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EXHIBIT 4.3
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OMNIBUS AMENDMENT AGREEMENT
Dated as of June 1, 1998
in respect of
ARCH COAL TRUST NO. 1998-1
PARENT GUARANTY AND SURETYSHIP AGREEMENT
LEASE INTENDED AS SECURITY
SUBSIDIARY GUARANTY AND SURETYSHIP AGREEMENT
Each dated as of January 15, 1998
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AMENDMENT OF ORIGINAL AGREEMENTS....................... 2
Section 1.1. Amendments to Parent Guaranty....................... 2
Section 1.2. Amendments to Lease................................. 15
SECTION 2. RELEASE................................................ 27
SECTION 3. REPRESENTATIONS OF PARENT GUARANTOR, THE SUBSIDIARY
GUARANTORS AND THE LESSEES.......................... 27
SECTION 4. ACKNOWLEDGMENT BY GUARANTORS........................... 28
SECTION 5. AUTHORIZATION AND DIRECTION............................ 28
SECTION 6. CONDITIONS PRECEDENT................................... 28
SECTION 7. FEES AND EXPENSES...................................... 29
SECTION 8. MISCELLANEOUS.......................................... 29
Section 8.1. Construction........................................ 29
Section 8.2. References.......................................... 29
Section 8.3. Headings and Table of Contents...................... 29
Section 8.4. Counterparts........................................ 29
Section 8.5. Governing Law....................................... 29
OMNIBUS AMENDMENT AGREEMENT
THIS OMNIBUS AMENDMENT AGREEMENT dated as of June 1, 1998 (this "Amendment") is
among APOGEE COAL COMPANY, a Delaware corporation, CATENARY COAL COMPANY, a
Delaware corporation, and HOBET MINING, INC., a West Virginia corporation (each
a "Lessee" and collectively the "Lessees"), ARCH COAL, INC., a Delaware
corporation ("Parent Guarantor"), GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,
BANK OF MONTREAL, BARCLAYS BANK PLC, FIRST UNION NATIONAL BANK AND BA LEASING &
CAPITAL CORPORATION (the "Certificate Purchasers" ), ARCH COAL SALES COMPANY,
INC., ARK LAND COMPANY AND XXXXX XXXXX COAL COMPANY (each a "Subsidiary
Guarantor" and collectively the "Subsidiary Guarantors") and FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as
certificate trustee under the Trust Agreement referred to below ("Certificate
Trustee" ) and lessor under the Lease referred to below ("Lessor").
RECITALS:
A. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Lease (as hereinafter defined and
as amended hereby).
B. The Certificate Purchasers and First Security Bank, National
Association, in its individual capacity and as Certificate Trustee have
heretofore entered into that certain Trust Agreement dated as of January 15,
1998 (the "Trust Agreement").
C. The Lessees, the Certificate Purchasers and Lessor have heretofore
entered into that certain Lease Intended as Security dated as of January 15,
1998 (the "Lease").
D. Parent Guarantor has heretofore entered into that certain Parent
Guaranty and Suretyship Agreement dated as of January 15, 1998 (the "Parent
Guaranty") in favor of Lessor for the benefit of the Certificate Purchasers.
E. The Subsidiary Guarantors have entered into that Subsidiary Guaranty
and Suretyship Agreement dated as of January 15, 1998 (the "Subsidiary
Guaranty") in favor of Lessor for the benefit of the Certificate Purchasers.
F. Arch Coal, Inc. is also party to that certain $600,000,000 Revolving
Credit Facility and $300,000,000 Term Loan Credit Agreement dated as of June 1,
1998 among Parent Guarantor, as borrower, PNC Bank, National Association, as
Administrative Agent, Xxxxxx Guaranty Trust Company of New York, as Syndication
Agent and First Union Bank, as Documentation Agent and the Lenders listed
therein (the "Revolving Credit Facility").
G. The Lessees, Parent Guarantor, the Certificate Purchasers and
Certificate Trustee now desire to amend the Lease and Parent Guaranty
(collectively, the "Original Agreements") in the respects, but only in the
respects, hereinafter set forth.
NOW, THEREFORE, the Lessees, Parent Guarantor, the Certificate Purchasers and
Certificate Trustee, in consideration of good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, do hereby agree as
follows:
SECTION 1. AMENDMENT OF ORIGINAL AGREEMENTS.
Section 1.1.Amendments to Parent Guaranty. Article IV of the Parent Guaranty
shall be and is hereby amended in its entirety to read as follows:
ARTICLE IV
COVENANTS
"Parent Guarantor covenants that so long as this Agreement is in effect:
(a) Corporate Existence, Etc. Parent Guarantor shall, and shall cause Arch
Western to, maintain its legal existence as a corporation, limited partnership
or limited liability company, as the case may be. Parent Guarantor shall cause
each of its Subsidiaries (other than Arch Western, which is subject to the
previous sentence) to maintain its legal existence as a corporation or limited
liability company, as the case may be, except as otherwise expressly permitted
in clause (e) of this Article IV. Parent Guarantor shall, and shall cause Arch
Western to, maintain its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except where the failure
to so qualify or maintain such qualification could be corrected without a
Material Adverse Effect on Parent Guarantor or Arch Western. Parent Guarantor
shall cause each of its Subsidiaries (other than Arch Western, which is subject
to the previous sentence) to maintain its license or qualification and good
standing in each jurisdiction where a Unit is located and in each other
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except where the failure
to so qualify could not reasonably be expected to have a Material Adverse
Effect.
(b) Compliance With Laws. Parent Guarantor shall, and shall cause each of
its Subsidiaries to, comply with all applicable laws, including all
Environmental Laws, in all respects, provided that it shall not be deemed to be
a violation of clause (b) of this Article IV if any failure to comply with any
law would not result in fines, penalties, remediation costs, other similar
liabilities or injunctive relief which in the aggregate could reasonably be
expected to result in a Material Adverse Effect. Without limiting the generality
of the foregoing, Parent Guarantor shall, and shall cause each of its
Subsidiaries to, comply with all Environmental Permits applicable to their
respective operations and properties; obtain and renew all Environmental Permits
necessary for their respective operations and properties; and manage, use and
handle all Hazardous Material in compliance with all applicable Environmental
Laws, in each case, except for such non-compliance which would not or could not
reasonably be expected to have a Material Adverse Effect.
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(c) Indebtedness. Parent Guarantor shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) additional Indebtedness of Parent Guarantor or any Subsidiary
incurred after the Effective Date (not to exceed $300,000,000 in the aggregate
outstanding for Parent Guarantor and all Significant Subsidiaries at any time
during any period prior to the date on which the senior unsecured long-term debt
of Parent Guarantor, on a consolidated basis, has been rated Investment Grade)
so long as, both before and after giving effect to any proposed additional
Indebtedness:
(y) Parent Guarantor and its Subsidiaries shall be in compliance with
clauses (l), (m) and (n) of this Article IV determined on a pro forma basis (in
the case of the Fixed Charge Coverage Ratio, the Minimum Net Worth test and the
Leverage Ratio as of the end of the fiscal quarter most recently ended and as if
such proposed additional Indebtedness was outstanding as of the first day of
such fiscal quarter), and
(z) the covenants and defaults applicable in respect of such proposed
additional Indebtedness (other than the financial covenants included in the
Private Placement Agreement on the Effective Date; without further amendment
thereto to make such covenants more restrictive, which amendment is expressly
prohibited) are not, taken as a whole, materially more restrictive with respect
to Parent Guarantor and its Subsidiaries than the covenants and defaults under
this Parent Guaranty;
(iii) Indebtedness of Arch Western payable to Parent Guarantor, subject to
the limitations of clause (s)(vii) of this Article IV);
(iv) Indebtedness of Arch Western and its Subsidiaries pursuant to the
Arch Western Credit Facility;
(v) Indebtedness of any Subsidiary of Parent Guarantor which is a member
of the Arch Coal Group payable to Parent Guarantor or to any other member of the
Arch Coal Group;
(vi) Indebtedness of Parent Guarantor payable to Arch Western; and
(vii) Indebtedness of Parent Guarantor and its Subsidiaries reflected in
the Historical Statements (other than Indebtedness refinanced with the proceeds
of the Loans) and any refinancings thereof or amendments thereto that do not
increase the amount of such Indebtedness beyond an amount otherwise permitted by
this Parent Guaranty.
(d) Liens. Parent Guarantor shall not, and shall not permit any member of
the Arch Coal Group to, at any time create, incur, assume or suffer to exist any
Lien on any of its respective property or assets (other than the Units which,
with respect to Liens, are covered by
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Section 5.5. of the Lease), tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so, except Permitted Encumbrances so
long as the aggregate amount of Parent Guarantor payments by any such Person in
respect of all operating leases which subject the assets of Parent Guarantor or
any of its Subsidiaries to any Permitted Encumbrance (as the type of such lease
and the amount of such payments would be determined under GAAP) and all
Indebtedness secured by such Permitted Encumbrances does not at any time exceed
seven and one-half percent (71/2%) of the total assets of the Arch Coal Group
(exclusive of Investment in the Arch Western Group), as determined and
consolidated in accordance with GAAP.
(e) Liquidations, Mergers, Consolidations, Acquisitions. Parent Guarantor
shall not, and shall not permit any of its Subsidiaries to, dissolve, liquidate
or wind-up its affairs, or become a party to any merger or consolidation, or
acquire by purchase, lease or otherwise all or substantially all of the assets
or capital stock of any other Person, provided that
(1) any Subsidiary of Parent Guarantor may consolidate or merge into any
other Subsidiary of Parent Guarantor (except for the Excluded Subsidiaries),
provided that each of the following requirements is met:
(i) no Incipient Default or Event of Default shall exist immediately
prior to and after giving effect to such transaction;
(ii) immediately after such transaction, Lessor, on behalf of the
Certificate Purchasers shall have an enforceable, perfected first priority Lien
of record in all Collateral, free and clear of all Liens other than Permitted
Liens;
(iii) promptly upon the consummation of such transaction, the survivor of
such transaction shall have executed and delivered to Lessor and the Certificate
Purchasers an assumption agreement in form and substance reasonably satisfactory
to Lessor whereby such survivor assumes all of the obligations of such
Subsidiary under the Operative Documents, if any; and
(iv) promptly upon the consummation of such transaction, each Certificate
Purchaser and Lessor shall have received an opinion of counsel to such
Subsidiary with respect to the validity of such transaction and as to the
enforceability of the assumption agreement referred to in clause (iii) above and
the Operative Documents against the survivor of such transaction, and
(2) Parent Guarantor and Arch Western may complete the Acquisition in
accordance with the Acquisition Documents, and
(3) Parent Guarantor, any Subsidiary Guarantor or any Lessee may acquire,
whether by purchase or by merger, (A) all of the ownership interests of another
Person or (B) substantially all of assets of another Person or of a business or
division of another Person (each a "Permitted Acquisition"), provided that each
of the following requirements is met:
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(i) the board of directors or other equivalent governing body of such
Person shall have approved such Permitted Acquisition;
(ii) the business acquired, or the business conducted by the Person whose
ownership interests are being acquired, as applicable, shall be substantially
the same as one or more line or lines of business conducted by Parent Guarantor
and shall comply with clause (i) of this Article IV;
(iii) no Incipient Default or Event of Default shall exist immediately
prior to and after giving effect to such Permitted Acquisition;
(iv) Parent Guarantor and its Subsidiaries shall be in compliance with the
covenants contained in clauses (l), (m), and (n) of this Article IV determined
on a pro forma basis after giving effect to such Permitted Acquisition
(including in such computation Indebtedness or other liabilities assumed or
incurred in connection with such Permitted Acquisition as if such liabilities
were incurred as of the first day of the applicable period of determination).
(v) immediately after such transaction, Lessor, on behalf of the
Certificate Purchasers shall have an enforceable, perfected first priority Lien
of record in all Collateral, free and clear of all Liens other than Permitted
Liens;
(vi) promptly upon the consummation of such transaction, the survivor of
such Permitted Acquisition shall have executed and delivered to Lessor and the
Certificate Purchasers an assumption agreement in form and substance reasonably
satisfactory to the Required Certificate Purchasers whereby such survivor
assumes all of the obligations of Parent Guarantor, such Subsidiary Guarantor or
such Lessee, as the case may be, under the Operative Documents; and
(vii) promptly upon the consummation of such transaction, each Certificate
Purchaser and Lessor shall have received an opinion of counsel to Parent
Guarantor, such Subsidiary Guarantor or such Lessee with respect to the validity
of such transaction and as to the enforceability of the assumption agreement
referred to in clause (vi) above and the Operative Documents against the
survivor of such Permitted Acquisition.
(f) Dispositions of Assets or Subsidiaries. Parent Guarantor shall not,
and shall not permit any of its Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment, general intangibles with or without recourse or of capital stock,
shares of beneficial interest, partnership interests or limited liability
company interests of a Subsidiary of Parent Guarantor), except:
(i) transactions involving the sale of inventory in the ordinary course
of business;
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(ii) any sale, transfer or lease of assets (other than the Units) by any
Subsidiary of Parent Guarantor which is a member of the Arch Coal Group to any
other member of the Arch Coal Group or any sale, transfer or lease of assets
(other than the Units) by any Subsidiary of Arch Western which is a member of
the Arch Western Group to any other member of the Arch Western Group;
(iii) any sale of assets (other than the Units) if and to the extent the
Net Cash Proceeds thereof are applied within 90 days of the consummation of such
sale to the purchase by Parent Guarantor or a Subsidiary of substitute assets;
provided that Parent Guarantor shall have delivered to Certificate Trustee,
Lessor and each Certificate Purchaser a certificate (a "Replacement Sales
Certificate") of the chief financial officer or the treasurer of Parent
Guarantor, certifying as to (x) the amount of such Net Cash Proceeds and (y) the
fact that Parent Guarantor or a Subsidiary shall invest such Net Cash Proceeds
in substitute assets within 90 days after the date of consummation of such sale;
and provided further that if and to the extent such Net Cash Proceeds are not so
applied to the purchase of substitute assets within such 90-day period, such
sale shall be deemed to have been made on the last day of such period pursuant
to clause (v) below;
(iv) any sale, transfer or lease (including any lease transaction under
clause (k) of this Article IV) of assets (other than the Units), other than
those specifically excepted pursuant to subparagraphs (i) through (iii) above,
provided that (a) at the time of any disposition, no Event of Default shall
exist or shall result from such disposition, (b) Parent Guarantor and its
Subsidiaries shall be in compliance with the covenants contained in clauses (l),
(m) and (n) of this Article IV determined on a pro forma basis after giving
effect to each such sale, transfer or lease of assets, and (c) the aggregate net
book value of all assets so sold by Parent Guarantor and its Subsidiaries shall
not exceed in any calendar year the greater of (x) $100,000,000 or (y) 5% of the
total assets of the Arch Coal Group (exclusive of investment in the Arch Western
Group) (as of the last day of such calendar year), determined and consolidated
in accordance with GAAP;
(v) any sale, transfer or lease of assets (other than the Units), other
than those specifically excepted pursuant to subparagraphs (i) through (iv)
above or subparagraph (vi) below, so long as (A) if any principal and interest
is outstanding under the Term Loans, Guarantor shall, simultaneously with the
application of the Net Cash Proceeds to a mandatory prepayment of the Term Loans
in accordance with the provisions of Section 4.4.6 of the Revolving Credit
Facility, purchase a Unit or Units in accordance with the provisions of Section
11.5 of the Lease so that the Lease Balance is reduced in the same proportion
that the Term Loans were reduced by the application of the Net Cash Proceeds or
(B) if no principal and interest is outstanding under the Term Loans, Guarantor
shall apply the Net Cash Proceeds to the purchase of a Unit or Units in
accordance with the provisions of Section 11.5 of the Lease;
(vi) any transfer of assets by Parent Guarantor to Arch Western as
contemplated by the Contribution Agreement; or
(vii) any transfer of assets by any member of the Arch Western Group
permitted by the Arch Western Credit Facility, as in effect on the Effective
Date.
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(g) Affiliate Transactions. Parent Guarantor shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property or services
to) with any Affiliate of Parent Guarantor unless such transaction is not
otherwise prohibited by this Parent Guaranty and is entered into in the ordinary
course of business upon fair and reasonable arm's length terms and conditions.
(h) Subsidiaries, Partnerships and Joint Ventures. Parent Guarantor shall
not, and shall not permit any of its Subsidiaries to, own or create directly or
indirectly any Subsidiaries other than (i) the Excluded Subsidiaries, (ii) any
Significant Subsidiary which has joined the Subsidiary Guaranty as a Subsidiary
Guarantor on the Delivery Date; (iii) any Significant Subsidiary formed or
acquired after the Delivery Date which becomes a Subsidiary Guarantor in
accordance with clause (w) of this Article IV; (iv) any Subsidiary which after
the Delivery Date becomes a Significant Subsidiary and which upon becoming a
Significant Subsidiary becomes a Subsidiary Guarantor in accordance with clause
(w) of this Article IV and (v) any Subsidiary which is not a Significant
Subsidiary. Parent Guarantor shall cause any of its Subsidiaries which at any
time becomes a Significant Subsidiary to become a Subsidiary Guarantor in
accordance with clause (w) of this Article IV. Neither Parent Guarantor nor any
Subsidiary of Parent Guarantor shall become or agree to become (1) a general or
limited partner in any general or limited partnership, except that Parent
Guarantor, the Subsidiary Guarantors and Lessees may be general or limited
partners in other Subsidiary Guarantors or Lessees or may make an Investment in
a Permitted Joint Venture; provided, however, that the aggregate permitted
Investments in all Permitted Joint Ventures shall not at any time exceed, for
Parent Guarantor, all Subsidiary Guarantors and Lessees and their Subsidiaries,
$50,000,000, or (2) become a member or manager of, or hold a limited liability
company interest in, a limited liability company, except that Parent Guarantor,
Subsidiary Guarantors and Lessees may be members or managers of, or hold limited
liability company interests in, other Subsidiary Guarantors and Lessees and
except that Parent Guarantor may hold a limited liability company interest in
Arch Western and Arch Western may hold limited liability company interests in
its Subsidiaries which are members of the Arch Western Group.
(i) Continuation of or Change in Business. Parent Guarantor shall not, and
shall not permit any of its Subsidiaries to, engage in any business other than
the business substantially as conducted and operated by Parent Guarantor or such
Subsidiary as of the date hereof and any business substantially related thereto,
and neither Parent Guarantor nor any Subsidiary of Parent Guarantor shall permit
any material change in such business.
(j) Plans and Benefit Arrangements. Parent Guarantor shall not, and shall
not permit any of its Subsidiaries to, engage in a Prohibited Transaction with
any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in
conjunction with any other circumstances or set of circumstances results in
liability under ERISA which could reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, Parent
Guarantor shall cause all of its Plans and all Plans maintained by any ERISA
Affiliate to be funded in accordance with the minimum funding requirements of
ERISA and shall make, and cause each ERISA Affiliate to make, in a timely
manner, all contributions due to Plans, Benefit Arrangements and Multiemployer
Plans.
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(k) Off-Balance Sheet Financing. Parent Guarantor shall not, and shall not
permit any of its Subsidiaries to, engage in any off-balance sheet transaction
(i.e., the liabilities in respect of which do not appear on the liability side
of the balance sheet) providing the functional equivalent of borrowed money
(including asset securitizations (other than accounts receivable or inventory
securitizations), sale/leasebacks, or Synthetic Leases), in excess, in the
aggregate for Parent Guarantor and its Subsidiaries as of any date of
determination, of 7.5% of the sum, without duplication, of (y) the total assets
of Parent Guarantor and its Subsidiaries, determined and consolidated in
accordance with GAAP as of the date of determination, and (z) with respect to
each Special Subsidiary, an amount equal to the Appropriate Percentage
multiplied by the total assets of such Person, determined in accordance with
GAAP. For purposes of this clause (k), (a) "Synthetic Lease" shall mean any
lease transaction under which the parties intend that (i) the lease will be
treated as an "operating lease" by the lessee pursuant to Statement of Financial
Accounting Standards No. 13, as amended, and (ii) the lessee will be entitled to
various tax benefits ordinarily available to owners (as opposed to lessees) of
like property and (b) the amount of any lease which is not a capital lease in
accordance with GAAP is the aggregate amount of minimum lease payments due
pursuant to such lease for any noncancelable portion of its term.
(l) Maximum Leverage Ratio. Parent Guarantor shall not at any time permit
the Leverage Ratio to exceed the ratio set forth below for the periods specified
below:
Period Ratio
Effective Date through and
including December 31, 1998 4.50 to 1.00
January 1, 1999 through and
including December 31, 1999 4.25 to 1.00
January 1, 2000 through and
including December 31, 2000 4.00 to 1.00
January 1, 2001 through and
including December 31, 2001 3.50 to 1.00
January 1, 2002 and thereafter 3.00 to 1.00
(m) Minimum Fixed Charge Coverage Ratio. Parent Guarantor shall not permit
the Fixed Charge Coverage Ratio to be less than the ratio set forth below for
the periods specified below:
Period Ratio
Effective Date through and
including December 31, 1998 2.50 to 1.00
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January 1, 1999 through and
including December 31, 1999 2.75 to 1.00
January 1, 2000 through and
including December 31, 2000 3.00 to 1.00
January 1, 2001 and thereafter 3.25 to 1.00
(n) Minimum Net Worth. Parent Guarantor shall not at any time permit
Consolidated Tangible Net Worth to be less than the Base Net Worth.
(o) No Restriction on Dividends. Parent Guarantor shall not, and shall not
permit any of its Subsidiaries to, enter into or be bound by any agreement which
prohibits or restricts, in any manner, the payment of dividends (whether in
cash, securities, property or otherwise), other than restrictions applicable to
the Arch Western Group set forth in the Arch Western Credit Facility, other than
restrictions applicable to Arch Western set forth in the Arch Western LLC
Agreement and other than restrictions applicable to Canyon Fuel set forth in the
Canyon Fuel LLC Agreement.
(p) Change of Name or Location. Parent Guarantor shall furnish to Lessor
notice on or before the 30th day prior to any relocation of its chief executive
office or principal place of business, or change of its name.
(q) Keeping of Records and Books of Account. Parent Guarantor shall, and
shall cause each Subsidiary of Parent Guarantor to, maintain and keep proper
books of record and account which enable Parent Guarantor and its Subsidiaries
to issue financial statements in accordance with GAAP and as otherwise required
by applicable Laws of any Authority having jurisdiction over Parent Guarantor or
any Subsidiary of Parent Guarantor, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.
(r) Visitation Rights. Parent Guarantor shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of Lessor or any of the Certificate Purchasers to visit and
inspect during normal business hours any of its properties (including, without
limitation, the Units) and to examine and make excerpts from its books and
records (including, without limitation, any Lessee's records pertaining to the
Units), and discuss its business affairs, finances and accounts with the
officers and accountants of Parent Guarantor or any of its Subsidiaries
(including, but not limited to, any independent public accountants), all in such
detail and at such times and as often as any of the Certificate Purchasers may
reasonably request, provided that each Certificate Purchaser and Lessor shall
provide Parent Guarantor and each Subsidiary of Parent Guarantor with reasonable
notice prior to any visit or inspection. Parent Guarantor will pay the
reasonable expenses of Lessor and the Certificate Purchasers incurred in the
exercise of the rights granted pursuant to this clause (r).
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(s) Loans and Investments. Parent Guarantor shall not, and shall not
permit any of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any stock, bonds
(other than, in the ordinary course of business, royalty bonds or bonds securing
performance by Parent Guarantor or a Subsidiary of Parent Guarantor under bonus
bids), notes or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other investment or
interest in, or make any capital contribution to, any other Person (an
"investment"), or agree, become or remain liable to do any of the foregoing,
except:
(i) trade credit extended on usual and customary terms in the ordinary
course of business;
(ii) investments by Parent Guarantor in its Subsidiaries which are members
of the Arch Coal Group;
(iii) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;
(iv) commercial paper maturing in 180 days or less rated not lower than
A-1 by Standard & Poor's or P-1 by Moody's on the date of acquisition;
(v) demand deposits, time deposits or certificates of deposit maturing
within one year in a commercial bank whose obligations are rated A-1, A or the
equivalent or better by Standard & Poor's on the date of determination;
(vi) investments in Permitted Joint Ventures in accordance with clause (h)
of this Article IV;
(vii) investments by Parent Guarantor in, or reimbursement obligations by
Parent Guarantor to an Issuing Bank with respect to any letter of credit issued
for the direct or indirect benefit of, Arch Western (collectively the "Permitted
Investments in Arch Western"); provided, however, that Parent Guarantor shall
not make any Permitted Investment in Arch Western if at the time such investment
is proposed to be made and after giving effect thereto (x) the aggregate amount
of the Permitted Investments in Arch Western would exceed $100,000,000 and (y)
the Leverage Ratio would be greater than 3.00 to 1.00; and
(viii) loans and advances permitted by clause (c)(v).
(t) Reporting Requirements. Parent Guarantor covenants and agrees that
it will furnish or cause to be furnished to Lessor and each of the Certificate
Purchasers:
(i) Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) calendar days after the end of each of the first three
fiscal quarters in each fiscal
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year, financial statements of Parent Guarantor and its Subsidiaries, consisting
of a consolidated and consolidating balance sheet as of the end of such fiscal
quarter, related consolidated and consolidating statements of income and
stockholders' equity and related consolidated statement of cash flows for the
fiscal quarter then ended and the fiscal year through that date, all in
reasonable detail and certified (subject to normal year-end audit adjustments)
by the Chief Executive Officer, President or Chief Financial Officer of Parent
Guarantor as having been prepared in accordance with GAAP, consistently applied,
and setting forth in comparative form the respective financial statements for
the corresponding date and period in the previous fiscal year. Parent Guarantor
will be deemed to have complied with the delivery requirements with respect to
the consolidated financial statements required to be delivered under this clause
(t) if within forty-five (45) days after the end of its fiscal quarter, Parent
Guarantor delivers to Lessor and each Certificate Purchaser a copy of Parent
Guarantor's Form 10-Q as filed with the SEC and the financial statements
contained therein meet the requirements described in this clause (t).
(ii) Annual Financial Statements. As soon as available and in any event
within ninety (90) days after the end of each fiscal year of Parent Guarantor,
financial statements of Parent Guarantor and its Subsidiaries consisting of a
consolidated and consolidating balance sheet as of the end of such fiscal year,
related consolidated and consolidating statements of income and stockholders'
equity and related consolidated statement of cash flows for the fiscal year then
ended, all in reasonable detail and setting forth in comparative form the
financial statements as of the end of and for the preceding fiscal year, and
certified, in the case of the consolidated financial statements, by independent
certified public accountants of nationally recognized standing satisfactory to
Lessor. The certificate or report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement or duty of any Parent Guarantor or any
of its Subsidiaries under any of the Operative Documents. Parent Guarantor will
be deemed to have complied with the delivery requirements with respect to the
consolidated financial statements required to be delivered under this clause
(ii) if within ninety (90) days after the end of its fiscal year, Parent
Guarantor delivers to Lessor and each Certificate Purchaser a copy of Parent
Guarantor's Annual Report and Form 10-K as filed with the SEC and the financial
statements and certification of public accountants contained therein meet the
requirements described in this clause (ii).
(iii) Certificate of Parent Guarantor. Concurrently with the financial
statements of Parent Guarantor furnished to Lessor and each Certificate
Purchaser pursuant to clause (t)(i) and clause (t)(ii) a certificate of Parent
Guarantor signed by the Chief Executive Officer, President or Chief Financial
Officer of Parent Guarantor to the effect that, except as described pursuant to
clause (t)(iv), (A) the representations and warranties of Parent Guarantor
contained in the Operative Documents are true on and as of the date of such
certificate with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time which shall be true and
correct on and as of the specific dates or times referred to therein) and Parent
Guarantor and its Subsidiaries have performed and complied with all covenants
and conditions
11
contained in the Operative Documents, (B) no Event of Default, Incipient Default
or Casualty exists and is continuing on the date of such certificate and (C)
containing calculations in sufficient detail to demonstrate compliance as of the
date of such financial statements with all financial covenants contained in the
Operative Documents.
(iv) Notice of Defaults. Promptly after any officer of Parent Guarantor
has learned of the occurrence of an Event of Default or Incipient Default, a
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of Parent Guarantor setting forth the details of such Event of Default
or Incipient Default and the action which Parent Guarantor proposes to take with
respect thereto.
(v) Notice of Litigation. Promptly after the commencement thereof or
promptly after the determination thereof, notice of all actions, suits,
proceedings or investigations before or by any Authority or any other Person
against Parent Guarantor or any Subsidiary of Parent Guarantor or, which (x)
involve or could be reasonably expected to involve assessments against Parent
Guarantor or any Subsidiary of Parent Guarantor in excess of $20,000,000,
individually or in the aggregate, or (y) involve a claim or series of claims
which if adversely determined could reasonably be expected to constitute a
Material Adverse Effect.
(vi) Notice of Change in Debt Rating. Within five (5) Business Days after
Standard & Poor's or Moody's announces a change in Parent Guarantor's Debt
Rating, notice of such change. Parent Guarantor will deliver together with such
notice a copy of any written notification which Parent Guarantor received from
the applicable rating agency regarding such change of Debt Rating.
(vii) Notices Regarding Plans and Benefit Arrangements.
(A) Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(I) any Reportable Event with respect to Parent Guarantor or any
other member of the ERISA Group which has been waived by the PBGC),
(II) any Prohibited Transaction which could subject Parent Guarantor
or any other member of the ERISA Group to a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue
Code in connection with any Plan, any Benefit Arrangement or any trust created
thereunder but only if the assessment of such (iv) penalty or tax could
reasonably be expected to have a Material Adverse Effect,
(III) any assertion of material withdrawal liability with respect to
any Multiemployer Plan,
12
(IV) any partial or complete withdrawal from a Multiemployer Plan by
Parent Guarantor or any other member of the ERISA Group under Title IV of ERISA
(or assertion thereof), where such withdrawal is likely to result in material
withdrawal liability,
(V) any cessation of operations (by Parent Guarantor or any other
member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA where such cessation of operations is likely to result
in material liability under ERISA Sections 4060 or 4064,
(VI) withdrawal by Parent Guarantor or any other member of the ERISA
Group from a Multiple Employer Plan where such withdrawal is likely to result in
material withdrawal liability,
(VII) a failure by Parent Guarantor or any other member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a Lien under
Section 302(f) of ERISA,
(VIII) the adoption of an amendment to a Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA, or
(IX) any change in the actuarial assumptions or funding methods used
for any Plan, where the effect of such change is to materially increase the
unfunded benefit liability or obligation to make periodic contributions.
(viii) Notices of Involuntary Termination and Annual Reports. As soon as
available or within thirty (30) days after receipt thereof, copies of (a) all
notices received by Parent Guarantor or any other member of the ERISA Group of
the PBGC's intent to terminate any Plan administered or maintained by Parent
Guarantor or any member of the ERISA Group, or to have a trustee appointed to
administer any such Plan; and (b) at the request of Lessor or any Certificate
Purchaser, each annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent financial
information concerning the financial status of each Plan administered or
maintained by Parent Guarantor or any other member of the ERISA Group, and
schedules showing the amounts contributed to each such Plan by or on behalf of
Parent Guarantor or any other member of the ERISA Group in which any of their
personnel participate or from which such personnel may derive a benefit, and
each Schedule B (Actuarial Information) to the annual report filed by Parent
Guarantor or any other member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
(ix) Notices of Voluntary Termination. Promptly upon the filing thereof,
copies of any notice of standard termination with the PBGC, or any successor or
equivalent form, filed with the PBGC in connection with the termination of any
Plan.
(x) SEC Information. As soon as practicable, copies of all such
financial statements, proxy statements, notices and reports as Parent Guarantor
shall send to its public stockholders, if
13
any, and copies of any registration statements (without exhibits) and any
regular or periodic reports which it files with the SEC (or any Authority
succeeding to the function of the SEC).
(xi) Rule 144A Information. At any time when Parent Guarantor is not
subject to Section 13 or 15(d) of the Exchange Act, if Lessor or any Certificate
Purchaser shall request that Parent Guarantor deliver to Lessor, or to such
Certificate Purchaser, information with respect to Parent Guarantor that meets
the requirements of Rule 144A(d)(4)(i) of the Exchange Act (or any successor
provision), then: (x) promptly following the receipt by Parent Guarantor of that
request, Parent Guarantor shall deliver such information to Lessor, or to such
Certificate Purchaser, and (y) such information shall, at the time of such
delivery, be as of a date so as to be entitled to the presumption that such
information is "reasonably current" within the meaning of Rule 144A(d)(4)(ii) of
the Exchange Act (or any successor provision; provided that Parent Guarantor (i)
shall not be so obligated to the extent that any amendment to Rule 144A after
the date hereof expands or makes more onerous the provisions of Rule 144A, and
(ii) shall in no event be obligated to provide more information pursuant to this
clause (t) of Article IV with respect to the nature of its business and the
products and services that it offers than it is providing to its commercial
lenders at such time.
(xii) Other Information. With reasonable promptness, such other data and
information with respect to the business, affairs and conditions of Parent
Guarantor or its Subsidiaries as from time to time Lessor or any Certificate
Purchaser or each Assignee may reasonably request.
(u) Reports to Certificate Purchasers. Parent Guarantor shall,
concurrently with any notice, delivery or other communication to Lessor pursuant
to any Operative Document, deliver a copy of such notice, delivery or other
communication to each Certificate Purchaser at such Certificate Purchaser's
current address.
(v) Securities. Parent Guarantor shall not, nor shall it permit any
Subsidiary or anyone authorized to act on its or such Subsidiary's behalf to,
take any action which would subject the issuance or sale of the Certificates,
any of the Units or the Lease, or any security or lease the offering of which,
for purposes of the Securities Act or any state securities laws, would be deemed
to be part of the same offering as the offering of the aforementioned items, to
the registration requirements of Section 5 of the Securities Act or any state
securities laws.
(w) Guarantor Joinder. Parent Guarantor shall cause any Significant
Subsidiary of Parent Guarantor to execute and deliver to Lessor and each
Certificate Purchaser (i) a Guarantor Joinder in substantially the form attached
as Exhibit A to the Subsidiary Guaranty pursuant to which it shall join as a
Subsidiary Guarantor each of the documents to which the Subsidiary Guarantors
are parties; and (ii) the applicable documents in the forms described in Section
3.11 to the Lease modified as appropriate to relate to such Significant
Subsidiary. Parent Guarantor shall deliver such Guarantor Joinder and related
documents to Lessor and each Certificate Purchaser with five (5) Business Days
after any Subsidiary of Parent Guarantor becomes a Significant Subsidiary.
14
(x) Operation of Mines. Parent Guarantor shall, and shall cause each of its
Subsidiaries to, operate their mines in all material respects in accordance with
sound coal mining practices and all applicable Federal, state and local laws,
rules and regulations, including, without limitation, laws and regulations
relating to land reclamation, pollution control and mine safety.
(y) No Amendments to Acquisition Documents. Parent Guarantor shall not, and
shall not permit any of its Subsidiaries to, enter into any amendment or
modification to or waiver or consent under (or solicit any such amendment,
modification, waiver or consent) any of the Acquisition Documents or the Coastal
Agreement which could reasonably be expected to be material and adverse to the
Certificate Purchasers without the prior written consent of Lessor.
Section 1.2.Amendments to Lease. (a) Article I of the Lease is hereby amended by
adding or amending, as the case may be, the following definitions:
"Acquisition" means the transactions contemplated by the Purchase Agreement and
the Contribution Agreement, as such documents may be amended, modified or
supplemented after June 1, 1998 as permitted by clause (y) of Article IV of the
Parent Guaranty.
"Acquisition Documents" means collectively the Purchase Agreement, the
Contribution Agreement, the Tax Sharing Agreement, and the LLC Agreements, as
limited by their schedules and exhibits, as the same may be amended, modified or
supplemented after June 1, 1998 as permitted by clause (y) of Article IV of the
Parent Guaranty.
"Affiliate" as to any Person means any other Person (i) which directly or
indirectly controls, is controlled by, or is under common control with such
Person, (ii) which beneficially owns or holds 5% or more of any class of the
voting or other equity interests of such Person, or (iii) 5% or more of any
class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be. Notwithstanding the foregoing, a Subsidiary of Parent
Guarantor (other than an Excluded Subsidiary) shall not be deemed to be an
Affiliate of Parent Guarantor.
"Applicable Margin" shall mean, as applicable:
(A) the percentage spread to be added to the LIBO Rate at the indicated level of
Leverage Ratio for any period during which a Debt Rating is not in effect as set
forth in the pricing grid on Schedule V.1(A) Part (A) below the heading
"Spread", or
(B) the percentage spread to be added to the LIBO Rate at the indicated level of
Debt Rating for any period during which a Debt Rating is in effect as set forth
in the pricing grid on Schedule V.1(A) Part (B) below the heading "Spread".
15
"Amendment" means that certain Omnibus Amendment Agreement dated as of June 1,
1998 among Lessees, Parent Guarantor, the Certificate Purchasers, the Subsidiary
Guarantors and Certificate Trustee/Lessor.
"Appropriate Percentage" means, with respect to each Special Subsidiary, the
percentage of the equity of such Person owned by Parent Guarantor or any
Subsidiary of Parent Guarantor.
"Arch Coal Group" means, as of any date of determination, Parent Guarantor and
its Subsidiaries (other than the Excluded Subsidiaries).
"Arch of Wyoming LLC Agreement" means that certain Limited Liability Agreement,
dated as of April 15, 1998, of Arch of Wyoming LLC.
"Arch Western" means Arch Western Resources, LLC, a limited liability company
organized and existing under the laws of the State of Delaware.
"Arch Western Credit Facility" means that certain Credit Agreement by and among
Arch Western, PNC Bank as administrative agent, Xxxxxx Guaranty Trust Company of
New York, as syndication agent and NationsBank N.A. as documentation agent,
providing for a $675,000,000 term loan facility to Arch Western, as the same may
be amended, restated, modified or supplemented from time to time after the date
hereof.
"Arch Western Group" means, as of any date of determination, AWAC, Arch Western
and the Subsidiaries of Arch Western.
"Arch Western LLC Agreement" means that certain Limited Liability Company
Agreement by and between AWAC and Delta Housing, Inc., a Delaware corporation,
dated as of June 1, 1998, with AWAC and Delta Housing, Inc. as members and
creating Arch Western Resources, LLC, a Delaware limited liability company.
"ARCO" means Atlantic Richfield Company, a corporation organized and existing
under the laws of the State of Delaware.
"AU Sub LLC Agreement" means that certain Limited Liability Company Agreement,
dated as of April 8, 1998, as amended, of AU Sub LLC, a limited liability
company organized and existing under the laws of the State of Delaware.
"AWAC" means Arch Western Acquisition Corporation, a corporation organized and
existing under the laws of the State of Delaware.
"Banks" means the financial institutions named on Schedule 1.1(B) to the
Revolving Credit Facility and their respective successors and assigns as
permitted hereunder, each of which is referred to herein as a Bank.
16
"Base Net Worth" means the sum of $500,000,000, plus 50% of consolidated net
income of Parent Guarantor and its Subsidiaries (before the after-tax effect of
changes in accounting principles) for each fiscal quarter in which net income
was earned plus 80% of the net increase in Consolidated Tangible Net Worth
resulting from the issuance of any equity securities by Parent Guarantor, for
the period from April 1, 1998 through the date of determination. In no event
shall Base Net Worth be reduced on account of a consolidated net loss for any
fiscal period.
"Bid Loans" means collectively and Bid Loan means separately all of the Bid
Loans or any Bid Loan made by any of the Lenders to Parent Guarantor pursuant to
Section 2.9 of the Arch Western Credit Facility.
"Canyon Fuel" means Canyon Fuel Company, LLC, a limited liability company
organized and existing under the laws of the State of Delaware
"Canyon Fuel LLC Agreement" means that certain Limited Liability Company
agreement by and between Arch Western (or a Subsidiary of Arch Western) and
Itochu Coal International, Inc., a Delaware corporation, dated as of January 1,
1997, as amended, with Arch Western and Itochu Coal International, Inc. as
members of Canyon Fuel Company, LLC, a Delaware limited liability company.
"Consolidated Tangible Net Worth" means as of any date of determination total
stockholders' equity less intangible assets of Parent Guarantor and its
Subsidiaries as of such date determined and consolidated in accordance with GAAP
less the positive number, if any, equal to the amount of the Investment by
Parent Guarantor and its Subsidiaries in Permitted Joint Ventures in excess of
$30,000,000 and adjusted to exclude the after tax effect of any changes in
accounting principles subsequent to March 31, 1998.
"Contribution Agreement" means that certain Contribution Agreement among Parent
Guarantor, AWAC, ARCO, Delta Housing, Inc., a Delaware corporation, and Arch
Western.
"Debt" shall mean for any Person as of any date of determination the aggregate
of the following for such Person, as of such date, determined in accordance with
GAAP: (i) all indebtedness for borrowed money (including, without limitation,
all subordinated indebtedness but excluding obligations under any interest rate
swap, cap, collar or floor agreement or other interest rate management device),
(ii) all amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) all indebtedness in respect of any other
transaction (including production payments (excluding royalties), installment
purchase agreements, forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such Person to finance its operations or capital
requirements, (iv) reimbursement obligations (contingent or otherwise) under any
letter of credit (other than, with respect to Parent Guarantor and its
Subsidiaries, contingent reimbursement obligations aggregating at any time up to
$10,000,000 and other than contingent reimbursement obligations in respect of
the letter of credit issued to support the Port Bond) and (v) the amount of all
indebtedness (whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, or joint or several) in respect of all
Guarantees by such Person (the
17
"Guaranteeing Person") of Debt of other Persons (each such other Person being a
"Primary Obligor" and the obligations of a Primary Obligor which are subject to
a Guarantee by a Guaranteeing Person being "Primary Obligations") (it being
understood that if the Primary Obligations of the Primary Obligor do not
constitute Debt, then the Guarantee by the Guaranteeing Person of the Primary
Obligations of the Primary Obligor shall not constitute Debt). It is expressly
agreed that the amount of the indebtedness in respect of the Guaranty by the
Borrower of the Port Bond, shall be excluded from the amount determined under
clause (v) of the previous sentence. Further, it is expressly agreed that the
difference between actual funded indebtedness and the fair market value of
funded indebtedness recorded as required by Accounting Principles Board Opinion
No. 16 (as in effect on the Effective Date) will be excluded from indebtedness
in the determination of Debt.
"Debt Rating" shall mean the rating of Parent Guarantor's senior unsecured
long-term debt by either of Standard & Poor's or Moody's.
"Derivatives Obligations" shall mean, for any Person, all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"EBITDDA" for any period of determination means with respect to any Person the
sum of income from operations before the effect of changes in accounting
principles, nonrecurring charges and extraordinary items, net interest expense,
income taxes, depreciation, depletion and amortization for such period
determined in accordance with GAAP. For purposes of calculating the Fixed Charge
Coverage Ratio and the Leverage Ratio: (i) EBITDDA of Arch Western and its
Subsidiaries, including the Appropriate Percentage of EBITDDA of Canyon Fuel,
shall be assumed to be $39,200,000 for the fiscal quarter ended March 31, 1998,
and (ii) EBITDDA for Arch Western and its Subsidiaries, including the
Appropriate Percentage of EBITDDA of Canyon Fuel for the months of April and
May, 1998, shall be determined based upon the results from the operations of the
business of such Persons for such months by ARCO as set forth in an income
statement with respect to such months prepared by ARCO and reasonably acceptable
to Lessor and each Certificate Purchaser, shall take into account the $1,000,000
per month reduction in overhead resulting from the consummation of the
Acquisition, shall assume that operating lease expense of Arch Western and its
Subsidiaries, including Canyon Fuel, shall be $970,000 per month and shall
assume that interest expense for such Persons for such months shall be zero,
with such calculation of EBITDDA for Arch Western and its Subsidiaries for such
months to be reasonably acceptable to the Agents. Further, for purposes of
calculating the Fixed Charge Coverage Ratio and the Leverage Ratio for the
fiscal quarters ended June 30, 1998, and September 30, 1998, EBITDDA of Arch
Western and its Subsidiaries, including the Appropriate Percentage of EBITDDA of
Canyon Fuel, shall be deemed to be an amount equal to: (i) for the fiscal
quarter ended June 30, 1998, the product of, (x) without duplication, EBITDDA of
Arch Western and its Subsidiaries for the two fiscal quarters then ended
determined on a consolidated
18
basis in accordance with GAAP, plus the Appropriate Percentage of EBITDDA of
Canyon Fuel, for the two fiscal quarters then ended, determined on a
consolidated basis in accordance with GAAP, multiplied by (y) two (2); and (ii)
for the fiscal quarter ended September 30, 1998, the product of, (x) without
duplication, EBITDDA of Arch Western and its Subsidiaries for the three fiscal
quarters then ended determined on a consolidated basis in accordance with GAAP,
plus the Appropriate Percentage of EBITDDA of Canyon Fuel for the three fiscal
quarters then ended determined on a consolidated basis in accordance with GAAP,
multiplied by (y) four-thirds (4/3).
"Effective Date" shall mean June 1, 1998.
"Environmental Permit" means any permit, approval, license or other
authorization required under any Environmental Law.
"Excluded Subsidiaries" means, collectively, AWAC, Arch Western and the
Subsidiaries of Arch Western.
"Fixed Charge Coverage Ratio" means the ratio of (a) the sum, without
duplication, of EBITDDA of Parent Guarantor and its Subsidiaries, plus the
Appropriate Percentage of each Special Subsidiary's EBITDDA, each on a
consolidated basis in accordance with GAAP, plus operating lease expense of
Parent Guarantor and its Subsidiaries, plus the Appropriate Percentage of each
Special Subsidiary's operating lease expense, each on a consolidated basis in
accordance with GAAP, to (b) the sum of interest expense (other than Permitted
Loan Origination Expense) of Parent Guarantor and its Subsidiaries, plus the
Appropriate Percentage of interest expense of each Special Subsidiary, each on a
consolidated basis in accordance with GAAP, plus operating lease expense of
Parent Guarantor and its Subsidiaries, plus the Appropriate Percentage of
operating lease expense of each Special Subsidiary, each on a consolidated basis
in accordance with GAAP, with the amounts under the numerator and denominator of
such ratio all calculated as of the last day of each fiscal quarter for the four
fiscal quarters of Parent Guarantor then ended. It is assumed that operating
lease expense of Arch Western and its Subsidiaries, including Canyon Fuel, shall
be $970,000 per month for the months of April and May, 1998 and that interest
expense for such Persons for such months shall be zero. For purposes of
calculating the Fixed Charge Coverage Ratio for the fiscal quarters ended June
30, 1998, September 30, 1998 and December 31, 1998, operating lease expense of
Arch Western and its Subsidiaries, including the Appropriate Percentage of
operating lease expense of Canyon Fuel, shall be deemed to be an amount equal
to: (i) for the fiscal quarter ended June 30, 1998, the product of, (x) without
duplication, operating lease expense of Arch Western and its Subsidiaries for
such fiscal quarter determined and consolidated in accordance with GAAP, plus
the Appropriate Percentage of operating lease expense of Canyon Fuel for such
fiscal quarter determined in accordance with GAAP, multiplied by (y) four (4);
(ii) for the fiscal quarter ended September 30, 1998, the product of, (x)
without duplication, operating lease expense of Arch Western and its
Subsidiaries for the two fiscal quarters then ended determined and consolidated
in accordance with GAAP, plus the Appropriate Percentage of operating lease
expense of Canyon Fuel for the two fiscal quarters then ended determined in
accordance with GAAP, multiplied by (y) two (2); and (iii) for the fiscal
quarter ended December 31, 1998, the product of, (x) without duplication,
operating lease expense of Arch Western and its Subsidiaries for the three
fiscal quarters then
19
ended determined and consolidated in accordance with GAAP, plus the Appropriate
Percentage of operating lease expense of Canyon Fuel for the three fiscal
quarters then ended determined in accordance with GAAP, multiplied by (y)
four-thirds (4/3). For purposes of calculating the Fixed Charge Coverage Ratio
for the fiscal quarters ended June 30, 1998, September 30, 1998 and December 31,
1998, interest expense of Arch Western and its Subsidiaries, including the
Appropriate Percentage of interest expense of Canyon Fuel, shall be deemed to be
an amount equal to: (i) for the fiscal quarter ended June 30, 1998, the product
of, (x) without duplication, interest expense of Arch Western and its
Subsidiaries for such fiscal quarter determined and consolidated in accordance
with GAAP, plus the Appropriate Percentage of interest expense of Canyon Fuel
for such fiscal quarter determined in accordance with GAAP, multiplied by (y)
four (4); (ii) for the fiscal quarter ended September 30, 1998, the product of,
(x) without duplication, interest expense of Arch Western and its Subsidiaries
for the two fiscal quarters then ended determined and consolidated in accordance
with GAAP, plus the Appropriate Percentage of interest expense of Canyon Fuel
for the two fiscal quarters then ended determined in accordance with GAAP,
multiplied by (y) two (2); and (iii) for the fiscal quarter ended December 31,
1998, the product of, (x) without duplication, interest expense of Arch Western
and its Subsidiaries for the three fiscal quarters then ended determined and
consolidated in accordance with GAAP, plus the Appropriate Percentage of
interest expense of Canyon Fuel for the three fiscal quarters then ended
determined in accordance with GAAP, multiplied by (y) four-thirds (4/3).
"Historical Statements" shall have the meaning assigned to that term in Section
5.1.7(i) of the Revolving Credit Facility.
"Indebtedness" means, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money, (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit, currency swap agreement, interest rate swap, cap, collar or
floor agreement or other interest rate management device, (iv) any other
transaction (including production payments (excluding royalties), installment
purchase agreements, forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness and which are not more than thirty (30) days
past due), or (v) any Guaranty of any such Indebtedness. It is understood that
Derivatives Obligations shall not be deemed to be Indebtedness.
"Initial Annual Statements and Compliance Certificate" shall mean collectively
with respect to the fiscal year of the Borrower ended December 31, 1998, the
annual financial statements of the Borrower and its Subsidiaries consisting of
the unaudited consolidated and consolidating balance sheet as of the end of such
fiscal year, related consolidated and consolidating statements of income and
stockholders' equity and related consolidated statement of cash flows for the
fiscal year then ended, together with the duly executed related compliance
certificate required to be delivered to Lessor and each Certificate Purchaser
pursuant to clause (t)(iii) of Article IV of the
20
Parent Guaranty. It is acknowledged and agreed that the Initial Annual
Statements and Compliance Certificate are to be delivered by the Borrower for
purposes of calculating the Leverage Ratio as of December 31, 1998 in order to
determine the Applicable Margin. Notwithstanding the delivery of the Initial
Annual Statements and Compliance Certificate, the Borrower shall still be
required to comply with the provisions of clause (t)(ii) of Article IV of the
Parent Guaranty and deliver the audited financial statements required thereby,
together with the related Compliance Certificate required to be delivered under
clause (t)(iii) of Article IV of the Parent Guaranty.
"Initial Delivery Date" shall mean the date the Borrower delivers to Lessor and
the Certificate Purchasers the Initial Annual Statements and Compliance
Certificate.
"Interest Rate" means, with respect to any Rent Period or portion thereof, the
rate per annum equal to (a) unless, per the terms of Section 2.9(c) or Section
7.6 hereof, the Base Rate is in effect, the sum of the LIBO Rate plus the
Applicable Margin or (b) if the Base Rate is in effect, the Base Rate, in each
case, for such Rent Period.
"Investment Grade" means the rating of Parent Guarantor's senior unsecured
long-term debt, on a consolidated basis, of BBB- or better by Standard & Poor's
and Baa3 or better by Moody's.
"Issuing Banks" shall have the meaning set forth in the Revolving Credit
Facility.
"Leverage Ratio" means the ratio of the sum of, without duplication, Debt of
Parent Guarantor and its Subsidiaries, plus the Appropriate Percentage of Debt
of each Special Subsidiary, each on a consolidated basis in accordance with GAAP
(as the numerator) to EBITDDA of Parent Guarantor and its Subsidiaries, plus the
Appropriate Percentage of each Special Subsidiary's EBITDDA, each on a
consolidated basis in accordance with GAAP (as the denominator). For purposes of
calculating the Leverage Ratio, Debt shall be determined as of the end of each
fiscal quarter of Parent Guarantor and EBITDDA shall be determined as of the end
of each fiscal quarter of Parent Guarantor for the four fiscal quarters then
ended.
"LLC Agreements" means collectively the Arch Western LLC Agreement, Canyon Fuel
LLC Agreement, Mountain Coal LLC Agreement, Arch of Wyoming LLC Agreement, AU
Sub LLC Agreement, State Leases LLC Agreement and the Thunder Basin LLC
Agreement.
"Loans" means collectively and Loan means separately all Revolving Credit Loans,
Term Loans, Swing Loans and Bid Loans or any Revolving Credit Loan, Term Loan,
Swing Loan or Bid Loan.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc.
"Mountain Coal LLC Agreement" means that certain Limited Liability Company
Agreement, dated as of March 6, 1998, as amended, creating Mountain Coal
Company, L.L.C., a limited liability company organized and existing under the
laws of the State of Delaware.
21
"Net Cash Proceeds" means, with respect to any transaction, an amount equal to
the cash proceeds received by Parent Guarantor or any of its Subsidiaries (other
than Excluded Subsidiaries) from or in respect of such transaction (including,
when received, any cash proceeds received as income or other cash proceeds of
any non-cash proceeds of such transaction), less (x) any expenses or charges
(including commissions, fees and taxes paid or payable) reasonably incurred by
such Person in respect of such transaction, (y) any amounts considered
appropriate by the chief financial officer of Parent Guarantor to provide
reserves in accordance with GAAP for payment of indemnities or liabilities that
may be incurred in connection with such sale or disposition, and (z) in the case
of any asset sale permitted by clause (f)(v) of Article IV of the Parent
Guaranty, the amount of any debt secured by a Lien on the related asset and
discharged as part of such asset sale. For purposes of this definition, if taxes
or other expenses payable in connection with the sale or other disposition of
any asset are not known as of the date of such sale or other disposition, then
such fees, commissions, expenses or taxes shall be estimated in good faith by
the chief financial officer of Parent Guarantor and such estimated amounts shall
be deducted.
"Parent Guaranty" means that certain Guaranty and Suretyship Agreement dated as
of January 15, 1998 by Parent Guarantor for the benefit of Lessor and
Certificate Purchasers, as amended by the Amendment and as the same may be
further amended, modified, waived or supplemented from time to time, pursuant to
the terms thereof.
"Permitted Encumbrances" means:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course
of business to secure payment of reclamation liabilities, worker's compensation,
or to participate in any fund in connection with worker's compensation,
unemployment insurance, old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or leases, not in excess of the
aggregate amount due thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds required in the ordinary
course of business (it being understood that any appeal or similar bond (other
than such a bond required pursuant to Applicable Laws and Regulations to secure
in the ordinary course payment of worker's compensation or reclamation
liabilities) in an amount exceeding $50,000,000 shall not be in the ordinary
course of business);
22
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens on property leased by Parent Guarantor or
any of its Subsidiaries under capital or operating leases (in either case, as
the nature of such lease is determined in accordance with GAAP) securing
obligations of Parent Guarantor or such Subsidiary to the lessor under such
leases;
(vii) Purchase Money Security Interests; and
(viii) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and they do not in the aggregate
materially impair the ability of any Lessee, Parent Guarantor or any Subsidiary
Guarantor to perform its Obligations hereunder or under the Operative Documents:
(1) Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty, provided that such
Lessee, Parent Guarantor or such Subsidiary Guarantor maintains such reserves or
other appropriate provisions as shall be required by GAAP and pays all such
taxes, assessments or charges forthwith upon the commencement of proceedings to
foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property, including any attachment of
personal or real property or other legal process prior to adjudication of a
dispute on the merits;
(3) Claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual Liens; or
(4) Liens resulting from judgments or orders
described in Section 8.1(j); and
(ix) Any Lien or restriction resulting from ownership,
by an entity other than an Affiliate of Parent Guarantor, of a minority interest
in Canyon Fuel;
(x) the pledge by Coal-Mac, Inc. and Ashland
Terminal, Inc. of their respective partnership interests in Dominion Terminal
Associates in connection with the Port Bond; and
(xi) Liens granted under the Arch Western Credit
Facility.
23
provided, however, that no such Permitted Encumbrance shall attach or extend to
any Collateral.
"Permitted Joint Venture" means any Person (i) with respect to which the
ownership of equity interests thereof by Parent Guarantor or any Subsidiary of
Parent Guarantor is accounted for in accordance with the "equity method" in
accordance with GAAP; (ii) engaged in a line of business permitted by clause (i)
of Article IV of the Parent Guaranty; and (iii) with respect to which the equity
interests thereof were acquired by Parent Guarantor or Subsidiary of Parent
Guarantor in an arms-length transaction; provided that any such Person shall be
treated for purposes of this Agreement as a Subsidiary and not a Permitted Joint
Venture if (A) Parent Guarantor has management control over the operations of
such Person and (B) Parent Guarantor owns directly or indirectly a majority of
the economic equity interest in such Person.
"Port Bond" shall mean collectively, those certain Coal Terminal Revenue
Refunding Bonds (Dominion Terminal Associates Project), Series 1987-A, B, C and
D Bonds issued by Peninsula Ports Authority of Virginia, a political subdivision
of the Commonwealth of Virginia, in the face amount of $23,240,000, together
with any renewals thereof or replacements therefor so long as the face amount
thereof is not in excess of $23,240,000.
"Purchase Agreement" means that certain Purchase and Sale Agreement among ARCO,
ARCO Uinta Coal Company, a Delaware corporation, Parent Guarantor and AWAC,
dated as of March 22, 1998, together with all schedules and exhibits thereto.
"Revolving Credit Facility" means that certain $600,000,000 Revolving Credit
Facility and $300,000,000 Term Loan Credit Agreement dated as of June 1, 1998
among Parent Guarantor, as borrower, PNC Bank, National Association, as
Administrative Agent, Xxxxxx Guaranty Trust Company of New York, as Syndication
Agent and First Union Bank, as Documentation Agent and the lenders listed
therein.
"Revolving Credit Loans" means collectively and Revolving Credit Loan means
separately all Revolving Credit Loans or any Revolving Credit Loan made by the
Banks or one of the Banks to Parent Guarantor pursuant to Section 2.1 or 2.10.3
of the Revolving Credit Facility. A Bid Loan is not a Revolving Credit Loan,
except that it will be treated as a Revolving Credit Loan following a
termination of the Commitments under the Revolving Credit Facility pursuant to
Section 8.2.1 or 8.2.2 of the Revolving Credit Facility as provided in Section
8.3 of the Revolving Credit Facility.
"Significant Subsidiary" shall mean any Subsidiary of Parent Guarantor (other
than the Excluded Subsidiaries) which at any time (i) has gross revenues equal
to or in excess of five percent (5%) of the gross revenues of Parent Guarantor
and its Subsidiaries on a consolidated basis, or (ii) has total assets equal to
or in excess of five percent (5%) of the total assets of Parent Guarantor and
its Subsidiaries, in either case, as determined and consolidated in accordance
with GAAP.
"Special Subsidiary" means Canyon Fuel and each other Person to be treated as a
Subsidiary in accordance with the proviso to the definition of Permitted Joint
Venture.
24
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. and its successors.
"State Leases LLC Agreement" means that certain Limited Liability Company
Agreement, dated as of April 8, 1998, as amended, of State Leases LLC, a limited
liability company organized and existing under the laws of the State of
Delaware.
"Subsidiary Guarantors" means Arch Coal Sales Company, Inc., Ark Land Company
and Xxxxx Xxxxx Coal Company and each other Person that joins the Subsidiary
Guaranty as a Subsidiary Guarantor.
"Subsidiary Guaranty" means that certain Guaranty and Suretyship Agreement dated
as of January 15, 1998 made by the Subsidiary Guarantors for the benefit of
Lessor and Certificate Purchasers, as amended by the Amendment and as the same
may be further amended, modified, waived or supplemented from time to time,
pursuant to the terms thereof.
"Swing Loans" means collectively and Swing Loan means separately all Swing Loans
or any Swing Loan made by PNC Bank to Parent Guarantor pursuant to Section 2.5
of the Revolving Credit Facility.
"Tax Sharing Agreement" means that certain Tax Sharing Agreement dated as of
June 1, 1998 by and among Parent Guarantor, AWAC, Arch Western and Delta
Housing, Inc., a Delaware corporation.
"Term Loan" shall have the meaning given to such term in Section 2.12 of the
Revolving Credit Facility; Term Loans means collectively all of the Term Loans.
"Thunder Basin LLC Agreement" means that certain Limited Liability Company
Agreement, dated as of July 10, 1997, as amended, creating Thunder Basin Coal
Company, L.L.C., a limited liability company organized and existing under the
laws of the State of Delaware.
(b) Section 8.1 clause (d) of the Lease shall be and is hereby amended in
is entirety to read as follows:
"(d) Parent Guarantor shall default in the performance or observance of any
term, covenant, condition or agreement on its part to be performed or observed
under clauses (c) through (o) and clause (s) of Article IV of the Parent
Guaranty."
(c) Section 8.1 clause (h) of the Lease shall be and is hereby amended by
deleting the number $10,000,000 wherever such number appears in the
aforementioned clause (h) and replacing it with the number $20,000,000.
25
(d) Section 8.1 clause (k) of the Lease shall be and is hereby amended by
deleting the number $10,000,000 wherever such number appears in the
afore-mentioned clause (k) and replacing it with the number $20,000,000.
(e) Section 11.5 of the Lease shall be and is hereby amended in its
entirety to read as follows:
"Section 11.5. Early Termination.
(a) Early Termination. If no Incipient Default or Event of Default shall
exist, on any scheduled Payment Date (the "Early Termination Date"), if any
Lessee (I) has made a good faith determination that any Unit leased by such
Lessee should be replaced or removed from this Lease for operational reasons (as
evidenced by a resolution of the Board of Directors of such Lessee) or (II)
pursuant to Section IV(f)(v) of the Parent Guaranty, has elected to apply Net
Cash Proceeds to a purchase of a Unit or Units selected by Lessor and the
Certificate Purchasers in their sole discretion, upon at least 30 days' advance
written notice to Lessor and the Certificate Purchasers, such Lessee may:
(i) purchase such Unit for a purchase price equal to the Casualty Amount
of such Unit; or in the case of clause (I) above only
(ii) replace such Unit pursuant to the following provisions of this Section
11.5.
If such Lessee has elected to pay the Casualty Amount pursuant to clause (i)
above, Lessees shall continue to make all payments of Rent with respect to such
Unit due under this Lease until and including the Early Termination Date. Upon
payment of the Casualty Amount in respect of such Unit on such Early Termination
Date, (x) the remaining scheduled payments of Capital Rent shall be
proportionately reduced by an amount equal to the product of the scheduled
amount of such Capital Rent payment (determined in each case prior to the
receipt of such Casualty Amount), multiplied by the Unit Value Fraction of such
Unit and the Lease Balance shall be appropriately adjusted to reflect such
reduction in the remaining scheduled payments of Capital Rent.
If any Lessee has given notice that it intends to replace such Unit on or before
the Early Termination Date, then such Lessee shall make subject to this Lease, a
replacement for such Unit meeting the suitability standards hereinafter set
forth. To be suitable as a replacement Unit, an item must be of the same general
type, year of construction (or a later year of construction), function, utility,
state of repair and operating condition (immediately preceding such termination
assuming that such Unit had been maintained in accordance with the terms of
Section 5.3) as the Unit being replaced, must have a Fair Market Value of not
less than the Fair Market Value (immediately preceding such replacement assuming
that such Unit had been maintained in accordance with the terms of Section 5.3)
of the Unit being replaced and be free and clear of any Liens other than
Permitted Liens. Such Lessee shall cause a Xxxx of Sale and an Acceptance
Certificate to be executed and delivered to Lessor and the Certificate
Purchasers in order to subject such replacement item to this Lease, and upon
such execution and delivery and the
26
receipt by Lessor and the Certificate Purchasers of (i) evidence reasonably
satisfactory to them of such Lessee's compliance with the insurance provisions
of Section 6.2 with respect to such replacement item, and (ii) an opinion of
counsel to such Lessee in form and substance reasonably satisfactory to Lessor
and the Certificate Purchasers opining, among other things, to the effect that
all appropriate filings, recordings and other acts have been taken to protect
the right, title and interest of Lessor, on behalf of the Certificate
Purchasers, in such replacement item and that no other filing, recording,
deposit, or giving of notice with or to any Authority is necessary to protect
such right, title and interest in such replacement item, such replacement item
shall be deemed a "Unit" for all purposes hereof.
Notwithstanding anything contained herein to the contrary, Lessees' right to
purchase a Unit pursuant to clause (I) of the first paragraph of this Section
11.5 is limited in the aggregate to Units having a Purchase Price equal to or
less than 10% of the Purchase Price for all Units.
(b) Early Purchase Option. If no Incipient Default or Event of Default
shall exist on any Payment Date (the "Early Purchase Date"), upon at least 30
days' advance written notice from Lessees' Agent to Lessor and the Certificate
Purchasers, Lessees may purchase all but not less than all of the Units subject
to this Lease for a purchase price equal to the entire outstanding Lease
Balance, plus all Accrual Rent accrued on the Lease Balance, plus the Applicable
Administrative Charge on the Lease Balance, plus all other sums then due and
payable under the Operative Documents by Lessees, Parent Guarantor or any
Subsidiary Guarantor."
SECTION 2. RELEASE.
Upon and by virtue of this Amendment becoming effective as herein contemplated,
Allegheny Land Company and Cumberland River Coal Company shall be deemed to be
released from their obligations under the Subsidiary Guaranty and the Subsidiary
Guaranty is hereby amended to evidence such release.
SECTION 3. REPRESENTATIONS OF PARENT GUARANTOR, THE SUBSIDIARY
GUARANTORS AND THE LESSEES.
Parent Guarantor represents and warrants that (i) all representations and
warranties set forth in the Parent Guaranty, as amended, are true and correct as
of the date hereof and are incorporated herein by reference with the same force
and effect as though herein set forth in full, (ii) no Incipient Default or
Event of Default exists, (iii) the consolidated balance sheet of Parent
Guarantor and its Subsidiaries as of December 31, 1997 and the related
consolidated statements of income, cash flows and common shareholders' equity
for the fiscal year then ended, audited by Ernst & Young LLP, a copy of which
has been delivered to each of the Certificate Purchasers, fairly present, in
conformity with GAAP, the consolidated financial position of Parent Guarantor
and its Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal year, and (iv)
since December 31, 1997 there has been no Material Adverse Effect. The Lessees
represent and warrant that (i) all representations and warranties set forth in
the Lease, as amended, are true and correct as of the date hereof and are
27
incorporated herein by reference with the same force and effect as though herein
set forth in full and (ii) no Incipient Default or Event of Default exists. The
Subsidiary Guarantors represent and warrant that (i) all representations and
warranties set forth in the Subsidiary Guaranty, as amended, are true and
correct as of the date hereof and are incorporated herein by reference with the
same force and effect as though herein set forth in full and (ii) no Incipient
Default or Event of Default exists.
SECTION 4. ACKNOWLEDGMENT BY GUARANTORS.
The Subsidiary Guarantors and Parent Guarantor hereby acknowledge and agree to
the amendments of the Original Agreements effected hereby and hereby ratify and
re-affirm the Subsidiary Guaranty and the Parent Guaranty, as the case may be.
SECTION 5. AUTHORIZATION AND DIRECTION.
The Certificate Purchasers, by their execution hereof, authorize Certificate
Trustee to execute and deliver this Amendment.
SECTION 6. CONDITIONS PRECEDENT
The effectiveness of the First Amendment shall be subject to the fulfillment by
Parent Guarantor, Subsidiary Guarantors and the Lessees of the following
conditions precedent:
Section 6.1. Lessees, Parent Guarantor, each Certificate Purchaser and
Lessor shall have executed this Amendment and each Subsidiary Guarantor shall
have acknowledged this Amendment.
Section 6.2. Lessor and each Certificate Purchaser shall have received
evidence satisfactory to them that the Revolving Credit Facility has been duly
executed.
Section 6.3. On or prior to June 1, 1998 (the "Effective Date"), Lessor and
each Certificate Purchaser shall have received a Certificate of the Secretary or
Assistant Secretary of each Lessee, dated the Effective Date, with respect to
such Lessee's governing documents, resolutions and incumbent officers.
Section 6.4. On or prior to the Effective Date, Lessor and each Certificate
Purchaser shall have received a certificate of the Secretary or Assistant
Secretary of Parent Guarantor and each Subsidiary Guarantor, dated the Effective
Date, with respect to Parent Guarantor's or such Subsidiary Guarantor's, as the
case may be, governing documents, resolutions and incumbent officers.
Section 6.5. On or prior to the Effective Date, Lessor and each Certificate
Purchaser shall have received the opinions of (a) General Counsel of Lessees,
Parent Guarantor and
28
Subsidiary Guarantors, satisfactory in form and substance to Lessor and each
Certificate Purchaser, and (b) Xxxxxxx and Xxxxxx, special counsel to the
Certificate Purchasers.
SECTION 7. FEES AND EXPENSES
Parent Guarantor agrees to pay all the reasonable fees and expenses of the
Certificate Purchasers in connection with the negotiation, preparation,
approval, execution and delivery of this Amendment (including the fees and
expenses of their special counsel).
SECTION 8. MISCELLANEOUS.
Section 0.0.Xxxxxxxxxxxx. This Amendment shall be construed in connection with
and as part of the Original Agreements, and except as modified and expressly
amended by this Amendment, all terms, conditions and covenants contained in the
Original Agreements are hereby ratified and shall be and remain in full force
and effect.
Section 8.2.References. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Amendment may refer to the Original Agreements without making specific reference
to this Amendment but nevertheless all such references shall be deemed to
include this Amendment unless the context otherwise requires.
Section 8.3.Headings and Table of Contents. The headings of the Sections of this
Amendment and the Table of Contents are inserted for purposes of convenience
only and shall not be construed to affect the meaning or construction of any of
the provisions hereof and any reference to numbered Sections, unless otherwise
indicated, are to Sections of this Amendment.
Section 8.4.Counterparts. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Amendment.
SECTION 8.5.GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS (EXCLUDING CHOICE-OF-LAW
PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE
LAWS OF A JURISDICTION OTHER THAN SUCH STATE).
29
SCHEDULE V.1(A)
PART (A)
PRICING GRID
Level Applicable Leverage Ratio Spread
I Less than or equal to .50%
2.0 to 1.0
II Greater than .60%
2.0 to 1.0 but less than or
equal to 2.5 to 1.0
III Greater than .65%
2.5 to 1.0 but less than or
equal to 3.0 to 1.0
IV Greater than .875%
3.0 to 1.0 but less than or
equal to 3.5 to 1.0
V Greater than 1.125%
3.5 to 1.0 but less than or
equal to 4.0 to 1.0
VI Greater than 4.0 to 1.0 1.375%
(a) Applicable Leverage Ratio means, at any date, the Leverage Ratio as at
the last day of the fiscal quarter of Parent Guarantor most recently ended prior
to such date, for which Parent Guarantor has delivered financial statements
pursuant to clause (t)(i) or (t)(ii) of Article IV of the Parent Guaranty, as
the case may be, together with the duly executed compliance certificate required
by clause (t)(3) of Article IV; provided that if Parent Guarantor shall fail to
timely deliver the financial statements required to be delivered by it pursuant
to clause (t)(i) or (t)(ii) of Article IV of the Parent Guaranty, as the case
may be, together with the duly executed compliance certificate required by
clause (t)(3) of Article IV of the Parent Guaranty, the Applicable Leverage
Ratio for each date from and including the date on which such statements are
required to be delivered until the date on which such statements are delivered
shall be deemed to be greater than 4.0:1.
(b) It is expressly agreed that through and including the Initial Delivery
Date, the Applicable Margin Rate shall be such rates as determined in accordance
with paragraph (a) above but shall be no less than the respective amounts set
forth under Level IV of Part (A) of Schedule V.1(A) to the Lease. It is
expressly agreed that after the Initial Delivery Date until such time as Parent
Guarantor's senior unsecured long-term debt, on a consolidated basis, has been
rated Investment Grade, the Applicable Margin shall be determined based upon
Part (A) of
SCHEDULE V.1(A) - Part (A) - 1
Schedule V.1(A) to the Lease, and for the period thereafter when a Debt Rating
is in effect, the Applicable Margin shall be the respective amounts determined
under Part (B) of Schedule V.1(A) to the Lease.
SCHEDULE V.1(A) - Part (A) - 2
SCHEDULE V.1(A) - Part (B) - 1
SCHEDULE V.1(A)
PART (B)
PRICING GRID
Level Debt Rating Spread
[S&P and Xxxxx'x, respectively]
I A- or above .275%
or A3 or above
II BBB+ or Baa1 .325%
III BBB or Baa2 .375%
IV BBB- or Baa3 .500%
V BB+ or Ba1 .65%
VI BB or below .950%
or Ba2 or below
For purposes of determining the Applicable Margin:
(a) Through and including the Initial Delivery Date, the Applicable Margin
shall be such rates as determined in accordance with paragraph (b) below but
shall be no less than the respective amounts set forth under Level IV of Part
(A) of Schedule V.1(A) to the Lease. It is expressly agreed that after the
Initial Delivery Date until such time as Parent Guarantor's senior unsecured
long-term debt, on a consolidated basis, has been rated Investment Grade, the
Applicable Margin shall be determined based upon Part (A) of Schedule V.1(A) to
the Lease, and for the period thereafter when a Debt Rating is in effect, the
Applicable Margin shall be the indicated percentage set forth in the Pricing
Grid above for the higher of the Xxxxx'x rating or the Standard & Poor's rating
then in effect for Parent Guarantor; provided, however, that if the Xxxxx'x and
Standard & Poor's ratings, respectively, differ by more than two levels, then
the pricing level shall be the average of the pricing determined at each such
Debt Rating Level.
(b) If this Part (B) of Schedule V.1(A) to the Lease is applicable, any
change in the Applicable Margin shall become effective five (5) Business Days
after any public announcement of the change in the Debt Rating requiring such an
increase or decrease.
SCHEDULE V.1(A) - Part (B) - 1
IN WITNESS WHEREOF, the Lessees, Parent Guarantor, the Subsidiary Guarantors,
Certificate Trustee and the Certificate Purchasers have caused this instrument
to be executed, all as of the day and year first above written.
LESSEES
APOGEE COAL COMPANY
By /s/ Xxxx X. Xxxxxxx
---------------------------
Its Attorney-In-Fact
CATENARY COAL COMPANY
By /s/ Xxxx X. Xxxxxxx
------------------------------
Its Vice President and Treasurer
HOBET MINING, INC.
By /s/ Xxxx X. Xxxxxxx
------------------------------
Its Vice President and Treasurer
PARENT GUARANTOR
ARCH COAL, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxxx
------------------------------
Its Senior Vice President
CERTIFICATE PURCHASERS
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxx
------------------------------
Its Assistant Vice President
Investments
By /s/ Xxxxx X. Xxxxxxxx
------------------------------
Its Vice President
Investments
BANK OF MONTREAL
By /s/ Xxx X. Xxxxxxx
------------------------------
Its Director
BARCLAYS BANK PLC
By /s/ Xxxxx X. Xxxxx
------------------------------
Its Director
FIRST UNION NATIONAL BANK
By /s/ Xxxxxxxx X. Xxxx
------------------------------
Its Vice President
BA LEASING & CAPITAL CORPORATION
By /s/ Xxxxxx X. Xxxxxx
------------------------------
Its Vice President
CERTIFICATE TRUSTEE/
LESSOR
FIRST SECURITY BANK NATIONAL
ASSOCIATION, not in its
individual capacity except as
solely provided herein, but
solely as Certificate Trustee,
as Lessor
By /s/ Xxxxx X. Xxxx
------------------------------
Its Vice President
SUBSIDIARY GUARANTORS
ARCH COAL SALES COMPANY, INC.
By /s/ Xxxx X. Xxxxxxx
------------------------------
Its Treasuer
ARK LAND COMPANY
By /s/ Xxxx X. Xxxxxxx
------------------------------
Its Attorney-In-Fact
XXXXX XXXXX COAL COMPANY
By /s/ Xxxx X. Xxxxxxx
------------------------------
Its Vice President and Treasurer
