EXHIBIT 10.1
$10,000,000
REVOLVING CREDIT AGREEMENT
AMONG
NATIONAL COAL CORP.,
AS HOLDINGS
NATIONAL COAL CORPORATION,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
AND
NEXT VIEW PARTNERS, LLC,
AS ADMINISTRATIVE AGENT
DATED AS OF APRIL 9, 2009
TABLE OF CONTENTS
Section 1. DEFINITIONS.........................................................1
1.1 Defined Terms................................................1
1.2 Other Definitional Provisions...............................15
Section 2. AMOUNT AND TERMS OF COMMITMENTS....................................15
2.1 The Revolving Credit Facility...............................15
2.2 Procedure for Revolving Loan Borrowing......................16
2.3 Repayment of Revolving Loans; Evidence of Debt..............17
2.4 Interest Rates and Payment Dates............................18
2.5 Pro Rata Treatment and Payments.............................19
2.6 Fees........................................................20
2.7 Requirements of Law.........................................21
2.8 Taxes.......................................................22
2.9 Change of Lending Office....................................24
2.10 Replacement of Lenders under Certain Circumstances..........24
Section 3. REPRESENTATIONS AND WARRANTIES.....................................24
3.1 Financial Condition.........................................24
3.2 No Change...................................................25
3.3 Corporate Existence; Compliance with Law....................25
3.4 Corporate Power; Authorization; Enforceable Obligations.....25
3.5 No Legal Bar................................................26
3.6 No Material Litigation......................................26
3.7 No Default..................................................26
3.8 Ownership of Property; Mines; Liens.........................26
3.9 Intellectual Property.......................................26
3.10 Taxes.......................................................27
3.11 Federal Regulations.........................................27
3.12 Labor Matters...............................................27
3.13 ERISA.......................................................28
3.14 Investment Company Act; Other Regulations...................28
3.15 Subsidiaries................................................28
3.16 Use of Proceeds.............................................28
3.17 Environmental Matters.......................................29
3.18 Accuracy of Information, etc................................30
3.19 Security Documents..........................................30
3.20 Senior Indebtedness.........................................31
3.21 Solvency....................................................31
3.22 Regulation H................................................31
3.23 Coal Act; Black Lung Act....................................31
Section 4. CONDITIONS PRECEDENT...............................................31
4.1 Conditions to Initial Extension of Credit...................31
4.2 Conditions to Additional Revolving Loans....................34
Section 5. AFFIRMATIVE COVENANTS..............................................35
5.1 Financial Statements........................................35
5.2 Certificates; Other Information.............................36
5.3 Payment of Obligations......................................37
5.4 Conduct of Business and Maintenance of Existence, etc. (a)..37
5.5 Maintenance of Property; Insurance. (a).....................37
5.6 Inspection of Property; Books and Records; Field Audits.....38
5.7 Notices.....................................................38
5.8 Environmental Laws..........................................39
5.9 Additional Collateral, etc..................................39
5.10 Further Assurances..........................................41
5.11 Coal Related Matters; Mining................................41
Section 6. NEGATIVE COVENANTS.................................................42
6.1 Financial Condition Covenants...............................42
6.2 Limitation on Indebtedness..................................43
6.3 Limitation on Liens.........................................44
6.4 Limitation on Fundamental Changes...........................45
6.5 Limitation on Disposition of Property.......................45
6.6 Limitation on Restricted Payments...........................46
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6.7 Limitation on Capital Expenditures..........................46
6.8 Limitation on Optional Payments and Modifications of
Debt Instruments, etc.......................................47
6.9 Limitation on Transactions with Affiliates..................47
6.10 Limitation on Sales and Leasebacks..........................48
6.11 Limitation on Changes in Fiscal Periods.....................48
6.12 Limitation on Negative Pledge Clauses.......................48
6.13 Limitation on Restrictions on Subsidiary Distributions......48
6.14 Limitation on Lines of Business.............................48
6.15 Limitation on Hedge Agreements..............................48
Section 7. EVENTS OF DEFAULT..................................................49
Section 8. THE ADMINISTRATIVE AGENT...........................................51
8.1 Appointment.................................................51
8.2 Delegation of Duties........................................51
8.3 Exculpatory Provisions......................................52
8.4 Reliance by Administrative Agent............................52
8.5 Notice of Default...........................................52
8.6 Non-Reliance on Administrative Agent and Other Lenders......53
8.7 Indemnification.............................................53
8.8 Administrative Agent in Its Individual Capacity.............54
8.9 Successor Administrative Agent..............................54
8.10 Authorization to Release Liens and Guarantees...............54
Section 9. MISCELLANEOUS......................................................55
9.1 Amendments and Waivers......................................55
9.2 Notices.....................................................56
9.3 No Waiver; Cumulative Remedies..............................57
9.4 Survival of Representations and Warranties..................58
9.5 Payment of Expenses.........................................58
9.6 Successors and Assigns; Participations and Assignments......59
9.7 Adjustments; Set-off........................................61
9.8 Counterparts................................................62
9.9 Severability................................................62
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9.10 Integration.................................................62
9.11 GOVERNING LAW...............................................62
9.12 Submission To Jurisdiction; Waivers.........................62
9.13 Acknowledgments.............................................63
9.14 Confidentiality.............................................63
9.15 Accounting Changes..........................................64
9.16 Intercreditor Agreement.....................................64
9.17 WAIVERS OF JURY TRIAL.......................................64
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SCHEDULES:
I. Revolving Loan Commitments
1.1 Mortgaged Property
3.1 Financial Statements
3.4 Consents, Authorizations, Filings and Notices
3.8 Ownership of Property; Mines
3.15 Subsidiaries
3.17 Environmental Matters
3.19(b) Mortgage Filing Jurisdictions
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
EXHIBITS:
A Form of Security Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Revolving Note
F Form of Borrowing Notice
G Intentionally Deleted
H Reclamation Bonds
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REVOLVING CREDIT AGREEMENT, dated as of April 9, 2009, among
National Coal Corp., a Florida corporation ("HOLDINGS"), National Coal
Corporation, a Tennessee corporation (the "BORROWER"), the several banks and
other financial institutions or entities from time to time parties to this
Agreement (the "LENDERS"), and Next View Partners, LLC, as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, Holdings and the Borrower have requested that the
Lenders make available a revolving credit facility to the Borrower;
WHEREAS, the Lenders are willing to make such credit facility
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"ASSET SALE": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 6.5) which yields gross proceeds to Holdings,
the Borrower or any Restricted Subsidiary (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or other
debt securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $100,000.
"ASSIGNEE": as defined in Section 9.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in Section 9.6(c).
"ASSIGNOR": as defined in Section 9.6(c).
"AVAILABLE CREDIT": the undrawn portion of the Revolving Loan
Commitment.
"BANKRUPTCY CODE": title 11, United States Code, as amended
from time to time, or any subsequent legislation that amends, supplements or
supersedes such statute.
"BENEFITED LENDER": as defined in Section 9.7.
"BLACK LUNG ACT" : collectively, the Black Lung Benefits
Revenue Act of 1977, as amended and the Black Lung Benefits reform Act of 1977,
as amended.
"BOARD": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING NOTICE": with respect to any request for borrowing
of Revolving Loans hereunder, a notice from the Borrower, substantially in the
form of, and containing the information prescribed by, EXHIBIT F, delivered to
the Administrative Agent.
"BUSINESS DAY": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois are authorized or required by law to
close.
"CAPITAL EXPENDITURES": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"CAPITAL LEASE OBLIGATIONS": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by S&P or P-2 by Xxxxx'x, or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating
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agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or P by Xxxxx'x; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CHANGE OF CONTROL": the occurrence of any of the following
events: (a) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of Holdings and its Subsidiaries taken as a whole to any "person" (as that term
is used in Section 13(d) of the Exchange Act) other than a Permitted Investor;
(b) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) shall
become, or obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than 35% of the outstanding
common stock of Holdings, (c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the board of
directors of Holdings (together with any new directors whose election by such
board of directors or whose nomination for election by the shareholders of
Holdings was approved by a vote of a majority of the directors of Holdings then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved), cease for
any reason to constitute a majority of the board of directors of Holdings then
in office, or (d) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of the
Borrower free and clear of all Liens (except Liens permitted hereunder and Liens
created by the Security Agreement).
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date shall be not later
than April 9, 2009.
"COAL": all of the coal owned or leased by any Loan Party and
(i) located on, under, or within, or (ii) produced and severed from, the
properties owned or leased by any Loan Party.
"COAL ACT": the Coal Industry Retiree Health Benefits Act of
1992, as amended.
"COAL SUPPLY AGREEMENTS": those contracts now in effect or
hereafter entered into by any Loan Party for the sale, purchase, exchange,
processing or handling of Coal with an initial term of more than one year.
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"CODE": the United States Internal Revenue Code of 1986, as
amended from time to time.
"COLLATERAL": as defined in the Security Agreement.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"CONTRACTUAL OBLIGATION": as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its Property is bound.
"CONTROL AGREEMENT": with respect to any deposit account, any
securities account, commodity account, securities entitlement or commodity
contract, an agreement, in form and substance satisfactory to the Administrative
Agent, among the Administrative Agent, the financial institution or other Person
at which such account is maintained or with which such entitlement or contract
is carried and the Loan Party maintaining such account, effective to grant
"control" (as defined under the applicable UCC) over such account to the
Administrative Agent.
"CONTROL INVESTMENT AFFILIATE": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"DEFAULT": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"DERIVATIVES COUNTERPARTY": as defined in Section 6.6.
"DISPOSITION": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "DISPOSE" and "DISPOSED OF" shall have
correlative meanings.
"DOLLARS" and "$": lawful currency of the United States of
America.
"ELIGIBLE ASSIGNEE": (a) a Lender or an Affiliate, Related
Fund or Control Investment Affiliate of any Lender, (b) a commercial bank, (c) a
finance company, insurance company, financial institution or fund, in each case
regularly engaged in making, purchasing, holding or otherwise investing in loans
and similar extensions of credit, or (d) a savings and loan association or
savings bank organized under the laws of the United States or any State thereof.
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"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other Governmental Authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect, including, without limitation,
the Surface Mining Control and Reclamation Act.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EVENT OF DEFAULT": any of the events specified in Section 7,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%) equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, PROVIDED that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Effective Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Effective
Rate for such day shall be the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by it.
"FUNDING DATE": the date on which any borrowing of Revolving
Loans is made pursuant to Section 2.2 hereof.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROWTH CAPEX": for any period, the Capital Expenditures made
by Holdings, Borrower or any Restricted Subsidiary that have not been made for
the purpose of replacing, maintaining, repairing or upgrading existing Mines or
to improve business efficiencies.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of such obligation of such other Person the guaranteeing
person has issued a reimbursement, counterindemnity or similar obligation, in
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either case guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other third
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
Property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"HEDGE AGREEMENTS": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by Holdings or its Restricted Subsidiary
providing for protection against fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"HOLDINGS": as defined in the preamble hereto.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables with original payment terms of 90 days or
less incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock of such Person, in each case,
to the extent such obligations are treated as indebtedness on the financial
statements (including any notes thereto) of such Person or is otherwise then due
and payable in cash by such Person, (h) all Guarantee Obligations of such Person
in respect of obligations of the kind referred to in clauses (a) through (g)
above; (i) all obligations of the kind referred to in clauses (a) through (h)
above secured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured by) any Lien on Property
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(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation and (j) for the purposes of Section 7(e) only, all
obligations of such Person in respect of Hedge Agreements.
"INDEMNIFIED LIABILITIES": as defined in Section 9.5.
"INDEMNITEE": as defined in Section 9.5.
"INITIAL REVOLVING LOAN": as defined in Section 2.1.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": as defined in the Security Agreement.
"INTERCREDITOR AGREEMENT": the Intercreditor Agreement dated
April 9, 2009, between the Administrative Agent and Xxxxx Fargo Bank, National
Association, a national banking association.
"INTEREST PAYMENT DATE": the last day of each calendar month,
commencing April 30, 2009.
"INVESTMENTS": as defined in Section 6.8.
"LENDERS": as defined in the preamble hereto.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"LOAN DOCUMENTS": this Agreement, the Security Documents, any
Revolving Notes and each other agreement or document executed by a Loan Party
and delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.
"LOAN PARTIES": Holdings, the Borrower and each Subsidiary
that is a party to a Loan Document.
"MAINTENANCE CAPEX": for any period, the Capital Expenditures
made by Holdings, Borrower or any Restricted Subsidiary that have been made for
the purpose of replacing, maintaining, repairing or upgrading existing Mines or
to improve business efficiencies.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or prospects
7
of (i) Holdings and its Subsidiaries taken as a whole, or (ii) the Borrower and
any Restricted Subsidiary taken as a whole, or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": an amount or amounts payable
by Holdings and/or any of its Subsidiaries, in the aggregate in excess of
$250,000, for: costs of any investigation, and any remediation, of any Material
of Environmental Concern; and compensatory damages (including, without
limitation, damages to natural resources), punitive damages, fines, and
penalties pursuant to any Environmental Law.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactive materials, and any other substances or forces of any
kind, whether or not any such substance or force is defined as hazardous or
toxic under any Environmental Law, that is regulated pursuant to or could give
rise to liability under any Environmental Law.
"MATURITY DATE": December 15, 2009; provided that such date
shall be extended to March 31, 2010 if and only if Holdings obtains the consent
to so extend such date from the requisite holders of Senior Secured Notes in
accordance with the Senior Secured Indenture.
"MINE": any excavation or opening into the earth now and
hereafter made from which Coal is or can be extracted on or from any of the
properties owned or leased by any Loan Party, together with all appurtenances,
fixtures, structures, improvements, and all tangible property of whatsoever kind
or nature in connection therewith.
"MINING LAWS": any and all applicable current and future
federal, state, local and foreign statutes, laws, regulations, guidances,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions or common
law causes of action relating to mining operations and activities. Mining Laws
shall include, but not be limited to the Federal Coal Leasing Amendments Act,
the Surface Mining Control and Reclamation Act, all other land reclamation and
use statutes and regulations, the Federal Coal Mine Health and Safety Act, the
Black Lung Act and the Coal Act, each as amended, and their state and local
counterparts or equivalents.
"MINING LEASE": a lease which provides a Loan Party the right
to mine coal reserves.
"MINING PERMITS": any and all permits, licenses,
registrations, notifications, exemptions and any other authorization required
under any applicable Mining Law or otherwise necessary to recover Coal from any
Mine being operated by a Loan Party.
"MOODY'S": Xxxxx'x Investors Service, Inc.
"MORTGAGED PROPERTIES": the real properties listed on
Schedule 1.1, as to which the Administrative Agent for the benefit of the
Secured Parties shall be granted a Lien pursuant to one or more Mortgages.
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"MORTGAGES": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Secured Parties, in form and substance satisfactory to the
Administrative Agent, in its reasonable discretion, as the same may be amended,
supplemented or otherwise modified from time to time.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": in connection with any Asset Sale, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such Asset Sale, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such Asset Sale (other than any Lien under a
Security Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements).
"NET INSURANCE/CONDEMNATION PROCEEDS": an amount equal to: (i)
any cash payments or proceeds received by the Loan Parties (a) under any
casualty, business interruption or "key man" insurance policies in respect of
any covered loss thereunder, or (b) as a result of the taking of any assets of
the Loan Parties by any Person pursuant to the power of eminent domain,
expropriation, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, minus (ii)
(a) any actual and reasonable costs incurred by the Loan Parties in connection
with the adjustment or settlement of any claims of the Loan Parties in respect
thereof and (b) any bona fide direct costs incurred in connection with any sale
of such assets as referred to in clause (i)(b) of this definition, including
income taxes payable as a result of any gain recognized in connection therewith.
"NON-CONSENTING LENDER": has the meaning specified in Section
9.1.
"NON-EXCLUDED TAXES": as defined in Section 2.9(a).
"NON-U.S. LENDER": as defined in Section 2.9(d).
"NOTE TRUSTEE": has the meaning specified in the definition of
"Senior Secured Indenture".
"OBLIGATIONS": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Revolving Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Revolving Loans, and
all other obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender or any Qualified Counterparty, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document any Specified Hedge Agreement or any other
9
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise; PROVIDED,
that (i) obligations of Holdings or any Restricted Subsidiary under any
Specified Hedge Agreement shall be secured and guaranteed pursuant to the
Security Documents only to the extent that, and for so long as, the other
Obligations are so secured and guaranteed and (ii) any release of Collateral or
Guarantors effected in the manner permitted by this Agreement shall not require
the consent of holders of obligations under Specified Hedge Agreements.
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"PARTICIPANT": as defined in Section 9.6(b).
"PAYMENT OFFICE": as to any Lender or the Administrative
Agent, the office specified from time to time by such Lender or the
Administrative Agent, as the case may be, as its payment office by notice to the
Borrower and, in the case of a Lender's Payment Office, the Administrative
Agent.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED ACQUISITION" means any Proposed Acquisition
satisfying each of the following conditions: (a) the aggregate amounts payable
in connection with, and other consideration for (in each case, including all
transaction costs and all Indebtedness, liabilities and obligations incurred or
assumed in connection therewith or otherwise reflected in a consolidated balance
sheet of Holdings and the Proposed Acquisition Target), such Proposed
Acquisition and all other Permitted Acquisitions consummated on or prior to the
date of the consummation of such Proposed Acquisition shall not exceed
$20,000,000, (b) the Administrative Agent shall have received reasonable advance
notice of such Proposed Acquisition including a reasonably detailed description
thereof at least 30 days prior to the consummation of such Proposed Acquisition
(or such later date as may be agreed by the Administrative Agent) and on or
prior to the date of such Proposed Acquisition, the Administrative Agent shall
have received copies of the acquisition agreement and related Contractual
Obligations and other documents (including financial information and analysis,
environmental assessments and reports, opinions, certificates and lien searches)
and other information reasonably requested by the Administrative Agent, (c) as
of the date of consummation of any transaction as part of such Proposed
Acquisition and after giving effect to all transactions to occur on such date as
part of such Proposed Acquisition, all conditions set forth in Section 4.2 shall
be satisfied or duly waived and, after giving effect to such Permitted
Acquisition, Holdings shall be in compliance with the financial covenants set
forth in Section 6 on a pro forma basis as of the last day of the last fiscal
quarter for which financial statements have been delivered hereunder, and (d)
such Proposed Acquisition shall be consummated by the Borrower, Holdings, or a
Guarantor Subsidiary, and shall not result in the formation or acquisition of an
Unrestricted Subsidiary.
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"PERMITTED REFINANCING INDEBTEDNESS": any Indebtedness of any
Loan Party incurred or issued in exchange for, or the net proceeds of which are
used to renew, refund, refinance, replace, defease or discharge other
Indebtedness of any Loan Parties (other than intercompany Indebtedness);
PROVIDED that (a) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums
incurred in connection therewith), (b) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged, (c) if the Indebtedness being renewed,
refunded refinanced, replaced, defeased or discharged is subordinated in right
of payment of the Obligations, such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and is subordinated
in right of payment to, the Obligations on terms at least as favorable to the
Lenders as those contained in the documentation governing the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged, and (d) such
Indebtedness is incurred by a Loan Party who is the obligor on the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"PROJECTIONS": as defined in Section 5.2(c).
"PROPERTY": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"PROPOSED ACQUISITION": (a) any proposed acquisition that is
consensual and approved by the board of directors of such Proposed Acquisition
Target, of all or substantially all of the assets or Capital Stock of any
Proposed Acquisition Target by the Borrower or any Restricted Subsidiary of the
Borrower (or by Holdings to the extent such assets and Stock are transferred to
the Borrower or any Restricted Subsidiary of the Borrower contemporaneously with
such acquisition) or (b) any proposed merger of any Proposed Acquisition Target
with or into the Borrower or any Restricted Subsidiary of the Borrower (and, in
the case of a merger with the Borrower, with the Borrower being the surviving
corporation).
"PROPOSED ACQUISITION TARGET": any Person or any brand, line
of business, division, branch, operating division or other unit operation of
any Person.
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"QUALIFIED COUNTERPARTY": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an Affiliate of a Lender.
"REGISTER": as defined in Section 9.6(d).
"REGULATION H": Regulation H of the Board as in effect from
time to time.
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"RELATED FUND": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. ss. 4043.
"REQUIRED LENDERS": at any time, the Administrative Agent
and the holders of more than 50% of the aggregate amount of Revolving Loans and
outstanding Revolving Loan Commitments.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president
or chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"RESTRICTED PAYMENTS": as defined in Section 6.6.
"RESTRICTED SUBSIDIARY": has the meaning set forth in the
Senior Secured Indenture, as in effect as of the date of this Agreement.
"REVOLVING LOAN": as defined in Section 2.1.
"REVOLVING LOAN COMMITMENT": as to any Lender, the obligation
of such Lender, if any, to make a Revolving Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Revolving
Loan Commitment" opposite such Lender's name on SCHEDULE I hereto, or, as the
case may be, in the Assignment and Acceptance pursuant to which such Lender
became a party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original aggregate amount of the Revolving Loan
Commitments is $10,000,000.
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"REVOLVING LOAN FACILITY": the Revolving Loan Commitments
and the Revolving Loans made hereunder.
"REVOLVING LOAN PERCENTAGE": as to any Lender at any time,
the percentage which such Lender's Revolving Loan Commitment then constitutes
of the aggregate Revolving Loan Commitments.
"REVOLVING LOAN SUBLIMIT": as defined in Section 2.1.
"REVOLVING NOTE": as defined in Section 2.3(f).
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"SECURED PARTIES": as defined in the Security Agreement.
"SECURITY AGREEMENT": the Security Agreement to be executed
and delivered by Holdings, the Borrower and each Subsidiary Guarantor,
substantially in the form of EXHIBIT A, as the same may be amended, supplemented
or otherwise modified from time to time.
"SECURITY DOCUMENTS": the collective reference to the Security
Agreement, the Intercreditor Agreement, any Control Agreement, the Mortgages,
the Intellectual Property Security Agreement and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any Property
of any Person to secure the obligations and liabilities of any Loan Party under
any Loan Document.
"SENIOR SECURED INDENTURE": the Indenture dated December 29,
2005, among Holdings, the guarantors party thereto and Xxxxx Fargo Bank,
National Association, a national banking association, as trustee in connection
with the issuance of the Senior Secured Notes.
"SENIOR SECURED NOTE DOCUMENTS": the Senior Secured Indenture,
the Senior Secured Notes, and each other agreement or document executed and
delivered in connection therewith or pursuant to any of the foregoing.
"SENIOR SECURED NOTES": the 10.5% senior secured notes
issued by Holdings pursuant to the Senior Secured Indenture.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOFTWARE": any and all computer programs, including any and
all software implementations of algorithms, models and methodologies, whether in
source code or object code; databases and compilations, including any and all
data and collections of data, whether machine readable or otherwise;
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, screens, user interfaces, report formats,
13
firmware, development tools, templates, menus, buttons and icons; and all
documentation including user manuals and other training documentation related to
any of the foregoing.
"SOLVENT": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"SPECIFIED HEDGE AGREEMENT": any Hedge Agreement entered into
by the Borrower or any Subsidiary Guarantor and any Qualified Counterparty.
"S&P": Standard & Poor's Rating Services.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of Holdings other
than any Unrestricted Subsidiary.
"TRANSFEREE": as defined in Section 9.14.
"UCC": the Uniform Commercial Code as in effect from time
to time in the State of Illinois.
"UNRESTRICTED SUBSIDIARY": has the meaning set forth in the
Senior Secured Indenture, as in effect as of the date of this Agreement.
"WEIGHTED AVERAGE LIFE TO MATURITY": when applied to any
Indebtedness at any date, the number of years obtained by dividing (x) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
14
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by (y) the then
outstanding principal amount of such Indebtedness.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant hereto
or thereto.
(b) As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to Holdings, the Borrower and their respective
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in
Section 6.1 shall be calculated to the same number of decimal places as the
relevant ratios are expressed in and shall be rounded upward if the number in
the decimal place immediately following the last calculated decimal place is
five or greater. For example, if the relevant ratio is to be calculated to
the hundredth decimal place and the calculation of the ratio is 5.126, the ratio
will be rounded up to 5.13.
(f) Unless the context requires otherwise, any definition
of or reference to any agreement, instrument or other document shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document).
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 THE REVOLVING CREDIT FACILITY. Subject to the terms
and conditions set forth herein, each Lender severally agrees to make loans
(each such loan, a "Revolving Loan" and together the "Revolving Loans") to the
Borrower in Dollars from time to time on any Business Day in an aggregate amount
not to exceed at any time outstanding the amount of such Lender's Revolving Loan
Commitment; PROVIDED, HOWEVER, that after giving effect to any borrowing of
Revolving Loans, the aggregate outstanding principal balance of the Revolving
Loans shall not exceed the lesser of (x) the aggregate Revolving Loan
Commitments, and (y) prior to June 30, 2009 and satisfaction of each of the
15
conditions in Section 2.2(b), the sum of $5,000,000 (the "REVOLVING LOAN
SUBLIMIT"). Within the limits of each Revolving Lender's Revolving Loan
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow, prepay and reborrow under this Section 2.
2.2 PROCEDURE FOR REVOLVING LOAN BORROWING.
(a) REVOLVING LOAN DISBURSEMENTS. With respect to each
requested borrowing of a Revolving Loan hereunder (including, without
limitation, the initial Revolving Loan to be made on or after the Closing Date),
the Borrower shall deliver to the Administrative Agent a Borrowing Notice (which
Borrowing Notice must be received by the Administrative Agent prior to 10:00
A.M., Chicago, Illinois time, at least five (5) Business Days prior to any
anticipated Funding Date (except in the case of the initial Revolving Loan which
would cause the aggregate principal balance of the Revolving Loans to exceed the
Revolving Loan Sublimit, in which case such Borrowing Notice must be received
not less than twenty-one (21) days prior to the anticipated Funding Date),
requesting that the Lenders make Revolving Loans on such Funding Date; PROVIDED,
HOWEVER, that (i) the Borrower shall be permitted to borrow a maximum of two (2)
Revolving Loans per calendar month, (ii) each borrowing shall be in an amount
not less than the lesser of (x) $1,000,000, or (y) the then Available Credit,
and (iii) the aggregate principal balance of the Revolving Loans shall not at
any time exceed (x) the aggregate Revolving Loan Commitments, and (y) prior to
June 30, 2009 and satisfaction of each of the conditions set forth in Section
2.2(b) below, the Revolving Loan Sublimit. Upon receipt of any such Borrowing
Notice the Administrative Agent shall promptly notify each Lender thereof. On
the applicable Funding Date each Lender shall make available to the Borrower at
an account designated by the Borrower in such Borrowing Notice, an amount in
immediately available funds equal to the Revolving Loan to be made by such
Lender.
(b) REVOLVING LOANS IN EXCESS OF THE REVOLVING LOAN
SUBLIMIT. Following June 30, 2009 and upon satisfaction (determined in
Administrative Agent's sole discretion) of each of the following conditions and
written confirmation of the same by Lender, the Borrower shall be permitted to
borrow under the Revolving Loan Facility amounts in excess of the Revolving Loan
Sublimit:
(i) Borrower shall have provided evidence to
Administrative Agent that as of June 30,
2009, Borrower shall have in place valid and
binding Coal Supply Agreements for the sale
of coal in calendar year 2010 from
Borrower's Tennessee operations (such Coal
Supply Agreement to be with creditworthy
counterparties on commercially reasonable
terms acceptable to the Lenders), of not
less than the greater of (1) $50,000,000 or
(2) 650,000 tons;
(ii) no Default or Event of Default shall have
occurred and be continuing on such date or
after giving effect to the extensions of
credit requested to be made on such date;
(iii) each of the representations and warranties
made by any Loan Party in or pursuant to the
Loan Documents shall be true and correct in
all material respects on and as of such date
as if made on and as of such date (except
16
for representations and warranties which
specifically relate to an earlier date, in
which case such representation and warranty
shall be true and correct as of such earlier
date);
(iv) the Borrower shall have delivered to
Administrative Agent PRO FORMA financial
projection which shall contain the
Borrower's anticipated, income statements,
on a consolidated basis for Holdings and its
Subsidiaries, on a monthly basis for the
period commencing on the September 30, 2009
and ending on the first anniversary of the
Closing Date; and
(v) the Borrower shall have delivered to
Administrative Agent all additional
documents, instruments and agreements
relative to the Loan Parties, their assets
and business operations reasonably requested
by the Administrative Agent, each in form
and substance reasonably satisfactory to the
Administrative Agent.
2.3 REPAYMENT OF REVOLVING LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay
to the Administrative Agent for the account of each Lender the principal amount
of each Revolving Loan of such Lender (together with all other Obligations then
outstanding) on the Maturity Date (or on such earlier date on which the
Revolving Loans become due and payable pursuant to Section 7). The Borrower
hereby further agrees to pay interest on the unpaid principal amount of the
Revolving Loans from time to time outstanding from the date of making each
Revolving Loan until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 2.5.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Revolving Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 9.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Revolving
Loan (with applicable interest) made hereunder and any Revolving Note evidencing
such Revolving Loan, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.3(d) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
17
obligation of the Borrower to repay (with applicable interest) the Revolving
Loans made to the Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any
Revolving Loans of such Lender, substantially in the form of EXHIBIT E (the
"REVOLVING NOTE"), with appropriate insertions as to date and principal amount;
PROVIDED, that delivery of Revolving Notes shall not be a condition precedent to
the occurrence of the Closing Date or the making of the Revolving Loans on the
Closing Date or any Funding Date.
2.4 MANDATORY PREPAYMENT; ASSET SALES;
INSURANCE/CONDEMNATION PROCEEDS. No later than the second Business Day following
the date of receipt by any Loan Party of Net Cash Proceeds of any Asset Sale or
Net Insurance/Condemnation Proceeds, Borrower shall prepay the Revolving Loans
in an aggregate amount equal to such Net Cash Proceeds or Net
Insurance/Condemnation Proceeds; PROVIDED, so long as no Default or Event of
Default shall have occurred and be continuing, the Borrower shall have the
option, directly or through one or more Subsidiary Guarantors, to invest the Net
Cash Proceeds or Net Insurance/Condemnation Proceeds within ninety (90) days of
receipt thereof in other assets that are not classified as current assets under
GAAP and that are used or useful in the business of the Borrower and any
Restricted Subsidiary; PROVIDED FURTHER, that pending any such reinvestment all
such Net Cash Proceeds or Net Insurance/Condemnation Proceeds shall be applied
to temporarily reduce revolving credit borrowings or otherwise deposited into a
bank account that is subject to a Control Agreement. In the event the Borrower
elects to use the Net Cash Proceeds or Net Insurance/Condemnation Proceeds to
prepay the Revolving Loans, such payment shall constitute a permanent reduction
in the Revolving Loan Commitments.
2.5 INTEREST RATES AND PAYMENT DATES.
(a) So long as no Event of Default has occurred and is
continuing and subject to Section 2.5(b) below, the outstanding principal amount
of the Revolving Loans shall bear interest, computed on the basis of actual days
elapsed over a 360-day year, (i) with respect to the initial $5,000,000
principal amount of Revolving Loans outstanding at any time, at a rate per annum
of 13%, and (ii) with respect to all Revolving Loans in excess of $5,000,000
outstanding at any time, at a rate per annum of 15%.
(b) Notwithstanding the rates of interest specified in
clause (a) above or elsewhere in any Loan Document, effective immediately upon
(i) the occurrence of any Event of Default or (ii) the delivery of a notice by
the Administrative Agent or the Required Lenders to the Borrower during the
continuance of any other Event of Default and, in each case, for as long as such
Event of Default shall be continuing, the principal balance of all Obligations
(including any Obligation that bears interest by reference to the rate
applicable to any other Obligation) then due and payable shall bear interest at
a rate that is 2% per annum in excess of the interest rate applicable to such
Obligations from time to time, payable on demand or, in the absence of demand,
on the date that would otherwise be applicable.
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(c) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (b) of this
Section shall be payable from time to time on demand.
(d) Notwithstanding anything to the contrary set forth in
this Section 2.5, if a court of competent jurisdiction determines in a final
order that the rate of interest payable hereunder exceeds the highest rate of
interest permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder
shall be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any
time thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, the Borrower shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by the
Lenders is equal to the total interest which would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate of interest
and in the manner provided in this Section, unless and until the rate of
interest again exceeds the Maximum Lawful Rate, and at that time this paragraph
shall again apply. In no event shall the total interest received by the Lenders
pursuant to the terms hereof exceed the amount which the Lenders could lawfully
have received had the interest due hereunder been calculated for the full term
hereof at the Maximum Lawful Rate. If, notwithstanding the provisions of this
Section 2.5(d), a court of competent jurisdiction shall finally determine that
the Lenders have received interest hereunder in excess of the Maximum Lawful
Rate, the Lenders shall refund any excess to Borrower or as a court of competent
jurisdiction may otherwise order.
2.6 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by the Borrower from the Lenders
hereunder and any reduction of the Revolving Loan Commitments of the Lenders,
shall be made PRO RATA according to the respective Revolving Loan Percentages of
the relevant Lenders.
(b) Each payment (including each optional and mandatory
prepayment) of the Revolving Loans outstanding under the Revolving Loan Facility
shall be allocated among the Lenders holding such Revolving Loans PRO RATA based
on the principal amount of such Revolving Loans held by such Lenders.
(c) All payments (including mandatory prepayments) to be
made by the Borrower hereunder, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, Chicago, Illinois time, on the due date thereof to the
Administrative Agent, for the account of the relevant Lenders, at the Payment
Office, in Dollars and in immediately available funds. Any payment made by the
Borrower after 12:00 Noon, Chicago, Illinois time, on any Business Day shall be
deemed to have been on the next following Business Day. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. In the case of any extension of any payment of principal pursuant
to the preceding sentence, interest thereon shall be payable at the then
applicable rate during such extension.
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(d) after the occurrence and during the continuance of an
Event of Default, all payments in respect of the Obligations and all proceeds of
the Collateral shall be applied against the Obligations in the following order:
(i) FIRST, to pay incurred and unpaid fees,
expenses and indemnities of the
Administrative Agent under the Loan
Documents;
(ii) SECOND, to pay interest then due and payable
in respect of the Revolving Loans;
(iii) THIRD, to the prepayment of the Revolving
Loans then outstanding; and
(iv) FOURTH, to pay all other Obligations.
If sufficient funds are not available to fund all payments to be made in respect
of any of the Obligations described in any of the foregoing clauses (i) through
(iv), the available funds being applied with respect to any such Obligation
shall be allocated to the payment of such Obligations ratably, based on the
proportion of the Administrative Agent's, Lender's or other Secured Party's
interest in the aggregate outstanding Obligations described in such clause. The
order of priority set forth in clauses (i) through (iv) of this Section 2.6(d)
may at any time and from time to time be changed by the agreement of the Lenders
in the Revolving Loan Facility and the Administrative Agent without necessity of
notice to or consent of or approval by the Borrower, any other Loan Party, any
Secured Party that is not a Lender or any other Person.
(e) Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment due to be
made by the Borrower hereunder that the Borrower will not make such payment to
the Administrative Agent, the Administrative Agent may assume that the Borrower
is making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective PRO RATA shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three (3) Business
Days after such due date, the Administrative Agent shall be entitled to recover,
on demand, from each Lender to which any amount which was made available
pursuant to the preceding sentence, such amount with interest thereon at the
rate per annum equal to the daily average Federal Funds Effective Rate. Nothing
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against the Borrower.
2.7 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent, for the ratable account of the Lenders, a commitment fee
(the "COMMITMENT FEE"), of (i) $100,000, due and payable on the Closing Date,
and (ii) $100,000, due and payable within three (3) Business Days following
Lender's delivery of the notice referred to in Section 2.2(b) above. The entire
amount of the Commitment Fee that becomes due and payable hereunder shall be
fully earned on such payment date, and no portion of the Commitment Fee that has
become due and payable hereunder shall be subject to refund, rebate or abatement
in whole or in part.
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(b) UNUSED LINE FEE. The Borrower shall pay to the Agent,
for the account of each Lender, in accordance with its Revolving Loan
Percentage, an unused line fee (the "UNUSED LINE FEE") equal to 0.50% per annum
times the actual daily amount by which the Revolving Loan Commitment exceeds the
Total Revolving Outstandings; PROVIDED, HOWEVER, that prior to the later of June
30, 2009 and the date on which Borrower satisfies the condition precedent set
forth in Section 2.2(b)(i) hereof, the Unused Line Fee shall be calculated based
upon the difference between the Total Revolving Outstandings and the Revolving
Loan Sublimit. The unused line fee shall accrue at all times during the term of
the Revolving Loan and shall be due and payable quarterly in arrears on the last
Business Day of each quarter, commencing with the first such date to occur after
the Closing Date. The unused line fees shall be calculated monthly in arrears.
(c) OTHER FEES. The Borrower shall pay to the Lenders
such additional fees as shall have been separately agreed upon in writing in the
amounts and at the times so specified. Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.
2.8 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by any
Lender with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this
Agreement, or change the basis of taxation
of payments to such Lender in respect
thereof (except for Non-Excluded Taxes
covered by Section 2.9 and changes in the
rate of tax on the overall net income of
such Lender); or
(ii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining the Revolving Loans, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
21
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction;
PROVIDED that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than six months prior to the
date that such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and PROVIDED FURTHER that, if the circumstances giving
rise to such claim have a retroactive effect, then such six month period shall
be extended to include the period of such retroactive effect.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Revolving Loans and all
other amounts payable hereunder.
(d) Any Lender claiming any additional amounts payable
pursuant to Section 2.11 shall use its reasonable efforts (consistent with its
internal policies and Requirements of Law) to change the jurisdiction of its
lending office if such a change would reduce any such additional amounts (or any
similar amount that may thereafter accrue) and would not, in the sole
determination of such Lender, be otherwise materially disadvantageous to such
Lender.
2.9 TAXES.
(a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent's or such Lender's
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or any Other Taxes are required to be
withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; PROVIDED, HOWEVER, that the Borrower shall
not be required to increase any such amounts payable to any Lender with respect
to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to
comply with the requirements of paragraph (d) or (e) of this Section or (ii)
that are United States withholding taxes imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement, except to the
extent that such Lender's assignor (if any) was entitled, at the time of
22
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for the account of the Administrative Agent or
the relevant Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section shall
survive the termination of this Agreement and the payment of the Revolving Loans
and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "NON-U.S. LENDER")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or
Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement in a form satisfactory to the
Administrative Agent and a Form W-8BEN, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal withholding
tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
23
payments to be made without withholding or at a reduced rate, PROVIDED that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.10 CHANGE OF LENDING OFFICE. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.8 or
2.9(a) with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Revolving Loans affected by such event
with the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.8 or 2.9(a).
2.11 REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES.
The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.8 or 2.9 or (b) defaults
in its obligation to make Revolving Loans hereunder, with a replacement
financial institution; provided that (i) such replacement does not conflict with
any Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action so as to eliminate the continued need for
payment of amounts owing pursuant to Section 2.8 or 2.9, (iv) the replacement
financial institution shall purchase, at par, all Revolving Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(v) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 9.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (vii) the Borrower shall
pay all additional amounts (if any) required pursuant to Section 2.8 or 2.9, as
the case may be, in respect of any period prior to the date on which such
replacement shall be consummated, and (viii) any such replacement shall not be
deemed to be a waiver of any rights that the Borrower, the Administrative Agent
or any other Lender shall have against the replaced Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Revolving Loans, Holdings and the Borrower
hereby jointly and severally represent and warrant to the Administrative Agent
and each Lender that:
3.1 FINANCIAL CONDITION. The audited consolidated balance
sheets of Holdings and its consolidated Subsidiaries as at December 31, 2008,
and the related consolidated statements of income and of cash flows for the
fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Ernst & Young LLP present fairly the consolidated
financial condition of Holdings and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. All such financial statements,
24
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). Except as disclosed on SCHEDULE 3.1, Holdings, the Borrower and their
respective Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most recent
financial statements referred to in this paragraph. Except as disclosed on
SCHEDULE 3.1(B), during the period from December 31, 2008 to and including the
date hereof there has been no Disposition by Holdings, the Borrower or any of
their respective Subsidiaries of any material part of its business or Property.
3.2 NO CHANGE. Except as disclosed in the periodic
filings of Holdings with the SEC prior to the date hereof, since December 31,
2008 there has been no development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of
Holdings, the Borrower and each Restricted Subsidiary (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification, (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect, and (e)
has all necessary licenses, Permits (including Mining Permits), consents or
approvals from or by each Governmental Authority having jurisdiction, to the
extent required to carry out its business as presently conducted.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS. Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform the Loan Documents to which it is a
party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the other Loan Documents, except (i) consents, authorizations, filings
and notices described in Schedule 3.4, which consents, authorizations, filings
and notices have been obtained or made and are in full force and effect and (ii)
the filings referred to in Section 3.19. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party that is a party thereto.
This Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party that is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
25
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance
of this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of Holdings, the Borrower or any of their respective
Restricted Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to Holdings, Borrower or any of their
respective Restricted Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
3.6 NO MATERIAL LITIGATION. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of Holdings or the Borrower, threatened by or against
Holdings, the Borrower or any of their respective Subsidiaries or against any of
their respective properties or revenues (a) with respect to any of the Loan
Documents, any of the transactions contemplated hereby or thereby, or the
ranking and seniority of their respective obligations thereunder, or (b) that
could reasonably be expected to have a Material Adverse Effect.
3.7 NO DEFAULT. None of Holdings or any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 OWNERSHIP OF PROPERTY; MINES; LIENS. Each of
Holdings, the Borrower and their respective Subsidiaries has title in fee simple
to, or a valid leasehold interest in, all its real property, and good title to,
or a valid leasehold interest in, all its other Property, and none of such
Property is subject to any Lien except as permitted by Section 6.3. Set forth on
Schedule 3.8 is a list as of the Closing Date of (i) all real property owned by
the Loan Parties (including surface rights and coal and other mineral rights),
(ii) all leases for material real property, including Mining Leases, and (iii)
all Mines (including addresses and the owner and operator thereof) owned or
operated by any Loan Party and indicates whether each such Mine is owned or
leased by such Loan Party. With respect to each Mining Lease, the applicable
Loan Party possesses the leasehold interest(s), mining rights and Mining Permits
necessary for the operation of the applicable Mine(s) currently being operated
on such parcel, and each of its rights under the applicable lease(s), contracts,
rights-of-way and easements necessary for the operation of such Mine(s) is in
full force and effect and no default exists thereunder, except to the extent
that such defaults or the failure to maintain such lease(s), mining rights,
Mining Permits, contracts, rights of way and easements in full force and effect
does not and will not have a material adverse effect on the operation and
intended use of such parcel by such Loan Party.
3.9 INTELLECTUAL PROPERTY. Holdings, the Borrower and
each of their respective Restricted Subsidiaries owns, or licenses pursuant to a
valid and enforceable written agreement, all material Intellectual Property and
material Software necessary and sufficient for the conduct of their businesses
as currently conducted and proposed to be conducted. No other Person has
26
contested any right, title or interest of Holdings, the Borrower or their
respective Restricted Subsidiaries in or relating to any material Intellectual
Property or challenged the ownership, use, validity or enforceability of any
material Intellectual Property of Holdings, the Borrower or their respective
Restricted Subsidiaries, nor does Holdings or the Borrower know of any valid
basis for any such claim. To the knowledge of Holdings, the Borrower and each of
their respective Restricted Subsidiaries, the operation and conduct of the
businesses of Holdings, the Borrower and each of their respective Restricted
Subsidiaries (including, without limitation, the use or practice of any
Intellectual Property and Software therein) does not infringe, misappropriate,
dilute, violate or otherwise impair any Intellectual Property owned by any other
Person. To the knowledge of Holdings, the Borrower and each of their respective
Restricted Subsidiaries, no Person has been or is infringing, misappropriating,
diluting, violating or otherwise impairing any Intellectual Property of
Holdings, the Borrower or their respective Restricted Subsidiaries. There are no
pending (or, to the knowledge of Holdings or the Borrower threatened) actions,
investigations, suits, proceedings, audits, claims, demands, orders or disputes
with respect to any such infringement, misappropriation, dilution, violation,
impairment, contest or challenge. No judgment or order regarding any such
infringement, misappropriation, dilution, violation, impairment, contest or
challenge has been rendered by any competent Governmental Authority, and no
settlement agreement or similar contract has been entered into by Holdings, the
Borrower or their respective Restricted Subsidiaries with respect to any such
infringement, misappropriation, dilution, violation, impairment, contest or
challenge.
3.10 TAXES. Each of Holdings, the Borrower and each of
their respective Subsidiaries has filed or caused to be filed all Federal, state
and other material tax returns that are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings, the Borrower or their
respective Subsidiaries, as the case may be); and no tax Lien has been filed,
and, to the knowledge of Holdings and the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
3.11 FEDERAL REGULATIONS. No part of the proceeds of any
Revolving Loan will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U as
now and from time to time hereafter in effect or for any purpose that violates
the provisions of the Regulations of the Board. If requested by any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent
and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 LABOR MATTERS. There are no strikes or other labor
disputes against Holdings, the Borrower or any of their respective Subsidiaries
pending or, to the knowledge of Holdings or the Borrower, threatened that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. Hours worked by and payment made to employees of
Holdings, the Borrower and their respective Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
27
Holdings, the Borrower or any of their respective Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid have
been paid or accrued as a liability on the books of Holdings, the Borrower or
the relevant Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither Holdings, the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither Holdings, the Borrower nor any
Commonly Controlled Entity would become subject to any material liability under
ERISA if Holdings, the Borrower or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
No such Multiemployer Plan is in Reorganization or Insolvent.
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
3.15 SUBSIDIARIES.
(a) The Subsidiaries listed on SCHEDULE 3.15 constitute
all the Subsidiaries of Holdings at the date hereof, including all Unrestricted
Subsidiaries. SCHEDULE 3.15 sets forth as of the Closing Date the name and
jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the
percentage of each class of Capital Stock owned by each Loan Party. Except as
identified on SCHEDULE 3.15, no Subsidiary or Holdings or the Borrower is an
Unrestricted Subsidiary.
(b) Except as listed on SCHEDULE 3.15, there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary.
3.16 USE OF PROCEEDS. The proceeds of the Revolving Loans
shall be used by Borrower primarily for the purchase of spot coal necessary for
Borrower to fulfill delivery requirements under Coal Supply Agreements, as well
as for general corporate purposes and to pay related fees and expenses, but not
to pay Indebtedness of Holdings or any of its Subsidiaries or interest, fees or
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charges associated with any such Indebtedness (other than the Obligations). No
proceeds of the Revolving Loans shall be used by Holdings or any of its
Subsidiaries in respect of unemployment insurance, black lung or other types of
social security benefits, other insurance or self insurance arrangements,
reclamation and other obligations incurred in connection with obtaining
Environmental Permits.
3.17 ENVIRONMENTAL MATTERS. Other than exceptions to any
of the following that could not, individually or in the aggregate, reasonably be
expected to result in the payment of a Material Environmental Amount and except
as set forth on Schedule 3.17:
(a) Holdings, the Borrower and their respective
Subsidiaries: (i) are, and within the period of all applicable statutes of
limitation have been, in compliance with all applicable Environmental Laws; (ii)
hold all Environmental Permits (each of which is in full force and effect)
necessary for any of their current operations or for any property owned, leased,
or otherwise operated by any of them; and (iii) are, and within the period of
all applicable statutes of limitation have been, in material compliance with all
of their Environmental Permits.
(b) Materials of Environmental Concern are not present
at, on, under, in, or about any real property now or formerly owned, leased or
operated by Holdings or any of its Subsidiaries, or at any other location
(including, without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which could reasonably be expected to (i) give rise to liability of
Holdings or any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to Holdings or any of its Subsidiaries, or (ii)
interfere with Holdings' or any of its Subsidiaries' continued operations, or
(iii) impair the fair saleable value of any real property owned or leased by
Holdings or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which Holdings or any of its Subsidiaries
is, or to the knowledge of Holdings or any of its Subsidiaries will be, named as
a party that is pending or, to the knowledge of Holdings or any of its
Subsidiaries, threatened.
(d) Neither Holdings nor any of its Subsidiaries has
received any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal Comprehensive
Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.
(e) Neither Holdings nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other agreement,
in any judicial, administrative, arbitral, or other forum for dispute
resolution, relating to compliance with or liability under any Environmental
Law.
(f) Since December 31, 2008, neither Holdings nor any of
its Subsidiaries has assumed or retained, by contract or operation of law, any
liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental Concern.
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3.18 ACCURACY OF INFORMATION, ETC. No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished, any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements contained
herein or therein not misleading. The projections in the materials referenced
above are based upon good faith estimates and assumptions believed by management
of the Borrower to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
3.19 SECURITY DOCUMENTS.
(a) The Security Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the
Security Agreement, when any stock certificates representing such Pledged Stock
are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Security Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 3 to the
Security Agreement (which financing statements have been duly completed and
delivered to and authorized to be filed by the Administrative Agent) and such
other filings as are specified in the Security Agreement have been completed
(all of which filings have been duly completed), the Security Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Security
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 6.3) and a fully perfected second priority Lien on any Collateral
pledged in connection with Indebtedness incurred under Section 6.2(g).
(b) Each of the Mortgages is effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable Lien on the Mortgaged Properties described therein and
proceeds thereof; and when the Mortgages are filed in the offices specified on
SCHEDULE 3.19(B) (in the case of the Mortgages to be executed and delivered on
the Closing Date) or in the recording office designated by the Borrower (in the
case of any Mortgage to be executed and delivered pursuant to Section 5.10(b)),
each Mortgage shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in the Mortgaged
Properties described therein and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (other than Persons holding Liens or other
encumbrances or rights permitted by the relevant Mortgage).
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3.20 SENIOR INDEBTEDNESS. The Obligations of the Borrower
and any Guarantor constitute "First Lien Obligations" of the Borrower and any
Guarantor under and as defined in the Senior Secured Indenture and the
Intercreditor Agreement.
3.21 SOLVENCY. Each Loan Party is, and after giving effect
to the incurrence of all Indebtedness and obligations being incurred in
connection herewith will be and will continue to be, Solvent.
3.22 REGULATION H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).
3.23 COAL ACT; BLACK LUNG ACT. Each Loan Party and their
respective "RELATED PERSONS" (as defined in the Coal Act) is in compliance in
all material respects with the Coal Act and none of the Loan Parties or their
related persons has any liability under the Coal Act except with respect to
premiums or other payments required thereunder which have been paid when due and
except to the extent that the liability thereunder, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Each Loan Party is in compliance in all material respects with the Black
Lung Act, and none of the Loan Parties has any liability under the Black Lung
Act except with respect to premiums, contributions or other payments required
thereunder which have been paid when due and except to the extent that the
liability thereunder individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The
agreement of each Lender to make the initial extension of credit requested to be
made by it hereunder is subject to the satisfaction, prior to or concurrently
with the making of such extension of credit on the Closing Date, of the
following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have
received (i) this Agreement, (ii) the Security Agreement, (iii) the
Intercreditor Agreement, (iv) the Intellectual Property Security Agreement, and
(v) Mortgages with respect to each Mortgaged Properties (other than as set forth
in Section 5.13(b)), each executed and delivered by a duly authorized officer of
each party thereto.
(b) FINANCIAL STATEMENTS. The Lenders shall have received
audited consolidated financial statements of Holdings and its consolidated
Subsidiaries for the 2006, 2007 and 2008 fiscal years; and such financial
statements shall not, in the reasonable judgment of the Administrative Agent,
reflect any material adverse change in the consolidated financial condition of
Holdings and its consolidated Subsidiaries, as reflected in the financial
statements or projections previously delivered to the Lenders.
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(c) APPROVALS. All governmental and third party approvals
(including regulatory approvals, landlords' and other consents) necessary in
connection with the continuing operations of Holdings, the Borrower and their
respective Subsidiaries and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the financing contemplated hereby.
(d) RELATED AGREEMENTS. The Administrative Agent shall
have received (in a form reasonably satisfactory to the Administrative Agent),
true and correct copies, certified as to authenticity by the Borrower, of supply
Agreements and such other documents or instruments as may be reasonably
requested by the Administrative Agent, including, without limitation, a copy of
any debt instrument, security agreement or other material contract to which the
Loan Parties may be a party.
(e) FEES. The Lenders and the Administrative Agent shall
have received all fees required to be paid, and all expenses for which invoices
have been presented (including reasonable fees, disbursements and other charges
of counsel to the Administrative Agent), on or before the Closing Date. All such
amounts will be paid with proceeds of Revolving Loans made on the Closing Date
and will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(f) CLOSING DATE PROJECTIONS. The Lenders shall have
received satisfactory PRO FORMA financial projections (the "CLOSING DATE
PROJECTIONS") for the period from the Closing Date through December 31, 2009,
which shall contain the Borrower's anticipated, income statements, on a
consolidated basis for Holdings and its Subsidiaries, on a monthly basis for the
period commencing on the Closing Date and ending on December 31, 2009.
(g) LIEN SEARCHES. The Administrative Agent shall have
received the results of a recent lien search in each of the jurisdictions in
which Uniform Commercial Code financing statement or other filings or
recordations should be made to evidence or perfect security interests in all
assets of the Loan Parties, and such search shall reveal no liens on any of the
assets of the Loan Parties, except for Liens permitted by Section 6.3.
(h) CLOSING CERTIFICATES; SECRETARY'S CERTIFICATES; GOOD
STANDING CERTIFICATES. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of EXHIBIT C, with appropriate insertions and attachments, (ii) a
certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying (A) the names and true signatures of each officer of such Loan Party
that has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party, (B) the true, correct and complete copy of the by-laws (or
equivalent constituent document) of such Loan Party as in effect on the date of
such certification, (C) the true, correct and complete copy of the resolutions
of such Loan Party's Board of Directors (or equivalent governing body) approving
and authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party and (D) the true, correct and
complete copy of the articles or certificate of incorporation (or equivalent
constituent document) of each Loan Party, certified as of a recent date by the
32
Secretary of State of the state of organization of such Loan Party and there
have been no changes in the certificate of incorporation (or equivalent
constituent document) of such Loan Party from the certificate of incorporation
(or equivalent constituent document) as attached thereto, and (iii) certificates
of such official attesting to the good standing of each such Loan Party.
(i) LEGAL OPINIONS. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Xxxxxx Xxxxxxxx &
Markiles, LLP, counsel to the Loan Parties,
in form and substance reasonably
satisfactory to the Administrative Agent;
(ii) the legal opinion of Trenam, Kemker, Scharf,
Barkin, Frye, X'Xxxxx & Xxxxxx, Professional
Association, special counsel to Holdings, in
form and substance reasonable satisfactory
to the Administrative Agent; and
(iii) the legal opinion of Xxxxxx & Xxxxxxxx PLLC,
special counsel to the Loan Parties, in form
and substance reasonably satisfactory to the
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(j) PLEDGED STOCK; STOCK POWERS; ACKNOWLEDGMENT AND
CONSENT; PLEDGED NOTES . The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant to the
Security Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof, and (ii) each promissory note pledged pursuant to the Security
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank satisfactory to the Administrative Agent) by the pledgor
thereof.
(k) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by
Section 6.3), shall have been filed, registered or recorded or shall have been
delivered to the Administrative Agent be in proper form for filing, registration
or recordation. The Administrative Agent, for the benefit of the Secured
Parties, shall have been granted a second priority lien on pledged cash of the
Loan Parties.
(l) NO MATERIAL ADVERSE EFFECT. The Administrative Agent
and the Lenders shall be satisfied that, prior to the Closing Date, there has
not occurred (i) any Material Adverse Change since December 31, 2008 or (ii) a
material disruption of or material adverse change in the financial, banking or
capital markets.
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(m) FULL DISCLOSURE. The Administrative Agent and the
Lenders not becoming aware prior to the Closing Date of any information or other
matter (including any matter relating to financial models and underlying
assumptions relating to the Closing Date Projections) affecting Holdings, the
Borrower and their respective Subsidiaries or the transactions contemplated
hereby that in their reasonable judgment is inconsistent in a material and
adverse manner with any such information or other matter disclosed to them prior
to the Closing Date.
(n) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of such date as if made on and as
of such date (except as expressly provided in such representation or warranty).
(o) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
4.2 CONDITIONS TO ADDITIONAL REVOLVING LOANS. The
agreement of each Lender to make each extension of credit requested to be made
by it hereunder is subject to the satisfaction, prior to or concurrently with
the making of such extension of credit on a Funding Date, of the following
conditions precedent:
(a) BORROWING NOTICE. The Agent shall have received a
duly executed Borrowing Notice with respect to the Revolving Loans to be
borrowed on the applicable Funding Date not less than five (5) Business Days
prior to such Funding Date in accordance with Section 2.2(b).
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
(c) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date (except as expressly provided in such
representation or warranty).
(d) REVOLVING LOANS IN EXCESS OF THE REVOLVING LOAN
SUBLIMIT. In the case of any borrowing of Revolving Loans which would cause the
aggregate principal balance of the Revolving Loans to exceed the Revolving Loan
Sublimit for the first time, Borrower shall have satisfied each of the
conditions set forth in Section 2.2(b).
4.3 Proof of Renewal of Insurance. Notwithstanding
anything to the contrary set forth herein, until the Administrative Agent shall
have received insurance certificates satisfying the requirements of Section 4.3
of the Security Agreement and proof that such insurance is in full force and
effect through at least March 1, 2010, the aggregate principal balance of the
Revolving Loans shall not exceed $500,000.
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SECTION 5. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Revolving Loan Commitments remain in effect or any
Revolving Loan or other amount is owing to any Lender or the Administrative
Agent hereunder, each of Holdings and the Borrower shall, and shall cause each
of their respective Restricted Subsidiaries to:
5.1 FINANCIAL STATEMENTS. Furnish to the Administrative
Agent and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Holdings (or such longer period that may be
available to Holdings to file annual financial statements with the SEC pursuant
to the Exchange Act), a copy of the audited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures as of the end
of and for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by Ernst & Young LLP or other independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than
50 days after the end of each of the first three quarterly periods of each
fiscal year of Holdings, the unaudited consolidated balance sheet of Holdings
and its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income for such quarter and the related
unaudited consolidated statements of income and of cash flows for the portion of
the fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding period
in the previous year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than
30 days after the end of each month occurring during each fiscal year of
Holdings (other than the third, sixth and ninth such month), the unaudited
consolidated balance sheets of Holdings and its Subsidiaries as at the end of
such month and the related unaudited consolidated statements of income and of
cash flows for such month and the portion of the fiscal year through the end of
such month, setting forth in each case in comparative form each of (x) the
figures for the such period set forth in the Projections delivered pursuant to
Section 5.2(c) below, (y) the figures as of the end of and for the corresponding
period in the previous year and (z) a budget for Holdings and its Subsidiaries
for each fiscal year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit adjustments)
beginning with January 1, 2009;
All such financial statements to present fairly Holdings' consolidated financial
position at the dates thereof and of its operations and cash flows for the
periods then ended and to be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
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5.2 CERTIFICATES; OTHER INFORMATION. Furnish to the
Administrative Agent and each Lender:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate (it being
understood that such certificate shall be limited to the items that independent
certified public accountants are permitted to cover in such certificates
pursuant to their professional standards and customs of the profession);
(b) concurrently with the delivery of any financial
statements pursuant to Section 5.1, (i) a Compliance Certificate (x) stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate, and (y)
containing all information and calculations necessary for determining compliance
by Holdings, the Borrower and their respective Subsidiaries with the provisions
of this Agreement referred to therein as of the last day of the fiscal month,
fiscal quarter or fiscal year of Holdings, as the case may be, and (ii) in the
case of quarterly or annual financial statements, (x) to the extent not
previously disclosed to the Administrative Agent, a listing of any county or
state within the United States where any Loan Party keeps inventory or equipment
and of any Intellectual Property acquired by any Loan Party since the date of
the most recent list delivered pursuant to this clause (x) (or, in the case of
the first such list so delivered, since the Closing Date) and (y) any UCC
financing statements or other filings specified in such Compliance Certificate
as being required to be delivered therewith;
(c) as soon as available, and in any event no later than
30 days after the end of each fiscal year of Holdings, a detailed consolidated
monthly budget for the following fiscal year (including a projected consolidated
balance sheet of Holdings and its Subsidiaries as of the end of the following
fiscal year, and the related consolidated statements of projected cash flow,
projected changes in financial position and projected income), and copies of all
budgets and financial projections provided to the Board of Directors of Holdings
and/or the Borrower, and, as soon as available, significant revisions, if any,
of such budget and projections with respect to such fiscal year (collectively,
the "PROJECTIONS"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions and that such Responsible
Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;
(d) upon Holdings ceasing to be a public reporting
company, within 40 days after the end of each fiscal quarter of Holdings (or at
any time during which a Default or Event of Default related to Sections 5.1, 5.2
or 6.1 has occurred and is continuing, within 40 days after the end of each
fiscal month of the Borrower), a narrative discussion and analysis of the
financial condition and results of operations of Holdings and its Subsidiaries
for such fiscal quarter or month, as the case may be, and for the period from
36
the beginning of the then current fiscal year to the end of such fiscal quarter
or month, as the case may be, as compared to the portion of the Projections
covering such periods and to the comparable periods of the previous year;
(e) within 5 days after the same are sent, copies of all
financial statements and reports that Holdings sends to the holders of any class
of its debt securities or public equity securities and, within five days after
the same are filed, copies of all financial statements and reports that Holdings
may make to, or file with, the SEC;
(f) as soon as possible and in any event within 10 days
of obtaining knowledge thereof: (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or conditions,
could reasonably be expected to result in the payment by Holdings and its
Subsidiaries, in the aggregate, of a Material Environmental Amount; and (ii) any
notice that any governmental authority may deny any application for a
Environmental Permit sought by, or revoke or refuse to renew any Environmental
Permit held by, the Borrower and necessary in the operation of its business;
(g) as soon as available but no later than Tuesday of
each week, a summary of the following information as at the end of the prior
week: (i) the number of tons of Coal produced by each Loan Party from mining
operations, (ii) tons of Coal produced per Mine, (iii) tons of Coal purchased
from third parties in order to meet the minimum delivery requirements under the
Coal Supply Agreements entered into by each Loan Party and the purchase price
per ton of such Coal, (iv) tons of Coal sold with a listing of customers and
sale prices per ton, and (v) detail of any force majeure claim or other
contractual remedy made by any Loan Party that purports to excuse performance
under the terms of any Coal Supply Agreement.
(h) as soon as available but within 30 days after the end
of each month, a detailed report of Capital Expenditures reflecting Growth Capex
and Maintenance Capex; and
(i) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Holdings or its Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE,
ETC. (a) Preserve, renew and keep in full force and effect its corporate or
other existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except, in each case, as otherwise permitted by Section 6.4; and (b)
comply with all Contractual Obligations (including Mine Permits) and
Requirements of Law (including Mining Laws), except to the extent that failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE . (a) Keep all
Property and systems useful and necessary in its business in good working order
and condition, ordinary wear and tear excepted, (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
37
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business, (c) maintain all rights, permits, licenses, approvals and
privileges (including all Mining Permits) used or useful or necessary in the
conduct of its business as then being conducted, and (d) maintain Coal reserves,
or the rights to acquire coal from third parties, sufficient to fulfill its
requirements under its Coal Supply Agreements.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; FIELD
AUDITS. (a) Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities, and (b) on reasonable advance notice, permit representatives of any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of Holdings, the Borrower and their respective
Subsidiaries with officers and employees of Holdings, the Borrower and their
respective Subsidiaries and with its independent certified public accountants;
provided, however, that unless an Event of Default has occurred and is
continuing at the time such inspection commences, the Borrower shall not be
required to pay expenses relating to more than two (2) inspections in any
twelve-month period; provided, further, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Loan Parties at any time during normal business hours and without advance
notice. In addition, the Loan Parties will permit, and will cause each
Subsidiary to permit, representatives of the Administrative Agent to conduct a
semi-annual field audit of the Borrower's and its Subsidiaries' assets at the
expense of the Borrower; provided that so long as no Event of Default exists,
the Borrower shall only be responsible for the costs and expenses of two (2)
such audits per year.
5.7 NOTICES. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of Holdings, the Borrower or any of their respective
Subsidiaries or (ii) litigation, investigation or proceeding which may exist at
any time between Holdings, the Borrower or any of their respective Subsidiaries
and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the
Borrower or any of their respective Subsidiaries in which the amount involved is
$250,000 or more and not covered by insurance or in which injunctive or similar
relief is sought;
(d) the following events, as soon as possible and in any
event within 10 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor of
38
the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
5.9 ADDITIONAL COLLATERAL, ETC.
(a) With respect to any Property acquired after the
Closing Date by Holdings, the Borrower or any of their respective Restricted
Subsidiaries (other than (x) any Property described in paragraph (b) or
paragraph (c) of this Section, or (y) any Property subject to a Lien expressly
permitted by Section 6.3(g) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Security
Agreement or such other documents as the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Secured
Parties, a security interest in such Property, and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected first priority security interest in such
Property, including without limitation, the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Security
Agreement or by law or as may be requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $250,000
individually or in the aggregate acquired after the Closing Date by Holdings,
the Borrower or any of their respective Restricted Subsidiaries (other than any
such real property subject to a Lien expressly permitted by Section 6.3(g)),
promptly (i) execute and deliver a first priority Mortgage in favor of the
Administrative Agent, for the benefit of the Secured Parties, covering such real
property, (ii) if requested by the Administrative Agent, provide the Lenders
39
with (x) to the extent available and customary within the jurisdiction of such
real property, title and extended coverage insurance covering such real property
in an amount at least equal to the purchase price of such real property (or such
other amount as shall be reasonably specified by the Administrative Agent) as
well as a current ALTA survey thereof, together with a surveyor's certificate,
and (y) any consents or estoppels reasonably deemed necessary or advisable by
the Administrative Agent in connection with such Mortgage, each of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent, and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Restricted Subsidiary created
or acquired after the Closing Date (which, for the purposes of this paragraph,
shall include any existing Subsidiary that ceases to be a Unrestricted
Subsidiary but shall exclude any newly created Unrestricted Subsidiary) by
Holdings, the Borrower or any of their respective Subsidiaries, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Security
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Restricted
Subsidiary that is owned by Holdings, the Borrower or any of their respective
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of Holdings, the Borrower or
such Subsidiary, as the case may be, (iii) cause such new Restricted Subsidiary
(A) to become a party to the applicable security document, and (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the
benefit of the Secured Parties a perfected first priority security interest in
the Collateral described in the Security Agreement with respect to such new
Restricted Subsidiary, including, without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Security Agreement or by law or as may be requested by the Administrative
Agent, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Unrestricted Subsidiary
created or acquired after the Closing Date by Holdings, the Borrower or any of
their respective Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Security Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by Holdings, the Borrower or any of their respective
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of Holdings, the Borrower or
such Subsidiary, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Lien of the Administrative Agent thereon, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
40
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) Attached hereto as EXHIBIT H is a true and correct
list of all cash, certificates of deposit, securities and other assets of the
Loan Parties utilized to purchase or post reclamation, surety or similar bonds
or pledged to secure or support reclamation obligations (collectively, the
"RECLAMATION BOND ASSETS"). To the extent that any portion of the Reclamation
Bond Assets is released and not reused by the Borrower and the Subsidiary
Guarantors to purchase or post new reclamation, surety or similar bonds or
pledged to secure or support new reclamation obligations, the Loan Parties shall
promptly (i) pledge and deliver such assets to the Administrative Agent, for the
benefit of the Secured Parties, as additional Collateral, and (ii) take all
actions necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
such assets.
5.10 FURTHER ASSURANCES. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by Holdings, the Borrower or any Subsidiary Guarantor which
may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Administrative Agent or any Lender of any power, right,
privilege or remedy pursuant to this Agreement or the other Loan Documents which
requires any consent, approval, recording, qualification or authorization of any
Governmental Authority, Holdings and the Borrower will execute and deliver, or
will cause the execution and delivery of, all applications, certifications,
instruments and other documents and papers that the Administrative Agent or such
Lender may be required to obtain from Holdings, the Borrower or any of their
respective Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
5.11 COAL RELATED MATTERS; MINING.
(a) Holdings, the Borrower and each of their respective
Subsidiaries shall comply with the Black Lung Act and all other laws, rules and
regulations relating to coal workers' pneumoconiosis, workers' compensation and
land reclamation in all material respects. To the extent required by GAAP,
maintain adequate reserves for (i) future costs associated with any lung disease
claim alleging pneumoconiosis or silicosis or arising out of exposure or alleged
exposure to coal dust or the coal mining environment, (ii) future costs
associated with retiree and health care benefits, (iii) future costs associated
with reclamation of disturbed acreage, removal of facilities and other closing
costs in connection with its mining operations and (iv) future costs associated
with other potential environmental liabilities.
(b) Holdings, the Borrower and each of their respective
Subsidiaries shall take all commercially reasonable efforts to ensure that all
of its tenants, subtenants, contractors, subcontractors, and invitees comply in
all material respects with all applicable Mining Laws, and obtain, comply in all
respects with and maintain any and all material Mining Permits, applicable to
41
any of them; and conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions in each case required under
applicable Mining Laws and promptly comply in all respects with all lawful
orders and directives of all Governmental Authorities regarding applicable
Mining Laws except to the extent that the same are being contested in good faith
by appropriate proceedings and the pendency of such proceedings would not be
reasonably expected to have a Material Adverse Effect.
(c) Each of Holdings and the Borrower shall, and shall
cause each of their respective Subsidiaries to, cause each Mine being operated
by a Loan Party to be operated, maintained, developed and mined and cause the
associated processing plants and other fixed and operating assets to be operated
and maintained, in a workmanlike manner, as would a prudent coal mine operator,
and in accordance with generally accepted mining practices and all applicable
Requirements of Law, including but not limited to applicable Mining Laws and
Environmental Laws, except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.
SECTION 6. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Revolving Loan Commitments remain in effect, or any
Revolving Loan or other amount is owing to any Lender or the Administrative
Agent hereunder, each of Holdings and the Borrower shall not, and shall not
permit any of their respective Restricted Subsidiaries to, directly or
indirectly:
6.1 MINIMUM COAL PRODUCTION AND SHIPMENTS.
(a) MINIMUM COAL PRODUCTION. Permit production of Coal
from Mining operations of the Loan Parties to be less than the amounts set forth
below for each calendar quarter ending on the dates indicated:
MINIMUM COAL PRODUCTION MINIMUM COAL PRODUCTION
REVOLVING LOAN BALANCE REVOLVING LOAN BALANCE
QUARTER ENDING < $5,000,000 > $5,000,000
-------------- ----------------------- -----------------------
March 31, 2009 189,000 tons 252,000 tons
June 30, 2009 189,000 tons 252,000 tons
September 30, 2009 189,000 tons 252,000 tons
December 31, 2009 189,000 tons 252,000 tons
In the event the Loan Parties are unable to meet the requirements for the
production of Coal set forth above for any calendar quarter, it shall not
constitute a Default under this Agreement if within ten (10) Business Days after
the end of such calendar quarter, the Loan Parties supplement any deficiency in
production with purchased Coal, so long as Borrower demonstrates to the
Administrative Agent's satisfaction that the purchase of such Coal is profitable
to the applicable Loan Party based upon the Coal Supply Agreement(s) being
fulfilled.
42
(b) Minimum Coal Shipments. Permit total shipments of
Coal by the Loan Parties pursuant to Coal Supply Agreement to be less than the
amounts set forth below for each calendar quarter ending on the dates indicated:
MINIMUM COAL PRODUCTION MINIMUM COAL PRODUCTION
REVOLVING LOAN BALANCE REVOLVING LOAN BALANCE
QUARTER ENDING < $5,000,000 > $5,000,000
-------------- ----------------------- -----------------------
March 31, 2009 189,000 tons 252,000 tons
June 30, 2009 189,000 tons 252,000 tons
September 30, 2009 189,000 tons 252,000 tons
December 31, 2009 189,000 tons 252,000 tons
(c) Minimum Liquidity. Permit the Available Credit plus
unrestricted cash and Cash Equivalents at any time to be less than $1,000,000.
6.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of a Loan Party to another Loan Party;
(c) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate
principal amount not to exceed $8,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and
listed on SCHEDULE 6.2(D) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower or any Subsidiary Guarantor;
(f) Indebtedness and Guarantee Obligations in connection
with the Senior Secured Note Documents;
(g) Indebtedness in respect of workers' compensation
claims, payment obligations in connection with health or other types of social
security benefits, unemployment or other insurance or self-insurance
obligations, statutory obligations, bankers' acceptances, performance,
reclamation, surety or similar bonds and letters of credit and completion or
performance guarantees (including, without limitation, performance guarantees
pursuant to coal supply agreements or equipment leases) in the ordinary course
of business;
(h) Guarantee Obligations of Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so long as
such Indebtedness is covered within five (5) Business Days;
43
(i) Indebtedness pursuant to letters of credit not issued
under this Agreement and used to support any obligations in respect of
unemployment insurance, black lung or other types of social security benefits,
other insurance or self insurance arrangements, reclamation and other
obligations incurred in connection with obtaining Environmental Permits, the
performance of bids, tenders, statutory obligations, sales, leases, contracts
(other than for the repayment of borrowed money) and surety, appeal, customs,
performance or return of money bonds and workers' compensation or other types of
social security benefits or to secure the performance of statutory obligations,
surety, appeal and other similar obligations up to an aggregate principal amount
not to exceed $15,000,000 at any time;
(j) Permitted Refinancing Indebtedness; and
(k) additional unsecured Indebtedness of Holdings or any
of its Restricted Subsidiaries in an aggregate principal amount (for the
Borrower and all Restricted Subsidiaries) not to exceed $500,000 at any one time
outstanding.
6.3 LIMITATION ON LIENS. Create, incur, assume or suffer
to exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, PROVIDED that adequate
reserves with respect thereto are maintained on the books of Holdings or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or any of its
Restricted Subsidiaries;
(f) Liens securing Indebtedness permitted by Section
6.2(d) in existence on the date hereof (i) listed on SCHEDULE 6.3(F) and (ii)
with respect to leased equipment, PROVIDED that no such Lien is spread to cover
any additional Property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any
other Restricted Subsidiary incurred pursuant to Section 6.2(c) to finance the
acquisition of fixed or capital assets, PROVIDED that (i) such Liens shall be
created substantially simultaneously with the acquisition of such fixed or
44
capital assets, (ii) such Liens do not at any time encumber any Property other
than the Property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the amount of
Indebtedness initially secured thereby is not less than 80%, or more than 100%
of the purchase price of such fixed or capital asset;
(h) Liens created pursuant to the Security Documents and
the Senior Secured Note Documents, which liens shall have the priority set forth
in the Intercreditor Agreement;
(i) any interest or title of a lessor under any lease
entered into by the Borrower or any other Restricted Subsidiary in the ordinary
course of its business and covering only the assets so leased; and
(j) Liens securing (i) Indebtedness of Holdings or any
Subsidiary incurred pursuant to Section 6.2(i), and (ii) cash or Cash
Equivalents pledged in connection with the supporting obligations incurred by
Holdings or any Subsidiary pursuant to Section 6.2(i).
6.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or Dispose of all or substantially
all of its Property or business, except that:
(a) any Subsidiary of Holdings may be merged or
consolidated with or into Holdings (PROVIDED that Holdings shall be the
continuing or surviving corporation) or with or into any Subsidiary Guarantor
(PROVIDED that (i) the Subsidiary Guarantor shall be the continuing or surviving
corporation, or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Subsidiary Guarantor and the Borrower shall
comply with Section 5.10 in connection therewith);
(b) any Subsidiary of Holdings may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor; and
(c) any Subsidiary of Holdings may consummate a Permitted
Acquisition.
6.5 LIMITATION ON DISPOSITION OF PROPERTY. Dispose of any
of its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete, damaged, surplus or worn
out property in the ordinary course of business;
(b) the sale of inventory in the ordinary course of
business;
(c) Dispositions permitted by Section 6.4(b); and
(d) the sale or issuance of any Subsidiary's Capital
Stock to Holdings, the Borrower or any Subsidiary Guarantor.
45
6.6 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Holdings, the Borrower
or any of their respective Subsidiaries, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of Holdings, the
Borrower or any of their respective Restricted Subsidiaries, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating
Holdings, the Borrower or any of their respective Restricted Subsidiaries to
make payments to such Derivatives Counterparty as a result of any change in
market value of any such Capital Stock (collectively, "Restricted Payments"),
except that Borrower or any Subsidiary may make Restricted Payments to Holdings
or any Subsidiary Guarantor.
6.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to
make any Capital Expenditure, except Capital Expenditures of the Loan Parties in
the ordinary course of business not exceeding $12,000,000 in any fiscal year.
6.8 LIMITATION ON INVESTMENTS. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence
of Indebtedness permitted by Section 6.2(b) and (e);
(d) loans and advances to employees of Holdings, the
Borrower or any Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and relocation
expenses) in an aggregate amount for Holdings, the Borrower and Subsidiaries of
the Borrower not to exceed $25,000 at any one time outstanding;
(e) Investments (other than those relating to the
incurrence of Indebtedness permitted by Section 6.8(c)) by Holdings, the
Borrower or any of its Subsidiaries in (i) the Borrower or any Person that,
prior to such Investment, is a Subsidiary Guarantor, or (ii) Borrower or any
Subsidiary (including any Unrestricted Subsidiary) provided that such Investment
is made (A) in a sum less than or equal to 100% of the aggregate net cash
proceeds, including cash and Cash Equivalents, received by Holdings from the
substantially concurrent issue or sale of Capital Stock of Holdings or from the
substantially concurrent contribution of common equity capital to Holdings or
(B) by the issuance and contribution by Holdings of its Capital Stock to
Borrower or such other Subsidiary (including any Unrestricted Subsidiary);
(f) Investments made pursuant to a Permitted Acquisition;
46
(g) investments in certificates of deposit and similar
instruments of Xxxxxx County Bank and Regions Bank in an amount not to exceed
$16.0 million, and used by Holdings, the Borrower or any of its Restricted
Subsidiaries for the sole purpose of enabling Holdings, the Borrower or any of
its Restricted Subsidiaries to purchase or post reclamation, surety, or similar
bonds, and any extensions or renewals thereof, provided that the aggregate
amount of all such certificates of deposit or similar instruments shall not
exceed $16.0 million; and
(h) investments in certificates of deposit and similar
instruments with maturities of thirty-six months or less from the date of
acquisition with any Lender or with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B"
or better which are used, in each case, by Holdings, the Borrower or any of its
Restricted Subsidiaries for the sole purpose of enabling Holdings, the Borrower
or any of its Restricted Subsidiaries to purchase or post reclamation, surety,
or similar bonds, and any extensions or renewals thereof.
6.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
DEBT INSTRUMENTS, ETC. (a) Except in connection with any debt-for-equity swap
providing for the substantially concurrent issue or sale of Capital Stock of
Holdings in exchange for the payment, prepayment, repurchase or redemption of
any debt of Holdings, Borrower or any Subsidiary (including any Unrestricted
Subsidiary), which swap may provide for the payment of interest in Cash
Equivalents, make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Secured Notes, or segregate funds for any such payment,
prepayment, repurchase, redemption or defeasance, or enter into any derivative
or other transaction with any Derivatives Counterparty obligating Holdings, the
Borrower or any Restricted Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of the Senior Secured
Notes, (b) amend, modify or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Senior Secured Note Documents (other than any such amendment, modification,
waiver or other change which (i) would extend the maturity or reduce the amount
of any payment of principal thereof, reduce the rate or extend the date for
payment of interest thereon or relax any covenant or other restriction
applicable to Holdings, the Borrower or any of their respective Restricted
Subsidiaries and (ii) does not involve the payment of a consent fee) or (c)
amend its certificate of incorporation in any manner determined by the
Administrative Agent to be adverse to the Lenders.
6.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter
into any transaction, including, without limitation, any purchase, sale, lease
or exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement (including any Investment permitted by
SECTION 6.7(E)), (b) in the ordinary course of business of Holdings, the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to Holdings, the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate.
47
6.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by Holdings, the Borrower
or any Restricted Subsidiary of real or personal property which has been or is
to be sold or transferred by Holdings, the Borrower or such Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of Holdings,
the Borrower or such Subsidiary.
6.12 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the
fiscal year of Holdings to end on a day other than December 31 or change
Holdings' method of determining fiscal quarters.
6.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of Holdings, the Borrower or any of their respective Restricted
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the Security
Agreement, other than (a) this Agreement, the other Loan Documents, (b) the
Senior Secured Note Documents, (c) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby), and (d) any agreements which provide by their express terms
that neither the agreement nor any interest therein may be assigned or pledged
without the consent of the other party(ies).
6.14 LIMITATION ON RESTRICTIONS ON SUBSIDIARY
DISTRIBUTIONS. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary (other than an
Unrestricted Subsidiary) to (a) make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the
Borrower or any other Subsidiary, (b) make Investments in the Borrower or any
other Subsidiary or (c) transfer any of its assets to the Borrower or any other
Subsidiary, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and the Senior
Secured Note Documents, (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary, and (iii) any restrictions with respect to a Subsidiary imposed
pursuant to agreements to which such Subsidiary is a party which provide by
their express terms that neither the agreement nor any interest therein may be
assigned or pledged by such Subsidiary without the consent of the other
party(ies).
6.15 LIMITATION ON LINES OF BUSINESS. Enter into any
business, either directly or through any Subsidiary or in connection with a
Permitted Acquisition, except for those businesses in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or that are reasonably
related thereto.
6.16 LIMITATION ON HEDGE AGREEMENTS. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates, commodity prices or foreign exchange rates.
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SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Revolving Loan when due in accordance with the terms hereof; or the Borrower
shall fail to pay any interest on any Revolving Loan or any other amount payable
hereunder or under any other Loan Document, within five days after any such
interest or other amount becomes due in accordance with the terms hereof or
thereof; or
(b) Any representation or warranty made or deemed made by
any Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made or furnished; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 5.4(a) (with respect to
Holdings and the Borrower only), Section 5.7(a) or Section 6, or in Section 4 of
the Security Agreement (other than Sections 4.1, 4.9 or 4.10) or (ii) an "Event
of Default" under and as defined in any Mortgage shall have occurred and be
continuing; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 15 days (or 5 days
for a default in the observance or performance of any agreement contained in
Section 5.1 or Section 5.2); or
(e) Holdings, the Borrower or any of their respective
Subsidiaries shall (i) default in making any payment of any principal of any
Indebtedness (including, without limitation, any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect thereto;
or (ii) default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of
such holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or to become
subject to a mandatory offer to purchase by the obligor thereunder or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; PROVIDED, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $250,000; or
49
(f) (i) Holdings, the Borrower or any of their respective
Subsidiaries shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or Holdings, the Borrower or any of their
respective Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Holdings, the Borrower or
any of their respective Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 45 days; or (iii) there shall be
commenced against Holdings, the Borrower or any of their respective Subsidiaries
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 30 days from the entry thereof; or (iv) Holdings, the
Borrower or any of their respective Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings,
the Borrower or any of their respective Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of
Holdings, the Borrower or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) Holdings, the Borrower or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders shall be
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if any, could, in the sole judgment of the Required
Lenders, reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered
against Holdings, the Borrower or any of their respective Restricted
Subsidiaries involving for Holdings, the Borrower and their respective
Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $250,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
50
(i) Any of the Security Documents shall cease, for any
reason (other than by reason of the express release thereof pursuant to the
terms thereof), to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any of the
Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) The guarantee contained in Section 2 of the Security
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to the terms thereof), to be in full force and effect
or any Loan Party or any Affiliate of any Loan Party shall so assert;
(k) Any Change of Control shall occur; or
(l) The Liens created pursuant to the Senior Secured Note
Documents shall cease, for any reason, to be validly subordinated to the
Obligations or the obligations of the Subsidiary Guarantors under the Security
Agreement, as provided in the Intercreditor Agreement, or any Loan Party, any
Affiliate of any Loan Party, the Note Trustee in respect of the Senior Secured
Notes or the holders of at least 25% in aggregate principal amount of the Senior
Secured Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above, automatically the Revolving Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Revolving Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents to be due
and payable forthwith, whereupon the same shall immediately become due and
payable.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 APPOINTMENT. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
8.2 DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
51
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
8.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Revolving Note as the owner thereof for all purposes unless such Revolving
Note shall have been transferred in accordance with Section 9.6 and all actions
required by such Section in connection with such transfer shall have been taken.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders or any other instructing group of Lenders
specified by this Agreement) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Revolving Loans.
8.5 NOTICE OF DEFAULT. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Administrative Agent shall have received notice
from a Lender, Holdings or the Borrower referring to this Agreement, describing
52
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent shall receive such a
notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or, if
so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER
LENDERS. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates have made any representations or warranties to it and that no act
by the Administrative Agent hereafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Revolving Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
Holdings or the Borrower and without limiting the obligation of Holdings or the
Borrower to do so), ratably according to their respective Revolving Loan
Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the
Revolving Loan Commitments shall have terminated and the Revolving Loans shall
have been paid in full, ratably in accordance with such Revolving Loan
Percentages immediately prior to such date), for, and to save the Administrative
Agent harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Revolving Loans) be imposed on, incurred
53
by or asserted against the Administrative Agent in any way relating to or
arising out of, the Revolving Loan Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Administrative Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Revolving Loans and
all other amounts payable hereunder.
8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent were not the Administrative Agent. With respect to its
Revolving Loans made or renewed by it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 7(a) or Section
7(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Revolving Loans. If no
successor agent has accepted appointment as Administrative Agent by the date
that is 10 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under this
Agreement and the other Loan Documents.
8.10 AUTHORIZATION TO RELEASE LIENS AND GUARANTEES. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section 5.1
of the Intercreditor Agreement.
54
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 9.1. The Required Lenders and each Loan Party party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive the principal amount or extend the
final scheduled date of maturity of any
Revolving Loan, extend the scheduled date of
any amortization payment in respect of any
Revolving Loan, reduce the stated rate of
any interest or fee payable hereunder or
extend the scheduled date of any payment
thereof, or increase the amount or extend
the expiration date of any Revolving Loan
Commitment of any Lender; require additional
consents to be obtained with respect to the
sale or any assignment or participations of
any interests of the Lenders hereunder, in
each case without the consent of the
Administrative Agent and each Lender
directly affected thereby;
(ii) amend, modify or waive any provision of this
Section, or reduce any percentage specified
in or otherwise amend or modify the
definition of Required Lenders, consent to
the assignment or transfer by the Borrower
of any of its rights and obligations under
this Agreement and the other Loan Documents,
release all or substantially all of the
Collateral or release all or substantially
all of the Subsidiary Guarantors from their
guarantee obligations under the Security
Agreement, in each case without the consent
of the Administrative Agent and all Lenders;
(iii) reduce the percentage specified in the
definition of Required Lenders without the
written consent of the Administrative Agent
and all Lenders;
(iv) amend, modify or waive any provision of
Section 8, or any other provision of this
Agreement affecting the rights and
obligations of the Administrative Agent,
without the consent of the Administrative
Agent; or
55
(v) amend, modify or waive any provision of
Section 2.8 without the consent of the
Administrative Agent and each Lender
directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Revolving Loans.
In the case of any waiver, the Loan Parties, the Lenders and the Administrative
Agent shall be restored to their former position and rights hereunder and under
the other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section; PROVIDED, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.
If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE") requiring the consent of all
affected Lenders, the consent of Required Lenders is obtained but the consent of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.1 being referred to as a
"NON-CONSENTING LENDER"), then, so long as the Lender acting as the
Administrative Agent is not a Non-Consenting Lender, at the Borrower's request,
an Eligible Assignee acceptable to the Administrative Agent shall have the right
with the Administrative Agent's consent and in the Administrative Agent's
reasonable discretion (but shall have no obligation) to purchase from such
Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon
the Administrative Agent's request, sell and assign to the Lender acting as the
Administrative Agent or such Eligible Assignee, all of the applicable Revolving
Loans of such Non-Consenting Lender for an amount equal to the principal balance
of all applicable Revolving Loans held by the Non-Consenting Lender and all
accrued interest and fees with respect thereto through the date of sale;
PROVIDED, HOWEVER, that such purchase and sale shall not be effective until the
Administrative Agent shall have received from such Eligible Assignee an
agreement in form and substance satisfactory to the Administrative Agent and the
Borrower whereby such Eligible Assignee shall agree to be bound by the terms
hereof. Each Lender agrees that, if it becomes a Non-Consenting Lender, it shall
execute and deliver to the Administrative Agent an Assignment an Acceptance to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Revolving Note (if the assigning Lender's Revolving Loans are evidenced by
Revolving Notes) subject to such Assignment and Acceptance; PROVIDED, HOWEVER,
that the failure of any Non-Consenting Lender to execute an Assignment and
Acceptance shall not render such sale and purchase (and the corresponding
assignment) invalid.
9.2 NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy or by electronic mail in "portable document format" (".pdf") form),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered, or three Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when received,
addressed (a) in the case of Holdings, the Borrower and the Administrative
56
Agent, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
Holdings and the Borrower: National Coal Corp.
0000 Xxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxxxx.xxx
with a copy to: Xxxxxx Xxxxxxxx & Markiles, LLP
00000 Xxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx XxXxxxxx, Esq.
Telecopy: (000) 000-0000
Email: xxxxxxxxx@xxxxxxxxxx.xxx
The Administrative Agent: Next View Partners, LLC
00 Xxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxxxx.xxx
with a copy to: Xxxxxxxxx Xxxxxxx, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
E-Mail: xxxxxx@xxxxx.xxx
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or any other Lender shall not be effective until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Revolving Loans and other extensions of credit hereunder.
9.5 PAYMENT OF EXPENSES. The Borrower agrees (a) to pay
or reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the syndication of the Revolving Loan
Facility and the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements
and other charges of counsel to the Administrative Agent in an amount not to
exceed $75,000, (b) to pay or reimburse each Lender and the Administrative Agent
for all their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any other documents prepared in connection herewith or therewith, including,
without limitation, the fees and disbursements of counsel (including the
allocated fees and disbursements and other charges of in-house counsel) to each
such Lender and of counsel to the Administrative Agent, (c) to pay, indemnify,
or reimburse each Lender and the Administrative Agent for, and hold each Lender
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents and (d) to pay, indemnify or reimburse each Lender, the Administrative
Agent, their respective affiliates, and their respective officers, directors,
trustees, employees, advisors, agents and controlling persons (each, an
"Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
use of proceeds of the Revolving Loans or the violation of, noncompliance with
or liability under, any Environmental Law applicable to the operations of
Holdings, the Borrower or any of their respective Subsidiaries or any of their
Properties and the fees and disbursements and other charges of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the
"INDEMNIFIED LIABILITIES"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Indemnitee. No Indemnitee shall
be liable for any damages arising from the use by unauthorized persons of
information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons or
for any special, indirect, consequential or punitive damages in connection with
the Revolving Loan Facility. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
57
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries so to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section shall be
payable not later than 30 days after written demand therefor. Statements payable
by the Borrower pursuant to this Section shall be submitted to the Borrower at
the address of the Borrower set forth in Section 9.2, or to such other Person or
address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Revolving Loans and all other amounts payable hereunder. Notwithstanding
anything to the contrary set forth herein and in the other Loan Documents,
Borrower's obligations to reimburse Administrative Agent for the fees of counsel
to the Administrative Agent in connection with the preparation and negotiation
of the Loan Documents and closing of the transaction contemplated thereby on the
Closing Date shall be limited to $75,000.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND
ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the
benefit of Holdings, the Borrower, the Lenders, the Administrative Agent, all
future holders of the Revolving Loans and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
Administrative Agent and each Lender.
(b) Any Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "PARTICIPANT") participating
interests in any Revolving Loan owing to such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Revolving
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would require the consent of all Lenders pursuant to Section 9.1. The
Borrower agrees that if amounts outstanding under this Agreement and the
Revolving Loans are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7(a) as fully as if such Participant
were a Lender hereunder. The Borrower also agrees that each Participant shall be
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entitled to the benefits of Sections 2.8 and 2.9 with respect to its
participation in the Revolving Loans outstanding from time to time as if such
Participant were a Lender; PROVIDED that, in the case of Section 2.9, such
Participant shall have complied with the requirements of said Section, PROVIDED,
further, that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been entitled
to receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "ASSIGNOR") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Eligible Assignee or, with the consent of
the Administrative Agent and the Borrower (which, in each case, shall not be
unreasonably withheld or delayed), to an additional bank, financial institution
or other entity (each, an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit D (an "ASSIGNMENT AND ACCEPTANCE"),
executed by such Assignee and such Assignor (and, where the consent of the
Administrative Agent and the Borrower is required pursuant to the foregoing
provisions, by the Administrative Agent and the Borrower) and delivered to the
Administrative Agent for its acceptance and recording in the Register; PROVIDED
that no such assignment to an Assignee (other than any Lender or any Affiliate,
Related Fund or Control Investment Affiliate thereof) shall be in an aggregate
principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Administrative Agent. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Revolving Loans as set forth
therein, and (y) the Assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of an Assignor's
rights and obligations under this Agreement, such Assignor shall cease to be a
party hereto, except as to Section 2.8, 2.9 and 9.5 in respect of the period
prior to such effective date). For purposes of the minimum assignment amounts
set forth in this paragraph, multiple assignments by two or more Related Funds
shall be aggregated. Notwithstanding any provision of this Section, the consent
of the Borrower shall not be required for any assignment that occurs at any time
when any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 9.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "REGISTER") for
the recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment of, and principal amount of the Revolving Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Revolving Loans and any Revolving Notes evidencing such Revolving
Loans recorded therein for all purposes of this Agreement. Any assignment of any
Revolving Loan, whether or not evidenced by a Revolving Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Revolving Note shall expressly so provide). Any assignment or transfer
of all or part of a Revolving Loan evidenced by a Revolving Note shall be
59
registered on the Register only upon surrender for registration of assignment or
transfer of the Revolving Note evidencing such Revolving Loan, accompanied by a
duly executed Assignment and Acceptance; thereupon one or more new Revolving
Notes in the same aggregate principal amount shall be issued to the designated
Assignee, and the old Revolving Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled".
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in any case where the consent of
any other Person is required by Section 9.6(c), by each such other Person)
together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (treating multiple, simultaneous assignments by or to
two or more Related Funds as a single assignment) (except that no such
registration and processing fee shall be payable in the case of an Assignee
which is already a Lender or is an affiliate or Related Fund of a Lender or a
Person under common management with a Lender), the Administrative Agent shall
(i) promptly accept such Assignment and Acceptance and (ii) on the effective
date determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the
Revolving Note of the assigning Lender) a new Revolving Note to the order of
such Assignee in an amount equal to the applicable Revolving Loans, assumed or
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained Revolving Loans, upon request, a new Revolving Note to the order of
the Assignor in an amount equal to the applicable Revolving Loans, as the case
may be, retained by it hereunder. Such new Revolving Note or Revolving Notes
shall be dated the Closing Date or Funding Date, as applicable, and shall
otherwise be in the form of the Revolving Note or Revolving Notes replaced
thereby.
(f) The parties to this Agreement acknowledge that the
provisions of this Section concerning assignments of Revolving Loans and
Revolving Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests in Revolving Loans and
Revolving Notes, including, without limitation, any pledge or assignment by a
Lender of any Revolving Loan or Revolving Note to any Federal Reserve Bank in
accordance with applicable law.
9.7 ADJUSTMENTS; SET-OFF.
(a) If any Lender (a "BENEFITED LENDER") shall at any
time receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 7(f), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Obligations, such Benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender's Obligations, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; PROVIDED, HOWEVER, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
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(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
Holdings or the Borrower, any such notice being expressly waived by Holdings and
the Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by Holdings or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Holdings or
the Borrower, as the case may be. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, PROVIDED that the failure to give such notice shall not affect
the validity of such setoff and application.
9.8 COUNTERPARTS. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission, by electronic mail in "portable document
format" (".pdf") form, or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, shall be effective as
delivery of a manually executed counterpart hereof. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
9.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 INTEGRATION. This Agreement and the other Loan
Documents represent the entire agreement of Holdings, the Borrower, the
Administrative Agent and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of Holdings
and the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the
00
Xxxxx xx Xxxxxxxx, xxx xxxxxx xx xxx Xxxxxx Xxxxxx of America for the District
of Illinois, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to Holdings
or the Borrower, as the case may be at its address set forth in Section 9.2 or
at such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
9.13 ACKNOWLEDGMENTS. Each of Holdings and the Borrower
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has
any fiduciary relationship with or duty to Holdings or the Borrower arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Administrative Agent and the Lenders, on one hand,
and Holdings and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Administrative Agent and the Lenders or among Holdings, the
Borrower and the Lenders.
9.14 CONFIDENTIALITY. Each of the Administrative Agent and
the Lenders agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate of any thereof, (b)
to any Participant or Assignee (each, a "Transferee") or prospective Transferee
that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
62
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative or other agent of such party) may disclose to any
and all persons, without limitation of any kind, such party's U.S. federal
income tax treatment and tax structure of the transactions contemplated by this
Agreement relating to such party and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no such party shall disclose any
information relating to such tax treatment or tax structure to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
9.15 ACCOUNTING CHANGES. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
9.16 INTERCREDITOR AGREEMENT. Each Lender hereunder (a)
agrees that it will be bound by and will take no actions contrary to the
provisions of the Intercreditor Agreement and (b) authorizes and instructs the
Administrative Agent to enter into the Intercreditor Agreement on behalf of such
Lender. The foregoing provisions are intended as an inducement to the Lenders to
extend credit and such are intended third party beneficiaries of such provisions
and the provisions of the Intercreditor Agreement.
9.17 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
NATIONAL COAL CORP.,
as Holdings
By: /S/ XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President & CFO
NATIONAL COAL CORPORATION,
as Borrower
By: /S/ XXXXXXX X. XXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President & CFO
NEXT VIEW PARTNERS, LLC,
as Administrative Agent
By: /S/ XXXXXXX X. XXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
