date in an
aggregate face amount at any time outstanding not exceeding Five Million Dollars
($5,000,000)(the "Letter of Credit Sublimit"). Each Request for Letter of Credit
Issuance shall be given no later than 11:00 a.m., Pittsburgh time, and shall be
in such form as the Agent may require, signed by an officer of the Borrower, and
shall state: (a) the date (which shall be a Business Day) on which the Letter of
Credit is to be issued; (b) the face amount of the Letter of Credit which is to
be issued; (c) the purpose for the issuance of the Letter of Credit and the
person or entity that is to be the beneficiary of the Letter of Credit; and (d)
the date which is to be expiration date of the Letter of Credit. Each Request
for Letter of Credit Issuance shall be irrevocable and shall be sent to the
Agent by (i) telecopier (which shall be effective when received), or by (ii)
overnight courier (which shall be effective when received), or by (iii) hand
delivery, first class or first class express mail (which shall be effective when
received), in all cases with charges prepaid. The Agent shall promptly (which in
any event shall be at least one (1) Business Day prior to the date of the
issuance of the Letter of Credit) give telecopied or telexed notice or
telephoned notice confirmed in writing to each Bank of its percentage share of
the Letter of Credit to be issued (which shall be each Bank's pro-rata portion
of the aggregate total of all Credit Exposures), together with a copy of each
Request for Letter of Credit Issuance. Each Request for Letter of Credit
Issuance and each issuance of the Letter of Credit requested thereby shall
constitute a certification by the Borrower that the representations and
warranties contained in Article III are true and correct in all material
respects (subject, in any event, to such matters as may be disclosed to and
agreed to by the Banks in writing) on the date of such Request for Letter of
Credit Issuance or such issuance, as the case may be. All Letters of Credit
issued by the Agent pursuant to this Agreement will be subject to the provisions
of the UCP. The aggregate face amount of outstanding Letters of Credit, as the
same may be changed from time to time by amendment or otherwise pursuant to the
terms thereof, shall be charged against the Revolving Credit Commitment. In no
event shall the Borrower request the issuance of a Letter of Credit if the face
amount of such Letter of Credit when taken together with the face amount of all
other issued and outstanding Letters of Credit and unreimbursed draws on Letters
of Credit exceeds the Letter of Credit Sublimit. Letters of Credit shall be
issued only for (i) the account of the Borrower or the Eligible Subsidiaries,
and (ii) for the purpose of securing obligations of the Eligible Subsidiaries in
the ordinary course of their coal related businesses, and (C) such other
purposes as are approved by the Banks.
(b) Letter of Credit Fees. Upon the issuance of a Letter of
Credit, Borrower agrees to pay to Agent, for its own
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account, from time to time any issuance, amendment and payment fees, at the
Agent's standard rates (schedules of which have been provided to Borrower), in
respect of Letters of Credit. Borrower agrees that upon the issuance of a Letter
of Credit, the Borrower shall pay to the Agent, for the account of the Banks, a
commission per annum equal to the Applicable Basis Points then applicable to the
Euro-Rate Portion of the Loans less one-half of one percent (0.50%) per annum
based upon the amount of the Letter of Credit outstanding. Such letter of credit
commission shall be payable on the last Business Day of each calendar quarter
during which any Letter of Credit is outstanding, and on the last date on which
any Letter of Credit issued hereunder expires, in each case for the preceding
period for which such fee has not been paid. Such letter of credit commission
shall change effective with each change in the Applicable Basis Points which are
applicable to the Euro-Rate Portion of the Loans. The Agent shall apportion the
letter of credit commission amongst the Banks according to each Bank's
percentage of the total of the Credit Exposures.
(c) Payments with Respect to Letters of Credit. The honor by
Agent of a Letter of Credit shall constitute a Revolving Credit Loan as long as
such a Revolving Credit Loan could be made within the Revolving Credit
Commitment and at the time of the honor unless Borrower shall reimburse the
Agent for any amounts drawn on a Letter of Credit on the date of the draw. If a
Revolving Credit Loan could not be made within the Revolving Credit Commitment,
Borrower shall reimburse the Agent, for the account of the Banks, forthwith and
otherwise in accordance with the terms of any related Application and Agreement
or reimbursement or other like agreement, for any payment made by Agent under a
Letter of Credit issued for the benefit of Borrower. Any such reimbursement to
the Agent shall be made absolutely and unconditionally and without any set-off,
counterclaim or reduction and free and clear of any withholding or similar taxes
other than any tax, levy, impost or duty based, in whole or in part, upon the
income, revenues or operations of the Agent or the Banks. Borrower shall pay to
the Agent, for the account of the Banks, interest on any unreimbursed portion of
each such payment made by the Agent from the date of such payment by the Agent
until reimbursement in full therefore at a rate per annum equal to two percent
(2%) above the Prime Rate Option from time to time.
(d) Additional Understandings Regarding Letters of Credit. In
order to induce the Agent to issue the Letters of Credit:
(1)
(i) the Borrower agrees that neither the Agent nor
the Banks shall be responsible or liable for, and the obligation of the
Borrower to reimburse the Agent
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or the Banks for any payment made by the Agent or the Banks under or in
respect of any Letter of Credit shall not be affected by (A) the
validity, enforceability or genuineness of any instrument or document
(or any endorsement thereof) presented under any Letter of Credit
which, upon examination by the Agent and in the absence of gross
negligence or willful misconduct, appears on its face to be
substantially in accordance with the terms and conditions of such
Letter of Credit, even if such instrument or document (or such
endorsement) is proven to be invalid, unenforceable, fraudulent or
forged, or (B) any dispute, claim, set-off, recoupment, defense or
other right or remedy which the Borrower may have at any time against
any beneficiary, transferee, the Agent, the Banks, or any other person,
whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transactions;
(ii) the Borrower agrees that drawings under any
Letter of Credit issued hereunder may be made only upon presentation of
documents required by the terms of the Letter of Credit issued, which
may include an appropriate sight draft and certificates required under
such Letter of Credit to be submitted to the Agent in connection with a
drawing; the Agent shall use its best efforts to provide the Borrower
with notice of any drawings contemporaneous with such drawings and will
give the Borrower notice of any drawings promptly but no later than one
(1) Business Day following the drawing;
(iii) the Borrower agrees that no Letter of Credit
shall have an expiry date later than the earlier of (i) one year from
the date such Letter of Credit was issued, or (ii) the Expiration Date;
and
(iv) neither the Agent nor the Banks shall have any
duty to investigate allegations of fraud or improper drawing prior to
permitting any drawing under any Letter of Credit.
(2)
(i) Funding. If at any time the Agent honors a draft
drawn under a Letter of Credit in accordance with the terms of such
Letter of Credit and is not reimbursed therefor on the same Business
Day, the Agent shall promptly notify each other Bank of such payment.
Forthwith upon and not later than one Business Day after its receipt of
such notice, each other Bank shall transfer to the Agent, in
immediately available funds, an amount equal to such Bank's percentage
share of such
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payment (which shall be each Bank's pro-rata portion of the aggregate
total of all Credit Exposures). If any Bank shall fail to so transfer
to the Agent its percentage of any unreimbursed payment made by the
Agent on account of any Letter of Credit, such Bank shall pay to the
Agent interest on its Percentage Share of such unreimbursed payment
from the date of such Bank's receipt of such notice from the Agent
until payment by such Bank of such Percentage Share in full at a rate
per annum for each day equal to the Federal Funds Effective Rate for
such day, such interest rate to change automatically from time to time
effective as of the date of each change in the Federal Funds Effective
Rate.
(ii) Pro Rata Treatment of Payments. If at any time
after the Agent has made a payment on account of any Letter of Credit
and has received from a Bank such Bank's portion of such payment, the
Agent shall hold any reimbursement (in whole or in part) for such
payment and any other amount received from the Borrower in respect of
such payment (but excluding any funds received by the Agent from any
other Bank pursuant to this subsection (ii) of this Section
2.20(d)(2)), any documents evidencing the right to reimbursement for
such payment, and any security therefor for the pro rata benefit of the
Agent and any other Bank from whom the Agent has received such Bank's
portion of such payment and shall forthwith transfer to such other Bank
such other Bank's applicable percentage of such reimbursement or other
amount; provided, however, that in the event that the receipt by the
Agent of such reimbursement or other amount is found to have been a
transfer in fraud of creditors or a preferential payment under the
Bankruptcy Code or is otherwise required to be returned pursuant to a
final order of a court of competent jurisdiction, such other Bank
shall, upon demand therefor by the Agent, return to the Agent any
portion thereof previously transferred by the Agent to such other Bank.
(iii) Participating Interests in Letters of Credit.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, effective as of the
date hereof in the case of outstanding Letters of Credit and effective
as of the date of issuance of other Letters of Credit, the Agent agrees
to allot and does allot, and each Bank severally and irrevocably agrees
to take and does take, such Bank's respective percentage share (which
shall be each Bank's pro-rata portion of the aggregate total of all
Credit Exposures) of each such Letter of Credit.
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Within five Business Days after the issuance of any Letter of Credit by
the Agent under this Agreement, the Agent shall send to each Bank a
copy of the Letter of Credit issued and the application for issuance of
the Letter of Credit.
Notwithstanding anything to the contrary contained
herein, in any other Loan Document or in any document to be delivered
in connection herewith or therewith, the Borrower acknowledges and
agrees that all rights of the Agent under any application agreement
with respect to any Letter of Credit shall inure to the benefit of each
Bank to the extent of its percentage share in the Letter of Credit as
fully as if such Bank was a party to such application agreement.
(e) Cash Collateral for Letters of Credit. In the event that
any Letter of Credit shall (i) have an expiry date later than the Expiration
Date, or (ii) remain outstanding during the continuance of an Event of Default
or after the Loans shall have matured and become due and payable (whether
pursuant to demand, acceleration or otherwise), upon the request of the Agent or
the Banks (which in the case of Letters of Credit having an expiry date later
than the Expiration Date, shall be made no sooner than thirty (30) days prior to
the Expiration Date), the Borrower shall immediately deposit funds with the
Agent in an amount equal to one hundred five percent (105%) of the aggregate
face or stated amount of Letters of Credit at that time outstanding (less any
draws under the Letters of Credit which have been reimbursed by the Borrower) to
be held by the Agent, for the benefit of the Banks, as additional collateral to
reimburse the Agent and the Banks for any draws under such Letters of Credit for
so long as and to the extent such Letters of Credit remain outstanding. In the
event that the Borrower does not immediately deposit funds with the Agent as
provided above, the Banks shall be entitled to advance proceeds of the Revolving
Credit Loans and deposit such funds with the Agent to be held as provided in
this subsection (e) of Section 2.20, which shall be deemed to be advances of the
Revolving Credit Loans made by the Borrower pursuant to Section 2.01 of this
Agreement.
2.21 Termination. The revolving credit facility made available to
Borrower under Section 2.01 of this Agreement is terminable by the Banks at
their discretion upon the occurrence of an Event of Default under this
Agreement. The Revolving Credit Loans made available to Borrower under this
Agreement will automatically terminate on the Expiration Date (or the expiration
date of any subsequent renewal period) unless (i) the Agent receive written
notice from Borrower not more than one hundred and twenty (120) nor less than
ninety (90) days prior to the Expiration Date (or the expiration date of any
subsequent renewal period) that the Borrower request that the Revolving
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Credit Loans be renewed for an additional period or periods, and (ii) the Banks
notify Borrower within sixty (60) days after receipt of the Borrower's notice
and all information, including financial statements that the Banks request in
connection with such renewal request, that the Banks are willing to renew the
revolving credit facility for an additional period, subject to the absence of
any Event of Default and subject to such terms and conditions as the Banks shall
require. Notwithstanding the foregoing, Borrower shall have the right to request
that the Banks extend the Revolving Credit Loans on an annual basis one year in
advance of the Expiration Date and Banks will review the extension request as
provided for in this Section 2.21. If the Banks (but less than all of the Banks)
determine to extend the Expiration Date, the Agent will use its best efforts to
either (x) find another lender or lenders to commit to the percentage share of
the Revolving Credit Loans which Banks have not agreed to extend on the same
terms and conditions as the Banks which have elected to extend the Expiration
Date or (y) reallocate the percentage share of the Revolving Credit Loans of the
Banks which have not elected to extend the Expiration Date amongst the Banks
which have elected to extend the Expiration Date, at the sole discretion of the
Banks. If the Agent is unable to either find additional lenders or obtain
agreement amongst the Banks which have elected to extend the Expiration Date to
reallocate amongst themselves the percentage share of the Revolving Credit Loans
of the Banks which have not elected to extend the Expiration Date, the Banks may
offer to reduce the Revolving Credit Commitment to an amount equal to the amount
of the commitments to make the Revolving Credit Loans of the Banks which have
elected to extend the Expiration Date. In the event the Revolving Credit Loans
are terminated for any reason, the outstanding balance of the Revolving Credit
Loans together with any accrued and unpaid interest thereon and any other sums
due pursuant to the terms of this Agreement, the Notes, the other Loan Documents
and any other agreement, instrument, or document or undertaking arising under or
in connection with this Agreement shall be due and payable immediately;
provided, however, that any Letter of Credit outstanding on the effective date
of such termination may remain outstanding until its maturity or expiration date
if the Banks shall have received indemnification for, and collateral securing,
any such outstanding Letter of Credit in form, substance and amount satisfactory
to the Banks, as provided in subsection (e) of Section 2.20 of this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks and the
Agent that:
3.01 Organization and Qualification. The Borrower and each of
the Sureties is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. The Borrower and
each of the Sureties is duly qualified or licensed to do business as a foreign
corporation and is in good standing in all jurisdictions in which the ownership
of its properties or the nature of its activities or both makes such
qualification or licensing necessary except for such jurisdictions where the
failure to be so qualified or licensed will not have a Material Adverse Effect
upon the financial condition, business or operations of the Borrower or the
Surety in question, or prevent the enforcement of material contracts entered
into. Schedule 3.01 to this Agreement states as of the Closing Date the
jurisdiction of incorporation of the Borrower and each of the Sureties and the
jurisdiction in which the Borrower and each of the Sureties is qualified to do
business as a foreign corporation.
3.02 Power to Carry on Business; Licenses. The Borrower and
each of the Sureties has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
presently planned to be conducted in all material respects. The Borrower and
each of the Sureties has all licenses, permits, consents and governmental
approvals or authorizations necessary to carry on its business as now conducted
in all material respects.
3.03 Authority and Authorization. The Borrower has corporate
power and authority to execute and deliver this Agreement, the Notes, the
Security Agreements and the other Loan Documents to which the Borrower is a
party, to make the borrowings provided for in this Agreement, to execute and
deliver the Notes in evidence of such borrowings and to perform its obligations
under this Agreement, the Notes, the Security Agreements and the other Loan
Documents. Each of the Sureties has corporate power and authority to execute and
deliver each of the Loan Documents to which such Surety is a party, including,
without limitation, each Surety's respective Suretyship Agreement, Subsidiary
Note, Subsidiary Security Agreement and Subsidiary Deed of Trust, as the case
may be, and to perform its obligations thereunder. All such action has been duly
and validly authorized by all necessary corporate proceedings on the part of the
Borrower and on the part of each of the Sureties.
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3.04 Execution and Binding Effect. This Agreement, the Notes,
the Security Agreements and the other Loan Documents have been duly and validly
executed and delivered by the Borrower and the Sureties, as the case may be, and
each such document or agreement constitutes a legal, valid and binding
obligation of the Borrower and the Sureties, as the case may be, enforceable in
accordance with its terms except as the enforceability of such document or
agreement may be limited by bankruptcy, insolvency, general principals of equity
or other laws of general application relating to or affecting the enforcement of
creditors' rights generally.
3.05 Absence of Conflicts. Neither the execution and delivery
of this Agreement, the Notes, the Security Agreements or the other Loan
Documents, nor the consummation of the transactions contemplated in any of them,
nor the performance of or compliance with their terms and conditions will (a)
violate any Law, (b) conflict with or result in a breach of or a default under
the certificate of incorporation or by-laws of any of the Borrower or any of the
Sureties or any agreement or instrument to which the Borrower or any of the
Sureties is a party or by which the Borrower or any of the Sureties or any of
their properties (now owned or acquired in the future) may be subject or bound,
the effect of which would have a Material Adverse Effect, or (c) result in the
creation or imposition of any material Lien upon any property (now owned or
acquired in the future) of the Borrower or any of the Sureties, except as
contemplated by the provisions of this Agreement.
3.06 Authorizations and Filings. No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary in connection with the execution and delivery of this
Agreement, the Notes, the Security Agreements or the other Loan Documents or
Related Documents, the consummation of the transactions contemplated in any of
them, or the performance of or compliance with the terms and conditions of this
Agreement, the Notes, the Security Agreements or the other Loan Documents,
except as contemplated by the provisions of this Agreement or as has already
been obtained and which remains in effect.
3.07 Ownership and Control. (a) Schedule 3.01 to this
Agreement states the authorized capitalization of the Borrower and each of the
Sureties (including capital stock of the Borrower and each of the Sureties held
in Treasury), the number of shares of each class of capital stock issued and
outstanding of the Borrower and each of the Sureties and the number and
percentage of outstanding shares of each such class of capital stock and the
names of the record and beneficial owners of such shares. The outstanding shares
have been duly authorized and validly issued and are fully paid and
nonassessable. Schedule 3.01 to this
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Agreement describes all outstanding options, rights and warrants issued by the
Borrower and each of the Sureties for the acquisition of shares of the capital
stock of the Borrower and each of the Sureties, as the case may be, all
outstanding securities or obligations convertible into such shares and all
agreements by the Borrower and each of the Sureties, or any of them, to issue or
sell such shares. Schedule 3.01 to this Agreement describes all options, sale
agreements, pledges, proxies, voting trusts, powers of attorney and other
agreements or instruments binding upon any of its shareholders with respect to
beneficial or record ownership of or voting rights with respect to shares of the
capital stock of the Borrower and each of the Sureties.
3.08 Responsible Officers and Directors of the Borrower and
the Sureties. Schedule 3.01 to this Agreement states the Responsible Officers
and the directors of the Borrower and the Sureties.
3.09 Subsidiaries. Except as set forth on Schedule 3.01 to
this Agreement, neither the Borrower nor any Surety has any Subsidiaries.
3.10 Business. Schedule 3.10 to this Agreement describes the
business of the Borrower, the Sureties and each of their Subsidiaries and
Affiliates as presently conducted and presently planned to be conducted in all
material respects.
3.11 Title to Property. (a) The Borrower and each of the
Sureties has good and marketable title to all real property and all other
Property purported to be owned by it which is material to the operations,
activities or business of the Borrower and its Consolidated Subsidiaries,
including that reflected in the most recent audited balance sheet referred to in
Section 3.12(a) of this Agreement or submitted pursuant to Section 5.01(a) of
this Agreement (except as sold or otherwise disposed of in the ordinary course
of business), subject only to Liens not forbidden by Section 6.01 of this
Agreement.
(b) The Deeds of Trust and the Mortgages include
legal descriptions of, or references to, all fee and all material leasehold
interests in real property and mineral rights located in West Virginia, Kentucky
or South Carolina held by the Borrower or the Eligible Subsidiaries. The
Borrower does not, however, hereby warrant the adequacy of the legal
descriptions of the fee and leasehold interests contained in the Deeds of Trust
and the Mortgages which are not either (i) currently being mined or are part of
the ten year mining plan of the Borrower and its Consolidated Subsidiaries, or
(ii) upon which are located operations, structures or activities which are
material to the operations of the business of the Borrower and its Consolidated
Subsidiaries.
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3.12 Financial Statements; Projections.
(a) The Borrower has delivered to the Agent an
audited consolidated balance sheet and related statements of income and retained
earnings and cash flow of Borrower and its Consolidated Subsidiaries for the
fiscal years ended December 31, 1997 and December 31, 1996, as audited and
certified without qualification by Price Waterhouse LLP. Such financial
statements (including the notes) present fairly the financial condition of
Borrower and its Consolidated Subsidiaries as of the end of such fiscal periods
and the results of their operations and the changes in financial position for
the fiscal periods then ended, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal periods.
(b) Borrower has delivered to the Agent internally
prepared unaudited consolidated and consolidating balance sheets and related
statements of income and retained earnings of Borrower and its Consolidated
Subsidiaries for the period ended March 31, 1998. Such unaudited financial
statements present fairly the financial condition of Borrower and its
Consolidated Subsidiaries as of the end of such periods and the results of their
operations for the periods then ended, all in conformity with GAAP applied on a
basis consistent with that of the preceding fiscal periods, subject to year-end
adjustments.
(c) Borrower has delivered to the Agent projections
(the "Projections") covering the fiscal years ending 1998 through 2002 for the
Borrower and its Consolidated Subsidiaries. The Projections were prepared by
Borrower and are based on all information known to the Borrower as of the date
of the Projections and the Closing Date and represent the good faith estimate of
the Borrower regarding the course of the Borrower's business for the periods
covered by such projections. The Borrower believes that the assumptions set
forth in the Projections are reasonable based on economic conditions as of the
date of the Projections and the Closing Date.
3.13 Taxes. All tax returns required to be filed by the
Borrower and the Sureties have been timely and properly prepared, executed and
filed or appropriate lawful extensions have been filed. All payroll taxes and
all other material taxes, assessments, fees and other governmental charges upon
the Borrower, the Sureties, or upon any of their properties, income, sales or
franchises which are due and payable have been paid. The reserves and provisions
for taxes on the books of the Borrower and each of the Sureties are adequate for
all open years and for its current fiscal period. Except as described in
Schedule 3.13 to this Agreement, the Borrower has no knowledge or any basis for
knowledge of any proposed additional assessment or basis for any material
assessment for additional taxes (whether or not reserved against).
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3.14 Litigation. Except as described in Schedule
3.14 to this Agreement, there is no pending or, to the knowledge of the
Borrower, threatened action, suit or proceeding by or before any Official Body
against or affecting any of the Borrower or any of the Sureties, at law or
equity, which if adversely decided could reasonably be expected to have a
Material Adverse Effect.
3.15 Compliance with Laws. Neither the Borrower nor any of the
Sureties or any of their Subsidiaries or Affiliates is in violation of or
subject to any material direct or contingent liability on account of any Law
except for such violations which would not have a Material Adverse Effect.
3.16 ERISA Compliance. (a) The Borrower and the Consolidated
Subsidiaries maintain only the Plans described on Schedule 3.16 hereto; (b) each
Plan has been funded in accordance with its terms and, when applicable, with the
minimum funding standards of Part Three of Title I of ERISA; (c) each Plan has
been maintained in accordance with its terms and with all provisions of ERISA
applicable thereto in all material respects; (d) none of the Plans is a Defined
Benefit Plan; (e) neither the Borrower nor any Surety has any liability with
respect to any Defined Benefit Plan which was previously maintained by any of
the Consolidated Subsidiaries or multiemployer plan from which any of the
Consolidated Subsidiaries have withdrawn; (f) there have been no Prohibited
Transactions which would subject the Borrower or any Surety to any liability or
tax which may be imposed by Section 4975 of the Code and which would have a
Material Adverse Effect; (g) except as disclosed on Schedule 3.16, neither the
Borrower nor any Surety maintains any Welfare Benefit Plan, fund or arrangement,
whether under contract, verbal commitment or gratuitously which provides for
health benefits or life insurance benefits for retirees of the Borrower or any
Surety and their beneficiaries; (h) no Reportable Event as defined in ERISA has
occurred and is continuing with respect to any Plan; (i) no liability to the
Pension Benefit Guaranty Corporation (the "PBGC") has been incurred with respect
to any Plan, other than for premiums due and payable; (j) no Plan has been
terminated, no proceedings have been instituted to terminate any Plan, and there
exists no intent to terminate or institute proceedings to terminate any Plan;
(k) no withdrawal, either complete or partial, has occurred or commenced with
respect to any multi-employer Plan, and there exists no intent to withdraw
either completely or partially from any multi-employer Plan; and (l) there has
been no cessation of, and there is no intent to cease, operations at a facility
or facilities where such cessation could reasonably be expected to result in a
separation from employment of more than 20% of the total number of employees who
are participants under a Plan.
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3.17 Patents, Licenses, Franchises. The Borrower and the
Sureties own or possess all of the patents, trademarks, service marks, trade
names, copyrights, licenses, franchises and permits and rights with respect to
the foregoing necessary to own and operate the Borrower's properties and the
Sureties' properties, as the case may be, and to carry on their respective
businesses as presently conducted and presently planned to be conducted without
conflict with the rights of others. No patent, trademark, service xxxx, trade
name, copyright, license, franchise or permit or right with respect to the
foregoing is of material importance to the business of the Borrower or the
Sureties, and there is no reason to anticipate any material liability to the
Borrower or the Sureties in respect of any claim of infringement of any kind.
3.18 Environmental Matters.
(a) Neither the Borrower nor any of the Sureties or
any of their Subsidiaries or Affiliates, is in violation of or has received any
notices of violation of The Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, The Resource Conservation and Recovery Act of 1976,
as amended by the Hazardous and Solid Waste Amendments of 1984, The Clean Water
Act, The Toxic Substances Control Act or The Clean Air Act or any rule or
regulation promulgated pursuant to any of the foregoing statutes, or any other
federal, state or local environmental law, statute, rule, regulation or
ordinance applicable to the Borrower, the Sureties, their Affiliates or their
properties (all of the foregoing are sometimes collectively referred to in this
Section 3.18 as the "Environmental Laws"), the effect of which could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any of the Sureties or
any of their Subsidiaries or Affiliates, directors, officers, employees, agents
or independent contractors has arranged, by contract, agreement or otherwise,
(i) for the disposal or treatment of, or (ii) with a transporter for the
transport for disposal or treatment of, any hazardous substance (as defined by
CERCLA, as amended), owned, used or possessed by the Borrower or any of the
Sureties or any of their Affiliates, at any location identified by the EPA on
the National Priorities List, 40 C.F.R. Part 300, (or proposed by the EPA in the
Federal Register for listing on such National Priorities List) or identified
under any corresponding state statute or regulation concerning cleanup of waste
disposal sites (a "State Superfund Law"), or at any other location, other than
hazardous waste or substances generated from substances used in the Borrower's
or Surety's business, which is controlled, stored and disposed of in material
compliance with all Environmental Laws;
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(c) To the knowledge of the Borrower, no predecessor
(as defined by CERCLA, as amended) of Borrower, any Surety or any Subsidiary or
Affiliate has arranged by contract, agreement or otherwise, (i) for the disposal
or treatment of, or (ii) with a transporter for transport for the disposal or
treatment of, any hazardous substance (as defined by CERCLA, as amended), owned,
used or possessed by any Predecessor at any location, other than hazardous waste
or substances generated from substances used in such predecessor's business,
which was controlled, stored and disposed of in material compliance with all
Environmental Laws;
(d) Neither the Borrower nor any of the Sureties or
any of their Subsidiaries or Affiliates, are "owners" or "operators" of a
"facility", as defined by CERCLA, as amended, or any State Superfund Law; and
(e) Neither the Borrower nor any of the Sureties or
any of their Subsidiaries or Affiliates "owned" or "operated" any "facility" at
the time any hazardous substances were disposed of within the meaning of CERCLA,
as amended, or any State Superfund Law.
3.19 Margin Stock. The Borrower will not make any borrowing
under this Agreement and will not permit any Eligible Subsidiary to reborrow
proceeds of the Revolving Credit Loans, for the purpose of buying or carrying
any "margin stock", as such term is used in Regulation U and related regulations
of the Board of Governors of the Federal Reserve System, as amended from time to
time. Neither the Borrower nor any Surety owns any "margin stock." Neither the
Borrower nor any Surety is engaged in the business of extending credit to others
for such purpose, and no part of the proceeds of any borrowing under this
Agreement will be used to purchase or carry any "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any "margin stock."
3.20 No Event of Default; Compliance with Agreements. No event
has occurred and is continuing and no condition exists which constitutes an
Event of Default or Potential Default. Neither the Borrower nor any Surety is
(i) in violation of any term of any charter instrument or bylaw or (ii) in
default under any agreement, lease or instrument to which such entity is a party
or by which it or any of its properties (now owned or acquired in the future)
may be subject or bound which default could reasonably be expected to have a
Material Adverse Effect.
3.21 No Material Adverse Change. Since December 31, 1997,
there has been no material adverse change in the assets, liabilities, the
results of operations or the financial condition of the Borrower and its
Consolidated Subsidiaries, taken as a whole, and there has been no material
adverse change in the
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business prospects of the Borrower and its Consolidated Subsidiaries, taken as a
whole.
3.22 Accurate and Complete Disclosure. No representation or
warranty made by the Borrower or any Surety under this Agreement, the Notes, the
Security Agreements or the other Loan Documents and no statement made by the
Borrower or any Surety in any financial statement (furnished pursuant to
Sections 3.12 or 5.01 or otherwise), certificate, report, exhibit or document
furnished by the Borrower to the Agent or the Banks pursuant to or in connection
with this Agreement is false or misleading in any material respect (including by
omission of material information necessary to make such representation, warranty
or statement not misleading).
3.23 Security Interest. Except as described in Schedule 3.23
to this Agreement, the security interest in the Collateral granted to the Agent
pursuant to the Security Agreements and the Subsidiary Security Agreements upon
the filing of financing statements (i) constitutes and will continue to
constitute a perfected security interest under the Code entitled to all of the
rights, benefits and priorities provided by the Code and (ii) except as
otherwise permitted under Section 6.01 of this Agreement, is and will continue
to be superior and prior to the rights of all third parties existing on the date
of this Agreement or arising after the date of this Agreement whether by lien or
otherwise, to the full extent provided by Law. All such action as is necessary
or advisable to establish such rights of the Agent and the Banks have been taken
or will be taken at or prior to the time required for such purpose and there
will be upon execution and delivery of the Loan Documents no necessity of any
further action in order to preserve, protect and continue such rights except the
filing of continuation statements with respect to such financing statements
within six months prior to each five year anniversary of the filing of such
financing statements and continued possession by the Agent and the Banks of the
collateral delivered to them. All filing fees and other expenses in connection
with each such action shall be paid by the Borrower and the Agent and the Banks
shall be reimbursed by the Borrower for any such fees and expenses incurred by
the Agent or the Banks.
3.24 Deed of Trust and Mortgage Liens. The deed of trust and
mortgage liens granted to the Agent pursuant to the Deeds of Trust, Mortgages
and the Subsidiary Deeds of Trust and Subsidiary Mortgages will be superior and
prior to the rights of all third persons existing on the date of their execution
and delivery or thereafter arising by way of lien or otherwise to the full
extent provided by law upon the recording of such deeds of trust and mortgages
in the appropriate recording offices, except as may otherwise be permitted under
Section 6.01 of this Agreement. All such action as is necessary to establish the
deed
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of trust and mortgage liens of the Agent and their priority as described in the
preceding sentence will have been taken, and there will be as of the date of
recording of such deeds of trust and mortgages no necessity for any further
action in order to protect, preserve and continue the mortgage liens and such
priority. All recording fees and other expenses in connection with each such
action have been or will be paid by the Borrower.
3.25 Coal Purchase and Coal Supply Agreements; Contract Mining
Agreements and Leases. The Borrower has furnished to the Agent true and correct
copies of the Coal Purchase Agreements, the Coal Supply Agreements, the Contract
Mining Agreements, the documents and agreements specifically identified in the
Collateral Assignment of Operating Agreements and the leases and other
instruments referred to in the Assignment of Leases and Royalties together with
all exhibits, amendments, modifications and attachments thereto (the "Material
Agreements"). The Material Agreements are the valid and subsisting agreements of
the Borrower or Surety named therein and are in full force and effect, and have
been validly executed by such party and constitute valid agreements, enforceable
in accordance with their terms, except as the enforceability of such document or
agreement may be limited by bankruptcy, insolvency, general principals of equity
or other laws of general application relating to or affecting the enforcement of
creditors' rights generally. There exists no default nor any circumstance which,
after notice or lapse of time or both would constitute a default, nor any claim
of default on the part of any party to any Material Agreement and there exists
no lien, set-off or claim or other impairment of the validity or enforceability
of any such agreements. The Material Agreements constitute the entire agreement
between and among the Borrower or the Surety named therein and the other parties
thereto with respect to the transactions that are the subject matter of such
agreements, and there are no other agreements with respect to such matters.
3.26 Senior Notes. The issuance of the Senior Notes has
occurred and the Borrower has received gross proceeds from the issuance of the
Senior Notes of $99,216,000. The Senior Note Documents are the valid and
subsisting agreements of the Borrower and are in full force and effect, and have
been validly executed by the Borrower and constitute valid agreements,
enforceable in accordance with their terms. There exists no default nor any
circumstance which, after notice or lapse of time or both would constitute a
default, nor any claim of default on the part of any party to the Senior Note
Documents. The Senior Note Documents constitute the entire agreement between and
among the Borrower and the other parties thereto with respect to the
transactions that are the subject matter of such agreements, and there are no
other agreements with respect to such matters.
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3.27 Labor Agreements. Except as described in Schedule 3.27 to
this Agreement, neither the Borrower nor any of its Consolidated Subsidiaries is
a party to any union or labor workforce agreement with any organized labor
organization or the employees of the Borrower or any Consolidated Subsidiary.
3.28 Solvency. After the making of the Loans and the relending
of any proceeds of the Loans to the Eligible Subsidiaries, the Borrower and each
Eligible Subsidiary (a) will be able to pay its debts as they become due, (b)
will have funds and capital sufficient to carry on its business and all
businesses in which it is about to engage, and (c) will own property having a
value both at fair valuation and at fair saleable value in the ordinary course
of the Borrower's or the Eligible Subsidiary's respective business greater than
the amount required to pay its debts as they become due. Neither the Borrower
nor any Eligible Subsidiary will be rendered insolvent by the execution and
delivery of this Agreement, the borrowing hereunder and/or the consummation of
any transactions contemplated herein.
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ARTICLE IV
CONDITIONS OF LENDING
The obligation of the Banks to make any Loan is subject to the
accuracy as of the Closing Date of the representations and warranties contained
in this Agreement and the other Loan Documents, to the performance by the
Borrower of its obligations to be performed under this Agreement and under the
other Loan Documents on or before the date of such Loan and to the satisfaction
of the following further conditions:
4.01 Representations and Warranties; Events of Default and
Potential Defaults. The representations and warranties contained in Article III
shall be true and correct on and as of the date of each Loan with the same
effect as though made on and as of each such date. On the Closing Date, the
Borrower shall have delivered a Certificate to that effect signed by a
Responsible Officer of the Borrower. On the date of each Loan, no Event of
Default and no Potential Default shall have occurred and be continuing or exist
or shall occur or exist after giving effect to the Loan to be made on such date.
4.02 Proceedings and Incumbency. On the Closing Date, the
Borrower and each of the Sureties shall have delivered to the Agent a
certificate, in form and substance satisfactory to the Agent, dated the Closing
Date and signed on behalf of the Borrower and each of the Sureties, as the case
may be, by the Secretary of the Borrower or Surety, certifying as to (a) true
copies of the Articles or Certificate of Incorporation and bylaws or code of
regulations of the Borrower or Surety and any shareholders agreement concerning
the Borrower or Surety, all as in effect on such date, (b) true copies of all
corporate action taken by the Borrower and each of the Sureties relative to this
Agreement, the Notes, the Security Agreements and the other Loan Documents,
including but not limited to that described in Section 3.03 of this Agreement,
and (c) the names, true signatures and incumbency of the officers of the
Borrower and each of the Sureties authorized to execute and deliver this
Agreement, the Notes, the Security Agreements and the other Loan Documents to
which the Borrower or Surety is a party. The Agent may conclusively rely on each
such certificate unless and until a later certificate revising the prior
certificate has been received by the Agent.
4.03 Opinion of Counsel. On the Closing Date, there shall have
been delivered to the Agent written opinions, dated the Closing Date, of
Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel to the Borrower and the
Sureties and Xxxxx, Tarrant & Xxxxx, Kentucky and Tennessee counsel to the
Borrower and Sureties, Bowles, Rice, XxXxxxx, Xxxxx & Love, West Virginia
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counsel to the Borrower and the Sureties, Liskow & Xxxxx, a Professional Law
Corporation, Louisiana counsel to the Banks and The XxXxxx Law Firm, South
Carolina counsel to Pen Cotton, in substantially the form attached as Exhibits
"X-0", "X-0", "X-0", X-0" and "E-5" to this Agreement.
4.04 Agreement and Notes. On the Closing Date, this Agreement
and the Revolving Credit Notes of Borrower satisfactory in terms, form and
substance to the Agent and the Banks, shall have been executed and delivered by
the Borrower, as the case may be, to the Agent.
4.05 Security Agreements and Deeds of Trust and Mortgages . On
the Closing Date, the Security Agreements and Deeds of Trust and Mortgages or
amendments to the same (which will include amendments to reflect the amendment
and restatement of this Agreement and the inclusion of any Property which has
not been previously described in a Deed of Trust or a Mortgage, a Lien in which
can be perfected by the filing of a Deed of Trust or Mortgage), as the case may
be, satisfactory in terms, form and substance to the Agent, shall have been
executed and delivered by the Borrower and the Sureties to the Agent and shall
be in effect.
4.06 UCC Financing Statements. On or before the Closing Date,
all UCC-1 financing statements and UCC-3 financing statement amendments (to
reflect the amendment of the secured party and the release of the Mobile
Equipment from the Lien of the Security Agreements) to be filed pursuant to the
Security Agreements and the other Loan Documents shall have been duly executed
and delivered and shall be in effect.
4.07 Hazardous Waste Agreement. On the Closing Date, the
Hazardous Waste Certificate and Indemnity Agreement, satisfactory in terms, form
and substance to the Agent, shall have been executed and delivered by the
Borrower and the Sureties to the Agent.
4.08 Suretyship Agreements. On the Closing Date, the
Suretyship Agreements, satisfactory in terms, form and substance to the Agent,
shall have been executed and delivered by each of the Sureties to the Agent.
4.09 Pledge Agreements. On the Closing Date, the Pledge
Agreements and stock powers executed by Borrower, satisfactory in terms, form
and substance to the Agent, together with the stock certificates of all issued
and outstanding stock of Pen Coal, Elk Horn, River Marine, Pen Cotton, Pen
Cotton Company, Pen Hardwood and Marine Terminals and any other Active
Subsidiaries of the Borrower or any of its Subsidiaries, delivered by Borrower
(or any Subsidiary of Borrower which owns capital stock of an Active Subsidiary)
to the Agent.
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4.10 Collateral Assignment of Coal Purchase Agreements. On
the Closing Date, the Collateral Assignment of Coal Purchase Agreement,
satisfactory in terms, form and substance to the Agent shall have been executed
by Pen Coal and Elk Horn and any other Eligible Subsidiaries which are party to
any Coal Purchase Agreements, respectively, and delivered to the Agent.
4.11 Collateral Assignment of Contract Mining Agreements. On
the Closing Date, the Collateral Assignment of Contract Mining Agreements,
satisfactory in terms, form and substance to the Agent shall have been executed
by Pen Coal and Elk Horn and any other Eligible Subsidiaries which are party to
any Contract Mining Agreements, respectively, and delivered to the Agent.
4.12 Collateral Assignment of Operating Agreements. On the
Closing Date, the Collateral Assignment of Operating Agreements, satisfactory on
terms, form and substance to the Agent shall have been executed by the Borrower
and Sureties and delivered to the Agent.
4.13 Assignment of Leases and Royalties. On the Closing Date,
the Assignment of Leases and Royalties, satisfactory on terms, form and
substance to the Agent shall have been executed by each of Elk Horn, Pen Coal
and any other Eligible Subsidiaries which are a party to any leasehold mineral
or real property interests, and delivered to the Agent.
4.14 Senior Notes. On or before the Closing Date, evidence
that the Senior Note Documents shall have been duly authorized, executed and
delivered, and that the Senior Notes shall have been issued for cash in an
aggregate amount not less than $99,216,000 and not less than 99% of the
aggregate stated principal amount thereof, in each case containing terms in form
and substance satisfactory to the Agent. In addition, the Agent shall have
received a certificate of a Responsible Officer of the Borrower to that effect
(and attaching thereto true and complete copies of the Senior Note Documents,
which shall be reasonably satisfactory to the Agent in form and substance).
4.15 Repayment of Existing Loans. On or before the Closing
Date, evidence that the principal of and interest on, and all other amounts
owing in respect of (including repurchase by the Borrower of the warrants issued
to the Bank parties to the Original Credit Agreement) all obligations
outstanding under or in connection with the Original Credit Agreement shall have
been paid in full.
4.16 Repayment of Wachovia Bank Facility and Xxxxxxxx Company
Purchase Money Financing. On or before the Closing Date, evidence that the
principal of and interest on, and all other
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amounts owing in respect of all obligations outstanding under or in connection
with the (i) credit facility provided by Wachovia Bank to Pen Cotton, and (ii)
the purchase money financing provided by Xxxxxxxx Company, Inc. to Elk Horn in
connection with the Fork Creek Reserves, shall have been paid in full.
4.17 Other Documents and Conditions. On or before the Closing
Date, the following documents and conditions shall have been delivered or
satisfied by or on behalf of the Borrower to the Agent:
(a) Good Standing and Tax Lien Certificates -
Borrower and Eligible Subsidiaries. Good Standing Certificate of the state of
incorporation of each of the Borrower and each Eligible Subsidiary certifying to
the good standing and corporate status of the Borrower and each Eligible
Subsidiary, respectively, good standing/foreign qualification certificates from
other jurisdictions in which such corporations are qualified to do business and
tax lien certificates from each jurisdiction in which such corporations are
qualified to do business.
(b) Financial Statements; Projections. Financial
statements and projections in form and substance satisfactory to the Agent, as
described in Section 3.12 of this Agreement.
(c) Insurance. Evidence, in form and substance
satisfactory to the Agent, that the business and all assets of the Borrower and
the Sureties are adequately insured and that the Agent has been named as loss
payee on all policies of insurance covering the Collateral (as defined in the
Security Agreement) and mortgagee/loss payee on all policies of insurance
covering the real property subject to the Deeds of Trust.
(d) Ownership Interests. Evidence satisfactory to the
Agent that the ownership interests in the Borrower and Sureties are as described
in Schedule 3.01 to this Agreement.
(e) Lien Searches and Real Estate Lien and
Encumbrance Searches. Copies of record searches (including UCC searches, real
property lien reports, and judgment, tax and other lien searches) evidencing
that the Agent has a first priority security interest in the Collateral
described in the Security Agreements and a first priority mortgage or deed of
trust lien on the Pen Coal Real Property, the Elk Horn Real Property, the River
Marine Real Property and the Pen Cotton Real Property, except as otherwise
provided in Section 6.01 of this Agreement.
(f) Releases of Liens. UCC-3 terminations, deed of
trust releases other releases of Liens that are required pursuant to a review of
the Lien Searches, including releases of liens of Xxxxxxxx Company, Inc. in
connection with the Elk Horn Real Property located in West Virginia and known as
the "Fork
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Creek Reserves", and other Liens as required by the Agent, against the assets or
properties of the Borrower or Sureties.
(g) No Material Adverse Change. Evidence satisfactory
to the Agent that since December 31, 1997, there has been no material adverse
change in the assets, liabilities, the results of operations or the financial
condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
and there has been no material adverse change in the business prospects of the
Borrower and its Consolidated Subsidiaries, taken as a whole.
(h) Subsidiary Notes, Subsidiary Security Agreements,
Subsidiary Deeds of Trust and Mortgages and Assignment of Subsidiary Security
Documents. The Subsidiary Notes, the Subsidiary Security Agreements the
Subsidiary Deeds of Trust and Mortgages and the Assignment of Subsidiary
Security Documents, satisfactory in terms, form and substance to the Agent,
shall have been executed by the appropriate parties and delivered to the Agent
and all filings contemplated by the Subsidiary Security Agreements and the
Subsidiary Deeds of Trust and Mortgages shall have been made.
(i) Other Documents and Conditions. Such other
documents and conditions as may be required to be submitted to the Agent or the
Banks by the terms of this Agreement or of any Loan Document.
4.18 Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be satisfactory to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the Agent, as the Agent may from time to time request.
4.19 Fees and Expenses. The Borrower shall have paid all fees
and charges as required for the Closing and relating to the Closing, including
reasonable legal fees, closing costs, filing and notary fees, and any other
similar matters pertinent to the Closing.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants to the Agent and the Banks as follows:
5.01 Reporting and Information Requirements.
(a) Annual Audited Reports. As soon as practicable,
and in any event within 120 days after the close of each fiscal year of
Borrower, Borrower will furnish to the Agent and the Banks audited, consolidated
statements of income, retained earnings and cash flow of Borrower and its
Consolidated Subsidiaries for such fiscal year and an audited, consolidated
balance sheet of Borrower and its Consolidated Subsidiaries as of the close of
such fiscal year, and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding fiscal year, with
such statements and balance sheet to be certified by Price Waterhouse LLP or
other independent certified public accountants of recognized standing selected
by Borrower and satisfactory to the Agent. The certificate or report of such
accountants shall be free of exception or qualifications not acceptable to the
Agent and the Banks and shall in any event contain a written statement of such
accountants substantially to the effect that such statements and balance sheet
were prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal year (except for
changes in application in which such accountants concur).
(b) Quarterly Reports. As soon as practicable, and in
any event within 60 days after the close of each fiscal quarter of the Borrower
and its Consolidated Subsidiaries during the term of this Agreement, Borrower
will furnish to the Agent and the Banks consolidated and consolidating
statements of income for Borrower and its Consolidated Subsidiaries for such
period and for the portion of the fiscal year to the end of such period, and a
consolidated and consolidating balance sheet of Borrower and its Consolidated
Subsidiaries as of the close of such period, all in reasonable detail and
showing variances from the annual forecast and business plan of Borrower and its
Consolidated Subsidiaries for such fiscal period. All such income statements and
balance sheets shall be prepared by Borrower and shall present fairly the
financial position of Borrower and its Consolidated Subsidiaries as of the end
of such period and the results of their operations for such periods subject to
year end adjustment, in conformity with generally accepted accounting principles
applied in a manner consistent with that of the most recent audited financial
statements furnished to the Agent and the Banks.
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(c) Compliance Certificate. Within 120 days after the
end of each fiscal year of Borrower and its Consolidated Subsidiaries and within
60 days after the end of each fiscal quarter, Borrower will deliver to the Agent
and the Banks a certificate, in the form attached to this Agreement as Exhibit
"F" (a "Compliance Certificate"), dated as of the end of such fiscal year or
quarter, as the case may be, signed on behalf of Borrower and its Consolidated
Subsidiaries by a Responsible Officer of Borrower calculating the covenants set
forth in Section 6.16 and stating that, as of the date of the certificate, no
Event of Default or Potential Default has occurred and is continuing or exists,
or if an Event of Default or Potential Default has occurred and is continuing or
exists, specifying in detail the nature and period of existence of the Event of
Default or Potential Default and any action taken or contemplated to be taken by
Borrower.
(d) Copies of Senior Note Document Reports. As soon
as possible, and in any event within 10 days after delivery to the required
recipient pursuant to the Senior Note Documents, copies of any reports,
certificates or other deliveries required to be submitted in connection with the
Senior Note Documents.
(e) Visitation. During normal business hours and upon
reasonable telephonic notice to the Borrower or Surety, the Borrower and the
Sureties will permit such persons as the Agent or any Bank may designate to
visit and inspect any of the properties of the Borrower or the Sureties, to
examine, and to make copies and extracts from, the books and records of any of
the Borrower or the Sureties and to discuss its affairs with its officers,
employees and independent accountants at such times and as often as the Agent
may request. The Borrower and the Sureties authorizes its officers, employees
and independent accountants to discuss with the Agent or any of the Banks the
affairs of the Borrower. The Agent and the Banks will use their best efforts to
coordinate such visits by the Banks with those of the Agent in order to minimize
disruption to the Borrower and its Consolidated Subsidiaries and their
operations.
(f) Notice of Event of Default. Promptly upon
becoming aware of an Event of Default or Potential Default, the Borrower will
give each of the Banks notice of the Event of Default or Potential Default,
together with a written statement of a Responsible Officer of the Borrower
setting forth the details of the Event of Default or Potential Default and any
action taken or contemplated to be taken by the Borrower.
(g) Notice of Material Adverse Change. Promptly upon
becoming aware thereof, the Borrower will give each of the Banks telephonic or
telegraphic notice (with written confirmation sent on the same or next Business
Day) about any material adverse change in the assets, business, operations or
financial condition
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of any of the Borrower or any development or occurrence which could reasonably
be expected to materially and adversely affect the ability of the Borrower and
the Sureties to perform their obligations under this Agreement.
(h) Notice of Proceedings. Promptly upon becoming
aware thereof, the Borrower will give the Agent notice of the commencement,
existence or threat of all proceedings by or before any Official Body against or
affecting either of the Borrower or any of the Sureties which, if adversely
decided, could have a Material Adverse Effect.
(i) Notice of Default Under Material Agreements.
Promptly upon becoming aware thereof, the Borrower will give the Agent notice of
the occurrence of an event of default under any Material Agreement, the effect
of which could have a Material Adverse Effect.
(j) Further Information. Upon request of the Agent,
Borrower shall deliver or cause to be delivered to the Agent detailed schedules
of accounts receivable and accounts payable aging, monthly sales reports listing
all sales of inventory and a report of inventory as established by a physical
count or such other method as is customary in the coal industry and approved by
Agent, of the Borrower or the Sureties, as the case may be. Further the Borrower
will promptly furnish to the Agent such other information, and in such form, as
the Agent may reasonably request from time to time.
5.02 Preservation of Existence and Franchises. The Borrower
and the Sureties will maintain its corporate existence, rights and franchises in
full force and effect in its jurisdiction of incorporation. The Borrower and the
Sureties will qualify and remain qualified as a foreign corporation in each
jurisdiction in which failure to receive or retain qualification could
reasonably be expected to have a Material Adverse Effect.
5.03 Insurance. The Borrower, the Sureties and their
Consolidated Subsidiaries will maintain with financially sound and reputable
insurers insurance with respect to their properties and business and against
such liabilities, casualties and contingencies and of such types and in such
amounts as is satisfactory to the Agent and as is customary in the case of
corporations or other entities engaged in the same or similar business or having
similar properties similarly situated. Risk of loss of, damage to or destruction
of the properties and assets of the Borrower, the Sureties and their
Consolidated Subsidiaries is on the Borrower and the Sureties. The Borrower and
the Sureties will add the Agent as mortgagee and loss payee, as the case may be,
to all policies of insurance which insure against loss of or damage to the
Collateral (as defined in the Security
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Agreement) or the real property subject to the Deeds of Trust and the Mortgages,
shall provide the Agent with thirty (30) days advance notice of the termination
of any such policy of insurance and shall obtain endorsements to such policies
which shall insure the Agent and the Banks regardless of the conduct or neglect
of the Borrower or the Sureties. If the Borrower or the Sureties fail to effect
and keep in full force and effect such insurance or fail to pay the premiums
when due, the Agent may (but shall not be obligated to) do so for the account of
the Borrower and add the cost thereof to the Debt which is evidenced by this
Agreement.
5.04 Maintenance of Properties. The Borrower, the Sureties and
their Consolidated Subsidiaries will maintain in good repair, working order and
condition, the properties now or in the future owned, leased or otherwise
possessed by the Borrower, the Sureties and their Consolidated Subsidiaries, or
any of them, and shall make or cause to be made all needful and proper repairs,
renewals, replacements and improvements to the properties so that the business
carried on in connection with the properties may be properly and advantageously
conducted at all times. The Borrower shall notify the Agent prior to any change
in the location of any properties or businesses of the Borrower or the Sureties
to any county in which Agent does not have a perfected security interest against
the property of Borrower and Sureties.
5.05 Payment of Liabilities. The Borrower, the Sureties and
their Consolidated Subsidiaries will pay or discharge:
(a) on or prior to the date on which penalties
attach, all taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income except taxes, assessments or charges
subject to good faith dispute for which the Borrower, Surety or Consolidated
Subsidiary has created adequate reserves on its books;
(b) on or prior to the date when due, all lawful
claims of materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid, might result in the creation of a Lien upon any
of the Borrower's property or the property of any Surety or Consolidated
Subsidiary, except such claims which are subject to good faith dispute and as to
which the Borrower or the Surety or Consolidated Subsidiary has created adequate
reserves on its books;
(c) on or prior to the date when due, all other
lawful claims which, if unpaid, might result in the creation of a Lien upon any
of the Borrower's property or the property of any Surety or Consolidated
Subsidiary, except such claims which are subject to good faith dispute and as to
which the Borrower or the
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Surety or Consolidated Subsidiary has created adequate reserves on its books;
and
(d) all other current liabilities so that none is due
more than sixty (60) days after the due date for each liability, except current
liabilities which are subject to good faith dispute and as to which it has
created adequate reserves on its books.
5.06 Financial Accounting Practices. The Borrower, the
Sureties and their Consolidated Subsidiaries will make and keep books, records
and accounts which, in reasonable detail, accurately and fairly reflect their
transactions and dispositions of their assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
5.07 Compliance with Laws. The Borrower, the Sureties and
their Consolidated Subsidiaries will comply with all applicable Laws in all
respects, unless failure to comply could not reasonably be expected to have a
Material Adverse Effect.
5.08 Pension Plans. The Borrower, Surety and their
Consolidated Subsidiaries will furnish to the Agent notice: (A) of a Plan
Employer's intention to adopt any new Defined Benefit Plan; (B) of a Plan
Employer's intention to terminate for purposes of Title IV of ERISA any Defined
Benefit Plan or to withdraw from or cease making timely contributions to any
multiemployer plan; and (C) of a Plan Employer's adoption of a Plan amendment
which results in the imposition of a Lien on the Borrower, Surety or
Consolidated Subsidiary under Section 401(a)(29) of the Code. Promptly after the
occurrence or filing or any of the events or documents described below, as the
case may be, the Borrower or Surety will (i) furnish to the Agent (A) notice of
a Plan Employer's failure to make a required payment under Section 412 of the
Code on or before the due date for such payment, if applicable, (B) copies of
IRS Form 5310 relating to a Defined Benefit Plan termination or transfer of
Defined Benefit Plan assets or liabilities, (C) any 30-day notice to the PBGC of
a Reportable Event, (D) upon the Agent's request, any IRS Form 5500, including
all Schedules, for any Plan which, on the date on which such IRS Form 5500 is
filed, has unfunded vested liabilities in excess of $500,000, (E) any writing
from the PBGC to the effect that it may or will take action to terminate any
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Plan under Title IV of ERISA or from any multiemployer Plan that it may and will
take action to assert withdrawal liability against the Plan Employer, (F) any
notice filed with the PBGC pursuant to Section 4041 of ERISA and (G) any notice
from the Secretary of the Treasury to the effect that a Plan has lost its
qualified status under Section 401 of the Code or has been terminated within the
meaning of Section 411(d)(3) of the Code or the related trust of such Plan lost
its tax exempt status under Section 501 of the Code if such action is likely to
cause the Plan Employer to incur liability in an amount in excess of $500,000,
and (ii) furnish to the Agent within thirty (30) days of the filing or receipt
of each such document other than IRS Form 5500, a certificate of a Responsible
Officer of the Borrower or Surety certifying as to what further action has been
taken by the Plan Employer in connection therewith and whether the matter
referred to in such documents is likely to cause the Plan Employer to incur
liability to the PBGC or multiemployer Plan in an amount in excess of $500,000.
The Borrower and the Sureties shall (a) keep in full force and effect any and
all Plans which are presently in existence or may, from time to time, come into
existence under ERISA, unless such Plans can be terminated without material
liability to the Borrower in connection with such termination; (b) make
contributions to all of the Borrower's, the Sureties' and the Consolidated
Subsidiaries' Plans in a timely manner and in a sufficient amount to comply with
the requirements of ERISA; and (c) comply with all material requirements of
ERISA which relate to such Plans so as to preclude the occurrence of any
Reportable Event, Prohibited Transaction (other than a Prohibited Transaction
subject to an exemption under ERISA) or material "accumulated funding
deficiency" as such term is defined in ERISA.
5.09 Continuation of and Change in Business. The Borrower, the
Sureties and their Consolidated Subsidiaries will continue to engage in the
businesses and activities in which they are currently engaged in the geographic
regions in which they are currently engaged and none of the Borrower nor any of
the Sureties or Consolidated Subsidiaries will engage in any other businesses or
activities without the prior written consent of the Banks.
5.10 Use of Proceeds. Borrower and the Eligible Subsidiaries
will use the proceeds of the Revolving Credit Loans for the purposes set forth
in Section 2.01(a).
5.11 Lockbox. The Borrower and the Sureties will maintain one
or more lockbox accounts and depository transfer checking accounts with the
Agent, whereby all checks, drafts, cash and other remittances to the Borrower
and the Sureties in payment of the Borrower's or the Sureties' accounts are
deposited into such lockbox account or accounts or depository transfer checking
accounts.
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5.12 Lien Searches. The Agent may, but shall not be obligated
to, conduct lien searches of the Borrower, the Sureties and their assets and
properties and the Collateral (i) on an annual basis and (ii) at such other
times as the Agent, in its sole discretion, may determine to be necessary. The
Borrower shall reimburse the Agent or the Banks for the out-of-pocket costs
incurred in connection with any such lien searches, provided, that so long as no
Event of Default is in existence, the Borrower shall not be obligated to
reimburse the Agent or the Banks for such cost more often than once each year.
5.13 Further Assurances. The Borrower and the Eligible
Subsidiaries, at their own cost and expense, will cause to be promptly and duly
taken, executed, acknowledged and delivered all such further acts, documents and
assurances as the Agent or the Banks may from time to time reasonably request in
order more effectively to carry out the intent and purposes of this Agreement
and the transactions contemplated by this Agreement and to cause the security
interest or interests, the liens, or conveyance granted under the Security
Agreement or any other Loan Documents to be, at all times, valid, perfected and
enforceable against the Borrower, the Eligible Subsidiaries and all third
parties. All expenses of such filings, and recordings, and refilings, and
rerecordings, shall be borne by the Borrower. Promptly upon request by the
Agent, the Borrower agrees to execute or cause to be executed by the Eligible
Subsidiaries all financing statements describing the property in which the Agent
has a security interest under the Security Agreements or the Subsidiary Security
Agreements, the Deeds of Trust and Mortgages and the Subsidiary Deeds of Trust
and Mortgages. The Borrower irrevocably appoint the Agent as its agent and
attorney to execute any such financing statements in the Borrower's name. The
Borrower further agree that a carbon, photographic or other reproduction of a
financing statement or the Security Agreements or the Subsidiary Security
Agreements is sufficient as a financing statement and may be filed as such. The
Borrower further agrees, at its own cost and expense, to, or to cause the
Eligible Subsidiaries to, promptly and duly, take, execute, acknowledge and
deliver all such further acts, documents and assurances as the Agent or the
Banks may from time to time reasonably request in connection with any of the
other Loan Documents to more effectively carry out the intent and purposes of
any of the Loan Documents and the transactions contemplated by such Loan
Documents and to cause the security interest or interests, the liens, or
conveyance granted under the Loan Documents to be, at all times, valid,
perfected and enforceable against the Borrower, the Sureties and all third
parties. Upon the request of the Agent, the Borrower shall, and shall cause the
Eligible Subsidiaries to, use all commercially reasonable efforts to obtain any
consents or agreements not previously obtained which are necessary to assign to
the Agent, for the benefit of the Banks, any or all of the Material Agreements,
including,
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without limitation, the Coal Supply Agreements, the Coal Purchase Agreements and
any material leases of mineral rights or real property rights which are subject
to the Mortgages or the Deeds of Trust, which either come into existence after
the date hereof or in which the Agent, on behalf of the Banks, has not received
a direct assignment or security interest, provided, however, that unless an
Event of Default is in existence, the Agent shall not request the Borrower or
any Eligible Subsidiary to use commercially reasonable efforts to obtain any
necessary consents to an assignment of any of the Coal Supply Agreements.
5.14 Litigation. Upon the request of the Agent, the Borrower
shall furnish to the Agent a verbal summary of the material developments,
including, without limitation, all hearings and orders in pending suits or
proceedings relating to the Borrower or Sureties which litigation (A)(i) names
the Borrower or Surety as a party or (ii) puts at issue assets or operations of
the Borrower or Surety, and (B) which could reasonably be expected to have a
Material Adverse Effect. Upon the request of the Agent, Borrower shall promptly
furnish the Agent with a written summary of the matters set forth in this
Section 5.14, and such other information and materials as the Agent may
reasonably request in connection therewith.
5.15 Notice of Change of Management. The Borrower shall
promptly furnish written notice to the Agent of a change in the respective
Responsible Officers or the directors of the Borrower or any Surety.
5.16 Labor Agreements. Promptly upon execution thereof, the
Borrower will provide to the Agent a copy of (i) any union or labor workforce
agreements entered into with any organized labor organization or the employees
of the Borrower, Surety or Consolidated Subsidiary, and all amendments,
extensions or revisions to such agreements and (ii) any notice of any default
thereunder.
5.17 Ownership and Control. Pen Holdings shall at all times
own 100% of the issued and outstanding capital stock of the Eligible
Subsidiaries and the other Consolidated Subsidiaries and all of the capital
stock of the Eligible Subsidiaries and the other Consolidated Subsidiaries of
the Borrower which are Active Subsidiaries shall at all times be pledged to the
Agent pursuant to and in accordance with the terms of the Pledge Agreements.
5.18 Maintenance of Material Agreements. The Borrower shall
maintain and be in compliance with the Material Agreements at all times. The
Borrower will, and will cause the Consolidated Subsidiaries, to (i) perform in
all material respects their obligations under the Material Agreements and will
enforce or will cause the enforcement of the performance by the other parties
thereto of all of their obligations under the Material
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Agreements or any other document or agreement, (ii) not terminate the Material
Agreements or modify or amend the terms of the Material Agreements or release
any other party thereto from any material obligations under the Material
Agreements or any other agreement or document by and between the Borrower and
the other parties to the Material Agreements with respect to the performance of
the Material Agreements unless such modification or noncompliance would not
diminish or adversely affect the value of the Material Agreements to the
Borrower or adversely affect the rights or obligations of the Borrower under the
Material Agreements.
5.19 Newly Acquired Property. The Borrower shall (i) notify
the Agent with respect to any interest acquired by the Borrower or any of its
Consolidated Subsidiaries in any Property after the date hereof (including,
without limitation, by acquisition of any Person which becomes a Consolidated
Subsidiary of the Borrower, but excluding any Property acquired in a transaction
or a series of transactions where the consideration paid or delivered in
exchange therefor is or has a value less than $1,000,000 or such Property
consists of Mobile Equipment) not less than five (5) Business Days after such
acquisition, and (ii) not later than sixty (60) days after request by the Agent
or the Banks, cause the Borrower or Consolidated Subsidiary which acquires such
Property to mortgage, assign or grant a security interest in such Property to
the Agent, for the benefit of the Banks, and, after, and to execute and deliver
such other documentation, evidence of ownership interests and other information
regarding such Property as the Agent may reasonably request, including, without
limitation, Code financing statements, environmental assessments, corporate
resolutions and other corporate documentation, opinions of counsel and evidence
of title, all in form and substance reasonably satisfactory to the Agent;
provided, however, if the consent of a third party is necessary to the granting
of a security interest, mortgage or assignment, the Borrower or Consolidated
Subsidiary which acquires such Property shall not be required to grant a
security interest, mortgage or assignment in such Property to the Agent if the
Borrower or Consolidated Subsidiary, as the case may be, has used commercially
reasonable efforts to obtain such consent and the consent has not been granted.
5.20 Active Subsidiaries. In the event that the Borrower or
any of its Consolidated Subsidiaries shall form or acquire any new Consolidated
Subsidiary that the Borrower anticipates will be an Active Subsidiary (or in the
event that any existing Subsidiary which currently is not an Active Subsidiary
shall become an Active Subsidiary), the Borrower will cause such new Active
Subsidiary to become a Surety hereunder, and to pledge and grant a security
interest in its Property to the Agent for the benefit of the Banks pursuant to
documents substantially in the same form as the relevant Loan Documents and
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to deliver such proof of corporate or other organizational action, incumbency of
officers, opinions of counsel and other documents as is consistent with those
delivered by each Surety pursuant to Article IV of this Agreement upon the
Closing Date or as the Agent may reasonably request.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants to the Agent and the Banks as follows:
6.01 Liens. Neither the Borrower nor any of the Sureties or
any of their Consolidated Subsidiaries shall at any time create, incur, assume
or suffer to exist any Lien on any of its property or assets, tangible or
intangible, now owned or acquired in the future, or agree to become liable to do
so, except:
(a) Liens existing on the Closing Date and described
in Schedule 6.01 to this Agreement, Liens in favor of the Agent and Liens
securing Debt permitted under Section 6.02(d), (e) and (i) of this Agreement;
(b) Liens arising from taxes, assessments, charges,
levies or claims described in Section 5.05(a) of this Agreement that are not yet
due or that remain payable without penalty or to the extent permitted to remain
unpaid under the proviso to Section 5.05(a) of this Agreement;
(c) Deposits or pledges to secure workmen's
compensation, unemployment insurance, old age benefits or other social security
obligations, or in connection with or to secure the performance of bids,
tenders, trade contracts or leases, or to secure statutory obligations,
including without limitation, statutory obligations of strip mining reclamation,
or stay, surety or appeal bonds, or other pledges or deposits of like nature and
all in the ordinary course of business;
(d) Mechanics', carriers', workmen's, repairmen's or
similar liens arising in the ordinary course of business in respect of
obligations which are not overdue, or deposits made to obtain the release of
such mechanics', carriers', workmen's, repairmen's or similar liens which are
being contested in good faith by appropriate proceedings diligently conducted
which operate to stay any foreclosure, distraint or execution on the property or
deposit or pledges to obtain the release of any such lien and with respect to
which the Borrower or the Surety has created reserves which are determined to be
adequate by the application of GAAP consistently applied;
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(e) Zoning restrictions, easements, minor
restrictions on the use of real property, minor irregularities in title to real
property and other minor Liens that do not secure the payment of money or the
performance of an obligation and that do not in the aggregate materially detract
from the value of a property or asset to, or materially impair its use in the
business of, the Borrower or any Surety; and
(f) rights reserved to the lessor under any Capital
Lease Obligations permitted under Section 6.02(d);
(g) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(h) Liens arising pursuant to any sale and leaseback
transactions entered into in compliance with this Agreement;
(i) Liens on Property constituting Mobile Equipment
securing Debt otherwise permitted under this Agreement, provided that such Liens
do not extend to or cover any other Property;
(j) Liens constituting judgment liens which are fully
bonded or stayed pending appeal, provided that without the prior written consent
of the Banks, neither the Borrower nor any of its Consolidated Subsidiaries
shall incur any Debt or Liens in connection with the bonding of any such
judgment Liens if the Debt or Liens incurred in connection with any surety, bond
or other obligation on account of a judgment Lien would otherwise not be
permitted by the terms of this Agreement;
(k) the Columbia Lien; and
(l) any extension, renewal or replacement, in whole
or in part, of any Lien described in the foregoing clauses (a) through (k);
provided that any such extension, renewal or replacement shall be no more
restrictive in any material respect than the Lien so extended, renewed or
replaced and shall not extend to any other Property of the Borrower or its
Consolidated Subsidiaries other than such item of Property originally covered by
such Lien or any improvement thereon or additions or accessions thereto.
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In addition, the Borrower and the Sureties shall not agree, warrant, represent,
pledge or otherwise commit with or to any Person other than Agent and the Banks
to not incur, create, assume or permit to exist, any mortgage, pledge, lien
charge or other encumbrance of any nature whatsoever on all or any of its
Property, now or hereafter owned (except as provided in the Senior Notes to the
extent that such prohibition contained in the Senior Note Documents does not
prohibit the granting of Liens on the Property of the Borrower and the
Consolidated Subsidiaries in favor of the Agent for the benefit of the Banks).
6.02 Debt. Neither the Borrower nor any of the Sureties or any
of their Consolidated Subsidiaries will at any time create, incur, assume or
suffer to exist any Debt, except:
(a) Debt under this Agreement, the Notes, the other
Loan Documents or under any other document, instrument or agreement between or
among the Borrower or any Surety and any of the Banks;
(b) Debt existing on the Closing Date and described
in Schedule 6.02 to this Agreement; provided, however, that none of such
indebtedness shall be extended, renewed or refinanced without the prior written
consent of the Banks unless such renewal, extension or refinance of such Debt is
based upon terms which are no less favorable to the Banks than the terms which
currently exist with respect to such Debt; (for purposes of this Section
6.02(b), any material increase in interest rate, requirement for a material
addition to the collateral or security for such Debt, addition or amendment of
covenants or agreements such that any agreement governing such Debt is more
restrictive on the borrower thereunder, extension of the period of time over
which such Debt amortizes in the case of term Debt, or increase in the amount of
the Debt, shall conclusively be deemed to be less favorable to the Banks);
(c) Current accounts payable, accrued expenses,
accrued reclamation costs and other current items arising out of transactions
(other than borrowings) in the ordinary course of business;
(d) Debt of the Borrower or Sureties secured by a
purchase money security interest or Mobile Equipment; provided, however that in
no event shall (i) Debt permitted by this subsection (d) of Section 6.02, plus
(ii) Debt permitted by subsection (k) of this Section 6.02, plus (iii) Debt
which is outstanding under this Agreement and the Notes, exceed $50,000,000 in
the aggregate at any time, and provided further that the purchase money security
interest shall in no event encumber or create a Lien on any Property other than
the Property purchased in accordance therewith or the identifiable cash proceeds
thereof;
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(e) Debt of Eligible Subsidiaries to Borrower
evidenced by the Subsidiary Notes which are subject to the Assignment of
Subsidiary Security Documents;
(f) Guarantees permitted by Section 6.03 of this
Agreement;
(g) the Senior Notes;
(h) Debt incurred in connection with Rate Protection
Agreements which have been approved by the Banks; and
(i) Debt of the Borrower occurring after January 3,
2006 which results from the redemption of the Borrower's outstanding mandatorily
redeemable convertible preferred stock in accordance with its terms as contained
in the Pen Holdings Charter as in effect on the Closing Date;
(j) Debt in respect of performance, surety and
similar bonds and completion guarantees provided by the Borrower or any of its
Consolidated Subsidiaries in the ordinary course of business if such obligations
are not otherwise prohibited by the terms of this Agreement; and
(k) other Debt of the Borrower and the Consolidated
Subsidiaries not exceeding $7,000,000 in the aggregate.
6.03 Guarantees and Contingent Liabilities. Neither the
Borrower nor any Surety or Consolidated Subsidiary will at any time directly or
indirectly assume, guarantee, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of any other Person, including, without limitation, any Subsidiary of
Borrower, except (a) as shown on Schedule 6.03 to this Agreement, (b) pursuant
to the Senior Notes, (c) indemnities of directors, officers and employees of the
Borrower and its Consolidated Subsidiaries in their capacities as such, (d)
obligations of Pen Hardwood as a general partner of Camden Hardwood and Marine
Terminals as a general partner of International Marine Terminals, provided that
such obligations are limited to obligations arising as a general partner of
Camden Hardwood or Marine Terminals, as the case may be, and are not guarantees
or other contractual obligations for the benefit of any Person other than Camden
Hardwood (with respect to Pen Hardwood) or International Marine Terminals (with
respect to Marine Terminals), (e) obligations of the Borrower in connection with
that certain Cash Deficiency Agreement dated as of August 15, 1981 among
International Marine Terminals, Houston Natural Gas Corporation and Florida
Power Corporation ("IMT Deficiency Agreement"), provided, that (1) Borrower
shall give the Agent notice of the requirement for any payment by Borrower or
Marine Terminals under the IMT Deficiency
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Agreement at least five (5) Business Days prior to the making of any payment,
and (2), without the prior written consent of the Banks, Borrower shall neither
make any payment or make loans, advances or investments in Marine Terminals or
any other Person in order to satisfy any obligation to make any payment under
the IMT Deficiency Agreement if (x) an Event of Default is then in existence or
will be in existence after giving effect to the making of any such payment, or
(y) the making of such payment would cause the Borrower to breach any covenant
or agreement contained in this Agreement, or (f) guarantees of Borrower for the
benefit of any of the Eligible Subsidiaries, whether now existing or hereafter
arising, if the obligation of the Eligible Subsidiary is not prohibited by this
Agreement.
6.04 Loans or Investments. (a) Neither the Borrower nor any
Surety or any Consolidated Subsidiary will make any loan, advance or extension
of credit to or capital or equity investment in, any person, firm or
corporation, except: (i) credit extended under usual and customary terms in the
ordinary course of business of the Borrower, Surety or Consolidated Subsidiary;
(ii) loans, advances or credit between the Borrower or Surety and any of the
Eligible Subsidiaries or capital or equity investments by Borrower in any of the
Eligible Subsidiaries; (iii) loans, advances or credit by Borrower to, or
capital or equity investments by Borrower in, any of its Consolidated
Subsidiaries (other than the Eligible Subsidiaries), provided that any such
loan, advance, extension of credit, capital investment or equity investment by
Borrower is made with the proceeds of dividends or distributions made to
Borrower by its Consolidated Subsidiaries which are not Eligible Subsidiaries
and which are do not comprise any part of the coal division of Borrower; (iv)
credit extended by the Borrower or any of its Consolidated Subsidiaries in
connection with the sale or disposition of (A) Non-Core Assets, or (B) other
Property not used or intended to be used in the business of the Borrower and its
Consolidated Subsidiaries, provided that the amount of all such credit at any
one time outstanding for the Borrower and all of its Consolidated Subsidiaries
pursuant to this clause (iv)(B) shall not exceed $500,000 in the aggregate; (v)
credit extended or advanced pursuant to the provisions of leases of mining
property, mining contracts, coal purchase contracts, arrangements with railroads
with respect to the construction of sidings for unit train loadout or similar
agreements, or in connection with agreements with third parties for the
production or processing of coal owned or leased by the Borrower or Surety not
in excess of $1,000,000 in the aggregate at any time outstanding for the
Borrower and its Consolidated Subsidiaries; (vi) loans to contract miners which
do not exceed $1,000,000 at any time outstanding to any contract miner or
$2,000,000 at any time outstanding in the aggregate for all contract miners; and
(vii) other loans to employees for travel and similar advances to employees and
independent contractors not exceeding for the Borrower or any Consolidated
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Subsidiary $250,000 in the aggregate at any one time outstanding; provided,
however, that in each case (other than with respect to loans or investments
pursuant to clauses (i), (ii) or (vii) above), no event shall occur or be
continuing which constitutes an Event of Default, and further, provided, that
notwithstanding any of the foregoing exceptions, the Borrower and the
Consolidated Subsidiaries will not make any loan, advance or extension of credit
to any Person (other than those loans shown on Schedule 6.04 to this Agreement,
loans to the Borrower or an Eligible Subsidiary, or loans extended pursuant to
clause (iv)(A) or (vi) above) in excess of $500,000, without the prior written
consent of the Agent, and provided, further, that with respect to loans,
advances or extensions of credit made by Borrower to any of the Eligible
Subsidiaries, such loans, advances or extensions of credit will be evidenced by
the note of the Eligible Subsidiary to Borrower which is assigned to the Agent
pursuant to the Assignment of Subsidiary Security Documents.
(b) Borrower shall have the right to lend proceeds of
the Revolving Credit Loans to the Eligible Subsidiaries ("Subsidiary Loans") in
accordance with the provisions of Section 2.01(a) of this Agreement, provided
that such loans to Eligible Subsidiaries shall (i) not be in amounts which would
cause the representation set forth in Section 3.28 to be inaccurate with respect
to any Eligible Subsidiary and (ii) be evidenced by intercompany notes of each
of the Eligible Subsidiaries payable to Borrower, which shall be secured by the
Subsidiary Collateral of the Eligible Subsidiaries pursuant to notes, security
agreements and deeds of trust in substantially the form attached hereto as
Exhibits "G-1", "G-2", and "G-3", and provided further, that (x) Borrower shall
execute and deliver to the Agent the Assignments of Subsidiary Security
Documents whereby such note and collateral security shall be assigned to the
Agent as collateral for the Loans and (y) the Sureties shall have executed and
delivered their Suretyship Agreements to the Agent as security for the Loans,
all in accordance with the documentation and upon terms as shall be satisfactory
to the Agent.
(c) Borrower and its Consolidated Subsidiaries shall
have the right to make (i), only with respect to Borrower and Marine Terminals,
equity investments in International Marine Terminals (A) to repay indebtedness
to Mellon Bank, N.A. of approximately $7.7 million due in 2000 and to repay
approximately $13.3 million of bonds due 2006 issued by International Marine
Terminals, provided, however, that such investments shall only be permitted to
the extent they are derived from investments deposited by Borrower or Marine
Terminals in escrow as of the date of this Agreement to fund such obligations of
International Marine Terminals and (B) in accordance with the Borrower's
partnership obligations existing on the date of this Agreement
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with respect to International Marine Terminals, and (ii) other investments that
do not exceed $1,000,000 in the aggregate at any one time outstanding.
6.05 Dividends and Related Distributions. Neither the Borrower
nor any Surety or Consolidated Subsidiary will declare, make, pay, or agree,
become or remain liable to make or pay, any dividend or other distribution of
any nature (whether in cash, property, securities or otherwise) on account of or
in respect of any shares of the capital stock of the Borrower or any Surety or
on account of the purchase, redemption, retirement or acquisition of any shares
of the capital stock (or warrants, options or rights for any shares of the
capital stock) of the Borrower or any Surety (the foregoing are herein
collectively referred to as "Distributions") without the consent of the Banks;
provided, however, that so long as no Event of Default or Potential Default
exists or could exist at the time of, after or as a result of any of the
following Distributions, (a) Borrower may make Distributions on account of the
mandatorily redeemable convertible preferred stock of Borrower in accordance
with the terms of the Pen Holdings Charter, provided that any Distributions on
account of such mandatorily redeemable convertible preferred stock (i) are only
made prior to any conversion of such stock into common stock of Borrower, and
(ii) are made no earlier than January 3, 2006 and are made in accordance with
the Pen Holdings Charter as in effect on the Closing Date, (b) the Subsidiaries
of Borrower may make Distributions to Borrower in any amount, and (c) for the
purchase, redemption or other acquisition for value of shares of capital stock
of the Borrower or options on such shares held by officers or employees or
former officers or employees (or their estates or beneficiaries under their
estates), other than Xxxxxxx X. Xxxxxxx, upon the death, disability, retirement
or termination of employment of such current or former officers or employees
pursuant to the terms of an employee benefit plan or any other agreement
pursuant to which such shares of capital stock or options were issued or
pursuant to a severance, buy-sell or right of first refusal agreement with such
current or former officer or employee; provided that, without the prior written
consent of the Banks, Distributions made pursuant to this clause (c) may only be
made if (i) the aggregate Distributions made pursuant to this clause (c) do not
exceed $3,000,000, and (ii) an Event of Default is not then in existence and the
Borrower shall not be in violation of the covenants contained in Section 6.16 of
this Agreement after giving effect to the making of such Distributions.
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6.06 Lease Payments. In no event shall the Lease Obligations
on all Property (exclusive of Lease Obligations on account of mineral or coal
reserve leases) leased by the Borrower and its Consolidated Subsidiaries, when
taken together with all Consolidated Capital Expenditures (other than
Consolidated Capital Expenditures incurred in connection with the Fork Creek
Reserves), during any fiscal year of the Borrower, exceed (i) $35,000,000 in the
aggregate during the fiscal year of the Borrower ending December 31, 1998, or
(ii) $25,000,000 in the aggregate during any fiscal year of the Borrower and its
Consolidated Subsidiaries ending thereafter.
6.07 Merger; Consolidation; Business Acquisitions. None of the
Borrower nor any Surety or Consolidated Subsidiary will merge or agree to merge
with or into or consolidate with any other Person except that the Borrower or
any Eligible Subsidiary may enter into a liquidation, merger or consolidation
with any of the Consolidated Subsidiaries, provided, however, that in each case
(i)(A) if such merger or consolidation involves the Borrower, the Borrower is
the surviving corporation, or (B) if the Borrower is not a party to such merger
or consolidation, an Eligible Subsidiary is the surviving corporation, and (ii)
no Event of Default is in existence.
6.08 Dispositions of Assets. None of the Borrower nor any
Surety or any of the other Consolidated Subsidiaries will sell, convey, assign,
lease, abandon or otherwise transfer or dispose of, voluntarily or involuntarily
(any of the foregoing being referred to in this Section as a "transaction" and
any series of related transactions constituting but a single transaction), any
of its Property (including stock of Subsidiaries), but excluding any transaction
referred to in any of clauses (i), (ii), (iii), (iv) and (v) of the definition
of "Disposition" in Section 1.01 of this Agreement and provided that the
Borrower, the Sureties and the Consolidated Subsidiaries may in the ordinary
course of business lease items of equipment to one or more Consolidated
Subsidiaries for use in the business of such Consolidated Subsidiaries provided
the Borrower or Surety notifies the Agent of such lease and, upon the Agent's
request, assigns to the Agent as security for the Borrower's or Surety's
indebtedness to the Banks all rents and other amounts due the Borrower under
such leases pursuant to lease assignment documentation satisfactory to the
Agent.
6.09 Self-Dealing. None of the Borrower nor any Surety will
enter into or carry out any loan, advance or other transaction (including,
without limitation, purchasing property or services or selling property or
services) with any Affiliate except that:
(a) directors, officers and employees of the Borrower
and any Surety may render services to, and receive
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indemnifications from, the Borrower or the Consolidated Subsidiaries, or any of
them, for compensation at the same rates generally paid by corporations engaged
in the same or similar businesses for the same or similar services, provided,
that in no event shall the Borrower or any Surety enter into any consulting,
service or other arrangement or agreement with any of such directors, officers
or employees which provide for the payment of any sum to such individuals other
than the payment of compensation for services rendered to the Borrower or
Sureties as set forth above;
(b) the Borrower and any Surety may, without the
prior written consent of the Banks, enter into and carry out other transactions
with Affiliates if in the ordinary course of business, pursuant to the
reasonable requirements of the Borrower's or Surety's business upon terms
reasonably found by the board of directors of the Borrower or the Surety after
due inquiry to be fair and reasonable and no less favorable to the Borrower or
the Surety than would be obtained in a comparable arm's-length transaction,
provided, that in no event shall the Borrower or any Surety enter into any
consulting, service or other arrangement or agreement with any Affiliate without
the prior written consent of the Banks;
(c) Borrower and Eligible Subsidiaries may enter into
transactions which are permitted in Sections 6.04 or 6.08 of this Agreement; and
(d) the Borrower and its Consolidated Subsidiaries
may make payments to International Marine Terminals, on an arm's-length basis in
the ordinary course of business, relating to the loading of coal onto ships or
the purchase of coal or in accordance with the financial obligations of Marine
Terminals, if any, pursuant to Marine Terminal's contractual partnership
obligations existing on the Closing Date with respect to International Marine
Terminals.
6.10 Continuation of or Change in Business. The Borrower, the
Sureties and their Consolidated Subsidiaries will continue to engage in their
respective businesses substantially as described in Schedule 3.10 to this
Agreement, and the Borrower, the Sureties and their Consolidated Subsidiaries
will not engage in any other businesses, without the prior written consent of
the Banks.
6.11 Margin Stock. The Borrower and the Eligible Subsidiaries
will not use the proceeds of any Loans directly or indirectly to purchase or
carry any "margin stock" (within the meaning of Regulations U, G, T, or X of the
Board of Governors of the Federal Reserve System) or to extend credit to others
for the
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purpose of purchasing or carrying, directly or indirectly, any margin stock.
6.12 Consolidated Tax Returns. The Borrower and the Sureties
will not without prior written consent of the Agent, file, or consent to the
filing of, any consolidated income tax return with any person other than a
Consolidated Subsidiary.
6.13 Capital Expenditures. (a) The Borrower shall not permit
Consolidated Capital Expenditures (other than Consolidated Capital Expenditures
incurred in connection with the Fork Creek Reserves), when taken together with
Lease Obligations of the Borrower and its Consolidated Subsidiaries (exclusive
of Lease Obligations on account of mineral or coal reserve leases), to exceed
(i) $35,000,000 during the fiscal year of the Borrower and its Consolidated
Subsidiaries ending on December 31, 1998, or (ii) $25,000,000 during any fiscal
year of Borrower and its Consolidated Subsidiaries ending thereafter.
(b) The Borrower shall not permit Consolidated
Capital Expenditures incurred in connection with the Fork Creek Reserves
(including, without limitation, Consolidated Capital Expenditures incurred in
connection with the construction of the preparation plant and the load out, rail
and mine development work, but excluding capitalized general and administrative
expense and interest expense) to exceed (i) $12,000,000 through the period
ending December 31, 1998, (ii) $44,000,000 through the period ending December
31, 1999, and (iii) $50,000,000 through the period ending December 31, 2000, all
on a cumulative basis.
6.14 Sale of Coal. Borrower shall not permit any Subsidiary to
sell, transfer or dispose of coal to an Affiliate of Borrower for less than the
then current fair market rate therefor.
6.15 Change of Control, etc. Borrower shall not at any time
permit a Change of Control to occur. The Borrower shall at all times cause (i)
100% of the outstanding capital stock of the Eligible Subsidiaries and all other
Active Subsidiaries to be pledged to the Agent pursuant to the Pledge
Agreements. Borrower shall not amend, alter, repeal, modify or change the Pen
Holdings Charter in any respect without the prior written consent of the Banks.
6.16 Financial Maintenance Covenants. The Borrower shall not
permit or suffer:
(a) the Consolidated Debt to EBITDA Ratio to be
greater than (i) 5.50 to 1 at the end of each fiscal quarter of Borrower ending
on or prior to December 31, 1999; (ii) 5.0 to 1 on March 31, 2000 or any fiscal
quarter ending thereafter through and including June 30, 2002, or (iii) 4.0 to 1
on September 30,
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2002 or at the end of each fiscal quarter of Borrower ending thereafter, as
calculated on a rolling four quarter basis;
(b) the Consolidated Fixed Charge Coverage Ratio to
be less than (i) 1.30 to 1 at the end of each fiscal quarter of Borrower ending
on or prior to June 30, 2002; or (ii) 1.40 to 1 at the end on September 30, 2002
or at the end of each fiscal quarter of Borrower ending thereafter, as
calculated on a rolling four quarter basis; and
(c) the Consolidated Net Worth to be less than (i)
$35,000,000 at any time on or before December 31, 1998, or (ii) for the period
commencing January 1, 1999 and continuing until December 31, 1999, the sum of
(A) $35,000,000, plus (B) 50% of Consolidated Net Income (not less than $0) for
the twelve (12) month period ending December 31, 1998, minus (C) accrued but
unpaid dividends on the outstanding mandatorily redeemable convertible preferred
stock of the Borrower for the twelve (12) month period ending December 31, 1998;
and (iii) for any period commencing on January 1 and ending on December 31
thereafter, the sum of (A) $35,000,000, plus (B) 50% of Consolidated Net Income
(not less than $0) for each of the twelve (12) month periods ending on a
December 31st, commencing with the twelve (12) month period ending December 31,
1998, minus (C) accrued but unpaid dividends on the outstanding mandatorily
redeemable convertible preferred stock of the Borrower for each of the twelve
(12) month periods ending on a December 31st, commencing with the twelve (12)
month period ending December 31, 1998.
6.17 Change Fiscal Year. The Borrower and
Sureties will not change the fiscal year end date from December 31 without the
prior written consent of the Agent, which consent shall not be unreasonably
withheld.
6.18 Senior Notes. The Borrower will not, and
will not permit any of its Consolidated Subsidiaries, to pay, prepay, purchase
or redeem any principal of or interest on the Senior Notes except that the
Borrower may make regularly scheduled required payments on the Senior Notes in
accordance with the terms of the Senior Note Documents as in effect on the
Closing Date.
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ARTICLE VII
DEFAULTS
7.01 Events of Default. An Event of Default means the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of Law) beyond the applicable grace period
or notice, if any:
(a) The Borrower shall fail to pay principal on any
of the Notes or Loans when due; or
(b) The Borrower shall fail to pay interest or any
fees payable pursuant to Article II of this Agreement or any other fee, or other
amount payable pursuant to this Agreement, the Notes, the Security Agreements or
any of the other Loan Documents when due and the failure shall continue for ten
(10) days after the due date; or
(c) Any representation or warranty made by the
Borrower under this Agreement, the Notes, the Security Agreements, or any of the
other Loan Documents, by any of the Sureties under any of the Loan Documents to
which such Surety is a party, or any statement made by the Borrower or any
Surety in any financial statement, certificate, report, exhibit or document
furnished by the Borrower or any Surety, as the case may be, to the Agent or the
Banks pursuant to this Agreement or the other Loan Documents shall fail to be as
stated or prove to be in any respect false or misleading in any material
respect; or
(d) The Agent's or the Banks' security interest under
the Security Agreements, the Deeds of Trust and Mortgages, the Assignment of
Subsidiary Security Documents, the Pledge Agreements or any of the other Loan
Documents within which a security interest or lien is granted to the Agent or
the Banks is or shall become unperfected; or
(e) The Borrower shall be in default in the
performance or observance of any covenant, agreement or duty contained in
Section 5.01 (e), (f), (g), (h) or (i), Sections 5.03, 5.06, 5.07, 5.08, 5.09,
5.10, 5.13, 5.15, 5.16, 5.17, 5.18, 5.19, 5.20 or Article VI of this Agreement;
or
(f) The Borrower or any Surety, shall be in default
in the performance or observance of any other covenant, agreement or duty under
this Agreement, the Notes, the Security Agreements or the other Loan Documents
to which such entity is a party, and the default shall continue for ten (10)
days after the Agent has notified the Borrower or Surety, as the case may be, of
the default; or
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(g) The Borrower or any Surety shall (i) default (as
principal or guarantor or other surety) in any payment of principal of or
interest on any obligation (or set of related obligations) for borrowed money in
an aggregate amount in excess of $1,000,000 beyond any period of grace with
respect to the payment or, if an obligation (or set of related obligations) is
or are payable or repayable on demand, fails to pay or repay such obligation or
obligations when demanded, or (ii) default (as principal or guarantor or other
surety) in the observance of any other covenant, term or condition contained in
any agreement or instrument by which an obligation (or set of related
obligations) for borrowed money in an aggregate amount in excess of $1,000,000
is or are created, secured or evidenced if the effect of such default is to
cause, or to permit the holder or holders of such obligation or obligations (or
a trustee or agent on behalf of such holder or holders) to cause, all or part of
such obligation or obligations to become due before its or their otherwise
stated maturity; or
(h) One or more uninsured judgments for the payment
of money against the Borrower or any Surety which in the aggregate exceeds
$1,000,000 (or would require the payment of a deductible in excess of
$1,000,000) or the operation or result of which would be to interfere materially
and adversely with the conduct of the business of the Borrower or Surety, taken
as a whole, shall not have been paid, stayed on appeal, discharged bonded or
dismissed within thirty (30) days after the entry of such judgment or
attachment; or
(i) A writ or warrant of attachment, garnishment,
execution, distraint or similar process shall have been issued against the
Borrower or any Surety, or any of their Property which in the aggregate exceeds
$1,000,000, or the operation or result of which would be to interfere materially
and adversely with the conduct of the business of the Borrower and the Sureties,
taken as a whole; or
(j) The Banks shall have determined (which
determination shall be made in good faith) that a material adverse change has
occurred in the business, operations, financial condition, prospects or
management of the Borrower and the Sureties, and that such change impairs or
will impair the prospect of payment or performance of any material covenant,
agreement or duty under this Agreement, the Notes, or any other Loan Document;
or
(k) A proceeding shall be instituted in respect of
the Borrower or any Surety:
(i) seeking to have an order for relief
entered in respect of the Borrower or
Surety, or seeking a declaration or
entailing a finding that the
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Borrower or Surety is insolvent or a
similar declaration or finding, or
seeking dissolution, winding-up, charter
revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment,
composition or other similar relief with
respect to the Borrower or Surety, its
assets or its debts under any law
relating to bankruptcy, insolvency,
relief of debtors or protection of
creditors, termination of legal entities
or any other similar law now or in the
future in effect; or
(ii) seeking appointment of a receiver,
trustee, custodian, liquidator,
assignee, sequestrator or other similar
official for the Borrower or Surety or
for all or any substantial part of its
property; or
(l) The Borrower or any Surety shall become
insolvent, shall become generally unable to pay its debts as they become due,
shall voluntarily suspend transaction of its business, shall make a general
assignment for the benefit of creditors, shall institute a proceeding described
in Section 7.01(k)(i) of this Agreement or shall consent to any order for
relief, declaration, finding or relief described in Section 7.01(k)(i) of this
Agreement, shall institute a proceeding described in Section 7.01(k)(ii) of this
Agreement or shall consent to the appointment or to the taking of possession by
any such official of all or any substantial part of its property whether or not
any proceeding is instituted, dissolves, winds-up or liquidates itself or any
substantial part of its property, or shall take any action in furtherance of any
of the foregoing; or
(m) a default by any party under the terms and
conditions of any of the Material Agreements, and the default shall continue
beyond the expiration of any grace period contained in such Material Agreements
if such default could reasonably be expected to have a Material Adverse Effect;
or
(n) (A) A Termination Event with respect to a Defined
Benefit Plan shall occur, (B) any Person shall engage in any Prohibited
Transaction involving any Plan or Welfare Benefit Plan, (C) an accumulated
funding deficiency, whether or not waived, shall exist with respect to any Plan,
(D) the Borrower or Surety shall be in "Default" (as defined in section
4219(c)(5) of ERISA) with respect to payments due to a multiemployer plan
resulting from the Borrower's or Surety's complete or partial withdrawal (as
described in section 4203 or 4205 of ERISA) from such plan, or (E) any other
event or condition shall occur or exist with respect to a single employer plan,
except that no such event or condition shall constitute a Default if it together
with all other events or conditions at the time existing, would not
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subject the Borrower or Surety to any tax, penalty, debt or liability which,
alone or in the aggregate, would have a materially adverse effect on the
Borrower or Surety but only to the extent that any of the foregoing is likely to
result in liability to the Borrower or Surety in an amount in excess of
$500,000; or
(o) (A) Any Eligible Subsidiary shall default or deny
liability under the terms and conditions of any Subsidiary Note, Subsidiary
Security Agreement or Subsidiary Deed of Trust or Subsidiary Mortgage executed
by it beyond the expiration of any grace period, if any, contained in such
Subsidiary Note, Subsidiary Security Agreement or Subsidiary Deed of Trust or
Subsidiary Mortgage, or (B) any Subsidiary Note, Subsidiary Security Agreement
or Subsidiary Deed of Trust or Subsidiary Mortgage is amended, modified,
canceled, extended or revoked without the prior written consent of the Agent; or
(p) An event of default or default shall occur under
the Senior Note Documents.
7.02 Consequences of an Event of Default.
(a) If an Event of Default specified in subsections
(a) through (j) or (m) through (p) of Section 7.01 of this Agreement occurs and
continues or exists, the Agent and each Bank will be under no further obligation
to make Loans and, upon the written consent of the Banks holding 75% of the
Credit Exposures of all of the Banks (provided that such 75% includes the Agent
and at least one other Bank), the Agent, on behalf of the Banks, may demand the
unpaid principal amount of the Notes, interest accrued on the unpaid principal
amount and all other amounts owing by the Borrower under this Agreement, the
Notes, the Security Agreements and the other Loan Documents to be immediately
due and payable without presentment, demand, protest or further notice of any
kind, all of which are expressly waived, and an action for any amounts due shall
accrue immediately.
(b) If an Event of Default specified in subsections
(k) or (l) of Section 7.01 of this Agreement occurs and continues or exists, the
Agent and each Bank will be under no further obligation to make Loans and the
unpaid principal amount of the Notes, interest accrued on the unpaid principal
amount and all other amounts owing by the Borrower under this Agreement, the
Notes, the Security Agreements and the other Loan Documents shall become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are expressly waived, and an action for any amounts due
shall accrue immediately.
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7.03 Set-Off. If the unpaid principal amount of the Notes,
interest accrued on the unpaid principal amount or other amount owing by the
Borrower under this Agreement, the Notes, the Security Agreements or the other
Loan Documents shall have become due and payable (at maturity, by acceleration
or otherwise), the Agent, the Banks and the holder of any participation in any
Loan will each have the right, in addition to all other rights and remedies
available to it, without notice to the Borrower, to set-off against and to
appropriate and apply to such due and payable amounts any debt owing to, and any
other funds held in any manner for the account of the Borrower by the Agent
(excluding any pension funds held at any Bank), the Banks or by such holder
including, without limitation, all funds in all deposit accounts (whether time
or demand, general or special, provisionally credited or finally credited, or
otherwise) now or in the future maintained by the Borrower with the Banks or
such holder. The Borrower consents to and confirms the foregoing arrangements
and confirm the Agent's and the Banks' rights and such holder's rights of
banker's lien and set-off. Nothing in this Agreement will be deemed a waiver or
prohibition of or restriction on the Agent's or Banks' rights or any such
holder's rights of banker's lien or set-off.
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ARTICLE VIII
AGENT
8.01 The Agent.
(a) Appointment. The Banks hereby appoint Mellon
Bank, N.A. to act as Agent as herein specified for the Banks hereunder and under
the Loan Documents. Each of the Banks does hereby accept and agree to all the
terms and conditions of the Loan Documents. Each of the Banks hereby irrevocably
authorizes, and each holder of any Note by the acceptance of a Note shall be
deemed irrevocably to authorize the Agent to take such action on its behalf
under the provisions of this Agreement and the Loan Documents and any other
instruments and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder and thereunder, as are specifically delegated
to or required of the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Mellon Bank, N.A. agrees to act as
the Agent on behalf of the Banks to the extent provided in this Agreement and
the Loan Documents.
(b) Delegation of Duties. The Agent may perform any
of its duties hereunder or under the Loan Documents by or through agents or
employees and shall be entitled to advice of counsel concerning all matters
pertaining to its duties hereunder.
(c) Nature of Duties: Independent Credit
Investigation. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Loan Documents. The duties of the
Agent shall be mechanical and administrative in nature; the Agent shall not have
by reason of this Agreement or any Loan Document a fiduciary relationship in
respect of any Bank; and nothing in this Agreement or any Loan Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any Loan Document,
except as expressly set forth herein or therein. Each Bank expressly
acknowledges (a) that the Agent has not made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of any of the Borrower or any of its Affiliates, shall be deemed to
constitute any representation or warranty by the Agent to any Bank; (b) that it
has made and will make its own independent investigation of the financial
condition and affairs and its own appraisal of the credit-worthiness of The
Borrower in connection with the making and continuance of the Loans hereunder;
(c) that it has made its own independent investigation of the legal matters
relating to this Agreement, the Loan Documents and the Notes to be issued to it
pursuant to the terms hereof; and (d) that the Agent shall have no duty or
responsibility, either
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initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before the
making of a Loan or at any time or times thereafter.
(d) Actions in Discretion of Agent; Instructions from
the Banks. The Agent agrees, upon the written instructions of all the Banks to
take any action of the type specified as being within the Agent's rights, powers
or discretion herein. In the absence of instructions by all the Banks the Agent
shall have authority, in its sole discretion, to take or not to take any such
action, unless this Agreement specifically requires the consent of other Banks.
Any action taken pursuant to such instructions or discretion shall be binding on
all the Banks and on all holders of Notes. No Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder or under the Loan Documents in accordance with
the instructions of all the Banks, or in the absence of such instructions, in
the absolute discretion of the Agent.
(e) Exculpatory Provisions. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder or under the
Loan Documents, or in connection herewith or therewith, unless caused by its or
their own gross negligence or willful misconduct. In performing its functions
and duties hereunder on behalf of the Banks, the Agent shall exercise the same
care which it would exercise in dealing with loans for its own account, but it
shall not (a) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement, any Loan Document or any of the Notes, or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any Loan
Document, or (b) be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Borrower, or the financial
condition of the Borrower, or the existence or possible existence of a Default.
(f) Reimbursement and Indemnification. Each Bank
agrees to reimburse and indemnify the Agent (to the extent not reimbursed by the
Borrower) ratably, in accordance with its Percentage Share, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this
Agreement, the Loan Documents or the Notes or any action taken or omitted by the
Agent hereunder or
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thereunder, provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (a) if the same results from the Agent's gross
negligence or willful misconduct, or (b) if such Bank was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense, or (c) if the same results from a compromise and settlement
agreement entered into without the consent of such Bank. Without limitation of
the foregoing, each Bank agrees to reimburse the Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including attorney's fees)
incurred by the Agent in connection with the preparation, execution,
administration or enforcement of, or the preservation of any rights under, this
Agreement and the Loan Documents to the extent that the Agent is not reimbursed
for such expenses by the Borrower.
(g) Reliance by Agent. The Agent shall be entitled to
rely upon any writing, telegram, telecopy, telex or teletype message,
resolution, notice, consent, certificate, letter, cablegram, statement, or order
or other document or phone conversation by telephone or otherwise believed by it
to be genuine and correct and to have been signed, sent or made by an authorized
person, and upon opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action hereunder or under any Loan Document unless it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
(h) Agent in its Individual Capacity. With respect to
its Commitments, the Loans made by it and any Note held by it, the Agent shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not the Agent, and the terms "Banks" or "holders of the
Notes" shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its affiliates may, without liability to
account, make loans to, accept deposits from, act as trustee under indentures
of, and generally engage in any kind of banking or trust business with, the
Borrower, or any of them, or any Surety or any Affiliates or Subsidiaries or the
Borrower or Surety as though it were not acting as Agent hereunder, including,
without limitation, the Agent's participation in the Rate Protection Agreements
or other credit facilities issued to the Borrower and Sureties and Affiliates of
the Borrower and the Sureties.
(i) Holders of Notes. The Agent may deem and treat
any payee of any Note as the owner thereof for all purposes hereof unless and
until written notice of the assignment or
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transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any legal entity who at the time of making such request or giving
such authority or consent is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of any
Note or Notes issued in exchange therefor.
(j) Equalization of Banks. The Banks agree among
themselves that, with respect to all amounts received by any Bank for
application on any obligation hereunder or on the Notes, after the earlier of an
exercise of any Bank's rights of set-off or the acceleration of maturity of any
of the Notes, equitable adjustment will be made in the manner stated in the next
succeeding sentence so that, in effect, all such amounts will be shared ratably
among the Banks, in proportion to the sum of the amounts then outstanding under
the Notes, plus all other Debt of the Borrower to them, whether received by
voluntary payment, by realization upon security, by the exercise of the right of
set-off or banker's lien, by counterclaim or cross action or any other non-pro
rata source. Any Bank receiving any such amount shall purchase for cash from the
other Banks an interest in their Notes, the Borrower's Indebtedness owing to the
Banks, and all other obligations of the Borrower to the Banks, if any, in such
amount as shall result in a ratable participation by each of the Banks in the
aggregate unpaid amount of all outstanding Notes then held by all of the Banks,
all Indebtedness of the Borrower to the Banks, and all other obligations of the
Borrower to the Banks, provided that if all or any portion of such excess amount
is thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(k) Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Banks and to the Borrower. Upon any such
resignation, the Banks shall have the right to appoint a successor Agent. If a
successor Agent is not appointed, or has not accepted such appointment within 30
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent which
shall be a commercial bank organized under the laws of the United States of
America or any State thereof and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance by a successor Agent of its appointment
as Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted
by it while it was Agent under this Agreement.
(l) Release of Collateral. Provided no Event of
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Default or Potential Default is in existence, the Agent shall have the
authority, in its sole discretion, to release the Agent's Lien (i) in any 12
month period, in Property which is not material to the businesses of the
Borrower and its Consolidated Subsidiaries and which has a fair market value of
$1,000,000 or less, in the aggregate, as determined by the Agent in its sole
discretion, and (ii) in Property which is described in clauses (i), (ii), (iii)
or (iv) in the definition of "Disposition" contained in Section 1.01 of this
Agreement.
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ARTICLE IX
MISCELLANEOUS
9.01 Holidays. Except as otherwise provided in this Agreement,
whenever any payment or action to be made or taken under this Agreement, or
under the Notes or under any of the other Loan Documents is stated to be due on
a day which is not a Business Day, such payment or action will be made or taken
on the next following Business Day and such extension of time will be included
in computing interest or fees, if any, in connection with such payment or
action.
9.02 Records. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount and the duration of such applicability shall at all
times be ascertained from the records of the Agent, which shall be conclusive
absent manifest error.
9.03 Amendments and Waivers. The Agent, and the Banks and the
Borrower may from time to time enter into agreements amending, modifying or
supplementing this Agreement, the Notes or any other Loan Document or changing
the rights of the Agent, Banks or of the Borrower under this Agreement, under
the Notes or under any other Loan Document and the Agent and the Banks may from
time to time grant waivers or consents to a departure from the due performance
of the obligations of the Borrower under this Agreement, under the Notes or
under any other Loan Document. Any such agreement, waiver or consent must be in
writing and will be effective only to the extent specifically set forth in such
writing. Notwithstanding any reference to "Banks" contained herein or in any of
the other Loan Documents, the Required Banks may effect any amendment,
modification or waiver of the terms of this Agreement, the Notes or any other
Loan Document, provided that the unanimous consent of the Banks shall be
required in order to effect any of the following: (a) increase the amount of the
commitment for any Loans; (b) extend the maturity date of any of the Loans; (c)
forgive, reduce or defer any payment of principal or interest under any of the
Loans; (d) decrease the rate of interest or amend the amount or method of
calculation of fees then applicable under any of the Loans such that the
amendment would result in a reduction in any fee; (e) release any of the
Collateral, except as specifically permitted in this Agreement; (f) release any
Surety from its obligation under any of the Suretyship Agreements; or (g) amend
the provisions of this Section 9.03. In the case of any such waiver or consent
relating to any provision of this Agreement, any Event of Default or Potential
Default so waived or consented to will be deemed to be cured and not continuing,
but no such waiver or consent will extend to any other or subsequent Event of
Default or Potential Default or impair any right consequent to any other or
subsequent Event of Default or Potential Default.
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9.04 No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of the Agent or the Banks in exercising any
right, power or privilege under this Agreement, the Notes or any other Loan
Document will affect any other or future exercise of any such right, power or
privilege or exercise of any other right, power or privilege except as and to
the extent that the assertion of any such right, power or privilege shall be
barred by an applicable statute of limitations; nor shall any single or partial
exercise of any such right, power or privilege or any abandonment or
discontinuance of steps to enforce such a right, power or privilege preclude any
further exercise of such right, power or privilege or of any other right, power
or privilege. The rights and remedies of the Agent and the Banks under this
Agreement, the Notes or any other Loan Document are cumulative and not exclusive
of any rights or remedies which the Agent or Banks would otherwise have.
9.05 Notices. All notices, requests, demands, directions and
other communications (collectively "notices") under the provisions of this
Agreement or the Notes must be in writing (including telexed or telecopied
communication) unless otherwise expressly permitted under this Agreement and
must be sent by first-class or first-class express mail, private overnight or
next Business Day courier or by telex or telecopy with confirmation in writing
mailed first class, in all cases with charges prepaid, and any such properly
given notice will be effective when received. All notices will be sent to the
applicable party at the addresses stated below or in accordance with the last
unrevoked written direction from such party to the other parties.
If to the Borrower: 0000 Xxxxxxxx Xxx
Third Xxxxx, Xxxxxx Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Chief
Financial Officer
and copy to: Xxxxxx Xxxxx, Esquire
Xxxxxxxx Xxxxxxxxx Professional
Corporation
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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If to Agent: Mellon Bank, N.A., Agent
Two Mellon Xxxx Xxxxxx, Xxxx 000,
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx,
Vice President
and copy to: Xxxxx X. Xxxxxxxx, Esquire
Xxxxx Xxxxxx Xxxxxx & Xxxxxxxxx, a
Professional Corporation
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to the Banks: As specified on the signature page
of the Banks attached to this
Agreement
9.06 Expenses; Taxes; Attorneys' Fees. The Borrower agrees to
pay or cause to be paid and to save the Agent and the Banks harmless against
liability for the payment of all out-of-pocket expenses, including, but not
limited to reasonable fees and expenses of counsel and paralegals for the Agent
and the Banks, incurred by the Agent and the Banks from time to time (i), with
respect to the Agent, arising in connection with the preparation, execution and
delivery of this Agreement, the Notes and the other Loan Documents, (ii)
relating to any requested amendments, waivers or consents to this Agreement, the
Notes or any of the other Loan Documents, (iii) arising in connection with the
performance of this Agreement or the other Loan Documents or the Agent's and the
Banks' enforcement or preservation of rights under this Agreement, the Notes or
any of the other Loan Documents, including but not limited to such expenses as
may be incurred by the Agent or the Banks in the collection of the outstanding
principal amount of the Agent or the Banks and (iv) arising in connection with
any case under the Bankruptcy Code filed by or against either of the Borrower.
The Borrower agrees to pay all stamp, document, transfer, recording or filing
taxes or fees and similar impositions now or in the future determined by the
Agent or the Banks to be payable in connection with this Agreement, the Notes or
any of the other Loan Documents. The Borrower agrees to save the Agent and the
Banks harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions, except to the extent that
same result solely from the gross negligence or willful misconduct of the Agent
or the Banks. In the event of termination adverse to the Borrower of any action
at law or suit in equity in relation to this Agreement, the Notes or any of the
other Loan Documents, the Borrower will pay, in addition to all other sums which
the Borrower may be required to pay, a reasonable sum for attorneys' and
paralegals' fees incurred by the Agent and the Banks or the holder of the Notes
in connection with such action or suit. All payments due from the Borrower
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under this Section will be added to and become part of the Loans until paid in
full.
9.07 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement is held invalid or
unenforceable in whole or in part in any jurisdiction, the provision will, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of the provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
9.08 Governing Law; Consent to Jurisdiction. This Agreement
will be deemed to be a contract under the laws of the Commonwealth of
Pennsylvania and for all purposes will be governed by and construed and enforced
in accordance with the laws of said Commonwealth. THE BORROWER CONSENTS TO THE
EXCLUSIVE JURISDICTION AND VENUE OF THE FEDERAL AND STATE COURTS LOCATED IN
ALLEGHENY COUNTY, PENNSYLVANIA, IN ANY ACTION ON, RELATING TO OR MENTIONING THIS
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS AND, TO THE EXTENT
PERMITTED BY LAW, APPOINT CT CORPORATION SYSTEM HAVING AN OFFICE AT 0000 XXXXXX
XXXXXX, XXXXX XXXX CENTER, XXXXXXXXXXXX, XXXXXXXXXXXX 00000, AS ITS AGENT FOR
THE SERVICE OF PROCESS ON ANY ACTION OR PROCEEDING UNDERTAKEN OR PROSECUTED IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS.
9.09 Prior Understandings. This Agreement, the Notes, the
Security Agreements and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, among the parties
relating to the transactions provided for in this Agreement, the Notes, the
Security Agreements and the other Loan Documents. This Agreement amends and
restates the Original Credit Agreement and is not a novation of the obligations
evidenced or created by the Original Credit Agreement and the notes issued in
connection therewith.
9.10 Duration; Survival. All representations and warranties of
the Borrower contained in this Agreement or made in connection with this
Agreement or any of the other Loan Documents shall survive the making of and
will not be waived by the execution and delivery of this Agreement, the Notes or
the other Loan Documents, by any investigation by the Agent or the Banks, or the
making of any Loan. Notwithstanding termination of this Agreement or an Event of
Default, all covenants and agreements of the Borrower will continue in full
force and effect from and after the date of this Agreement so long as the
Borrower may borrow under this Agreement and until payment in full of the Notes,
interest thereon, and all fees and other obligations of the Borrower under this
Agreement or the Notes. Without
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limitation, it is understood that all obligations of the Borrower to make
payments to or indemnify the Agent or the Banks will survive the payment in full
of the Notes and of all other obligations of the Borrower under this Agreement,
the Notes, the Security Agreements and the other Loan Documents.
9.11 Term of Agreement. This Agreement will terminate when all
Debt of the Borrower to Banks incurred under or in connection with this
Agreement, including, without limitation, the Loans and interest on the Loans is
paid in full, and the Borrower has no right to borrow under this Agreement and
the Agent and the Banks have no obligation to make Loans under this Agreement.
9.12 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties to this Agreement on
separate counterparts each of which, when so executed, will be deemed an
original, but all such counterparts will constitute but one and the same
instrument.
9.13 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Agent and the Banks, all
future holders of the Notes, and their respective successors and assigns, except
that the Borrower may not assign or transfer any of their rights hereunder
without the prior written consent of the Banks and the Agent, and any purported
assignment without such consent shall be void, and except that, to the fullest
extent permitted by law, a Bank may not voluntarily assign or transfer any of
its rights hereunder except in accordance with the other provisions of Section
9.15, and any other purported voluntary assignment or transfer shall be void;
provided, that this Agreement shall inure to the benefit of successors of Banks
by operation of law or resulting from an involuntary assignment or transfer
(including but not limited to receivers, conservators, trustees and like
persons, and successors by merger or consolidation).
9.14 No Third Party Beneficiaries. The rights and benefits of
this Agreement and the other Loan Documents are not intended to, and shall not,
inure to the benefit of any third party.
9.15 Participation and Holder.
(a) Participants. Any Bank may, in the ordinary
course of its commercial banking business and in accordance with applicable Law,
at any time sell participations to one or more commercial banks or other persons
(each a "Participant") in all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Revolving Credit Commitment and the Loans owing to it and
any Note held by it); provided, that:
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(i) any such Bank's obligations under this
Agreement and the other Loan Documents shall remain unchanged,
(ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations,
(iii) the parties hereto shall continue to
deal solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement and each of the other Loan
Documents,
(iv) such Participant shall, by accepting
such participation, be bound by the provisions of Section 8.01(j)
hereof,
(v) if such Participant is not already a
Participant or a Bank, and if such participation gives such Participant
any direct voting rights, such participation shall be subject to
consent of the Agent, and the Banks pursuant to Section 9.15(b)(i)
hereof as if such participation were an assignment described therein,
and
(vi) any participation shall be in an amount
of at least $2,000,000.
The Borrower agrees that any such Participant shall be entitled to the benefits
of Sections 2.11, 2.15, 7.03, 9.06, 9.18 and 9.19 of this Agreement with respect
to its participation in the Revolving Credit Commitments and the Loans
outstanding from time to time; provided, that no such Participant shall be
entitled to receive any greater amount pursuant to such Sections than the
transferor Bank would have been entitled to receive in respect of the amount of
the participation transferred to such Participant had no such transfer occurred.
(b) Assignments. Any Bank may, in the ordinary course
of its commercial banking business and in accordance with applicable Law, at any
time assign all or a portion of its rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, all or any portion
of its Revolving Credit Commitment and Loans owing to it and any Note held by
it) to any Bank, any affiliate of a Bank or to one or more additional commercial
banks or other persons (each a "Purchasing Bank"); provided, that:
(i) if a Bank makes such an assignment of
less than all of its then remaining rights and obligations under this
Agreement and the Loan Documents, such transferor Bank shall retain,
after such assignment, at least $5,000,000 of the Revolving Credit
Commitments and the Loans and such assignment shall be in a minimum
aggregate principal amount of $5,000,000 of the Revolving Credit
Commitments and the Loans except that if the
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Bank making the assignment holds prior to the assignment less than
$10,000,000 of the Revolving Credit Commitments and the Loans, the
assignment shall be in the aggregate principal amount of the Revolving
Credit Commitments and the Loans held by such Bank in excess of
$5,000,000,
(ii) each such assignment shall be of a
constant, and not a varying, percentage of the Revolving Credit
Commitment and the Loans, of the transferor Bank, and of all of the
transferor Bank's related rights and obligations under this Agreement
and the other Loan Documents,
(iii) each such assignment shall be made
pursuant to a Transfer Supplement in substantially the form of Exhibit
H to this Agreement, duly completed (a "Transfer Supplement"), and
(iv) if the Purchasing Bank is not chartered
under the laws of the United States or a state thereof, the Agent may
require the Borrower to enter into an amendment hereto containing the
Agent's customary provisions on indemnity, withholding and backup
withholding, and the Borrower agrees to enter into such amendment.
In order to effect any such assignment, the transferor Bank and the Purchasing
Bank shall execute and deliver to the Agent a duly completed Transfer Supplement
(including the consents required by clause (i) of the preceding sentence) with
respect to such assignment, together with any note or notes subject to such
assignment (the "Transferor Bank Notes") and a processing and recording fee of
$3,000; and, upon receipt thereof, the Agent shall accept such Transfer
Supplement. Upon receipt of the Purchase Price Receipt Notice (as defined in the
Transfer Supplement) pursuant to such Transfer Supplement, the Agent shall
record such acceptance and recording, and from and after the close of business
at the Agent's Office on the Transfer Effective Date (as defined in the Transfer
Supplement) specified in such Transfer Supplement:
(x) the Purchasing Bank shall be a party hereto and,
to the extent provided in such Transfer Supplement,
shall have the rights and obligations of a Bank
hereunder, and
(y) the transferor Bank thereunder shall be released
from its obligations under this Agreement to the
extent so transferred (and, in the case of a Transfer
Supplement covering all or the remaining portion of a
transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a
party to this Agreement) from and after the Transfer
Effective Date.
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On or prior to the Transfer Effective Date specified in a Transfer Supplement,
the Borrower shall execute and deliver to the Agent (for delivery to the
Purchasing Bank) new Notes evidencing such Purchasing Bank's assigned
Commitments or Loans and (for delivery to the transferor Bank) replacement Notes
in the principal amount of the Loans or Revolving Credit Commitments retained by
the transferor Bank (such Notes to be in exchange for, but not in payment of,
those Notes then held by such transferor Bank). Each such Note shall be dated
the date and be substantially in the form of the predecessor Note. The Agent
shall xxxx the predecessor Notes "exchanged" and deliver them to the Borrower.
Accrued interest and accrued fees shall be paid to the Purchasing Bank at the
same time or times provided in the predecessor Notes and this Agreement.
(c) Register. The Agent shall maintain at its office
a copy of each Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Banks and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Bank from time to time. The entries in the Register shall be conclusive absent
manifest error and the Borrower and each Bank Party may treat each person whose
name is recorded in the Register as a Bank hereunder for all purposes of the
Agreement. The Register shall be available for inspection by the Borrower or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(d) Financial and Other Information. Subject to
Section 9.15(f) hereof, the Borrower authorizes the Agent and each Bank to
disclose to any Participant or Purchasing Bank, or prospective Participant or
Purchasing Bank, any and all financial and other information in such Person's
possession concerning the Borrower and their respective Subsidiaries and
affiliates which has been or may be delivered to such person by or on behalf of
the Borrower or Bank in connection with this Agreement or any other Loan
Document or such person's credit evaluation of the Borrower and their respective
Subsidiaries and affiliates. At the request of any Bank, the Borrower, at the
Borrower' expense, shall provide to each prospective transferee the conformed
copies of documents referred to in Section 4 of the form of Transfer Supplement.
(e) Syndication. The Borrower shall, at the Agent's
reasonable request from time to time, at the Borrower' expense, use all
reasonable efforts to cooperate with the Agent's syndication effort (including,
without limitation, assisting the Agent from time to time in preparing
information packages for delivery to prospective Participants and Purchasing
Banks containing relevant information about the Borrower and the Loan Documents,
and causing appropriate officers, representatives and
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experts to meet with prospective participants and Purchasing Banks from time to
time).
(f) Confidentiality. Each Bank agrees to take
reasonable precautions to maintain the confidentiality of information designated
in writing as confidential and provided to it by the Borrower or any Subsidiary
in connection with this Agreement; provided, however, that any Bank may disclose
such information (i) at the request of any bank regulatory authority or other
Official Body or in connection with an examination of such Bank by any such
Official Body, (ii) upon notice to the Borrower, pursuant to subpoena or other
court process, (iii) upon notice to the Borrower, to the extent such Bank is
required (or believes in good faith that it is required) to do so in accordance
with any applicable Law, (iv) to such Bank's independent auditors and other
professional advisors, (v) in connection with the enforcement of any of its
rights under or in connection with any Loan Document, and (vi) to any actual or
potential Participant or Purchasing Bank, so long as, in the case of this clause
(vi), such actual or potential Participant or Purchasing Bank agrees to comply
with the provisions of this Section 9.15(f).
(g) Assignments to Federal Reserve Bank. Any Bank may
at any time assign all or any portion of its rights under this Agreement,
including without limitation any Loans owing to it and any Note held by it, to a
Federal Reserve Bank. No such assignment shall relieve the transferor Bank from
any of its obligations hereunder.
9.16 Exhibits. All exhibits and schedules attached to this
Agreement are incorporated and made a part of this Agreement.
9.17 Headings. The section headings contained in this
Agreement are for convenience only and do not limit or define or affect the
construction or interpretation of this Agreement in any respect.
9.18 WAIVER OF TRIAL BY JURY. EACH OF
THE Borrower AND THE BANKS EXPRESSLY, KNOWINGLY AND INITIAL:
VOLUNTARILY WAIVE ALL BENEFIT AND ADVANTAGE OF ANY /s/
RIGHT TO A TRIAL BY JURY, AND IT WILL NOT AT ANY --------
TIME INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF --------
A TRIAL BY JURY IN ANY ACTION ARISING IN CONNECTION
WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER
LOAN DOCUMENTS.
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9.19 Limitation of Liability. TO THE FULLEST EXTENT PERMITTED
BY LAW, NO CLAIM MAY BE MADE BY THE Borrower OR ANY OF THE SURETIES AGAINST THE
AGENT, ANY BANK OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT
OF ANY OF THEM FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE
DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF
CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY). THE Borrower HEREBY WAIVE,
RELEASE AND AGREE NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH
CLAIM PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS
KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. THIS SECTION 9.19 SHALL NOT LIMIT ANY
RIGHTS OF THE Borrower ARISING SOLELY OUT OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
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IN WITNESS WHEREOF, and intending to be legally
bound, the parties, by their duly authorized officers, have executed and
delivered this Agreement as of the date set forth at the beginning of this
Agreement.
BORROWER:
PEN HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------
Title: President
----------------------
AGENT:
MELLON BANK, N.A.
By: /s/ XXXXXXX XXXXXXX
-------------------------
Title: First Vice President
----------------------
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Signature pages for Banks
Revolving Credit Commitment: CIBC INC.
$20,000,000
By: XXXXXXX X. XXXXX
-------------------------
Title: Exec. Director
----------------------
Lending Office and Notice
Address for all Loans:
Two Paces West
0000 Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Telecopier No.:
--------------
and
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopier No.: 000-000-0000
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