Exhibit 2
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CREDIT AGREEMENT
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CREDIT AGREEMENT
DATED AS OF FEBRUARY 11, 1998,
BY AND AMONG
XXXXX RIVER COAL COMPANY,
AS BORROWER,
THE LENDERS REFERRED TO HEREIN,
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT AND
DOCUMENTATION AGENT,
AND
NATIONSBANK, N.A.,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
SECTION 1 - DEFINITIONS.......................................... 1
1.1 Definitions............................................... 1
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1.2 Miscellaneous............................................. 15
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1.3 References................................................ 15
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SECTION 2 - REVOLVING CREDIT LOANS............................... 15
2.1 Revolving Credit.......................................... 15
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2.2 Revolving Credit Loans.................................... 15
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2.3 Swingline Loans........................................... 16
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2.4 Notes..................................................... 17
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2.5 Fees...................................................... 17
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2.6 Optional Reduction or Termination of Commitment........... 18
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2.7 Notice and Manner of Borrowing............................ 19
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2.8 Prepayments............................................... 19
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2.9 Adjustments............................................... 20
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2.10 Limitations on Advances................................... 20
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SECTION 3 - INTEREST RATES; NOTICES.............................. 20
3.1 Selection of Interest Rate Option......................... 21
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3.2 Payments and Computations................................. 24
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3.3 LIBOR Inadequate or Unfair................................ 24
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3.4 Changes in Law Rendering a LIBOR Loan Unlawful............ 24
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3.5 Reimbursement and Indemnification......................... 25
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3.6 Default Rate.............................................. 26
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SECTION 4 - LETTER OF CREDIT FACILITY............................ 26
4.1 L/C Commitment............................................ 26
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4.2 Procedure for Issuance of Letters of Credit............... 26
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4.3 Commissions and Other Charges............................. 27
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4.4 L/C Participations........................................ 28
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4.5 Reimbursement Obligation of the Company................... 29
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4.6 Obligations Absolute...................................... 29
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4.7 Effect of L/C Application................................. 30
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4.8 Existing NationsBank Letters of Credit.................... 30
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SECTION 5 - REPRESENTATIONS...................................... 30
5.1 Subsidiaries.............................................. 30
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5.2 Good Standing............................................. 31
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5.3 Corporate Authority....................................... 31
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5.4 Binding Agreements........................................ 31
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5.5 Litigation................................................ 31
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5.6 No Conflicting Agreements................................. 31
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5.7 Financial Condition....................................... 32
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5.8 Title to Properties....................................... 32
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5.9 Disclosure................................................ 32
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5.10 Employee Benefit Pension Plans............................ 33
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5.11 Taxes..................................................... 33
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5.12 No Defaults............................................... 33
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5.13 Federal Regulations....................................... 33
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5.14 Environmental Compliance.................................. 34
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5.15 Material Contracts........................................ 34
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5.16 Controlling Stockholders.................................. 34
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SECTION 6 - CONDITIONS OF LENDING AND ISSUING LETTERS OF CREDIT.. 34
6.1 Approval of Bank's Counsel................................ 34
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6.2 Compliance................................................ 34
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6.3 Documents................................................. 35
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6.4 Evidence of Corporate Action.............................. 35
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6.5 Opinion of Company Counsel................................ 35
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6.6 Other Documents........................................... 35
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SECTION 7 - AFFIRMATIVE COVENANTS................................ 35
7.1 Financial Statements and Other Information.;.............. 35
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7.2 Taxes..................................................... 38
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7.3 Payment of Obligations.................................... 38
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7.4 Insurance................................................. 38
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7.5 Corporate Existence....................................... 38
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7.6 Licenses and Permits...................................... 38
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7.7 Properties................................................ 38
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7.8 Employee Benefit Pension Plans............................ 39
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7.9 Business Continuation..................................... 39
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7.10 Compliance with Environmental Laws........................ 39
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7.11 Other Applicable Laws..................................... 39
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7.12 GAAP...................................................... 39
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7.13 Subsequent Guaranty....................................... 39
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SECTION 8 - FINANCIAL COVENANTS.................................. 40
8.1 Consolidated Net Worth.................................... 40
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8.2 Senior Debt to EBITDA Ratio............................... 40
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8.3 Total Debt to EBITDA Ratio................................ 40
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8.4 Fixed Charge Coverage Ratio............................... 40
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SECTION 9 - NEGATIVE COVENANTS................................... 40
9.1 Additional Debt........................................... 40
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9.2 Mortgages And Pledges..................................... 41
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9.3 Dividends................................................. 41
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9.4 Loans, Advances, Investments and Contingent Liabilities... 42
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9.5 Sale of Stock or Debt..................................... 43
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9.6 Merger and Sale of Assets................................. 43
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9.7 Sale and Leaseback........................................ 44
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9.8 Environmental Law Compliance.............................. 44
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9.9 Prepayment of Prudential Debt............................. 44
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9.10 Subordinated Debt......................................... 44
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9.11 Margin Stock.............................................. 44
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9.12 Stockholders' Agreement................................... 45
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9.13 Certain Contracts......................................... 45
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9.14 Restrictions on Subsidiaries.............................. 45
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9.15 First Reserve Agreements.................................. 45
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SECTION 10 - EVENTS OF DEFAULT................................... 46
10.1 Events of Default......................................... 46
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10.2 Remedies.................................................. 48
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10.3 Rights and Remedies Cumulative; Non-Waiver; etc........... 48
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SECTION 11 - THE AGENTS.......................................... 49
11.1 Appointment............................................... 49
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11.2 Delegation of Duties...................................... 49
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11.3 Exculpatory Provisions.................................... 49
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11.4 Reliance by the Agents.................................... 50
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11.5 Notice of Default......................................... 50
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11.6 Non-Reliance on the Agents and Other Lenders.............. 51
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11.7 Indemnification........................................... 51
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11.8 The Agents in Their Individual Capacities................. 52
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11.9 Resignation of the Agents; Successor Agents............... 52
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SECTION 12 - MISCELLANEOUS PROVISIONS............................ 53
12.1 Capital Adequacy.......................................... 53
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12.2 Notices................................................... 53
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12.3 Expenses; Indemnity....................................... 55
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12.4 Set-off................................................... 55
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12.5 Governing Law............................................. 56
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12.6 Consent to Jurisdiction................................... 56
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12.7 Binding Arbitration; Waiver of Jury Trial................. 56
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12.8 Injunctive Relief; Punitive Damages....................... 58
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12.9 Accounting Matters........................................ 58
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12.10 Successors and Assigns; Participations.................... 58
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12.11 Amendments, Waivers and Consents.......................... 61
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12.12 Performance of Duties..................................... 62
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12.13 All Powers Coupled with Interest.......................... 62
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12.14 Survival of Indemnities................................... 62
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12.15 Titles and Captions....................................... 62
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12.16 Severability of Provisions................................ 62
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12.17 Counterparts.............................................. 62
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12.18 Term of Agreement......................................... 62
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CREDIT AGREEMENT, dated as of the 11th day of February, 1998, by and among
XXXXX RIVER COAL COMPANY, a Virginia corporation (the "Company"), the Lenders
who are or may become a party to this Agreement (the "Lenders"), FIRST UNION
NATIONAL BANK, a national banking association (the "Syndication Agent" or the
"Documentation Agent"), as Syndication Agent and Documentation Agent for the
Lenders, and NATIONSBANK, N.A., a national banking association (the
"Administrative Agent"), as Administrative Agent for the Lenders.
STATEMENT OF PURPOSE
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The Company has requested that the Lenders extend, and the Lenders have
agreed to extend, certain credit facilities to the Company on the terms and
conditions contained in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
SECTION 1
DEFINITIONS
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1.1 DEFINITIONS. As used in this Agreement, the following terms shall
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have the meanings herein specified and shall include in the singular number the
plural and in the plural number the singular:
"ADMINISTRATIVE AGENT" means NationsBank in its capacity as Administrative
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Agent hereunder, and any successor appointed pursuant to Section 11.9.
"ADVANCE" means an advance of Revolving Credit Loans by the Lenders to the
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Company pursuant to Section 2.
"AFFILIATE" means, as to any Person, each other Person that directly or
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indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"AGENTS" means the Syndication Agent, the Documentation Agent and/or the
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Administrative Agent as the context may require.
"AGGREGATE COMMITMENT" means the aggregate amount of the Lender's
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Commitments hereunder, as such amount may be reduced or modified at any time and
from time to time pursuant to the terms hereof. On the date hereof, the
Aggregate Commitment is One Hundred Seventy Five Million Dollars
($175,000,000.00).
"AGREEMENT" means this Credit Agreement, as it may be amended from time to
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time by written agreement as herein provided.
"APPLICABLE LIBOR MARGIN" means (i) .875% through and including June 30,
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1998, and (ii) thereafter shall be determined by reference to the Total Debt to
EBITDA Ratio in accordance with the following table:
TOTAL DEBT TO EBITDA RATIO APPLICABLE LIBOR MARGIN
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Higher than 3.0 to 1 1.0%
Higher than 2.25 to 1 but lower .875%
than or equal to 3.0 to 1
Higher than 1.50 to 1 but lower .75%
than or equal to 2.25 to 1
1.50 to 1 or lower .50%
The Applicable LIBOR Margin shall be automatically adjusted as of the first day
of the month following receipt by the Administrative Agent of Consolidated
financial statements of the Company and its Subsidiaries pursuant to Section
7.1(a) or Section 7.1(b) demonstrating to the Administrative Agent's
satisfaction that there has been a change in the Total Debt to EBITDA Ratio
which would cause a change in the Applicable LIBOR Margin in accordance with the
preceding table. Any such change shall apply to all LIBOR Rate Loans
outstanding on such effective date or made on or after such date. At all times
after and during the continuance of a Default and through but excluding the date
on which such Default becomes an Event of Default (at which point Section 3.6
shall be applicable), the Applicable LIBOR Margin shall be 1.0%.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned thereto in
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Section 12.10.
"AUTHORIZED OFFICER" means, with respect to any act to be performed or duty
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to be discharged by any Person which is not an individual, any officer or other
representative thereof then authorized to perform such act or discharge such
duty.
"BASE RATE" means, at any time, the higher of (i) the Prime Rate, or (ii)
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the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance which by request of the Company is to
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bear interest at the Base Rate.
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"BASE RATE LOAN" means a Base Rate Advance or a Revolving Credit Loan or
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portion thereof which bears or is to bear interest at the Base Rate.
"BLUE DIAMOND" means Blue Diamond Coal Company, a Delaware corporation.
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"BUSINESS DAY" means (i) for all purposes other than as set forth in clause
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(ii) below, any day other than a Saturday, Sunday or legal holiday on which
banks in Charlotte, North Carolina and New York, New York, are open for the
conduct of their commercial banking business, and (ii) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (i) and that is also a day for trading by and between banks in U.S.
Dollar deposits in the London interbank market.
"CAPITALIZED LEASE OBLIGATIONS" means, at any date, the amount determined
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in accordance with GAAP which represents the capitalized value of leases of the
Company and its Subsidiaries which appears on the liability side of the
Consolidated balance sheet of the Company and its Subsidiaries.
"CASH TAXES" means the provision for income taxes (exclusive of any
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deferred taxes) shown on the Consolidated quarterly statements of income for the
Company and its Subsidiaries and in the footnotes to the annual audit report of
the Company, and if for any reason such amount is not shown in such statements
or annual report, an amount computed in the same way such amounts were
previously computed in preparing such statements and annual report.
"COMMITMENT" means, as to any Lender, the obligation of such Lender to make
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Revolving Credit Loans to the Company and issue or participate in Letters of
Credit issued for the account of the Company or for the account of the Company
and one or more Subsidiaries hereunder in the aggregate principal or face amount
at any time outstanding not to exceed the amount set forth opposite such
Lender's name under Commitment on Schedule 1 hereto, as the same may be reduced
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or modified at any time and from time to time pursuant to the terms hereof.
"COMMITMENT PERCENTAGE" means, as to any Lender at any time, the ratio of
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(i) the Commitment of such Lender to (ii) the Aggregate Commitment.
"COMMITMENT TERMINATION DATE" means February 11, 2003, or such anniversary
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thereof as may be agreed to in writing by all of the Lenders.
"COMPANY" means Xxxxx River Coal Company, a Virginia corporation, in its
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capacity as borrower hereunder.
"CONSOLIDATED" means, when used with reference to financial statements or
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financial statement items of the Company and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
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"CONSOLIDATED FUNDED DEBT" means, at any date, the Funded Debt of the
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Company and its Subsidiaries, determined on a Consolidated basis, as of such
date.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
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Consolidated interest expense (including, without limitation, the portion of any
obligation under capital leases allocable to interest expense in accordance with
GAAP) of the Company and its Subsidiaries determined in accordance with GAAP for
such period (calculated without regard to any limitation on the payment
thereof).
"CONSOLIDATED NET EARNINGS" means, for any period, Consolidated gross
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revenues of the Company and its Subsidiaries less all operating and non-
operating expenses (including income taxes), but not including in gross revenues
any gains or losses resulting from the sale, conversion or other disposition of
assets, any gains resulting from the write-up of assets, any equity of the
Company or any Subsidiary in the unremitted earnings of any corporation or any
Person which is not a Wholly-Owned Subsidiary, any earnings of any Person
acquired by the Company or any Subsidiary through purchase, merger, or
consolidation prior to the date of such purchase, merger or consolidation, or
any deferred credit representing the excess of equity in any Subsidiary at the
date of acquisition over the cost of the investment in such Subsidiary, all
determined in accordance with GAAP. Notwithstanding anything to the contrary
contained in this definition, as long as the Company owns more than 50% of the
Voting Stock of Blue Diamond, Consolidated Net Earnings attributable to Blue
Diamond shall be included in Consolidated Net Earnings.
"CONSOLIDATED NET EARNINGS AVAILABLE FOR RESTRICTED PAYMENTS" means twenty-
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five percent (25%) of Consolidated Net Earnings (minus 100% in case of a
deficit) for the period taken as one accounting period commencing on January 1,
1992, to the date of any proposed dividend or similar distribution less the
aggregate amount of all dividends and other distributions paid or declared by
the Company on any class of its stock after January 1, 1992, and less the
aggregate amount expended, directly or indirectly, after January 1, 1992, for
the redemption, purchase or other acquisition of any shares of the Company's
stock in excess of the net proceeds obtained by the Company from the sale of any
class of that stock.
"CONSOLIDATED NET INCOME" means, for any period, the total Consolidated net
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income (or net loss) of the Company and its Subsidiaries determined in
accordance with GAAP for such period before gains or losses on sales of
investments, sales of machinery and equipment and other extraordinary items.
"CONSOLIDATED NET WORTH" means, at any date, the aggregate amount of
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capital stock (less treasury stock, capital stock subscribed and unissued and
other contra-equity accounts), paid-in capital, surplus and retained earnings of
the Company and its Subsidiaries, determined on a Consolidated basis in
accordance with GAAP (other than the exceptions to GAAP set forth in the annual
audited financial statements of the Company described in Section 5.7), excluding
any intercompany transactions, intangibles (other than coal rights) and all
Investments (other than those permitted by Section 9.4).
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"CONSOLIDATED SENIOR DEBT" means, at any date, Consolidated Funded Debt
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minus Subordinated Debt, as of such date.
"CONSOLIDATED TOTAL DEBT" means, at any date, the Indebtedness for Borrowed
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Money of the Company and its Subsidiaries, determined on a Consolidated basis,
as of such date.
"CONTINGENCY AMOUNT" means all obligations of Blue Diamond arising under
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the Contingency Agreement dated as of February __, 1998, by and among the
Company, Blue Diamond and certain other parties thereto, which agreement is
attached as Exhibit B to the Agreement of Merger dated as of February 11, 1998,
by and among the Company, Xxxxx River Coal Mergersub, Inc. and Blue Diamond.
"CREDIT FACILITIES" means the Revolving Credit Facility and the L/C
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Facility.
"CURRENT MATURITIES OF LONG-TERM DEBT" means, for any twelve-month period,
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the sum of all principal scheduled to be paid during such period by the Company
and its Subsidiaries with respect to long-term debt.
"DEBT" of any Person means, at any date, without duplication, (i) all
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obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable arising in the ordinary course of
business), (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to purchase securities or other property
which arise out of or in connection with the sale of the same or substantially
similar securities or property, (vi) all non-contingent obligations of such
Person to reimburse any bank or other person in respect of amounts paid under a
letter of credit or similar instrument, (vii) all obligations of others secured
by a Lien on any asset of such Person, and (viii) all obligations of others
guaranteed by such Person.
"DEFAULT" means any event or condition which, with the giving of notice or
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passage of time, or both, would constitute an Event of Default.
"DOCUMENTATION AGENT" means First Union in its capacity as Documentation
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Agent hereunder, and any successor appointed pursuant to Section 11.9.
"EASTERN TIME" means Eastern Standard Time or Eastern Daylight Savings
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Time, whichever shall be in effect on the date of determination.
"EBITDA" means, for any period, (i) Consolidated Net Income for such
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period, plus (ii) the aggregate amount deducted in determining such Consolidated
Net Income for such period with respect to Consolidated Interest Expense, taxes,
depreciation, amortization, other non-cash charges and non-recurring expenses;
provided, however, that (i) for purposes of measuring EBITDA for the twelve-
month period ending on June 30, 1998, any EBITDA for the preceding fiscal
quarter attributable to the acquisition of Blue Diamond will be annualized by
multiplying
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such EBITDA by four, (ii) for purposes of measuring EBITDA for the twelve-month
period ending on September 30, 1998, any EBITDA for the preceding two fiscal
quarters attributable to the acquisition of Blue Diamond will be annualized by
multiplying such EBITDA by two, and (iii) for purposes of measuring EBITDA for
the twelve-month period ending on December 31, 1998, any EBITDA for the
preceding three fiscal quarters attributable to the acquisition of Blue Diamond
will be annualized by multiplying such EBITDA by 1.33.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment of the rights,
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interests and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (c)
already a Lender hereunder (whether as an original party to this Agreement or as
the assignee of another Lender), (d) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (e) any other Person that has been
approved in writing as an Eligible Assignee by the Company and the Syndication
Agent.
"ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws
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relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
(including, without limitation all waste materials subject to regulation under
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. (S)(S) 9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. (S)(S) 6901 et seq., or applicable state law and any other applicable
federal, state or local laws and the regulations now in force or hereafter
enacted relating to hazardous waste disposal) and any materials present on any
property owned or operated by the Company or any Subsidiary which have been
shown to have significant adverse effects on human health or which are subject
to regulation under the Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601 et
seq., applicable state law, or any other applicable federal, state or local laws
now in force or hereafter enacted relating to toxic substances, which shall
include, but not be limited to, asbestos, polychlorinated biphenyls (PCBs),
petroleum products, and lead-based paints, in the environment (including without
limitation ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transportation, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes, and any and all
regulations, codes, plans, orders, decrees, judgments, injunctions, notices or
demand letters issued, entered, promulgated or approved thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, together
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with the rules and regulations promulgated thereunder, as in effect from time to
time.
"EVENT OF DEFAULT" means any of the Events of Default specified in Section
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10.1.
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"EXISTING NATIONSBANK LETTERS OF CREDIT" means the letters of credit
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described on Exhibit F attached hereto.
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"FEDERAL FUNDS RATE" means the rate per annum (rounded upwards, if
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necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any
reason, such rate is not available, then "Federal Funds Rate" shall mean a daily
rate which is determined, in the opinion of the Administrative Agent, to be the
rate at which federal funds are being offered for sale in the national federal
funds market at 9:00 a.m. (Eastern Time). Rates for weekends or holidays shall
be the same as the rate for the most immediate preceding Business Day.
"FIRST RESERVE AGREEMENTS" means the Put/Call Agreement dated as of May 10,
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1994, among American Oil & Gas Investors, AmGo II, First Reserve Fund V, Limited
Partnership, First Reserve Fund V-2, Limited Partnership, First Reserve Fund VI,
Limited Partnership and the Company and the Second Put/Call Agreement dated as
of June 14, 1995, by and among the same parties.
"FIRST UNION" means First Union National Bank, a national banking
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association, and its successors.
"FIXED CHARGE COVERAGE RATIO" means, for the twelve-month period ending on
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the date of measurement, the ratio of (i) the sum of EBITDA for such twelve-
month period and the Consolidated operating lease expense of the Company and its
Subsidiaries for such twelve-month period minus Cash Taxes for such twelve-month
period, to (ii) the sum of Current Maturities of Long-Term Debt for such twelve-
month period, Consolidated Interest Expense for such twelve-month period,
Capitalized Lease Obligations (excluding any portion thereof included in
Consolidated Interest Expense) which were payable during such twelve-month
period, the aggregate amount of mandatory preferred stock redemptions required
to be made by the Company during such twelve-month period, the aggregate amount
of preferred stock dividends paid by the Company during such twelve-month period
and the Consolidated operating lease expense of the Company and its Subsidiaries
for such twelve-month period.
"FUNDED DEBT" of any Person means, at any date, all Indebtedness for
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Borrowed Money of such Person.
"GAAP" means generally accepted accounting principles as in effect from
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time to time, consistently applied, with respect to a corporation conducting a
business the same as or similar to that of the Company and its Subsidiaries.
"GOVERNMENTAL AUTHORITY" means the United States, any state or other
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political subdivision thereof and any court, agency, department, commission,
board, bureau or instrumentality of any of the foregoing.
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"HAZARDOUS MATERIALS" means all materials defined as hazardous wastes or
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substances under any Environmental Law and petroleum, petroleum products, oil
and asbestos.
"INDEBTEDNESS FOR BORROWED MONEY" of any Person means, at any date, without
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duplication, (i) all obligations of such Person for borrowed money, which under
GAAP is shown on the balance sheet of such Person as a liability (including
Capitalized Lease Obligations), (ii) all indebtedness which is secured by any
Lien on property owned by such Person, whether or not such indebtedness secured
thereby shall have been assumed by such Person (other than with respect to a
Permitted Contingent Obligation), (iii) all indebtedness of others of the type
described in clauses (i), (ii) or (iv) of this definition with respect to which
such Person has provided a guarantee, and (iv) all obligations of such Person
for borrowed money incurred in connection with the redemption or purchase of
such Person's capital stock.
"INTEREST PERIOD" means, for each LIBOR Rate Loan, the period commencing on
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the date of such LIBOR Rate Loan and ending on the last day of such period as
selected by the Company pursuant to the provisions set forth below. The
duration of each such Interest Period for a LIBOR Rate Loan shall be one (1),
two (2), three (3) or six (6) months, subject in each case to availability and
as the Company may, upon notice received by the Administrative Agent, select;
provided, however, that whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided that if such extension would cause the last day of such Interest Period
for a LIBOR Rate Loan to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding Business Day.
"INVESTMENT" as applied to any Person means any direct or indirect purchase
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or other acquisition by such Person of stock or other securities of any other
Person, or any direct or indirect loan, advance (other than advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by such
Person to any other Person, including all debt and accounts receivable from such
other Person which are not current assets or did not arise from sales to such
other Person in the ordinary course of business.
"ISSUING LENDER" means First Union in its capacity as issuer of any Letter
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of Credit, or any successor thereto.
"L/C APPLICATION" means an application, in the form specified by the
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Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"L/C COMMITMENT" means Twenty-Five Million Dollars ($25,000,000.00).
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"L/C FACILITY" means the letter of credit facility established pursuant to
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Section 4.
"L/C FEE" means (i) .875% through and including June 30, 1998, and (ii)
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thereafter shall be determined by reference to the Total Debt to EBITDA Ratio in
accordance with the following table:
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TOTAL DEBT TO EBITDA RATIO L/C FEE
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Higher than 3.0 to 1 1.0%
Higher than 2.25 to 1 but lower .875%
than or equal to 3.0 to 1
Higher than 1.50 to 1 but lower .75%
than or equal to 2.25 to 1
1.50 to 1 or lower .50%
The L/C Fee shall be automatically adjusted as of the first day of the month
following receipt by the Syndication Agent of Consolidated financial statements
of the Company and its Subsidiaries pursuant to Section 7.1(a) or Section 7.1(b)
demonstrating to the Syndication Agent's satisfaction that there has been a
change in the Total Debt to EBITDA Ratio which would cause a change in the L/C
Fee in accordance with the preceding table. At all times after and during the
continuance of a Default or an Event of Default, the L/C Fee shall be 1.0%.
"L/C OBLIGATIONS" means, at any time, an amount equal to the sum of (i) the
---------------
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and Existing NationsBank Letters of Credit and (ii) the aggregate amount of
drawings under Letters of Credit and Existing NationsBank Letters of Credit
which have not then been reimbursed.
"L/C PARTICIPANTS" means the Lenders other than the Issuing Lender.
----------------
"LENDER" means each person executing this Agreement as a Lender as set
------
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 12.10.
"LETTERS OF CREDIT" shall have the meaning assigned thereto in Section 4.1.
-----------------
"LIBOR" means, for each LIBOR Rate Loan, that rate per annum (rounded
-----
upward, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to the quotient of (i) the LIBOR Base for such
LIBOR Rate Loan for the applicable Interest Period divided by (ii) one minus the
LIBOR Reserve Percentage for such LIBOR Rate Loan for such Interest Period. The
definition of LIBOR is illustrated by the following formula:
LIBOR = LIBOR BASE
-----------------------------
1 - LIBOR RESERVE PERCENTAGE
"LIBOR ADVANCE" means an Advance which by request of the Company is to bear
-------------
interest at a rate based on LIBOR.
"LIBOR BASE" as applicable to any Interest Period means the average
----------
(rounded upward, if necessary, to the next higher 1/100th of 1%) rate per annum
at which deposits in dollars are
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offered in the London interbank market for the Interest Period selected by the
Company in an amount approximately equal to $1,000,000 as such rate is reported
by Telerate, Inc. on page 3750 at 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period or if such rate is not reported
by Telerate, Inc., the rate per annum at which such dollar deposits are offered
in the London interbank market on such date as reported by a successor reporting
agency selected by the Administrative Agent.
"LIBOR RATE LOAN" means a LIBOR Advance or a Revolving Credit Loan or
---------------
portion thereof which bears or is to bear interest based on LIBOR.
"LIBOR RESERVE PERCENTAGE" means, for any LIBOR Rate Loan for any Interest
------------------------
Period therefor, the reserve percentage (expressed as a decimal) applicable
during such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) (or if more
than one such percentage is so applicable, the daily average of such percentages
for those days in such Interest Period during which any such percentage shall be
so applicable) for determining the maximum reserve requirement (including,
without limitation, any marginal reserve requirement) for the Lenders in respect
of liabilities or assets consisting of or including Eurocurrency Liabilities (as
defined in Regulation D) having a term equal to such Interest Period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind with respect to such asset.
For purposes of this Agreement, a person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"LOAN DOCUMENTS" means this Agreement, the Revolving Credit Notes, the
--------------
Swingline Note, the L/C Applications and all other documents and agreements
executed in connection with this Agreement.
"LOANS" means the collective reference to the Revolving Credit Loans and
-----
the Swingline Loans; and "Loan" means any of such Loans.
"NATIONSBANK" means NationsBank, N.A., a national banking association, and
-----------
its successors.
"NOTE AGREEMENT" means the Note Agreement dated as of June 20, 1995,
--------------
between the Company and The Prudential Insurance Company of America and Pruco
Life Insurance Company relating to the Company's $50,000,000 7.95% Senior Notes
due June 15, 2003.
"NOTES" means the collective reference to the Revolving Credit Notes and
-----
the Swingline Note; and "Note" means any of such Notes.
"NOTICE OF BORROWING" shall have the meaning assigned thereto in Section
-------------------
3.1(a).
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"NOTICE OF INTEREST RATE ELECTION" shall have the meaning assigned thereto
--------------------------------
in Section 3.1(b).
"OBLIGATIONS" means, in each case, whether now in existence or hereafter
-----------
arising: (a) the principal of and interest on (including interest accruing
after the filing of any bankruptcy or similar petition) the Revolving Credit
Loans and the Swingline Loans, (b) the L/C Obligations and (c) all other fees
and commissions (including attorneys' fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by the Company to the Lenders, the Syndication Agent, the Documentation Agent or
the Administrative Agent, of every kind, nature and description, direct or
indirect, absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money under or with respect to this Agreement,
any Revolving Credit Note, the Swingline Note, any Letter of Credit or any of
the other Loan Documents.
"PAYMENT DATE" means with respect to each LIBOR Rate Loan, the last day of
------------
the applicable Interest Period selected by the Company. Interest on LIBOR Rate
Loans shall be due and payable as provided in Section 3.1(f)(ii).
"PERMITTED CONTINGENT OBLIGATIONS" means (i) any letter of credit to secure
--------------------------------
the Contingency Amount and letters of credit obtained in the ordinary course of
business to secure obligations in connection with workers' compensation, black
lung insurance obligations, surety (or performance) bonds or reclamation bonds
not exceeding for all such letters of credit $25,000,000 in an aggregate stated
amount to the extent such letters of credit have not been drawn on by the
beneficiary thereof, (ii) any bonds issued by, or for the benefit of, the
Company in the ordinary course of business, (iii) guarantees of coal sale
contracts and/or mineral leases entered into in the ordinary course of business,
and (iv) any indemnity or similar agreements entered into in the ordinary
course of business relating to the matters set forth in clauses (i), (ii) or
(iii) above.
"PERSON" means an individual, corporation, partnership, limited liability
------
company, association, joint-stock company, trust, unincorporated organization or
joint venture, or a court or government or any agency or political subdivision
thereof.
"PREFERRED STOCK" means (i) that certain 11% Class A Cumulative Redeemable
---------------
Preferred Stock (par value $1,000 per share) of the Company and that certain
9.5% Class B Cumulative Redeemable Preferred Stock (par value $1,000 per share)
of the Company, and (ii) that certain Adjustable Rate Class C Cumulative
Redeemable Preferred Stock (par value $1,000 per share) of the Company and that
certain Adjustable Rate Class D Cumulative Redeemable Preferred Stock (par value
$1,000 per share) of the Company.
"PRIME RATE" means the rate established by NationsBank from time to time as
----------
its "prime rate." The Company acknowledges and agrees that the Prime Rate is a
reference used in determining interest rates on certain loans by NationsBank and
is not intended to be the lowest rate of interest charged on any extension of
credit to any customer.
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"REGISTER" shall have the meaning assigned thereto in Section 12.10(d).
--------
"REGULATION D" means Regulation D of the Board of Governors of the Federal
------------
Reserve System, as it may be amended from time to time.
"REIMBURSEMENT OBLIGATION" means the obligation of the Company to reimburse
------------------------
the Issuing Lender pursuant to Section 4.5 for amounts drawn under Letters of
Credit.
"REPORTABLE EVENT" has the meaning specified therefor in Title IV of ERISA.
----------------
"REQUIRED LENDERS" means, at any date, any combination of Lenders which
----------------
hold Commitment Percentages which aggregate at least sixty-six and two-thirds
percent (66-2/3%).
"RESTRICTED PAYMENTS" shall have the meaning assigned thereto in Section
-------------------
9.3.
"REVOLVING CREDIT FACILITY" means the Revolving Credit Facility established
-------------------------
pursuant to Section 2.
"REVOLVING CREDIT LOANS" means any revolving credit loan made to the
----------------------
Company pursuant to Section 2.1, and all such revolving credit loans
collectively as the context requires.
"REVOLVING CREDIT NOTES" means the collective reference to the Revolving
----------------------
Credit Notes made by the Company payable to the order of the Lenders, each
substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit
-----------
Loans of the Lenders, and any amendments and modifications thereto, any
substitutes therefor and any replacements, restatements, renewals and extensions
thereof; in whole or in part; "Revolving Credit Note" means any of such
Revolving Credit Notes.
"SENIOR DEBT TO EBITDA RATIO" means, as of the date of measurement, the
---------------------------
ratio of Consolidated Senior Debt as of such date to EBITDA for the twelve-month
period ending on such date.
"STOCKHOLDERS' AGREEMENT" means that certain Amended and Restated Stock
-----------------------
Redemption and Shareholder Agreement dated as of October 1, 1994, as amended,
among Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxxxx.
"SUBORDINATED DEBT" means any Debt of the Company or any Subsidiary the
-----------------
payment of which is subordinated to the payment of the Obligations, pursuant to
a written subordination agreement satisfactory to the Required Lenders.
"SUBSIDIARY" means any corporation of which more than fifty percent (50%)
----------
(by number of votes) of the Voting Stock is owned and controlled by the Company
or by the Company and one or more Subsidiaries or by one or more Subsidiaries.
"SWINGLINE COMMITMENT" means Fifteen Million Dollars ($15,000,000.00).
--------------------
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"SWINGLINE INTEREST RATE" means the interest rate applicable to Swingline
-----------------------
Loans quoted to the Company by the Swingline Lender and accepted by the Company
from time to time.
"SWINGLINE LENDER" means NationsBank in its capacity as swingline lender
----------------
hereunder.
"SWINGLINE LOAN" means any swingline loan made by the Swingline Lender to
--------------
the Company pursuant to Section 2.3, and all such swingline loans collectively
as the context requires.
"SWINGLINE NOTE" means the Swingline Note made by the Company payable to
--------------
the order of the Swingline Lender, substantially in the form of Exhibit A-2
-----------
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extensions thereof, in whole or in part.
"SWINGLINE TERMINATION DATE" means the earlier to occur of (a) the
--------------------------
resignation of NationsBank as Administrative Agent in accordance with Section
11.9 and (b) the Commitment Termination Date.
"SYNDICATION AGENT" means First Union in its capacity as Syndication Agent
-----------------
hereunder, and any successor appointed pursuant to Section 11.9.
"TOTAL DEBT TO EBITDA RATIO" means, as of any date of measurement, the
--------------------------
ratio of Consolidated Total Debt as of such date to EBITDA for the twelve-month
period ending on such date.
"TYPE" shall refer, with respect to interest rates, to the Base Rate and to
----
a rate based on LIBOR. With respect to Revolving Credit Loans or Advances,
"Type" shall refer to Base Rate Loans and LIBOR Rate Loans.
"UNUSED COMMITMENT FEE" shall have the meaning assigned thereto in Section
---------------------
2.5(b).
"UNUSED COMMITMENT FEE PERCENTAGE" means (i) .20% through and including
--------------------------------
June 30, 1998, and (ii) thereafter shall be determined by reference to the Total
Debt to EBITDA Ratio in accordance with the following table:
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UNUSED
COMMITMENT FEE
TOTAL DEBT TO EBITDA RATIO PERCENTAGE
-------------------------- ----------
Higher than 3.0 to 1 .25%
Higher than 2.25 to 1 but lower .20%
than or equal to 3.0 to 1
Higher than 1.50 to 1 but lower .15%
than or equal to 2.25 to 1
1.50 to 1 or lower .125%
The Unused Commitment Fee Percentage shall be automatically adjusted as of the
first day of the month following receipt by the Administrative Agent of
Consolidated financial statements of the Company and its Subsidiaries pursuant
to Section 7.1(a) or Section 7.1(b) demonstrating to the Administrative Agent's
satisfaction that there has been a change in the Total Debt to EBITDA Ratio
which would cause a change in the Unused Commitment Fee Percentage in accordance
with the preceding table. At all times after and during the continuance of a
Default or an Event of Default, the Unused Commitment Fee Percentage shall be
.25%.
"UCC" means the Uniform Commercial Code as in effect in the Commonwealth of
---
Virginia.
"UNIFORM CUSTOMS" means the Uniform Customs and Practice for Documentary
---------------
Credits (1994 Revision), International Chamber of Commerce Publication No. 500.
"VOTING STOCK" means securities of any class or classes, the holders of
------------
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"WARRANT" means that warrant issued by JR Coal, Inc. in favor of General
-------
Electric Capital Corporation entitling the holder thereof to purchase up to 1600
shares of common stock of JR Coal, Inc.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the issued and
-----------------------
outstanding shares of stock (except shares required as directors' qualifying
shares) shall be owned by the Company and/or one or more of its Wholly-Owned
Subsidiaries.
"XXXXXXXX HOLDINGS" means Xxxxxxxx Holdings of Delaware, Inc., a Delaware
-----------------
corporation.
1.2 MISCELLANEOUS. Each definition of a document in this Section 1 (other
-------------
than the definition of Note Agreement) shall include such document as modified,
amended or
-14-
supplemented from time to time. Except where the context otherwise requires,
definitions imparting the singular shall include the plural and vice versa.
Except where restricted, a reference to a party to a document includes that
party and its successors and assigns.
1.3 REFERENCES. All references herein to Sections, Subsections, Exhibits
----------
and Schedules are references to Sections, Subsections, Exhibits and Schedules of
or to this Agreement unless otherwise indicated.
SECTION 2
REVOLVING CREDIT LOANS
----------------------
2.1 REVOLVING CREDIT. Subject to the terms and conditions and relying
----------------
upon the representations and warranties set forth herein, each Lender severally
agrees to make Revolving Credit Loans to the Company from time to time from the
date hereof to but excluding the Commitment Termination Date as requested by the
Company hereunder; provided that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to any amount requested)
shall not exceed the Aggregate Commitment minus the sum of all outstanding
Swingline Loans and all L/C Obligations, and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Company shall not at
any time exceed such Lender's Commitment minus the sum of such Lender's
Commitment Percentage of all outstanding Swingline Loans and such Lender's
Commitment Percentage of all L/C Obligations. Each Revolving Credit Loan by a
Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Revolving Credit Loans requested
on such occasion. Within such limits, the Company may borrow, repay and reborrow
hereunder on or after the date hereof and prior to the Commitment Termination
Date, subject to the terms, provisions and limitations set forth herein.
2.2 REVOLVING CREDIT LOANS. (a) The aggregate Revolving Credit Loans made
----------------------
in any one borrowing hereunder shall be in a principal amount of $2,000,000 or
an integral multiple of $500,000 in excess thereof.
(b) Each Revolving Credit Loan shall bear interest either at a rate based
on LIBOR or at the Base Rate, as the Company may request subject to and in
accordance with the provisions of Section 3.1. Each of the Lenders may at its
option fund its Commitment Percentage of any LIBOR Rate Loan by causing a
foreign branch or Affiliate of such Lender to fund such Lender's Commitment
Percentage of such LIBOR Rate Loan, provided that any such exercise of such
option shall not affect the obligation of the Company to repay such Revolving
Credit Loan in accordance with the terms of the Revolving Credit Notes. Subject
to the other provisions of this Section 2, including the provisions of Section
2.7, and subject to the provisions of Section 3.1(h), Revolving Credit Loans of
more than one Type may be outstanding at the same time.
2.3 SWINGLINE LOANS. (a) Subject to the terms and conditions and relying
---------------
upon the representations and warranties set forth herein, the Swingline Lender,
in its individual capacity, agrees to make Swingline Loans to the Company from
time to time from the date hereof to but
-15-
excluding the Swingline Termination Date as requested by the Company hereunder;
provided that the aggregate principal amount of all outstanding Swingline Loans
(after giving effect to any amount requested) shall not exceed the lesser of (i)
the Aggregate Commitment minus the sum of all outstanding Revolving Credit Loans
and all L/C Obligations, and (ii) the Swingline Commitment.
(b)(i) Whenever the Company desires a Swingline Loan advance hereunder, it
shall give telephone notice promptly confirmed in writing to the Swingline
Lender not later than 12:00 noon (Eastern Time) on the Business Day of the
requested Swingline Loan advance. Each such notice shall be irrevocable and
shall specify (A) that a Swingline Loan advance is requested, (B) the date of
the requested Swingline Loan advance (which shall be a Business Day) and (C) the
principal amount of the Swingline Loan advance requested. Each Swingline Loan
shall have such maturity date as the Company and the Swingline Lender shall
agree upon receipt by the Swingline Lender of any such notice from the Company.
The Swingline Lender shall initiate the transfer of funds representing the
Swingline Loan advance to the Company by 3:00 p.m. (Eastern Time) on the
Business Day of the requested borrowing.
(ii) Each Swingline Loan shall be in a minimum principal amount of
$100,000 and in integral multiples of $50,000 in excess thereof (or the
remaining amount of the Swingline Commitment if less).
(iii) The principal amount of all Swingline Loans shall be due and
payable not later than 12:00 noon (Eastern Time) on the earlier to occur of (A)
the maturity date agreed to by the Swingline Lender and the Company with respect
to the applicable Swingline Loan, and (B) the Swingline Termination Date.
(iv) The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Company and the Lenders, demand repayment of the
outstanding Swingline Loans by way of an Advance of Revolving Credit Loans, in
which case the Company shall be deemed to have requested an Advance of Base Rate
Loans in the amount of such Swingline Loans; provided that any such demand shall
be deemed to have been given one Business Day prior to the Swingline Termination
Date and on the date of the occurrence of any Event of Default and upon
acceleration of the Obligations under Section 10.2. Each Lender hereby
irrevocably agrees to make its pro rata share of each such Revolving Credit Loan
in the amount, in the manner and on the dates specified in the preceding
sentence notwithstanding (A) the amount of such borrowing may not comply with
the minimum amount of advances for Revolving Credit Loans otherwise required
hereunder, (B) whether any conditions specified in Section 6 are then satisfied,
(C) whether a Default or an Event or Default then exists, (D) failure of any
such request or deemed request for Revolving Credit Loans to be made by the time
otherwise required hereunder, (E) whether the date of such borrowing is a date
on which Revolving Credit Loans are otherwise permitted to be made hereunder, or
(F) any termination of the Commitments. In the event that any Revolving Credit
Loans cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Company), each Lender hereby
agrees that it shall forthwith
-16-
purchase (as of the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Company on or after such date and
prior to such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such Lender to
share in such Swingline Loans ratably based upon its Commitment Percentage;
provided that (A) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
participation is purchased, and (B) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, in accordance with the terms of Section
2.3(c) below, interest on the principal amount of participation purchased for
each day from and including the day upon which such borrowing would otherwise
have occurred to but excluding the date of payment for such participation, at
the rate equal to the Federal Funds Rate.
(c) Each Swingline Loan shall bear interest at a rate per annum (computed
on the basis of the actual number of days elapsed over a year of 360 days) equal
to the Swingline Interest Rate as it exists from time to time. Interest on the
Swingline Loans shall be due and payable on the last day of each calendar
quarter (i.e., each March 31, June 30, September 30 and December 31) and on the
----
Swingline Termination Date.
2.4 NOTES. (a) Each Lender's Revolving Credit Loans and the obligation
-----
of the Company to repay such Revolving Credit Loans shall be evidenced by a
Revolving Credit Note executed by the Company payable to the order of such
Lender representing the Company's obligation to pay such Lender's Commitment or,
if less, the aggregate unpaid principal amount of all Revolving Credit Loans
made and to be made by such Lender to the Company hereunder, plus interest and
all other fees, charges and other amounts due thereon. Each Revolving Credit
Note shall be dated the date hereof and shall bear interest on the unpaid
principal amount thereof at the applicable interest rate per annum specified in
Section 3.
(b) The Swingline Loans and the obligation of the Company to repay such
Swingline Loans shall be evidenced by the Swingline Note executed by the Company
payable to the order of the Swingline Lender representing the Company's
obligation to pay the Swingline Lender's Swingline Commitment or, if less, the
aggregate unpaid principal amount of all Swingline Loans made and to be made by
the Swingline Lender to the Company hereunder, plus interest and all other fees,
charges and other amounts due thereon. The Swingline Note shall be dated the
date hereof and shall bear interest on the unpaid principal amount thereof as
provided in Section 2.3(c).
2.5 FEES. (a) The Company shall pay to the Syndication Agent, for the
----
account of the Lenders, on or before the date hereof, an upfront commitment fee
with respect to the Revolving Credit Facility equal to the aggregate of (i) .001
multiplied by the Commitment of each Lender which committed to make its
Commitment available hereunder on or before January 26, 1998, and (ii) .0006
multiplied by the Commitment of each Lender which committed to make its
Commitment available hereunder after January 26, 1998, which upfront commitment
fee will be fully earned and non-refundable once paid. The Syndication Agent
will, promptly following its receipt thereof, distribute such upfront commitment
fee to the Lenders, with each Lender which committed to make its Commitment
available hereunder on or before January 26, 1998, receiving
-17-
.001 multiplied by its Commitment, and with each other Lender receiving .0006
multiplied by its Commitment.
(b) The Company shall pay to the Administrative Agent, for the account of
the Lenders, on April 15, 1998, and quarterly in arrears thereafter on each July
15, October 15, January 15 and April 15 occurring prior to the Commitment
Termination Date (in each case for the fees accrued for the quarter ending as of
the last day of the immediately preceding month) and on the Commitment
Termination Date, the aggregate unused commitment fee (the "Unused Commitment
Fee") with respect to the Revolving Credit Facility due to the Lenders as
described below based on the Unused Commitment Fee in effect on the date each
installment of the Unused Commitment Fee is due. Each installment of the Unused
Commitment Fee for each Lender shall be equal to (i) in the case of each Lender
other than the Swingline Lender, the product of (A) the Unused Commitment Fee
Percentage in effect on the date such installment is due, multiplied by (B) the
daily average amount during the immediately preceding quarter or other period by
which (x) such Lender's Commitment (as it may be reduced from time to time
pursuant to Section 2.6) exceeded (y) the sum of such Lender's Commitment
Percentage of all outstanding Revolving Credit Loans and such Lender's
Commitment Percentage of all outstanding L/C Obligations, multiplied by (C) a
fraction, the numerator of which is the number of days in the immediately
preceding quarter or other period and the denominator of which is 360, and (ii)
in the case of the Swingline Lender, the product of (A) the Unused Commitment
Fee Percentage in effect on the date such installment is due, multiplied by (B)
the daily average amount during the immediately preceding quarter or other
period by which (x) the Swingline Lender's Commitment (as it may be reduced from
time to time pursuant to Section 2.6) exceeded (y) the sum of the Swingline
Lender's Commitment Percentage of all outstanding Revolving Credit Loans, the
Swingline Lender's Commitment Percentage of all outstanding L/C Obligations and
all outstanding Swingline Loans, multiplied by (C) a fraction, the numerator of
which is the number of days in the immediately preceding quarter or other period
and the denominator of which is 360. Each installment of the Unused Commitment
Fee will be fully earned and non-refundable once paid. The Administrative Agent
will, promptly following its receipt thereof, distribute each installment of the
Unused Commitment Fee to the Lenders ratably in accordance with their respective
shares thereof.
(c) The Company shall pay to the Syndication Agent, for its own account,
on or before the date hereof, the arrangement fee agreed to by the Company and
the Syndication Agent, which arrangement fee will be fully earned and non-
refundable once paid.
(d) The Company shall pay to the Administrative Agent, for its own
account, the fees agreed to by the Company and the Administrative Agent, each
installment of which will be fully earned and non-refundable once paid.
2.6 OPTIONAL REDUCTION OR TERMINATION OF COMMITMENT. The Company may at
-----------------------------------------------
any time and from time to time upon at least three (3) Business Days' prior
notice to each of the Lenders reduce the Aggregate Commitment or terminate it in
its entirety, without penalty or premium, provided that the amount of any such
reduction shall be in the amount of $2,000,000 or an integral multiple of
$500,000 in excess thereof. Such notice of reduction may be in writing or
-18-
by telecopy or by telephone if promptly confirmed in writing. From the effective
date of any such reduction or termination, the obligation of the Company to pay
any subsequent installment of the Unused Commitment Fee under Section 2.5(b)
shall thereupon correspondingly be reduced or cease.
2.7 NOTICE AND MANNER OF BORROWING. The Company shall give the
------------------------------
Administrative Agent notice of each requested Advance under this Section 2 as
provided in Section 3.1(a) not later than 12:00 noon (Eastern Time) (i) on the
date of such borrowing in the event that the borrowing will initially be made as
a Base Rate Advance, or (ii) on the date which is three (3) Business Days prior
to the date of such borrowing in the event that the borrowing will initially be
made as a LIBOR Advance. Not later than 2:00 p.m. (Eastern Time) on the
borrowing date specified in such notice, the Administrative Agent shall give
facsimile notice to the Lenders of the requested Advance. Not later than 3:00
p.m. (Eastern Time) on the borrowing date specified in such notice, each Lender
will wire such Lender's Commitment Percentage of such Advance to the
Administrative Agent in immediately available funds. On the borrowing date
specified in such notice, the Administrative Agent shall make the Advance by
crediting NationsBank's Commitment Percentage thereof and, to the extent the
Administrative Agent has received such other Lenders' Commitment Percentages
thereof from the other Lenders, such other Lenders' Commitment Percentages
thereof to the general deposit account of the Company maintained with the
Administrative Agent. The Company acknowledges and agrees that the Lenders'
obligations to make Advances under this Section 2 are several and not joint or
joint and several and that no Lender shall have any obligation whatsoever with
respect to any failure by another Lender to fund, or any delay by another Lender
in funding, such other Lenders' Commitment Percentage of any Advance.
2.8 PREPAYMENTS. (a) The Company shall have the right without premium or
-----------
penalty, by giving irrevocable notice to the Administrative Agent not later than
12:00 noon (Eastern Time) on the Business Day on which the prepayment is to
occur in the case of Base Rate Loans and three (3) Business Days prior to the
Business Day on which the prepayment is to occur in the case of LIBOR Rate
Loans, to prepay the Revolving Credit Loans in whole or to make partial
prepayments in the amount of $2,000,000 or any multiple of $500,000 in excess
thereof, at any time, provided that no prepayment may be made on any LIBOR Rate
Loan except on a Payment Date unless at the time such prepayment is made the
Company also pays to the Lenders all losses and out-of-pocket expenses incurred
by the Lenders, or any of them, as a result of such prepayment, including,
without limitation, the excess of (i) the interest that would have been received
from the Company on the amount prepaid during the remaining portion of the
Interest Period in question had the Company not prepaid such LIBOR Rate Loan or
portion thereof, over (ii) the amount of interest which would have accrued on
the amount prepaid if the Lenders had placed such funds on deposit with a prime
bank in the London interbank borrowing market from the date of such prepayment
until the end of such Interest Period, discounted in each case to present value
using the interest rate then existing on U.S. Treasury obligations maturing as
of the end of such Interest Period, as reasonably determined by the
Administrative Agent.
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(b) If the aggregate principal amount of Revolving Credit Loans
outstanding under this Section 2 at any time exceeds the Aggregate Commitment as
it exists from time to time minus the sum of all outstanding Swingline Loans and
all L/C Obligations, the Company shall, upon the request of any of the Lenders,
immediately prepay the Revolving Credit Loans in an amount sufficient to
eliminate such excess.
(c) The Company shall pay each prepayment made under Section 2.8(a) and
Section 2.8(b) to the Administrative Agent for the account of the Lenders. The
Administrative Agent shall, promptly following its receipt of each such
prepayment, distribute it to the Lenders ratably in accordance with their
respective Commitment Percentages.
2.9 ADJUSTMENTS. If any Lender (a "Benefitted Lender") shall at any time
-----------
receive any payment of all or part of its Revolving Credit Loans, or interest
thereon, or if any Lender shall at any time receive any collateral with respect
to its Revolving Credit Loans (whether voluntarily or involuntarily, by set-off
or otherwise) in a greater proportion than any such payment to and collateral
received by any other Lender, if any, with respect to such other Lender's
Revolving Credit Loans, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Revolving Credit Loans, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned to the extent of such recovery, but without interest. The
Company agrees that each Lender so purchasing a portion of another Lender's
Revolving Credit Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
2.10 LIMITATIONS ON ADVANCES. The Company acknowledges and agrees that (i)
-----------------------
the Lenders' several obligations to fund advances under this Section 2 shall
terminate on the Commitment Termination Date, and (ii) no Lender shall have any
obligation to fund any portion of any Advance hereunder which would result in
the aggregate amount of Revolving Credit Loans funded by such Lender hereunder
exceeding such Lender's Commitment minus the sum of such Lender's Commitment
Percentage of all outstanding Swingline Loans and such Lender's Commitment
Percentage of all L/C Obligations.
SECTION 3
INTEREST RATES; NOTICES
-----------------------
3.1 SELECTION OF INTEREST RATE OPTION.
---------------------------------
(A) AT TIME ADVANCE IS MADE. Any Advance shall, at the option of the
-----------------------
Company as provided in this Section 3 (and, in the case of LIBOR Advances,
subject to the provisions of Sections 3.1(h), 3.3 and 3.4) be made either as a
Base Rate Advance or a LIBOR Advance. Not later than 12:00 noon (i) on the date
of borrowing in the event that the borrowing will initially be
-20-
made as a Base Rate Advance, or (ii) on the date which is three (3) Business
Days prior to the date of such borrowing in the event that the borrowing will
initially be made as a LIBOR Advance, the Company shall give the Administrative
Agent notice of each requested Advance by telephone immediately confirmed in
writing substantially in the form attached hereto as Exhibit B (a "Notice of
---------
Borrowing"). For each Advance, such Notice of Borrowing shall specify the Type
of Advance, the requested funding date which shall be a Business Day, the
aggregate amount of the proposed Advance, the Interest Period (except in the
case of a Base Rate Advance), and if any portion of such Advance is to be of a
different Type, or has a different Interest Period, the amount of such portion,
the Type of Advance it will be, the Interest Period selected by the Company and
the manner of disbursement. Each Advance shall be in the aggregate principal
amount of $2,000,000, or an integral multiple of $500,000 in excess thereof,
except a Base Rate Advance may be in an amount equal to the unused amount of the
Aggregate Commitment.
(B) AFTER AN ADVANCE IS MADE. The Company may from time to time elect to
------------------------
change or continue the Type of interest rate applicable to any Revolving Credit
Loan or portion thereof (subject in each case to the provisions of this Section
3.1), as follows:
(i) if such Revolving Credit Loan or portion thereof is bearing
interest at the Base Rate, the Company may elect as of any Business Day to
change the applicable rate to a rate based on LIBOR; and
(ii) if such Revolving Credit Loan or portion thereof is bearing
interest at a rate based on LIBOR, the Company may elect to change the Revolving
Credit Loan or portion thereof to a Revolving Credit Loan bearing interest based
on the Base Rate, or may elect to continue such Revolving Credit Loan at a rate
based on LIBOR for an additional Interest Period, in each case beginning on the
last day of the then current Interest Period applicable to such Revolving Credit
Loan or portion thereof.
Each such election to change or continue the applicable Type of interest rate
shall be made by notice by telephone immediately confirmed in writing
substantially in the form attached hereto as Exhibit C (a "Notice of Interest
---------
Rate Election") to the Administrative Agent not later than 12:00 noon (Eastern
Time) (i) on the date the new Type of interest rate selected in such notice is
to begin in the event that the new Type of interest rate is the Base Rate, or
(ii) on the date which is three (3) Business Days prior to the date the new Type
of interest rate selected in such notice is to begin in the event that the new
Type of interest rate is a rate based on LIBOR or three (3) Business Days prior
to the date the additional Interest Period is to begin in the event that an
additional Interest Period is chosen.
(C) FORM OF NOTICE. Each Notice of Interest Rate Election shall specify
--------------
with respect to the outstanding Revolving Credit Loan or portion thereof to
which such notice applies:
(i) the date on which the new Type of interest rate or additional
Interest Period selected in such notice is to begin, which shall comply with the
applicable clause of subsection (b) above;
-21-
(ii) if the Type of interest rate borne by such Revolving Credit
Loan or portion thereof is to be changed, the new Type selected and, if such new
rate is based on LIBOR, the duration of the initial Interest Period; and
(iii) if such Revolving Credit Loan or portion thereof is currently
bearing interest at a rate based on LIBOR and such Type of interest rate is to
be continued for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(D) ABSENCE OF NOTICE. If the Company fails to deliver a timely Notice of
-----------------
Interest Rate Election selecting a new Type of interest rate or an additional
Interest Period for any Revolving Credit Loan or portion thereof bearing
interest at a rate based on LIBOR, such Revolving Credit Loan or portion thereof
shall bear interest at the Base Rate commencing on the last day of the then
current Interest Period and continuing until the Company selects a different
Type of interest rate for such Revolving Credit Loan or portion thereof as
provided in this Section 3.1.
(E) INTEREST ON BASE RATE LOANS.
---------------------------
(I) RATE. The Company shall pay interest on the unpaid principal
----
balance of each Base Rate Loan at a rate per annum equal to the Base Rate (with
such rate to be reset as of the date of each change in the Base Rate).
(II) BASE, PAYMENT DATES. Interest on the Base Rate Loans shall be
-------------------
computed on the basis of the actual number of days elapsed over a year of 360
days and shall be due and payable on the last day of each calendar quarter
(i.e., each March 31, June 30, September 30 and December 31) and on the
---
Commitment Termination Date. With respect to each interest payment due under
this Section 3.1(e), the Company shall pay such interest payment to the
Administrative Agent for the account of the Lenders. The Administrative Agent
shall, promptly following its receipt of each such interest payment, distribute
it to the Lenders ratably in accordance with their respective Commitment
Percentages.
-22-
(F) INTEREST ON LIBOR BASE LOANS.
----------------------------
(I) RATE. The Company shall pay interest on the unpaid principal
----
amount of each LIBOR Rate Loan at a rate per annum equal to LIBOR plus the
Applicable LIBOR Margin (with such rate to be reset as of the first day of each
Interest Period and as of the date of each change in the Applicable LIBOR
Margin). The Administrative Agent, whose determination shall be conclusive
(absent manifest error), shall determine the applicable LIBOR for each Interest
Period and shall notify the Company and each Lender of such LIBOR. The Company
shall promptly notify the Administrative Agent by telecopy or telephone, and
shall immediately confirm any such telephonic notice in writing, of its
selection of a rate based on LIBOR and Interest Period for all or a portion of
the Advance or outstanding principal balance, as the case may be.
(II) COMPUTATION, PAYMENT DATES. Interest on each LIBOR Rate Loan
--------------------------
shall be computed on the basis of the actual number of days elapsed over a year
of 360 days and shall be payable in arrears on the last day of each Interest
Period and, if any such Interest Period is of six months duration, three months
after it begins. With respect to each interest payment due under this Section
3.1(f), the Company shall pay such interest payment to the Administrative Agent
for the account of the Lenders. The Administrative Agent shall, promptly
following its receipt of each such interest payment, distribute it to the
Lenders ratably in accordance with their respective Commitment Percentages.
(III) INCREASED OR DECREASED COSTS. If either (A) the introduction
----------------------------
of or any change (including, without limitation, any change by way of imposition
or increase of reserve requirements other than those included in the computation
of LIBOR but excluding any income tax on the overall income of the Lenders)
after the date hereof in or in the interpretation of any law or regulation, or
(B) the compliance by the Lenders, or any of them, with any guideline or
directive adopted or otherwise asserted after the date hereof by any central
bank or other Governmental Authority (whether or not having the force of law),
shall result in any actual increase in the cost to the Lenders, or any of them,
of making, funding or maintaining LIBOR Rate Loans or reduce the amount
receivable by the Lenders, or any of them, on any such LIBOR Rate Loans, then
the Company shall from time to time, upon demand by the Lenders, or any of them,
pay to such Lender or Lenders additional amounts sufficient to indemnify such
Lender or Lenders against such increased cost actually incurred or reduction in
amount actually received. If either (x) the introduction of or any change
(including, without limitation, any change by way of decrease of reserve
requirements other than those included in the computation of LIBOR but excluding
any income tax on the overall income of the Lenders) after the date hereof in or
in the interpretation of any law or regulation, or (y) the compliance by the
Lenders, or any of them, with any guideline or directive adopted or otherwise
asserted after the date hereof by any central bank or other Governmental
Authority (whether or not having the force of law), shall result in any actual
decrease in the cost to the Lenders, or any of them, of making, funding or
maintaining LIBOR Rate Loans or increase the amount receivable by the Lenders,
or any of them, on any such LIBOR Rate Loans, then such Lender or Lenders shall
from time to time reduce the amount payable by the Company to such Lender or
Lenders by the amount of such decrease in cost actually incurred or increase in
amount actually received. A certificate in reasonable detail as to the amount
of such
-23-
increased or reduced cost or reduction or increase in amount received and method
of calculation shall be submitted to the Company by the applicable Lender or
Lenders and shall be conclusive absent manifest error.
(G) INTEREST ON ADVANCE IF NO NOTICE IS GIVEN OF SELECTION OF INTEREST
------------------------------------------------------------------
RATE OPTION. If the Company fails to give the Administrative Agent timely notice
-----------
of its election to have any Advance bear interest at a rate based on LIBOR or
the Interest Period applicable thereto, such Advance shall automatically bear
interest at the Base Rate.
(H) LIBOR CONTRACTS. At no time may the number of outstanding LIBOR Rate
---------------
Loans exceed five (5). For purposes of this Section 3.1(h), each Advance,
Revolving Credit Loan or portion of a Revolving Credit Loan bearing interest at
a rate based on LIBOR but with a different Interest Period shall be counted
separately.
3.2 PAYMENTS AND COMPUTATIONS. Each payment by the Company hereunder and
-------------------------
under the Revolving Credit Notes shall be made not later than 12:00 noon
(Eastern Time) on the day when due, in lawful money of the United States of
America and in Federal or other immediately available funds, by payment of such
funds to the Administrative Agent for the account of the Lenders. The
Administrative Agent shall, promptly following its receipt of each such payment,
distribute it to the Lenders ratably in accordance with their respective
Commitment Percentages. Amounts received after 12:00 noon (Eastern Time) on any
day shall be deemed received on the next succeeding Business Day. Whenever any
payment to be made under this Agreement or any of the Notes shall be stated to
be due on a day other than a Business Day, except as otherwise provided in the
definition of Interest Period, such payment shall be made on the next succeeding
Business Day and such extension of time shall in such case be included in the
computation of interest.
3.3 LIBOR INADEQUATE OR UNFAIR. If before the beginning of any Interest
--------------------------
Period for any LIBOR Rate Loan, by reason of circumstances affecting the London
interbank market generally, deposits in dollars are not being offered to the
Lenders, or any of them, in amounts approximately equal to the principal amount
of the LIBOR Rate Loan, the Syndication Agent shall forthwith give notice
thereof to the Company, whereupon (unless the Company and the Lenders shall have
agreed on an alternative method of determining the interest rate for such LIBOR
Rate Loan) no further LIBOR Rate Loans shall be made and no outstanding
Revolving Credit Loan or portion thereof shall be converted to a LIBOR Rate Loan
so long as the circumstances giving rise to such notice continue to exist, and
any then outstanding LIBOR Rate Loans shall, as of the expiration of the then
current Interest Period with respect to such LIBOR Rate Loan, be automatically
converted to a Base Rate Loan.
3.4 CHANGES IN LAW RENDERING A LIBOR LOAN UNLAWFUL. If, after the date of
----------------------------------------------
this Agreement, the introduction of, or any change in, any applicable law, rule
or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by the Lenders, or any of them, with any guideline or
directive (whether or not having the force of law) of any such Governmental
Authority, shall make it unlawful or impossible for the Lenders, or any of them,
to make,
-24-
maintain or fund a LIBOR Rate Loan, the Syndication Agent shall promptly notify
the Company, and the obligation of the Lenders to make, or convert to, a LIBOR
Rate Loan shall forthwith be suspended for the duration of such illegality or
impossibility. Upon such notice, on either (a) the last day of the then current
Interest Period applicable to each such LIBOR Rate Loan if all of the Lenders
may lawfully continue to maintain each such LIBOR Rate Loan to such day or days,
or (b) immediately if any of the Lenders may not lawfully continue to maintain
such LIBOR Rate Loan to such day or days, any LIBOR Rate Loan then outstanding
shall be automatically converted to a Base Rate Loan. If the Company repays any
LIBOR Rate Loans pursuant to clause (b) of this Section 3.4 on a day other than
a Payment Date, it will reimburse each Lender, on demand, for any loss or out-
of-pocket expense incurred by such Lender, in connection with such prepayment.
Such loss or out-of-pocket expense shall include, without limitation, expenses
incurred by such Lender, in connection with the re-employment of the funds
prepaid in an amount equal to the excess of (i) the interest that would have
been received from the Company on the amount so re-employed during the remaining
portion of the Interest Period in question had the Company not prepaid such
LIBOR Rate Loan over (ii) the amount of interest which would have accrued on
such funds if such Lender had placed such funds on deposit with a prime bank in
the London interbank borrowing market from the date of such prepayment until the
end of such Interest Period, discounted in each case to present value using the
interest rate then existing on U.S. Treasury obligations maturing as of the end
of such Interest Period, as reasonably determined by the Syndication Agent. A
certificate in reasonable detail setting forth the calculation of such loss or
expense, including the amount and method of calculation, shall be submitted to
the Company by the Lender or Lenders requesting such reimbursement and, in the
absence of manifest error, shall be conclusive.
3.5 REIMBURSEMENT AND INDEMNIFICATION. The Company shall indemnify each
---------------------------------
Lender against any reasonable losses or out-of-pocket expenses incurred by such
Lender as a result of (i) any failure by the Company to borrow any LIBOR Advance
after having given notice of its intention to borrow in accordance with Section
3.1 (whether by reason of the Company's election not to proceed or the non-
fulfillment of any of the conditions set forth in this Agreement), (ii) any
payment, prepayment, or conversion of any LIBOR Rate Loan other than on the
Payment Date for such LIBOR Rate Loan, (iii) failure by the Company to pay the
principal amount of any LIBOR Rate Loan when due (whether at the stated
maturity, by reason of acceleration or otherwise), (iv) failure by the Company
to convert an Advance or Revolving Credit Loan or portion thereof into another
Type of Advance or Revolving Credit Loan after having given notice of
conversion, or (v) any failure by the Company to fulfill, on or before the date
specified for such Advance, the applicable conditions set forth in this
Agreement, including without limitation, all such losses and out-of-pocket
expenses incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund the Advance to be made by such
Lender when such Advance, as a result of such failure, is not made on such date.
A certificate in reasonable detail setting forth the calculation of such loss or
expense, including the amount and method of calculation, shall be submitted to
the Company by the Lender requesting such indemnification and, in the absence of
manifest error, shall be conclusive.
-25-
3.6 DEFAULT RATE. Subject to Section 10.3, at the discretion of the
------------
Syndication Agent and the Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) no further LIBOR Advances shall be made
and no outstanding Revolving Credit Loan shall be converted to a LIBOR Rate
Loan, (ii) all outstanding LIBOR Rate Loans shall bear interest at a rate per
annum two percent (2%) in excess of the rate that would otherwise be applicable
thereto until the end of the applicable Interest Period and thereafter at a rate
two percent (2%) in excess of the rate then applicable to Base Rate Loans, and
(iii) all outstanding Base Rate Loans shall bear interest at a rate per annum
two percent (2%) in excess of the rate then applicable to Base Rate Loans.
SECTION 4
LETTER OF CREDIT FACILITY
-------------------------
4.1 L/C COMMITMENT. Subject to the terms and conditions hereof, the
--------------
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 4.4(a), agrees to issue letters of credit (the "Letters of Credit") for
the account of the Company or the Company and one or more Subsidiaries on any
Business Day from the date hereof to but excluding the Commitment Termination
Date in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to issue any Letter of
Credit if, after giving effect to such issuance, the L/C Obligations would
exceed the lesser of (i) the Aggregate Commitment less the sum of all
outstanding Revolving Credit Loans and all outstanding Swingline Loans and (ii)
the L/C Commitment less the L/C Obligations attributable to the Existing
NationsBank Letters of Credit. Each Letter of Credit shall (i) be denominated
in United States Dollars in a minimum amount of $50,000, (ii) be a standby
letter of credit issued to support the Contingency Amount or obligations of the
Company or the Company and one or more of its Subsidiaries, contingent or
otherwise, with respect to environmental and insurance matters and other
corporate purposes incurred in the ordinary course of business, (iii) expire on
a date satisfactory to the Issuing Lender, which date shall be no later than the
Commitment Termination Date and (iv) be subject to the Uniform Customs and, to
the extent not inconsistent therewith, the laws of the Commonwealth of Virginia.
The Issuing Lender shall not at any time be obligated to issue any Letter of
Credit hereunder if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
law. References herein to "issue" and derivations thereof with respect to
Letters of Credit shall also include extensions or modifications of any existing
Letters of Credit, unless the context otherwise requires.
4.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Company may from
-------------------------------------------
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender a L/C Application therefor, completed to the
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any L/C Application, the Issuing Lender shall process such L/C Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 4.1 and Section 6, promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing
-26-
Lender be required to issue any Letter of Credit earlier than three (3) Business
Days after its receipt of the L/C Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Company. The Issuing
Lender shall furnish to the Company a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
participation therein, all promptly following the issuance of such Letter of
Credit.
4.3 COMMISSIONS AND OTHER CHARGES.
-----------------------------
(A) ANNUAL LETTER OF CREDIT COMMISSION. The Company shall pay to the
----------------------------------
Syndication Agent, for the account of the Issuing Lender and the L/C
Participants, an annual letter of credit commission with respect to each Letter
of Credit in an amount equal to the L/C Fee in effect from time to time. The
annual letter of credit commission for each Letter of Credit shall be payable
annually in advance on the date the Letter of Credit is issued and on each
anniversary of such date occurring prior to the date such Letter of Credit
expires or is otherwise terminated, and each installment of such annual letter
of credit commission shall be equal to the product of (i) the face amount of the
Letter of Credit, times (ii) the L/C Fee in effect on the day such annual
installment is due; provided that, if the remaining term of such Letter of
Credit on the date any installment of the annual letter of credit commission is
due is less than a full year, the annual letter of credit commission due on such
date shall be prorated based on the remaining term of the Letter of Credit. The
Company shall be entitled to a pro rata refund of any annual letter of credit
commission installment paid to the extent that it has been paid in advance for a
full year and the applicable Letter of Credit expires or is otherwise terminated
prior to the end of such year.
(B) PAYMENTS TO L/C PARTICIPANTS. The Syndication Agent shall, promptly
----------------------------
following its receipt thereof, distribute to the Issuing Lender and the L/C
Participants ratably in accordance with their respective Commitment Percentages
all annual letter of credit commissions received by the Syndication Agent;
provided that, in the event that any portion of any such annual letter of credit
commission is required to be refunded to the Company as provided in Section
4.3(a), each L/C Participant shall return to the Syndication Agent its
Commitment Percentage of the amount required to be refunded.
(C) ISSUING COMMISSION. In addition to the annual letter of credit
------------------
commission described above, the Company shall pay to the Syndication Agent, for
the account of the Issuing Lender, a one-time issuance commission of one-
sixteenth of one percent (1/16th of 1%) of the face amount of each Letter of
Credit. The issuance commission for each Letter of Credit shall be payable in
advance on the date the Letter of Credit is issued and shall be equal to the
product of (i) the face amount of the Letter of Credit, times (ii) 1/16th of 1%.
-27-
4.4 L/C PARTICIPATIONS.
------------------
(A) GRANT AND ACCEPTANCE OF PARTICIPATIONS. The Issuing Lender irrevocably
--------------------------------------
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage of the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder (other than the annual
issuing commission) and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Company in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand an amount equal to such L/C Participant's Commitment Percentage of
the amount of such draft, or any part thereof, which is not so reimbursed.
(B) PAYMENTS BY L/C PARTICIPANTS. Upon becoming aware of any amount
----------------------------
required to be paid by any L/C Participant to the Issuing Lender pursuant to
Section 4.4(a) in respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each
L/C Participant of the amount and due date of such required payment and such L/C
Participant shall pay to the Issuing Lender the amount specified on the
applicable due date. If any such amount is paid to the Issuing Lender after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand, in addition to such amount, the product of (i) such amount, times
(ii) the daily average Federal Funds Rate as determined by the Syndication Agent
during the period from and including the date such payment is due to the date on
which such payment is immediately available to the Issuing Lender, times (iii) a
fraction, the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. A certificate of the Issuing Lender
with respect to any amounts owing under this Section 4.4(b) shall be conclusive
in the absence of manifest error. With respect to payment to the Issuing Lender
of the unreimbursed amounts described in this Section 4.4(b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Eastern Time) on any Business Day, such payment shall be due that Business Day,
and (B) after 1:00 p.m. (Eastern Time) on any Business Day, such payment shall
be due on the following Business Day.
(C) REVERSAL OF PAYMENTS. Whenever, at any time after the Issuing Lender
--------------------
has made payment under any Letter of Credit and has received from any L/C
Participant its Commitment Percentage of such payment in accordance with this
Section 4.4, the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Company or otherwise), or any payment of
interest on account thereof, the Issuing Lender will distribute to such L/C
Participant its pro rata share thereof; provided that in the event that any such
payment received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such L/C Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.
-28-
4.5 REIMBURSEMENT OBLIGATION OF THE COMPANY. The Company agrees to
---------------------------------------
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Company of the date and amount of a draft paid under any Letter of Credit
for the amount of (a) such draft so paid and (b) any taxes, fees, charges or
other costs or expenses reasonably incurred by the Issuing Lender in connection
with such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Company under this Section 4 from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate which would be payable on any outstanding Base Rate
Loan which was then overdue. If the Company fails to timely reimburse the
Issuing Lender on the date the Company receives the notice referred to in this
Section 4.5, the Company shall be deemed to have timely given a Notice of
Borrowing hereunder to the Administrative Agent requesting the Lenders to make a
Base Rate Loan on such date in an amount equal to the amount of such drawing
and, regardless of whether or not the conditions precedent specified in Section
6 have been satisfied, the Lenders shall make Revolving Credit Loans in such
amount, the proceeds of which shall be applied to reimburse the Issuing Lender
for the amount of the related drawing and costs and expenses.
4.6 OBLIGATIONS ABSOLUTE. The Company's obligations under this Section 4
--------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Company may have or have had against the Issuing Lender or any beneficiary of a
Letter of Credit. The Company also agrees with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Company's reimbursement
obligation under Section 4.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Company and any beneficiary of any Letter of Credit
or any other party to which such Letter of Credit may be transferred or any
claims whatsoever of the Company against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Company agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC shall
be binding on the Company and shall not result in any liability of the Issuing
Lender to the Company. The responsibility of the Issuing Lender to the Company
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
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4.7 EFFECT OF L/C APPLICATION. To the extent that any provision of any
-------------------------
L/C Application related to any Letter of Credit is inconsistent with the
provisions of this Section 4, the provisions of this Section 4 shall control.
4.8 EXISTING NATIONSBANK LETTERS OF CREDIT. The Issuing Lender, each L/C
--------------------------------------
Participant and NationsBank acknowledge and agree that the Existing NationsBank
Letters of Credit will remain outstanding until they expire or are otherwise
terminated or until they are replaced with Letters of Credit issued hereunder.
NationsBank hereby irrevocably agrees to grant and hereby grants to the Issuing
Lender and each L/C Participant, and, to induce NationsBank to permit the
Existing NationsBank Letters of Credit to remain outstanding, the Issuing Lender
and each L/C Participant irrevocably agree to accept and purchase and hereby
accept and purchase from NationsBank for their respective own accounts and risk
an undivided interest, equal to such Issuing Lender's and such L/C Participants'
respective Commitment Percentages, of NationsBank's obligations and rights under
each Existing NationsBank Letter of Credit and the amount of each draft paid by
NationsBank thereunder. The Issuing Lender and each L/C Participant
unconditionally and irrevocably agree with NationsBank that, if a draft is paid
under any Existing NationsBank Letter of Credit for which NationsBank is not
reimbursed in full by the Company, the Issuing Lender and the L/C Participants
shall pay to NationsBank upon demand an amount equal to their respective
Commitment Percentages of the amount of such draft, or any part thereof, which
is not so reimbursed.
SECTION 5
REPRESENTATIONS
---------------
The Company represents and warrants to each of the Lenders that:
5.1 SUBSIDIARIES. The Company has the following Subsidiaries as of the
------------
date hereof and no others:
JR Coal, Inc.
Xxxxxxx Coal Corporation
Xxxxx River Coal Service Company
Leeco, Inc.
Xxxx County Coal Corporation
Xxxxx River Coal Sales, Inc.
Xxxxx Creek Elkhorn Coal Corporation
XxXxx Elkhorn Coal Corporation
Xxxxx Creek Coal Company
Pike County Resources, Inc.
Kimkev Mining Corporation
Primary Energies Corporation
Transco Coal Company
Xxxxxxxxx & Company, Inc.
Xxxxxxx Coal Leasing Company
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Typo Mining, Inc.
XxXxxxxx Corporation
Each such Subsidiary is a Wholly-Owned Subsidiary.
5.2 GOOD STANDING. Each of the Company and its Subsidiaries is a
-------------
corporation organized and existing in good standing under the laws of the
jurisdiction of its incorporation, and each such corporation has the corporate
power to own its property and to carry on its business as now being conducted
and is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary and in
which the failure so to qualify would have a material adverse effect on the
financial condition or operations of the Company and its Subsidiaries on a
Consolidated basis.
5.3 CORPORATE AUTHORITY. The Company has full corporate power and
-------------------
authority to enter into this Agreement, to make the borrowings hereunder, to
execute and deliver the Revolving Credit Notes and the Swingline Note and to
incur the obligations provided for herein and therein, all of which have been
duly authorized by all proper and necessary corporate action. The Company and
each Subsidiary which is a party thereto have or will have full corporate power
and authority to execute and deliver each L/C Application at the time it is
delivered and to incur the obligations provided for therein, all of which have
been or at the time of such delivery will have been duly authorized by all
proper and necessary corporate action. No consent or approval of shareholders
of the Company or consent or approval of, notice to or filing with, any
Governmental Authority is required as a condition to the validity of this
Agreement, any of the Revolving Credit Notes, the Swingline Note, any L/C
Application or any other Loan Document.
5.4 BINDING AGREEMENTS. This Agreement constitutes, each of the Revolving
------------------
Credit Notes and the Swingline Note when issued and delivered pursuant hereto
for value received will constitute and each L/C Application when executed and
delivered to the Issuing Lender will constitute, the valid and binding
obligations of the Company and the applicable Subsidiaries enforceable in
accordance with their respective terms.
5.5 LITIGATION. Except as disclosed on Schedule 5.5, there are no
---------- ------------
proceedings pending or, so far as the officers of the Company know, threatened
before any court or administrative agency that, in the opinion of the officers
of the Company, will materially adversely affect the financial condition or
operations of the Company and its Subsidiaries on a Consolidated basis or
affect the validity or enforceability of this Agreement, any of the Revolving
Credit Notes, the Swingline Note, any L/C Application or any other Loan
Document.
5.6 NO CONFLICTING AGREEMENTS. There is no provision of the charter or
-------------------------
bylaws of the Company or any of its Subsidiaries and no provision of any
existing mortgage or indenture binding on the Company or any Subsidiary or
affecting their respective properties, and no provision of any other contract or
agreement binding on the Company or any Subsidiary or affecting their respective
properties which is (or together with other similar contracts and
-31-
agreements is) material to the operations, income, business prospects, financial
condition or assets of the Company and its Subsidiaries considered as a whole,
or that would conflict with or in any way prevent the execution, delivery, or
carrying out of the terms of this Agreement, any of the Revolving Credit Notes,
the Swingline Note, any L/C Application or any other Loan Document.
5.7 FINANCIAL CONDITION. The Consolidated balance sheet of the Company
-------------------
and its Subsidiaries as of December 31, 1997, and the related Consolidated
statements of income and retained earnings and cash flows for the period then
ended, certified by KPMG Peat Marwick, LLP, heretofore delivered to the Lenders,
are complete and correct and fairly present the Consolidated financial condition
of the Company and its Subsidiaries and the Consolidated results of operations
and cash flows as of the date and for the periods referred to therein and have
been prepared in accordance with GAAP. There are no material liabilities,
direct or indirect, fixed or contingent, of the Company or any of its
Subsidiaries as of the date of such balance sheet that are not reflected therein
or in the notes thereto or that have not been otherwise disclosed to each of the
Lenders in writing. There has been no material adverse change in the financial
condition, business prospects or operations of the Company or any of its
Subsidiaries since the date of such balance sheet, and there has been no other
material adverse change in the Company or any of its Subsidiaries since such
date.
5.8 TITLE TO PROPERTIES. Each of the Company and its Subsidiaries has
-------------------
good and indefeasible title to its real properties (other than properties which
it leases) and good title to all of its other properties and assets, including
the properties and assets reflected in the Consolidated balance sheet referred
to in Section 5.7 above (except for properties and assets disposed of in the
ordinary course of business), subject to no Lien of any kind except liens
permitted by Section 9.2. All leases necessary in any material respect for the
conduct of the respective businesses of the Company and its Subsidiaries are
valid and subsisting and are in full force and effect.
5.9 DISCLOSURE. Neither this Agreement nor any other document,
----------
certificate or statement furnished to the Lenders, or any of them, in writing by
or on behalf of the Company in connection herewith contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading. Although the
Company offers no assurances as to future events, the proforma Consolidated
income statement forecast 1997-2006, the proforma balance sheet forecast 1997-
2006, and the proforma Consolidated statement of changes in financial position
forecast 1997-2006, as last revised and supplemented and delivered to the
Lenders, were prepared on the basis of reasonable assumptions (based upon the
facts available to the Company at the time the assumptions were made) regarding
the Company and the Subsidiaries and their projected growth and performance.
Further, nothing has come to the attention of the Company since the making of
such assumptions, which would make such assumptions invalid or unreasonable in
any respect if the Company were to make such assumptions as of the date of the
execution hereof. There is no fact peculiar to the Company or any of its
Subsidiaries which materially adversely affects or in the future is likely (so
far as the Company can now reasonably foresee) materially and adversely to
affect the business, property or assets, or financial condition of the Company
or any of its Subsidiaries and
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which has not been set forth in this Agreement or in the other documents,
certificates and statements furnished to the Lenders by or on behalf of the
Company prior to the date hereof in connection with the transactions
contemplated hereby.
5.10 EMPLOYEE BENEFIT PENSION PLANS. No fact, including but not limited to
------------------------------
any Reportable Event, exists in connection with any employee benefit plan of the
Company or any Subsidiary covered by ERISA (including any plan of any member of
a controlled group of corporations and all trades and businesses (whether or not
incorporated) under common control which, together with the Company or any of
its Subsidiaries covered by ERISA, are treated as a single employer under
Section 414 of the Internal Revenue Code of 1986, as amended), which might
constitute grounds for the complete termination of any such plan by the PBGC or
for the appointment of any trustee to administer any such plan by the
appropriate United States District Court and which could have a material adverse
effect on the Company or its ability to perform its obligations hereunder.
5.11 TAXES. Except as disclosed on Schedule 5.11, each of the Company and
----- -------------
its Subsidiaries has filed or caused to be filed all tax returns which are
required to have been filed by it pursuant to applicable law. Each of the
Company and its Subsidiaries has paid, or made provisions for the payment of,
all taxes, assessments, fees and other governmental charges which have or may
have become due pursuant to those returns or otherwise, or pursuant to any
assessment received by the Company or such Subsidiary, except such taxes that
are being contested in good faith and by appropriate proceedings and as to which
adequate reserves (determined in accordance with GAAP) have been provided, and
no tax liens (except related solely to taxes not yet due) have been filed and,
to the best knowledge of the Company, no claims are being asserted against the
Company or any Subsidiary with respect to any such taxes, fees or other charges.
5.12 NO DEFAULTS. Neither the Company nor any of its Subsidiaries is in
-----------
default in the payment of principal of or any interest on any indebtedness for
borrowed money, and neither the Company nor any of its Subsidiaries is in
default under any instrument under or subject to which any such indebtedness has
been incurred, and no event has occurred under the provisions of any such
instrument which, with the giving of notice or the lapse of time, or both, would
constitute an event of default thereunder.
5.13 FEDERAL REGULATIONS. No part of the proceeds of the Revolving Credit
-------------------
Loans or the Swingline Loans will be used, directly or indirectly, by the
Company for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any other purpose which violates the provisions of the
regulations of such Board of Governors.
5.14 ENVIRONMENTAL COMPLIANCE. Each of the Company and its Subsidiaries
------------------------
and each of their respective properties and assets are in compliance with all
Environmental Laws except where a failure to be in compliance would not have a
material adverse effect on the financial condition or operations of the Company
and its Subsidiaries on a Consolidated basis.
-33-
5.15 MATERIAL CONTRACTS. Except for the contracts specified on Schedule
------------------ --------
5.15, neither the Company nor any of its Subsidiaries is a party to any
----
contract, the termination of which would have a material adverse effect on the
business, condition or operations of the Company and its Subsidiaries on a
Consolidated basis.
5.16 CONTROLLING STOCKHOLDERS. Xxxxx X. Xxxxxxxx and other members of the
------------------------
Company's senior management own and control not less than twenty-five percent
(25%) of the Voting Stock of the Company, and Xxxxx X. Xxxxxxxx is the chief
executive officer of the Company (there being no more senior management position
of the Company).
SECTION 6
CONDITIONS OF LENDING AND ISSUING LETTERS OF CREDIT
---------------------------------------------------
The obligation of the Lenders to make the Revolving Credit Loans and each
Advance, the obligation of the Swingline Lender to make Swingline Loans and the
obligation of the Issuing Lender to issue Letters of Credit and the Lenders to
participate therein are subject to the following conditions precedent:
6.1 APPROVAL OF BANK'S COUNSEL. All legal matters incident to the Loans
--------------------------
and the issuance of the Letters of Credit, including without limitation all
documents and opinions, shall be satisfactory to counsel for the Syndication
Agent and each of the Lenders.
6.2 COMPLIANCE. At the time of the making of each Loan and at the time of
----------
the issuance of each Letter of Credit, (i) the Company shall have complied and
shall then be in compliance with all the terms, covenants and conditions of this
Agreement and the other Loan Documents that are applicable to it, (ii) there
shall exist no Default or Event of Default, (iii) the representations and
warranties contained in Section 5 of this Agreement shall, except to the extent
that they relate solely to an earlier date, be true in all material respects
with the same effect as though such representations and warranties had been made
at the time of the making of such Loan or the issuance of such Letter of Credit
and after giving effect to such Loan or the issuance of such Letter of Credit,
and (iv) there shall have been no material adverse change in the financial
condition, business prospects or operations of the Company or any of its
Subsidiaries. Each borrowing hereunder and each delivery of an L/C Application
hereunder shall be deemed a repre sentation by the Company that each of the
conditions set forth in this Section 6.2 has been satisfied. (For purposes of
this Section 6.2, no change of any Revolving Credit Loan from one Type to
another Type and no continuation of any Revolving Credit Loan shall be deemed to
be the making of a new Revolving Credit Loan unless additional funds are
advanced.)
6.3 DOCUMENTS. The Documentation Agent shall have received an executed
---------
counterpart of this Agreement from the Company and each of the Lenders, and the
Company shall have executed and delivered the original Revolving Credit Notes to
the Lenders and the original Swingline Note to the Swingline Lender.
6.4 EVIDENCE OF CORPORATE ACTION. The Documentation Agent and each of the
----------------------------
Lenders shall have received certified copies of papers evidencing all corporate
action taken by
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the Company to authorize this Agreement, the Revolving Credit Notes, the
Swingline Note and the borrowings hereunder and such other papers as the
Documentation Agent or any of the Lenders shall reasonably require, and at the
time of the issuance of each Letter of Credit, the Documentation Agent and each
of the Lenders shall have received certified copies of papers evidencing all
corporate action taken by the Company and each Subsidiary which is a party to
such L/C Application to authorize the L/C Application for such Letter of Credit.
6.5 OPINION OF COMPANY COUNSEL. The Documentation Agent and each of the
--------------------------
Lenders shall have received a favorable written opinion of counsel for the
Company, satisfactory in form and substance to the Documentation Agent and
Lenders and their respective counsel, dated as of the date this Agreement is
executed.
6.6 OTHER DOCUMENTS. The Company shall have delivered to the
---------------
Documentation Agent and each of the Lenders such other documents and information
as may have been reasonably requested by the Documentation Agent or any of the
Lenders.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
So long as the Company may borrow hereunder or have Letters of Credit
issued hereunder and so long as any Letter of Credit shall be outstanding and
until payment in full of all of the Notes, performance of all obligations of the
Company under each L/C Application and performance of all other Obligations, the
Company will:
7.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. (a) Furnish to each of
------------------------------------------
the Lenders, as soon as practicable and in any event within forty-five (45) days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year of the Company, Consolidated and consolidating statements of
income and a Consolidated statement of cash flows of the Company and its
Subsidiaries for the period from the beginning of the current fiscal year to the
end of such quarterly period and for the period from the beginning of such
quarterly period to the end of such quarterly period, and a Consolidated balance
sheet of the Company and its Subsidiaries (and a Company only balance sheet) as
at the end of such quarterly period, setting forth in each case in comparative
form figures for the corresponding period in the preceding fiscal year, all in
reasonable detail and satisfactory in form to each of the Lenders and certified
by the chief financial officer of the Company, subject to changes resulting from
normal year-end adjustments;
(b) Furnish to each of the Lenders, as soon as practicable and in any event
within ninety (90) days after the end of each fiscal year of the Company,
Consolidated and consolidating statements of income and a Consolidated statement
of cash flows and a Consolidated statement of stockholders' equity of the
Company and its Subsidiaries for such year, and a Consolidated balance sheet of
the Company and its Subsidiaries (and a Company only balance sheet) as at the
end of such year, setting forth in each case in comparative form corresponding
and Consolidated figures from the preceding annual audited financial statements,
all in reasonable detail and satisfactory in form to each of the Lenders. The
Consolidated statements will be reported on by
-35-
independent public accountants of recognized national standing selected by the
Company whose report shall be without limitation as to the scope of the audit
and satisfactory in substance to each of the Lenders, and the consolidating
statements will be certified by an authorized financial officer of the Company;
(c) Furnish to each of the Lenders, promptly upon transmission thereof,
copies of all such financial statements, proxy statements, notices and reports,
if any, as it shall send to its stockholders and copies of all registration
statements (without exhibits and other than statements on Form S-8) and all
reports (other than reports on Forms 3, 4 or 5) which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission) and
copies of all reports or filings with the Federal Department of Energy, the
Federal Department of Health and Human Services, or the Federal Department of
Labor, other than filings made in the ordinary course of business with respect
to employee benefit plans of the Company and its Subsidiaries;
(d) Furnish to each of the Lenders, promptly upon receipt thereof, a copy
of each other written report submitted to the Company or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Company or any Subsidiary;
(e) Furnish to each of the Lenders, promptly upon receipt thereof, any
valuation by an independent third party of the Company's common stock;
(f) Furnish to each of the Lenders, with reasonable promptness, such other
data regarding the financial status, business or operations of the Company or
any Subsidiary as any of the Lenders may reasonably request, including, without
limitation, data regarding the adequacy of the reserves of the Company and its
Subsidiaries relating to coal miners' pneumoconiosis and land reclamation;
(g) Furnish to each of the Lenders, as soon as available, and in any event
not later than February 15 of each year, an annual budget for the Company and
its Subsidiaries signed by an Authorized Officer which shall be substantially in
the form of the budget prepared for calendar year 1998, a copy of which has been
delivered to each of the Lenders;
(h) Furnish to each of the Lenders, promptly upon receipt thereof, a copy
of each written report by an independent engineer or consultant or any such
internal written report relating to the proven reserves of coal which are owned
of record or beneficially by the Company or any Subsidiary or held by any of
them or otherwise controlled by any of them under lease or otherwise controlled
by any of them; and
(i) Promptly advise each of the Lenders in writing of (i) any and all
material enforcement, cleanup, remedial, removal, or other governmental or
regulatory actions instituted, completed or threatened in writing pursuant to
any applicable Environmental Law relating to any Hazardous Materials affecting
any real property owned or leased by the Company or any Subsidiary or their
respective business operations, (ii) all material claims made or threatened in
-36-
writing by any third party against the Company or any Subsidiary relating to
damages, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials, and (iii) any material remedial action taken by the
Company or any Subsidiary with respect to any Hazardous Materials affecting any
such property or their respective business operations;
Together with each delivery of financial statements required by Sections 7.1(a)
and (b), the Company will deliver to each of the Lender's an officer's
certificate computing the Applicable LIBOR Margin, demonstrating (with
computations in reasonable detail) compliance by the Company and its
Subsidiaries with the provisions of Sections 8.1, 8.2, 8.3, 8.4, 9.1 and 9.3 and
stating that there exists no Default or Event of Default, or, if any Default or
Event of Default exists, specifying the nature and period of existence thereof
and what action the Company proposes to take with respect thereto; and together
with each delivery of financial statements required by Section 7.1(b) above, the
Company will deliver to each of the Lenders a certificate of such accountants
stating that, in making the audit necessary for the certification of such
financial statements, they have obtained no knowledge of any Default or Event of
Default, or, if they have obtained knowledge of any Default or Event of Default,
specifying the nature and period of existence thereof. Such accountants,
however, shall not be liable to anyone by reason of their failure to obtain
knowledge of any Default or Event of Default which would not be disclosed in the
course of an audit conducted in accordance with generally accepted auditing
standards.
The Company also covenants that forthwith upon the chief executive officer,
principal financial officer or principal accounting officer of the Company
obtaining knowledge of:
(i) a Default or an Event of Default;
(ii) a material adverse change in the financial condition, business
or operations of the Company or any of its Subsidiaries;
(iii) the institution of legal proceedings against the Company and/or
any Subsidiary, which could reasonably be expected to have a material adverse
effect upon the financial condition, business or operations of the Company and
its Subsidiaries, taken as a whole, or which in any manner draws into question
the validity of or has a reasonable possibility of impairing the ability of the
Company to perform its obligations under this Agreement or any of the Notes; or
(iv) the occurrence of any default under the Note Agreement or any
other agreement or note evidencing Indebtedness for Borrowed Money of the
Company or any Subsidiary;
the Company will deliver to each of the Lenders an officer's certificate
specifying the nature and period of existence thereof and what action the
Company has taken, is taking or proposes to take with respect thereto.
7.2 TAXES. Pay and discharge, and cause each of its Subsidiaries to pay
-----
and discharge, all taxes, assessments, and governmental charges upon it, its
income, and its properties
-37-
prior to the date on which penalties are attached thereto, unless and to the
extent only that (i) such taxes, assessments, and governmental charges are being
contested by the Company or such Subsidiary, as the case may be, in good faith
and by appropriate proceedings, and (ii) the Company or such Subsidiary, as the
case may be, has established on its books adequate reserves with respect to such
tax, assessment or charge so contested in accordance with GAAP.
7.3 PAYMENT OF OBLIGATIONS. Pay and discharge, and cause each of its
----------------------
Subsidiaries to pay and discharge, at or before their maturity all indebtedness
and other obligations and liabilities of the Company and its Subsidiaries,
except when (i) the same may be contested by the Company or such Subsidiary, as
the case may be, in good faith and by appropriate proceedings, and (ii) the
Company or such Subsidiary, as the case may be, has established on its books
adequate reserves with respect to such indebtedness, obligation or liability in
accordance with GAAP.
7.4 INSURANCE. Maintain, and cause each of its Subsidiaries to maintain,
---------
with responsible insurers, insurance with respect to its properties and business
against casualties and contingencies (including, but not limited to, public
liability, larceny, embezzlement and other criminal misappropriation), and in
such amounts, as is customary in the case of similarly situated corporations
engaged in the same or similar businesses; and maintain, with responsible
insurers, key-man life insurance with respect to Xxxxx X. Xxxxxxxx providing for
the payment to the Company of at least $5,000,000 upon the death of such
individual.
7.5 CORPORATE EXISTENCE. Maintain, and cause each of its Subsidiaries to
-------------------
maintain, its corporate existence in good standing, except as otherwise
permitted by Section 9.6.
7.6 LICENSES AND PERMITS. Maintain, and cause each of its Subsidiaries to
--------------------
maintain, all permits, licenses, authorizations and approvals required to own
and operate the businesses and other properties of the Company and its
Subsidiaries, except where a failure to maintain any such permit, license,
authorization or approval would not have a material adverse effect on the
financial condition or operations of the Company or any of its Subsidiaries.
7.7 PROPERTIES. Maintain, preserve, and protect, and cause each of its
----------
Subsidiaries to maintain, preserve, and protect, all franchises and trade names
and preserve all the remainder of its property used or useful in the conduct of
its business and keep the same in good repair, working order, and condition, and
from time to time make or cause to be made all needful and proper repairs,
renewals, replacements, betterments, and improvements thereto so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, and permit the Lenders and their respective agents to
enter upon and inspect such properties during normal business hours upon
reasonable notice.
7.8 EMPLOYEE BENEFIT PENSION PLANS. Promptly during each year, pay, and
------------------------------
cause each of its Subsidiaries to pay, contributions that in the judgment of the
chief financial officer of the Company after reasonable inquiry are believed
adequate to meet at least the minimum funding standards set forth in Sections
302 through 305 of ERISA with respect to each employee benefit pension plan of
the Company and its Subsidiaries, if any, covered by ERISA; file, and cause each
of its Subsidiaries to file, each annual report required to be filed pursuant to
Section
-38-
103 of ERISA in connection with each such plan for each year; and notify each of
the Lenders within ten (10) days of the occurrence of a Reportable Event (as
defined in Section 4043 of ERISA) that might constitute grounds for termination
of any such plan by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer any such plan.
7.9 BUSINESS CONTINUATION. Continue, and cause each of its Subsidiaries
---------------------
to continue, to operate its business substantially as currently operated, except
where a change in such operation would not have a material adverse effect on the
financial condition or operations of the Company or any of its Subsidiaries.
7.10 COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of its
----------------------------------
Subsidiaries to comply, in all material respects with all applicable
Environmental Laws.
7.11 OTHER APPLICABLE LAWS. Comply, and cause each of its Subsidiaries to
---------------------
comply, in all material respects with all other applicable laws, including,
without limitation, laws and regulations related to equal employment opportunity
and employee safety, the Black Lung Benefits Act, 30 U.S.C. (S)(S) 901-945 (1986
& Supp. 1991), 26 U.S.C. (S) 9501 (1986), and all other laws, rules and
regulations relating to coal workers' pneumoconiosis, workers' compensation and
land reclamation, the failure to comply with which could reasonably be expected
to have a material adverse effect upon the business, operations, or financial
condition of the Company or any of its Subsidiaries.
7.12 GAAP. Maintain, and cause each of its Subsidiaries to maintain, its
----
books and records in accordance with GAAP.
7.13 SUBSEQUENT GUARANTY. In the event that the Company has violated one
-------------------
or more of the covenants contained in Section 8 as of the end of two consecutive
fiscal quarters of the Company, provide to the Lenders, promptly upon the
request of any of the Lenders, a guaranty agreement, substantially in the form
of Exhibit E attached hereto (with any Subsidiaries formed or acquired after the
---------
date hereof added thereto as guarantors and with the blanks therein
appropriately completed), duly executed and delivered by each of the Company's
Subsidiaries along with such corporate authorizations and legal opinions
relating to those Subsidiaries as the Lenders, or any of them, may require; it
being understood and agreed that the Lenders' rights under this Section 7.13 are
in addition to, and not in lieu of, the other rights and remedies available to
the Lenders in the event of a violation of any of the covenants contained in
Section 8, and that the acceptance by the Lenders, or any of them, of the
guaranty agreement described above will not constitute or be deemed to be a
waiver of any Default or Event of Default.
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SECTION 8
FINANCIAL COVENANTS
-------------------
So long as the Company may borrow hereunder or have Letters of Credit
issued hereunder and so long as any Letter of Credit shall be outstanding and
until payment in full of all of the Notes, performance of all obligations of the
Company under each L/C Application and performance of all other Obligations:
8.1 CONSOLIDATED NET WORTH. The Company will maintain Consolidated Net
----------------------
Worth at not less than (i) $70,000,000 at all times from the date hereof through
and including December 31, 1998, and, (ii) $75,000,000 at all times thereafter.
8.2 SENIOR DEBT TO EBITDA RATIO. The Company will not permit the Senior
---------------------------
Debt to EBITDA Ratio, measured as of the end of each fiscal quarter of the
Company beginning as of June 30, 1998, to exceed (i) 3.15 to 1 at any time from
June 30, 1998, through and including December 31, 1998, (ii) 3.0 to 1 at any
time thereafter through and including December 31, 1999, (iii) 2.75 to 1 at any
time thereafter through and including December 31, 2000, or (iv) 2.5 to 1 at any
time thereafter.
8.3 TOTAL DEBT TO EBITDA RATIO. The Company will not permit the Total
--------------------------
Debt to EBITDA Ratio, measured as of the end of each fiscal quarter of the
Company beginning as of June 30, 1998, to exceed 3.2 to 1 at any time.
8.4 FIXED CHARGE COVERAGE RATIO. The Company will not permit the Fixed
---------------------------
Charge Coverage Ratio, measured as of the end of each fiscal quarter of the
Company beginning as of June 30, 1998, to be less than 1.5 to 1 at any time.
SECTION 9
NEGATIVE COVENANTS
------------------
So long as the Company may borrow hereunder or have Letters of Credit
issued hereunder and so long as any Letter of Credit shall be outstanding and
until payment in full of all of the Notes, performance of all obligations of the
Company under each L/C Application and performance of all other Obligations,
without the prior written consent of the Required Lenders, the Company will not:
9.1 ADDITIONAL DEBT. Create, incur, assume or suffer to exist, or permit
---------------
any Subsidiary to create, incur, assume or suffer to exist, any Debt, except (i)
Debt owing to the Lenders hereunder, (ii) Debt existing as of the date hereof
and reflected on the financial statements described in Section 5.7, (iii) Debt
outstanding under the Note Agreement, (iv) Debt owing from the Company to a
Subsidiary, from a Subsidiary to the Company or from one Subsidiary to another
Subsidiary, (v) Permitted Contingent Obligations, (vi) Debt incurred to finance
the purchase of Fund Common Stock (as defined in the First Reserve Agreement
dated May 10, 1994) under the First Reserve Agreements, and (vii) additional
Debt that in the aggregate does not exceed ten percent (10%) of Consolidated Net
Worth at any time outstanding.
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9.2 MORTGAGES AND PLEDGES. Create, incur, assume, or suffer to exist, or
---------------------
permit any Subsidiary to create, incur, assume, or suffer to exist, any Lien on
any of its property or assets, whether now owned or hereafter acquired, except
(i) existing Liens and Liens on the same properties or assets securing renewals
or extensions of the obligations secured by such existing Liens, (ii) Liens for
taxes not yet delinquent or being contested in good faith and by appropriate
proceedings, (iii) Liens in connection with worker's compensation, unemployment
insurance, or other social security obligations, (iv) deposits or pledges to
secure bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety or appeal bonds, and other obligations of
like nature arising in the ordinary course of business, (v) mechanic's,
worker's, materialman's, landlord's, carrier's, or other like Liens arising in
the ordinary course of business with respect to obligations that are not due or
that are being contested in good faith, (vi) Liens in favor of all of the
Lenders, (vii) zoning restrictions, rights of way, easements, licenses,
restrictions on the use of real property or minor irregularities in the title
thereto, which do not, in the opinion of the Company, materially impair the use
of such property in the operation of the business of the Company and its
Subsidiaries or the value of such property for the purposes of such business;
(viii) any Lien on any property hereafter acquired by the Company or a
Subsidiary created contemporaneously with such acquisition to secure or provide
for the payment or financing of any part of the purchase price thereof, or the
assumption of any Lien on any such property hereafter acquired existing at the
time of such acquisition, or the acquisition of any such property subject to any
Lien without the assumption thereof, provided that each such Lien shall attach
only to the property so acquired and fixed improvements thereon, (ix) judgment
Liens and any other similar Liens arising in connection with court proceedings,
provided that execution and other enforcement of such Lien is effectively stayed
and the judgment or claim secured thereby is being actively contested in good
faith and by appropriate proceedings, and (x) additional Liens securing Debt
that in the aggregate does not exceed ten percent (10%) of Consolidated Net
Worth at any time outstanding. Nothing contained in this Section 9.2 shall
prohibit the Company or any Subsidiary from entering into any lease required to
be capitalized by GAAP in accordance with the Financial Accounting Standards
Board Statement No. 13 (Accounting for Leases) in effect on June 1, 1992,
provided such lease is not otherwise prohibited by the terms of this Agreement.
9.3 DIVIDENDS. Declare or pay any dividends on any shares of any class of
---------
its capital stock, or apply any of its property or assets to the purchase,
redemption or other retirement of, or set apart any sum for the payment of any
dividends on, or for the purchase, redemption, or other retirement of, or make
any other distribution by reduction of capital or otherwise in respect of, any
shares of any class of capital stock of the Company or purchase, redeem or
otherwise acquire for value any warrant for the purchase of any shares of its
capital stock (all of the foregoing being referred to herein as "Restricted
Payments"), except out of Consolidated Net Earnings Available for Restricted
Payments; provided that none of the following will constitute Restricted
Payments for purposes of this Agreement or be included in any computation of
Consolidated Net Earnings Available for Restricted Payments: (i) dividends paid
or distributions made in stock of the Company, (ii) exchanges of stock of one or
more classes of the Company for common stock of the Company or for stock of the
Company of the same class except to the extent that cash or other value is
involved in such exchange, (iii) scheduled dividend payments required by the
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designation of any Preferred Stock or any redemption required by the designation
of any Preferred Stock or by Section 6.3 of the Warrant or any redemption
pursuant to the First Reserve Agreements at a price determined in accordance
with the First Reserve Agreements as in effect on the date hereof, (iv) the
redemption of up to $6,000,000 of Preferred Stock held by Xxxxxxxx Holdings, (v)
the redemption of up to 3,402 shares of the Company's Common Stock held by
Xxxxxxx X. Xxxxxxxx for an aggregate amount, excluding any interest on the
deferred portion of the redemption payment, not to exceed $12,500,000, (vi) any
redemption required by Section 2.1 of the Stockholders' Agreement if such
redemption payments are made with proceeds of life insurance dedicated to such
purpose (other than the proceeds of life insurance required to be maintained
under Section 7.4) or (vii) the redemption of up to $17,000,000 of preferred
stock, common stock and warrants held by General Electric Capital Corporation;
and provided further that, notwithstanding anything to the contrary contained
herein, the Company will not pay or make any Restricted Payment (or any dividend
or redemption excepted from the definition of Restricted Payment by the
preceding proviso) if a Default or an Event of Default has occurred or would
occur as a result thereof.
9.4 LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES. Make or
-------------------------------------------------------
permit to remain outstanding any Investment, or permit any Subsidiary to make or
permit to remain outstanding any Investment, except that the Company or any
Subsidiary may:
(i) make or permit to remain outstanding loans and advances to any
Subsidiary;
(ii) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Company or any Subsidiary;
(iii) own, purchase or acquire stock, obligations or securities of a
Subsidiary or of a corporation which immediately after such purchase or
acquisition will be a Subsidiary;
(iv) own, purchase or acquire (a) prime commercial paper (rated A2
or better by Standard & Poor's Ratings Group or P2 or better by Xxxxx'x
Investors Service, Inc.) and certificates of deposit in United States commercial
banks (having capital reserves in excess of $100,000,000), (b) direct
obligations of the United States Government or any agency thereof, and
obligations guaranteed by the United States Government, each having a term of
one year or less, (c) readily marketable shares in mutual funds managed by
managers of recognized standing and investing solely in the foregoing
investments or in readily marketable corporate debt securities rated A or better
by Standard & Poor's Ratings Group, and (d) repurchase agreements of United
States commercial banks having capital reserves in excess of $100,000,000 having
terms of one year or less;
(v) incur Permitted Contingent Obligations;
(vi) make Investments in connection with the management of pension
and other benefit plans of the Company and its Subsidiaries; and
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(vii) make or permit to remain outstanding loans and advances to
contract miner companies in the ordinary course of business as long as such
loans and advances do not exceed $1,000,000 at any time outstanding in the case
of any individual contract miner company or $3,000,000 in the aggregate at any
time outstanding for all such contract miner companies.
9.5 SALE OF STOCK OR DEBT. Sell or otherwise dispose of, or part with
---------------------
control of, or permit any Subsidiary to sell or otherwise dispose of, or part
with control of, any shares of stock or Debt of any Subsidiary, except to the
Company or another Subsidiary, and except that all shares of stock and Debt of
any Subsidiary at the time owned by or owed to the Company and all Subsidiaries
may be sold as an entirety for a cash consideration which represents the fair
value (as determined in good faith by the Company) at the time of sale of the
shares of stock and Debt so sold, provided that (i) the assets of such
Subsidiary do not constitute more than ten percent (10%) of the Consolidated
assets of the Company and all Subsidiaries, (ii) the earnings of such Subsidiary
shall not have contributed more than ten percent (10%) of Consolidated Net
Earnings for any one of the three fiscal years then most recently ended and
(iii) at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Debt of any other Subsidiary (unless all of
the shares of stock and Debt of such other Subsidiary owned, directly or
indirectly, by the Company and all Subsidiaries are simultaneously being sold as
permitted by this Section 9.5) or any Debt of the Company.
9.6 MERGER AND SALE OF ASSETS. Merge, consolidate or exchange shares with
-------------------------
any other corporation, sell, lease or transfer or otherwise dispose of any of
its assets to any Person for a consideration which is materially less than the
fair value (as valued in good faith by the Company) of such assets at the time
of the disposition, or sell, lease or transfer or otherwise dispose of (whether
for fair value or otherwise) assets of the Company and/or its Subsidiaries
(other than inventory in the ordinary course of business) which constitute more
than ten percent (10%) of the Consolidated assets of the Company and all
Subsidiaries or which shall have contributed more than ten percent (10%) of
Consolidated Net Earnings for any one of the three fiscal years then most
recently ended to any Person, or permit any Subsidiary to do so, except that:
(i) any Subsidiary may merge or consolidate with the Company
(provided that the Company shall be the continuing or surviving corporation) or
with any one or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose
of any of its assets to the Company or another Subsidiary; and
(iii) the Company may merge with any corporation provided (a) the
Company shall be the continuing or surviving corporation or (b) the surviving
corporation, if not the Company, assumes the obligations of the Company under
this Agreement, the Notes, and the L/C Applications, and in either case under
clauses (a) or (b), Xxxxx X. Xxxxxxxx and other members of the Company's senior
management immediately prior to the merger shall own and control not less than
twenty-five percent (25%) of the Voting Stock of the surviving corporation, and
no Default or Event of Default shall be in existence immediately after such
merger.
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9.7 SALE AND LEASEBACK. Enter into or permit to remain in effect, or
------------------
permit any Subsidiary to enter into or permit to remain in effect, any
arrangement with any Person or to which such Person is a party providing for the
leasing by the Company or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Company or any Subsidiary to any
Person to whom funds have been or are to be advanced on the security of such
property or rental obligations of the Company or any Subsidiary except for any
such arrangement described on Schedule 9.7.
------------
9.8 ENVIRONMENTAL LAW COMPLIANCE. Use or permit any other party to use
----------------------------
any Hazardous Materials at any place of business of the Company or any
Subsidiary except such materials as are incidental to the normal course of
business, maintenance and repair of the Company or such Subsidiary, and are used
and handled in strict accordance with all Environmental Laws. The Company
agrees to permit the Lenders, and their respective agents, contractors and
employees to enter and inspect any of the places of business of the Company or
any Subsidiary at any reasonable times upon three (3) days prior notice for the
purposes of conducting an environmental investigation and audit (including
taking physical samples) to insure that the Company and its Subsidiaries are
complying with this covenant. The Company shall provide each of the Lenders,
and their respective agents, contractors, employees and representatives with
access to and copies of any and all data and documents relating to or dealing
with any Hazardous Materials used, generated, manufactured, stored or disposed
of by the business operations of the Company and its Subsidiaries within five
(5) days of the request therefor.
9.9 PREPAYMENT OF PRUDENTIAL DEBT. Prepay any Debt now existing or
-----------------------------
hereafter out standing under the Note Agreement.
9.10 SUBORDINATED DEBT. Make any payment of principal, premium, if any, or
-----------------
interest on, or redeem or pay any dividend or other distribution with respect
to, any Subordinated Debt if a Default or an Event of Default has occurred and
is continuing hereunder or would occur as a result of such payment.
9.11 MARGIN STOCK. Use any portion of the proceeds of any of the Loans to
------------
purchase or carry "margin stock" as such term is defined in Regulation U of the
Board of Governors of the Federal Reserve System or to repay any indebtedness
which was incurred for the purpose of purchasing or carrying any margin stock.
9.12 STOCKHOLDERS' AGREEMENT. Amend or modify any of the provisions of the
-----------------------
Stockholders' Agreement in any manner that would adversely affect the rights of
the Lenders.
9.13 CERTAIN CONTRACTS. Enter into or be a party to (i) except to the
-----------------
extent permitted under Section 9.1 or 9.4 and except for Permitted Contingent
Obligations, any contract providing for the making by the Company or any
Subsidiary of loans, advances or capital contributions to any Person other than
a Subsidiary, or for the purchase of any property from any Person, in each case
in order to enable such Person to maintain working capital, net worth or any
other balance sheet condition or to pay debts, dividends or expenses, (ii) any
contract for the purchase of
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materials, supplies, or other property or services if such contract (or any
related document) requires that payment for such materials, supplies or other
property or services shall be made regardless of whether or not delivery of such
materials, supplies or other property or services is ever made or tendered,
(iii) any contract to rent or lease (as lessee) any real or personal property if
such contract (or any related document) provides that the obligation to make
payments thereunder is absolute and unconditional under conditions not
customarily found in commercial or mineral leases then in general use or
requires that the lessee purchase or otherwise acquire securities or obligations
of the lessor, (iv) any contract for the sale or use of materials, supplies or
other property, or the rendering of services, if such contract (or any related
document) requires that materials, supplies or other property, or the use
thereof, or payment for such services, shall be subordinated to any indebtedness
(of the purchaser or user of such materials, supplies or other property or the
Person entitled to the benefit of such services) owed or to be owed to any other
Person, or (v) any other contract which, in economic effect, is substantially
equivalent to a guarantee, except where the obligation is a Permitted Contingent
Obligation or otherwise permitted under this Agreement.
9.14 RESTRICTIONS ON SUBSIDIARIES. Permit any Subsidiary (i) either
----------------------------
directly, or indirectly by the issuance of warrants, rights or options for, or
securities convertible into, such shares or equity interest, to issue (other
than pursuant to an exercise of the Warrant), sell or otherwise dispose of any
shares of any class of its stock or other equity interest in such Subsidiary to
any Person other than the Company or another Subsidiary, (ii) to enter into or
otherwise be bound by or subject to any contract or agreement (including without
limitation any provision of its articles of incorporation or by-laws) that
imposes restrictions on its ability to pay dividends or other distributions on
account of stock; provided, however, that the restriction on the ability of
Leeco, Inc. to pay dividends contained in Section 12.3.9 of the Coal Purchase
Agreement dated July 1, 1997, by and between Enron Capital & Trade Resources
Corp. and Leeco, Inc. shall not constitute a violation of this Section 9.14 or
(iii) except as otherwise permitted under this Agreement, to issue, sell,
create, incur, assume or maintain Debt owing to or held by any Person other than
the Company or any other Subsidiary.
9.15 FIRST RESERVE AGREEMENTS. Exercise its "call rights" under Section
------------------------
3.1 of the First Reserve Agreements or otherwise require the Funds (as defined
in the First Reserve Agreement dated May 10, 1994) to sell the Fund Common Stock
(as defined in the First Reserve Agreement dated May 10, 1994) or any portion
thereof to the Company under the First Reserve Agreements if a Default or an
Event of Default has occurred and is continuing hereunder or if a Default or an
Event of Default would occur or be caused as a result of the purchase by the
Company of the applicable Fund Common Stock or the payment of the purchase price
therefor.
SECTION 10
EVENTS OF DEFAULT
-----------------
10.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event of
-----------------
Default, whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected
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by operation of law or pursuant to any judgment or order of any court or any
order, rule or regulation of any Governmental Authority or otherwise:
(a) Default shall be made in the payment of any installment of principal or
of interest upon any one or more of the Notes, when and as the same becomes due
and payable, whether at the stated maturity thereof, by mandatory prepayment, by
acceleration or otherwise and such default shall have continued unremedied for a
period of five (5) Business Days after the Syndication Agent shall have given
the Company notice of such default.
(b) Default shall be made in the payment of any installment of the Unused
Commitment Fee or any other fee or payment required to be made by the Company or
any Subsidiary to the Syndication Agent, the Documentation Agent, the
Administrative Agent, the Lenders, or any of them, pursuant to the terms hereof
or the terms of any L/C Application (other than principal or interest on the
Notes) and such default shall have continued unremedied for a period of five
(5) days after the Syndication Agent shall have given the Company notice of such
default.
(c) Default shall be made by the Company in the due observance or
performance of any covenant or agreement contained in Section 8.
(d) Default shall be made in the due observance or performance of any other
term, covenant, or agreement contained in this Agreement or any L/C Application
and such default shall have continued unremedied for a period of thirty (30)
days after the Syndication Agent shall have given the Company notice of such
default.
(e) Any representation or warranty made by the Company herein or any
statement or representation made in any certificate, report, or opinion
delivered pursuant hereto shall prove to have been incorrect in any material
respect when made.
(f) The Company or any Subsidiary shall be generally not paying its debts
as such debts become due, shall become insolvent or unable to meet its
obligations as they mature, shall make an assignment for the benefit of
creditors, shall consent to the appointment of a trustee or a receiver, or shall
admit in writing its inability to pay its debts as they mature.
(g) A trustee, receiver or custodian shall be appointed for the Company,
any Subsidiary or for a substantial part of any of their respective properties.
(h) Any case in bankruptcy shall be commenced, or any reorganization,
arrangement, insolvency, or liquidation proceedings shall be instituted, by or
against the Company or any Subsidiary and, if commenced or instituted against
it, be consented to by the Company or such Subsidiary, as the case may be, or
remain undismissed for a period of thirty (30) days.
(i) The Company or any Subsidiary shall default in the payment of any
indebtedness to any of the Lenders other than indebtedness arising under this
Agreement or an L/C Application
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and such default shall continue for a period of ten (10) days after any of the
Lenders shall have given the Company notice of such default.
(j) Any default shall be made in the performance of (i) any obligation
incurred by the Company under or in connection with the Warrant, the First
Reserve Agreements or any Preferred Stock or (ii) any obligation under the Note
Agreement or any other obligation incurred in connection with any Indebtedness
for Borrowed Money of the Company or any Subsidiary in excess of $750,000, if
the effect of such default is to permit the holder of such obligation (or a
trustee on behalf of such holder) to cause it to become due prior to its stated
maturity or to do so with the giving of notice or lapse of time, or both, or any
such obligation becomes due prior to its stated maturity or shall not be paid
when due.
(k) Any final judgment for the payment of money in excess of $750,000 which
is not adequately insured or indemnified against shall be rendered against the
Company or any Subsidiary and the same shall remain undischarged for a period of
twenty (20) days during which time execution shall not be effectively stayed.
(l) Any substantial part of the properties of the Company or any Subsidiary
shall be sequestered or attached and shall not have been returned to the
possession of the Company or such Subsidiary, as the case may be, or released
from such attachment within thirty (30) days.
(m) The occurrence of a Reportable Event as defined in Section 4043 of
ERISA which might constitute grounds for complete termination of any employee
benefit plan of the Company or any Subsidiary covered by ERISA by the PBGC or
grounds for the appointment by the appropriate United States District Court of a
trustee to administer any such plan and which could have a material adverse
effect on the Company or its ability to perform its obligations thereunder.
(n) (a) Xxxxx X. Xxxxxxxx and other members of the Company's senior
management shall fail, for any reason or at any time, to own and control at
least twenty-five percent (25%) of the Voting Stock of the Company, or (b) Xxxxx
X. Xxxxxxxx shall cease to be actively engaged in the management of the Company
in the most senior management level of the Company (other than by reason of
death).
(o) Any person or group of persons (within the meaning of Section 13(d) of
the Securities Exchange Act of 1934, as amended), other than Xxxxx X. Xxxxxxxx
and other members of the Company's senior management, shall obtain ownership or
control in one or more series of transactions of a percentage of the Voting
Stock of the Company which is greater than the percentage of the Voting Stock
then held by Xxxxx X. Xxxxxxxx and other members of the Company's senior
management.
10.2 REMEDIES. Upon the occurrence of an Event of Default, with the
--------
consent of the Required Lenders, the Syndication Agent may, or upon the request
of the Required Lenders, the Syndication Agent shall, by notice to the Company:
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(A) ACCELERATION; TERMINATION OF FACILITIES. Declare the principal of and
---------------------------------------
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Syndication
Agent, the Documentation Agent and the Administrative Agent under this Agreement
or any of the other Loan Documents (including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and all other
Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facilities and each of the Commitments and any right of the
Company to request borrowings or Letters of Credit thereunder; provided that
upon the occurrence of an Event of Default specified in Section 10.1(h), the
Credit Facilities shall be automatically terminated and all Obligations shall
automatically become due and payable.
(B) LETTERS OF CREDIT. With respect to all Letters of Credit with respect
-----------------
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Company at such
time to deposit in a cash collateral account opened by the Syndication Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Syndication Agent to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay the other
Obligations. After all such Letters of Credit shall have expired or been fully
drawn upon and all Obligations shall have been satisfied and paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Company.
(C) RIGHTS OF COLLECTION. Exercise on behalf of the Lenders all of its
--------------------
other rights and remedies under this Agreement, the other Loan Documents and
applicable law, in order to satisfy all of the Obligations.
10.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The enumeration of
-----------------------------------------------
the rights and remedies of the Syndication Agent and the Lenders set forth in
this Agreement is not intended to be exhaustive and the exercise by the
Syndication Agent and the Lenders of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative, and
shall be in addition to any other right or remedy given hereunder or under the
Loan Documents or that may now or hereafter exist in law or in equity or by suit
or otherwise. No delay or failure to take action on the part of the Syndication
Agent or any Lender in exercising any right, power or privilege shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude other or further exercise thereof or the exercise of
any other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Company, the Syndication
Agent and the Lenders or their respective agents or employees shall be effective
to change, modify or discharge any provision of this Agreement or any of the
other Loan Documents or to constitute a waiver of any Event of Default.
SECTION 11
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THE AGENTS
----------
11.1 APPOINTMENT. Each of the Lenders hereby irrevocably designates and
-----------
appoints First Union as Syndication Agent and Documentation Agent and
NationsBank as Administrative Agent of such Lender under this Agreement and the
other Loan Documents for the term hereof, and each such Lender irrevocably
authorizes First Union as Syndication Agent and Documentation Agent for such
Lender and NationsBank as Administrative Agent for such Lender 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 Syndication Agent, the Documentation Agent and the
Administrative Agent, as the case may be, by the terms of this Agreement and
such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, neither the Syndication Agent, the
Documentation Agent nor the Administrative Agent shall have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Syndication
Agent, the Documentation Agent or the Administrative Agent.
11.2 DELEGATION OF DUTIES. Each of the Syndication Agent, the
--------------------
Documentation Agent and the Administrative Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither the Syndication
Agent, the Documentation Agent nor the Administrative Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
such Agent with reasonable care.
11.3 EXCULPATORY PROVISIONS. Neither the Syndication Agent, the
----------------------
Documentation Agent nor the Administrative Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person's own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Company or any of its Subsidiaries or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Syndication Agent, the Documentation Agent or the Administrative Agent,
as the case may be, under or in connection with this Agreement or the other Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the other Loan Documents or for any failure
of the Company or any of its Subsidiaries to perform its obligations hereunder
or thereunder. Neither the Syndication Agent, the Documentation Agent nor the
Administrative Agent shall 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
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of, this Agreement, or to inspect the properties, books or records of the
Company or any of its Subsidiaries.
11.4 RELIANCE BY THE AGENTS. Each of the Syndication Agent, the
----------------------
Documentation Agent and the Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, 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 Company), independent accountants and other
experts selected by such Agent. Each of the Syndication Agent, the
Documentation Agent and the Administrative Agent may deem and treat the payee of
any Revolving Credit Note as the owner thereof for all purposes unless such
Revolving Credit Note shall have been transferred in accordance with Section
12.10. Each of the Syndication Agent, the Documentation Agent and the
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Document, all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. Each of the Syndication Agent, the
Documentation Agent and the Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Revolving Credit Notes in accordance with a request of the Required Lenders (or,
when expressly required hereby, all the Lenders), 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 Credit Notes.
11.5 NOTICE OF DEFAULT. Neither the Syndication Agent, the Documentation
-----------------
Agent nor the Administrative Agent shall be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless it has
received notice from a Lender or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Syndication Agent receives such a
notice, it shall promptly give notice thereof to the Lenders. The Syndication
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided that unless and
until the Syndication Agent shall have received such direction, the Syndication
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.
11.6 NON-RELIANCE ON THE AGENTS AND OTHER LENDERS. Each Lender expressly
--------------------------------------------
acknowledges that neither the Syndication Agent, the Documentation Agent nor the
Administrative Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Syndication Agent,
the Documentation Agent or the Administrative Agent hereinafter taken, including
any review of the affairs of the Company or any of its Subsidiaries, shall be
-50-
deemed to constitute any representation or warranty by the Syndication Agent,
the Documentation Agent or the Administrative Agent to any Lender. Each Lender
represents to the Syndication Agent, the Documentation Agent and the
Administrative Agent that it has, independently and without reliance upon the
Syndication Agent, the Documentation Agent, 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
Company and its Subsidiaries and made its own decision to make its Revolving
Credit Loans, participate in Swingline Loans and issue or participate in Letters
of Credit hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Syndication Agent, the
Documentation Agent, 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
Company and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Syndication Agent, the
Documentation Agent or the Administrative Agent hereunder or by the other Loan
Documents, neither the Syndication Agent, the Documentation Agent nor the
Administrative Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Company or
any of its Subsidiaries which may come into the possession of the Syndication
Agent, the Documentation Agent or the Administrative Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
11.7 INDEMNIFICATION. The Lenders agree to indemnify the Syndication
---------------
Agent, the Documentation Agent and the Administrative Agent in their respective
capacities (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so), ratably according to the respective amounts
of their Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Syndication Agent, the Documentation Agent or the Administrative Agent, as
the case may be, in any way relating to or arising out of this Agreement or 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 Syndication Agent, the Documentation Agent or 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 resulting solely from the bad faith, gross
negligence or willful misconduct of the Syndication Agent, the Documentation
Agent or the Administrative Agent. The agreements in this Section 11.7 shall
survive the payment of the Notes, any Reimbursement Obligation and all other
amounts payable hereunder and the termination of this Agreement.
-51-
11.8 THE AGENTS IN THEIR INDIVIDUAL CAPACITIES. The Syndication Agent, the
-----------------------------------------
Documentation Agent and the Administrative Agent and their respective
Subsidiaries and Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company as though the
Syndication Agent, the Documentation Agent and the Administrative Agent were not
Agents hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Syndication Agent, the Documentation Agent and 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 an Agent, and the terms "Lender" and "Lenders" shall include the
Syndication Agent, the Documentation Agent and the Administrative Agent in their
individual capacities.
11.9 RESIGNATION OF THE AGENTS; SUCCESSOR AGENTS. Subject to the
-------------------------------------------
appointment and acceptance of a successor as provided below, the Syndication
Agent, the Documentation Agent and/or the Administrative Agent may resign at any
time by giving notice thereof to the Lenders and the Company. Upon any such
resignation, the Required Lenders, with the approval of the Company as long as
no Default or Event of Default has occurred and is continuing (which approval of
the Company shall not be unreasonably withheld), shall have the right to appoint
a successor Syndication Agent, Documentation Agent and/or Administrative Agent,
as the case may be, which successor shall have minimum capital and surplus of at
least $500,000,000. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after any Agent's giving of notice of resignation, then the applicable
Agent may, on behalf of the Lenders, with the approval of the Company as long as
no Default or Event of Default has occurred and is continuing (which approval of
the Company shall not be unreasonably withheld), appoint a successor Agent,
which successor shall have minimum capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Section
11 shall continue in effect for its benefit with respect to any actions taken or
omitted to be taken by it while it was acting as Agent.
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SECTION 12
MISCELLANEOUS PROVISIONS
------------------------
12.1 CAPITAL ADEQUACY. If any of the Lenders shall have determined that
----------------
the adoption after the date hereof of any applicable law, rule or regulation
regarding capital adequacy, or any change therein after the date hereof, or any
change after the date hereof in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender (or any
lending office of such Lender) or its holding company or any successor
corporation owning all or substantially all of the capital stock of such Lender
("its Parent") with any guideline or directive adopted after the date hereof
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or the capital of
its Parent as a consequence of its obligations hereunder to a level below that
which such Lender (or its Parent) could have achieved but for such adoption,
change or compliance by an amount deemed by such Lender to be material, then
from time to time, within fifteen (15) days after demand by such Lender, the
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender (or its Parent) for such reduction. Within fifteen (15)
days of the date that such Lender determines that it will invoke the provisions
of this Section 12.1, it will present its demand to the Company in a certificate
claiming compensation under this Section 12.1 which shall be accompanied by the
calculations supporting such claim. In addition, such Lender shall supply to
the Company such supporting information relating to such claim as the Company
may reasonably request.
12.2 NOTICES.
-------
(A) METHOD OF COMMUNICATION. Except as otherwise provided in this
-----------------------
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to an Agent as
understood by such Agent will be deemed to be the controlling and proper notice
in the event of a discrepancy with or failure to receive a confirming written
notice.
(B) ADDRESSES FOR NOTICES. Notices to any party shall be sent to it at the
---------------------
following addresses, or any other address as to which all the other parties are
notified in writing:
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If to the Company: Xxxxx River Coal Company
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
Vice President and Treasurer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: T. Xxxxxx Xxxxx, III, Esquire
Hunton & Xxxxxxxx
000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to First Union as First Union National Bank
Syndication Agent Xxx Xxxxx Xxxxx Xxxxxx, XX-00
or Documentation Agent: 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxxx X. Xxxx, Esquire
Xxxx & Valentine, L.L.P.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to NationsBank as
Administrative Agent: NationsBank, N.A.
Independence Center
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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With copies of NationsBank, N.A.
financial statements to: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Vice President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the address for such Lender set forth on Schedule 1
----------
hereto
12.3 EXPENSES; INDEMNITY. The Company will (a) pay all out-of-pocket
-------------------
expenses of the Syndication Agent in connection with (i) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including without limitation all out-
of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Syndication Agent and (ii) the preparation,
execution and delivery of any waiver, amendment or consent by the Syndication
Agent or the Lenders relating to this Agreement or any other Loan Document,
including without limitation reasonable fees and disbursements of counsel for
the Syndication Agent, (b) pay all reasonable out-of-pocket expenses of the
Syndication Agent and each Lender actually incurred in connection with the
administration and enforcement of any rights and remedies of the Syndication
Agent and Lenders under the Credit Facilities, including consulting with
appraisers, accountants, engineers, attorneys and other Persons concerning the
nature, scope or value of any right or remedy of the Syndication Agent or any
Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (c) defend, indemnify and
hold harmless the Syndication Agent, the Documentation Agent, the Administrative
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any losses,
penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Syndication Agent, the
Documentation Agent, the Administrative Agent or any Lender is a party thereto)
and the prosecution and defense thereof, arising out of or in any way connected
with this Agreement, any other Loan Document or the Loans, including without
limitation reasonable attorney's and consultant's fees, except to the extent
that any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
12.4 SET-OFF. Subject to the terms of the letters of each of the Lenders
-------
provided to The Prudential Insurance Company of America relating to the Lenders'
set-off rights, and in addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon and after
the occurrence of any Event of Default and during the continuance thereof, each
of the Lenders and any assignee or participant of a Lender in accordance with
Section 12.10 are hereby authorized by the Company at any time or from time to
time, without notice to the Company or to any other Person, any such notice
being hereby expressly waived, to
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set off and to appropriate and to apply any and all deposits (general or
special, time or demand, including, but not limited to, indebtedness evidenced
by certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Lenders, or any such assignee or
participant to or for the credit or the account of the Company against and on
account of the Obligations irrespective of whether or not (a) the Lenders shall
have made any demand under this Agreement or any of the other Loan Documents or
(b) the Syndication Agent shall have declared any or all of the Obligations to
be due and payable as permitted by Section 10.2 and although such Obligations
shall be contingent or unmatured.
12.5 GOVERNING LAW. This Agreement, the Notes and the other Loan
-------------
Documents, unless otherwise expressly set forth therein, shall be governed by
and construed and enforced in accordance with the laws of the Commonwealth of
Virginia, without reference to the conflicts or choice of law principles
thereof.
12.6 CONSENT TO JURISDICTION. The Company hereby irrevocably consents to
-----------------------
the personal jurisdiction of the state and federal courts located in the City of
Richmond, Virginia and the County of Henrico, Virginia in any action, claim or
other proceeding arising out of any dispute in connection with this Agreement,
the Notes and the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations. The Company
hereby irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Syndication Agent or
any Lender in connection with this Agreement, the Notes or the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations, on behalf of itself or its property, in the
manner specified in Section 12.2. Nothing in this Section 12.6 shall affect the
right of the Syndication Agent or any Lender to serve legal process in any other
manner permitted by applicable law or affect the right of the Syndication Agent
or any Lender to bring any action or proceeding against the Company or its
properties in the courts of any other jurisdictions.
12.7 BINDING ARBITRATION; WAIVER OF JURY TRIAL.
-----------------------------------------
(a) BINDING ARBITRATION. Upon demand of any party hereto, whether
-------------------
made before or after institution of any judicial proceeding, any dispute, claim
or controversy arising out of, in connection with or relating to this Agreement,
the Notes or any other Loan Document ("Disputes"), between or among parties
hereto or thereto shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from documents
executed in the future, or claims arising out of or connected with the
transactions contemplated by this Agreement or any of the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA"), as in effect from time to time, and Title 9 of the U.S.
Code, as amended. All arbitration hearings shall be conducted in Richmond,
Virginia. The expedited procedures set forth in Rule 51, et seq. of the
-------
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
-56-
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted, or if such person is not available, the single
arbitrator may be a licensed attorney. Notwithstanding the foregoing, this
arbitration provision does not apply to Disputes under and related to any
interest rate protection agreements.
(b) Notwithstanding the preceding binding arbitration provisions, the
Company, the Agents, and the Lenders agree to preserve, without diminution,
certain remedies, more particularly described below, that any party hereto may
employ or exercise freely, independently, or in connection with an arbitration
proceeding or after an arbitration action is brought. The Company, the Agents
and the Lenders shall have the right to proceed in any court of proper
jurisdiction or by self-help to exercise or prosecute the following remedies, as
applicable: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted under any Loan Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help including peaceful occupation
of real property and collection of rents, setoff, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these remedies
does not limit the power of any arbitrator to grant similar remedies that may be
requested by a party in a Dispute.
(c) WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
--------------------
SYNDICATION AGENT, THE DOCUMENTATION AGENT, THE ADMINISTRATIVE AGENT, EACH
LENDER AND THE COMPANY HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
12.8 INJUNCTIVE RELIEF; PUNITIVE DAMAGES.
-----------------------------------
(a) The parties recognize that, in the event any party fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy of law may prove to be inadequate relief. Therefore, (i) the Company
agrees that the Lenders, at the Lenders' option, shall be entitled to temporary
and permanent injunctive relief upon any such failure of the Company without the
necessity of proving actual damages, and (ii) the Lenders agree that the
Company, at the Company's option, shall be entitled to temporary and permanent
injunctive relief upon any such failure of the Lenders without the necessity of
proving actual damages.
(b) The Syndication Agent, the Documentation Agent, the Administrative
Agent, the Lenders and the Company (on behalf of itself and its Subsidiaries)
hereby agree that no such Person
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shall have a remedy of punitive or exemplary damages against any other party to
a Loan Document and each such Person hereby waives any right or claim to
punitive or exemplary damages that they may now have or may arise in the future
in connection with any dispute.
12.9 ACCOUNTING MATTERS. All financial and accounting calculations,
------------------
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by the Company or any
Subsidiary thereof to determine compliance with any covenant contained herein,
shall, except as otherwise expressly contemplated hereby or unless there is an
express written direction by the Syndication Agent to the contrary agreed to by
the Company, be performed in accordance with GAAP as in effect on the date of
this Agreement. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Company's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Company and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
12.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
--------------------------------------
(A) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and inure
--------------------
to the benefit of the Company, the Syndication Agent, the Documentation Agent,
the Administrative Agent and the Lenders, all future holders of the Revolving
Credit Notes, and their respective successors and assigns, except that the
Company shall not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(B) ASSIGNMENT BY LENDERS. Each Lender may, with the consent of the
---------------------
Syndication Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Company, which consents shall not be unreasonably
withheld, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Revolving Credit Loans at the time owing to
it and the Revolving Credit Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Commitment is to
be assigned, the Commitment so assigned shall not be less than $5,000,000;
(iii) parties to each such assignment shall execute and deliver to
the Syndication Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit D attached hereto (an
---------
"Assignment and Acceptance"), together with any Revolving Credit Note or
Revolving Credit Notes subject to such assignment;
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(iv) such assignment shall not, without the consent of the
Company, require the Company to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Revolving Credit
Loans or the Revolving Credit Notes under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Syndication Agent an
assignment fee of $3,500 upon the execution by such Lender of the Assignment and
Acceptance; provided that no such fee shall be payable upon any assignment by a
Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) 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 hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(C) RIGHTS AND DUTIES UPON ASSIGNMENT. By executing and delivering an
---------------------------------
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(D) REGISTER. The Syndication Agent shall maintain a copy of each
--------
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Revolving Credit
Loans with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Company, the Syndication Agent, the Documentation Agent, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(E) ISSUANCE OF NEW NOTES. Upon its receipt of an Assignment and
---------------------
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Revolving Credit Note or Revolving Credit Notes subject to such
assignment and the written consent to such assignment, the Syndication Agent
shall, if such Assignment and Acceptance has been completed and is substantially
in the form of Exhibit D:
---------
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Company;
and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Company.
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Within five (5) Business Days after receipt of notice, the Company shall execute
and deliver to the Syndication Agent, in exchange for the surrendered Revolving
Credit Note or Revolving Credit Notes, a new Revolving Credit Note or Revolving
Credit Notes to the order of such Eligible Assignee in amounts equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Revolving Credit Note or Revolving Credit Notes to the order of the assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Revolving Credit Note or Revolving Credit Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Revolving Credit Note or Revolving Credit Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Revolving Credit Notes delivered to the assigning
Lender. Each surrendered Revolving Credit Note or Revolving Credit Notes shall
be canceled and returned to the Company.
(F) PARTICIPATIONS. Each Lender may sell participations to one or more
--------------
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Loans and the Revolving Credit Notes held by it); provided that:
(i) each such participation shall be in an amount not less than
$5,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Revolving Credit
Notes held by it for all purposes of this Agreement;
(v) the Company, the Syndication Agent, the Documentation Agent,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this Agreement or any
other Loan Document other than waivers, amendments or modifications which would
reduce the principal of or the interest rate on any Revolving Credit Loan or
other Obligation, extend the term or increase the amount of such Lender's
Commitment, reduce the amount of any fees to which such participant is entitled
or extend any scheduled payment date for principal of any Revolving Credit Loan;
and
(vii) any such disposition shall not, without the consent of the
Company, require the Company to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Revolving Credit
Loans or the Revolving Credit Notes under the blue sky laws of any state.
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(G) DISCLOSURE OF INFORMATION; CONFIDENTIALITY. The Syndication Agent,
------------------------------------------
the Documentation Agent, the Administrative Agent and the Lenders shall hold all
non-public information with respect to the Company obtained pursuant to the Loan
Documents in accordance with their customary procedures for handling
confidential information; provided that the Syndication Agent may disclose
information relating to this Agreement to Gold Sheets and other similar bank
-----------
trade publications, such information to consist of deal terms and other
information customarily found in such publications. Any Lender may, in
connection with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 12.10, disclose to the assignee,
participant, proposed assignee or proposed participant any information relating
to the Company furnished to such Lender by or on behalf of the Company; provided
that prior to any such disclosure, each such assignee, proposed assignee,
participant or proposed participant shall agree with the Company or such Lender
to preserve the confidentiality of any confidential information relating to the
Company received from such Lender.
(H) CERTAIN PLEDGES OR ASSIGNMENTS. Nothing herein shall prohibit any
------------------------------
Lender from pledging or assigning any Revolving Credit Note to any Federal
Reserve Bank in accordance with applicable law.
12.11 AMENDMENTS, WAIVERS AND CONSENTS. Except as set forth below, any
--------------------------------
term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents may be amended or waived by the Lenders, and any consent given by
the Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Syndication Agent with the consent of
the Required Lenders) and delivered to the Syndication Agent and, in the case of
an amendment, signed by the Company; provided that no amendment, waiver or
consent shall (a) increase the amount or extend the time of the obligation of
the Lenders to make Revolving Credit Loans or issue or participate in Letters of
Credit, (b) extend the originally scheduled time or times of payment of the
principal of any Revolving Credit Loan or Obligation or the time or times of
payment of interest on any Revolving Credit Loan or other Obligation, (c) reduce
the rate of interest or fees payable on any Revolving Credit Loan or other
Obligation, (d) reduce the principal amount of any Revolving Credit Loan or
other Obligation, (e) permit any subordination of the principal or interest on
any Revolving Credit Loan or other Obligation or (f) amend the provisions of
this Section 12.11 or the definition of Required Lenders, without the prior
written consent of each Lender. In addition, no amendment, waiver or consent to
the provisions of (a) Section 2.3 shall be made without the written consent of
the Swingline Lender, (b) Section 11 shall be made without the written consent
of the Syndication Agent and (c) Section 4 shall be made without the written
consent of the Issuing Lender.
12.12 PERFORMANCE OF DUTIES. The Company's obligations under this
---------------------
Agreement and each of the Loan Documents shall be performed by the Company at
its sole cost and expense.
12.13 ALL POWERS COUPLED WITH INTEREST. All powers of attorney and other
--------------------------------
authorizations granted to the Lenders, the Agents and any Persons designated by
any Agent or any Lender pursuant to any provisions of this Agreement or any of
the other Loan Documents
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shall be deemed coupled with an interest and shall be irrevocable so long as any
of the Obligations remain unpaid or unsatisfied or the Credit Facilities have
not been terminated.
12.14 SURVIVAL OF INDEMNITIES. Notwithstanding any termination of this
-----------------------
Agreement, the indemnities to which the Agents and the Lenders are entitled
under the provisions of this Section 12 and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agents and the Lenders against events arising after such
termination as well as before.
12.15 TITLES AND CAPTIONS. Titles and captions of Articles, Sections and
-------------------
subsections in this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.
12.16 SEVERABILITY OF PROVISIONS. Any provision of this Agreement or any
--------------------------
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
12.17 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
12.18 TERM OF AGREEMENT. This Agreement shall remain in effect from the
-----------------
date of this Agreement through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full and all
Commitments shall have been terminated. No termination of this Agreement shall
affect the rights and obligations of the parties hereto arising prior to such
termination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
XXXXX RIVER COAL COMPANY,
as Borrower
By:/s/ Xxxxxxx X. Xxxxxxxx, Xx.
--------------------------------------------
Name:_______________________________________
Title:______________________________________
FIRST UNION NATIONAL BANK,
as Syndication Agent, Documentation Agent
and Lender
By:/s/ Xxxxxxxx X. Xxxx
--------------------------------------------
Name:_______________________________________
Title:______________________________________
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NATIONSBANK, N.A.,
as Administrative Agent and Lender
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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THE FIRST NATIONAL BANK OF CHICAGO,
as Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name:
---------------------------
Title:
--------------------------
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MELLON BANK, N.A., as Lender
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name:
-------------------------------
Title:
------------------------------
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PNC BANK, N.A., as Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name:
----------------------------
Title:
---------------------------
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