LIMITED CONSENT AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
EXHBIT
10.1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
This
LIMITED CONSENT AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this “Agreement”) is entered into as of July 19, 2007, by and
among A. T. XXXXXX COAL COMPANY, INC., a Virginia corporation
(the
“Administrative Borrower”), individually and as agent on behalf
of the other Loan Parties (such term and each other capitalized term used but
not defined herein having the meaning given to it in
Article I
of the Credit Agreement referenced
below), the Required Lenders signatory hereto, UBS AG, STAMFORD
BRANCH, as administrative agent
(the “Administrative Agent”), and THE CIT GROUP/BUSINESS
CREDIT, INC., as collateral agent and as security trustee (the “Collateral Agent”; and together with the
Administrative Agent, the “Agents”) for the Secured
Parties and Issuing Bank.
RECITALS
WHEREAS,
the Administrative Borrower, the other Borrowers, the Guarantors, the
Administrative Agent, the Collateral Agent and Lenders entered into that certain
Amended and Restated Credit Agreement dated as of August 15, 2006 (as amended,
supplemented, restated or otherwise modified from time to time, the
“Credit Agreement”);
WHEREAS,
the Administrative Borrower (on behalf of itself and each of the other Loan
Parties), the Administrative Agent, the Collateral Agent, and the Required
Lenders entered into that certain Limited Waiver, Consent and First Amendment
to
Credit Agreement effective as of March 12, 2007;
WHEREAS,
the Administrative Borrower has informed the Administrative Agent of its desire
to form one or more corporations (each an “Insurance
Subsidiary”), as direct or indirect Wholly-Owned Subsidiaries of the
Administrative Borrower to engage in the Insurance Business (as defined in
Section 2.1 hereof);
WHEREAS,
the parties acknowledge that federal and state insurance laws and regulations
will impose certain restrictions on the business and activities of the Insurance
Subsidiaries, including their ability to declare and issue Dividends, to grant
or permit Liens on their assets, to guarantee Obligations of their parent
corporations and to incur Indebtedness and such insurance laws and regulations
may preclude or restrict any transfer or pledge of the Equity Interests of
the
Insurance Subsidiaries;
WHEREAS,
the Administrative Borrower (on behalf of itself and each of the other Loan
Parties) has requested that Agents and the Required Lenders (i) consent to
the
formation of one or more Insurance Subsidiaries under Section 6.12 of the
Credit Agreement as direct or indirect Wholly-Owned Subsidiaries of the
Administrative Borrower, and (ii) amend certain Sections of the Credit Agreement
to permit the capitalization of such Insurance Subsidiaries, to permit the
incurrence of Indebtedness and other obligations by the Insurance Subsidiaries
in the ordinary course of their business and the granting of Liens (except
Liens
on the Collateral) to secure such obligations and to relieve the Insurance
Subsidiaries of certain covenants and restrictions otherwise applicable to
Subsidiaries under the provisions of the Credit Agreement, all upon the terms,
and subject to the limitations, set forth herein.
NOW
THEREFORE, in consideration of the foregoing recitals, mutual agreements
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Agents, the Required Lenders
and the Administrative Borrower (on behalf of itself and each of the other
Loan
Parties) agree as follows:
1 Limited
Consent. Subject to the satisfaction of each of the
conditions to effectiveness set forth in Section 3 hereof, the
Administrative Borrower (on behalf of itself and each of the other Loan
Parties), the Agents and the Required Lenders hereby agree as
follows:
1.1 Immediately
upon the effectiveness of this Agreement, the Agents and the Required Lenders
hereby consent to the formation of one or more Insurance Subsidiaries pursuant
to Section 6.12 of the Credit Agreement and to the issuance by any such
Insurance Subsidiary of the Equity Interests therein to the Administrative
Borrower or to any of its direct or indirect Wholly-Owned
Subsidiaries.
1.2 The
limited consent set forth in Section 1.1 above is effective
solely for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to be a consent to any amendment, waiver or
modification of any term or condition of the Credit Agreement, Security
Agreement or of any other Loan Document, except as expressly provided in this
Agreement, or prejudice any right or rights that Administrative Agent or Lenders
have or may have in the future under or in connection with the Credit Agreement,
the Security Agreement or any other Loan Document.
2 Agreements
and Amendments to Credit
Agreement. Subject to the satisfaction
of each of the conditions to effectiveness set forth in Section 3
hereof, the Administrative Borrower (on behalf of itself and each of the other
Loan Parties), the Agents and the Required Lenders hereby agree as
follows:
2.1 Immediately
upon the effectiveness of this Agreement, the following sections of the Credit
Agreement are amended as follows:
2.1.1 Section
1.01 (Defined Terms) of the Credit Agreement is amended by adding the
following additional defined terms:
“Insurance
Business” shall mean the business of (i) issuing surety bonds, reclamation
bonds, performance bonds, workers’ compensation insurance policies, fronting
policies for all risk general liability, casualty and property insurance and
other similar obligations as a captive insurance/bonding company to support
and/or insure reclamation and workers’ compensation obligations and all risk
general liability, casualty and property risks customarily covered by fronting
policies, in each case incurred by the Companies in the ordinary course of
their
businesses, and (ii) conducting all activities ancillary thereto, including
entering into reinsurance arrangements, receiving premiums, establishing
reserves for the payment of claims and for the return of unearned premiums
and
investing funds in support of such reserves, all as may be required or permitted
by applicable insurance laws and regulations.
“Insurance
Subsidiary” shall mean any direct or indirect Wholly-Owned Subsidiary of the
Administrative Borrower that is engaged solely in the Insurance
Business.
2.1.2 Section
5.04 (Insurance) of the Credit Agreement is amended by adding a new clause
(c) as follows:
“(c) Notwithstanding
any provision of this Section 5.04 to the contrary, no Insurance
Subsidiary shall be permitted to provide any insurance coverage with respect
to
the Collateral without the prior written consent of each of the Administrative
Agent and the Collateral Agent (as determined in their sole discretion) and
the
Required Lenders. Subject to the provisions of the preceding
sentence, the Loan Parties shall not be deemed to have breached any provision
of
this Section 5.04 solely as a result of maintaining insurance coverages
with any Insurance Subsidiary.”
2.1.3 Section
5.11 (Additional Collateral; Additional Guarantors) of the Credit Agreement
is amended by inserting the following provision as new clause (d):
“(d) Notwithstanding
any provision of this Section 5.11 to the contrary, clauses (a), (b) and
(c) above shall not apply to any Insurance Subsidiary.”
2.1.4 Section
6.01 (Indebtedness) of the Credit Agreement is amended by (i) deleting the
“and” at the end of existing clause (o) thereof, (ii) deleting the “.” at the
end of existing clause (p) thereof and substituting “; and” in its place and
(iii) inserting the following provision as new clause (q):
“(q) Indebtedness
and other obligations incurred by any Insurance Subsidiary in the ordinary
course of its Insurance Business.”
2.1.5 Section
6.02 (Liens) of the Credit Agreement is amended by amending and restating
clause (l) and (v) as follows:
“(l) claims
of insureds against properties of any Insurance Subsidiary and Liens granted
or
incurred on properties of any Insurance Subsidiary in the ordinary course of
its
Insurance Business.”
* * *
“(v) other
Liens (not of a type set forth in clauses (a) through (u) above) incurred in
the
ordinary course of business of any Company with respect to obligations
(including without limitation, any Capitalized Lease Obligations resulting
from
the conversion of operating leases existing on December 1, 2003, but excluding
any other Indebtedness) or securing any surety bonds, reclamation bonds,
performance bonds, workers’ compensation property, casualty or general liability
insurance policies and other similar obligations issued or incurred by any
Insurance Subsidiary in the ordinary course of its Insurance Business (but
excluding any other Indebtedness) that do not in the aggregate exceed at any
one
time outstanding 5% of Consolidated Net Tangible Assets; provided that
such Liens permitted under this clause (v) do not attach to any
Collateral;”
2.1.6 Section
6.04 (Investments, Loans and Advances) of the Credit Agreement is amended by
amending and restating clauses (h) and (p) as follows:
“(h) Investments
(other than as described in Section 6.04(e)) (i) by any Borrower in any
Guarantor that is a Subsidiary, (ii) by any Company in any Borrower or any
Guarantor that is a Subsidiary, (iii) by Holdings in any Borrower, (iv) by
a
Guarantor in another Guarantor, (v) by any Loan Party in a Company that is
not a
Loan Party (other than the Insurance Subsidiary); provided,
however, that the aggregate amount of all Investments permitted pursuant
to this clause (v) shall not exceed $25 million at any time; and (vi) by any
Loan Party in any Insurance Subsidiary; provided, however, that
(A) the aggregate amount of Investments permitted pursuant to this clause (vi)
with respect to the initial formation and capitalization of the Insurance
Subsidiaries shall not exceed $60 million and (B) during any Fiscal Year,
additional Investments from and after the initial formation and capitalization
of any Insurance Subsidiary shall not exceed the sum of $20 million plus the
cumulative unused amount, if any, otherwise permitted under clause (A) above
or
this clause (B); provided, that any Investment in one or more of the
Insurance Subsidiaries shall not be permitted if, after giving effect to such
Investment, (x) the aggregate amount of all Investments permitted pursuant
to
this clause (vi) would exceed $125 million at any time or (y) Excess
Availability is less than $30,000,000 after giving effect to such
Investment;”
* * *
“(p) Each
Borrower and its Subsidiaries may make or acquire Investments in connection
with
Permitted Acquisitions and each Insurance Subsidiary may make or acquire
Investments permitted by applicable insurance laws and
regulations;”
2.1.7 Section
6.05 (Mergers, Consolidations, Sales of Assets and Acquisitions) of the
Credit Agreement is amended by amending and restating the final paragraph
thereof as follows:
“To
the
extent the Required Lenders waive the provisions of this Section 6.05 with
respect to the sale of any Collateral, or, subject in each case to Section
11.02(b)(vii), any Collateral is sold, exchanged or otherwise disposed of as
permitted by this Section 6.05, such Collateral (unless sold, exchanged or
transferred to a Company) shall be sold, exchanged or otherwise disposed of
free
and clear of the Liens created by the Security Documents, and the Administrative
Agent and the Collateral Agent shall take all actions deemed appropriate in
order to effect the foregoing.”
2.1.8 Section
6.07 (Transactions with Affiliates) of the Credit Agreement is amended by
(i) deleting the “and” at the end of the existing clause (d) thereof,
(ii) deleting the “.” at the end of the existing clause (e) thereof and
substituting “; and” in its place and (iii) inserting the following provision as
new clause (f):
“(f) any
Company may pay insurance premiums to any Insurance Subsidiary so long as the
proceeds of such payments are either (i) used to pay such Insurance Subsidiary’s
franchise taxes, income taxes and other current period operating expenses
(including any reinsurance premiums), (ii) used or invested by such Insurance
Subsidiary to support loss reserves, or (iii) retained by such Insurance
Subsidiary as capital; provided, however, that any such retained
amount shall apply against the amounts permitted by Section
6.04(h)(vi).”
2.1.9 Section
6.10 (Limitation on Certain Restrictions on Subsidiaries) of the
Credit Agreement is amended by adding a new sentence at the end of Section
6.10
as follows:
“Notwithstanding
any provision of this Section 6.10 to the contrary, clauses (a) and (b)
above shall not apply to any Insurance Subsidiary.”
2.1.10 Section
6.13 (Business) of the Credit Agreement is amended by amending and restating
clause (b) as follows:
“(b) With
respect to the Borrowers and their Subsidiaries, engage (directly or indirectly)
in any business other than those businesses in which the Borrowers and their
Subsidiaries are engaged on the Restatement Date, whether in connection with
a
Permitted Acquisition or otherwise; provided that this Section shall not
preclude (i) a Permitted Acquisition of any entity engaged in a Permitted
Business or the formation of a Subsidiary of Holdings to be engaged in a
Permitted Business or (ii) any Insurance Subsidiary from engaging in the
Insurance Business.”
2.1.11 Section
6.16 (Negative Pledges) is amended by adding a new clause (c) as
follows:
“(c) Notwithstanding
any provision of this Section 6.16 to the contrary, clauses (a) and (b)
above shall not apply to any assets (other than Equity Interests) of any
Insurance Subsidiary.”
2.2 The
parties acknowledge and agree that the financial performance of each Insurance
Subsidiary shall be included in the calculations to determine compliance with
the financial covenants in Section 6.08 of the Credit
Agreement.
3 Conditions
to Effectiveness. This Agreement shall
be effective on the date on which all of the following conditions precedent
are
satisfied:
3.1 This
Agreement shall have been executed and delivered by the Administrative Agent,
the Collateral Agent, the Required Lenders and the Administrative Borrower
(on
behalf of itself and each of the other Loan Parties).
3.2 The
representations and warranties contained herein shall be true and correct in
all
respects, and, after giving effect to this Agreement, no Event of Default or
Default shall exist on the date hereof.
4 Representations
and Warranties.
4.1 The
execution, delivery and performance by Administrative Borrower (on behalf of
itself and each of the other Loan Parties) of this Agreement has been duly
authorized by all necessary corporate action and this Agreement is a legal,
valid and binding obligation of the Administrative Borrower and each of the
other Loan Parties enforceable against the Administrative Borrower and each
of
the other Loan Parties in accordance with its terms, except as the enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
4.2 Each
of
the representations and warranties contained in the Credit Agreement is true
and
correct in all material respects on and as of the date hereof as if made on
the
date hereof, except to the extent that such representations and warranties
expressly relate to an earlier date; and
4.3 Neither
the execution, delivery and performance of this Agreement by the Administrative
Borrower (on behalf of itself and each of the other Loan Parties) nor the
consummation of the transactions contemplated hereby does or shall result in
a
breach of, or violate (i) any provision of the Administrative Borrower’s or any
other Loan Party’s articles of incorporation or bylaws, (iii) any law or
regulation, or any order or decree of any court or government instrumentality,
applicable to the Administrative Borrower or the other Loan Parties or binding
upon any of their properties, or (iii) any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which the Administrative Borrower or
any
other Loan Party is a party or by which the Administrative Borrower or any
other
Loan Party or any of their property is bound, except in any such case to the
extent such conflict or breach has been waived by a written waiver document,
a
copy of which has been delivered to the Agents on or before the date
hereof.
5 Reference
to and Effect upon the Credit Agreement.
5.1 Except
as
specifically set forth above, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby ratified and
confirmed.
5.2 The
execution, delivery and effectiveness of this Agreement shall not operate as
a
waiver of any right, power or remedy of any Agent or any Lender under the Credit
Agreement or any other Loan Document, nor constitute amendment of any provision
of the Credit Agreement or any other Loan Document, except as specifically
set
forth herein. Upon the effectiveness of this Agreement, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby.
5.3 The
Administrative Borrower (on behalf of itself and each of the other Loan Parties)
acknowledges and agrees that the execution and delivery by Agents and Required
Lenders of this Agreement shall not be deemed (i) to create a course of dealing
or otherwise obligate Agents or Lenders to forbear, waive, consent or execute
similar amendments under the same or similar circumstances in the future, or
(ii) to amend, relinquish or impair any right of Agents or Lenders to receive
any indemnity or similar payment from any Person or entity as a result of any
matter arising from or relating to this Agreement.
5.4 The
Administrative Borrower (on behalf of itself and each of the other Loan Parties)
affirms and acknowledges that this Agreement constitutes a Loan Document under
the Credit Agreement and any reference to the Loan Documents under the Credit
Agreement contained in any notice, request, certificate or other document
executed concurrently with or after the execution and delivery of this Agreement
shall be deemed to include this Agreement unless the context shall otherwise
specify.
6 Costs
and Expenses. As provided in Section 11.03 of the
Credit Agreement, Borrowers agree to reimburse Agents for all reasonable
out-of-pocket expenses incurred by the Administrative Agent and the Collateral
Agent in connection with the preparation, execution and delivery of this
Agreement, including the fees, charges and disbursements of Xxxxxx &
Xxxxxxx, LLP, counsel for the Administrative Agent and Xxxx & Hessen, LLP,
counsel to the Collateral Agent.
7 GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS
OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
8 Headings. Section
headings in this Agreement are included herein for convenience of reference
only
and shall not constitute a part of this Agreement for any other
purposes.
9 Counterparts. This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed an original, but all such counterparts shall constitute
one and the same instrument. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a
valid and binding obligation of the party executing (or on whose behalf the
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof, and such party shall promptly
follow its facsimile signature page by mailing of a hard copy
original.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first written above.
ADMINISTRATIVE
BORROWER
A.
T.
XXXXXX COAL COMPANY, INC., individually and as agent for each of the other
Loan
Parties
By: /s/
Xxxxxx X.
Xxxxxxx
Name:
Xxxxxx X. Xxxxxxx
Title:
Treasurer
AGENTS
UBS
AG,
STAMFORD BRANCH, as the Administrative Agent
By: /s/
Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Associate Director
By:
/s/ Xxxx X.
Xxxx
Name:
Xxxx X. Xxxx
Title:
Associate Director
LENDERS
UBS
LOAN
FINANCE LLC,
as
Swingline Lender
By: /s/
Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Associate Director
By: /s/
Xxxx X.
Xxxx
Name:
Xxxx X. Xxxx
Title:
Associate Director
UBS
LOAN
FINANCE LLC,
as
a
Lender
By: /s/
Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Associate Director
By:
/s/ Xxxx X.
Xxxx
Name:
Xxxx X. Xxxx
Title:
Associate Director
THE
CIT
GROUP/BUSINESS CREDIT, INC., as the Collateral Agent
By:
/s/ Xxxx X.
Xxxxxxxx
Name:
Xxxx X.
Xxxxxxxx
Title:
Vice
President
GENERAL
ELECTRIC CAPITAL CORPORATION, as a Lender
By: /s/
Meenoo
Sameer
Name:
Meenoo Sameer
Title:
Duly Authorized Signatory
BANK
OF
AMERICA, N.A., as a Lender
By: /s/
Xxxxxxxx X.
Xxxxx
Name:
Xxxxxxxx X. Xxxxx
Title:
Sr. Vice President
PNC
BANK,
NATIONAL ASSOCIATION, as a Lender
By: /s/
Xxxxx
X'Xxxxxxx
Name:
Xxxxx X'Xxxxxxx
Title:
Credit Officer
