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EXHIBIT 10(liv)
U.S. $175,000,000
CREDIT AGREEMENT
Dated as of October 11, 2000
Among
THE NORTH AMERICAN COAL CORPORATION
AS BORROWER
and
THE INITIAL LENDERS NAMED HEREIN
AS INITIAL LENDERS
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
AS LEAD ARRANGER AND BOOK MANAGER
and
KEYBANK NATIONAL ASSOCIATION
AS SYNDICATION AGENT
and
CITIBANK, N.A.
AS AGENT
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TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 Certain Defined Terms.................................. 1
SECTION 1.02 Computation of Time Periods............................ 11
SECTION 1.03 Accounting Terms....................................... 11
ARTICLE II
AMOUNTS OF TERMS OF THE ADVANCES
SECTION 2.01 The Advances........................................... 11
SECTION 202 Making the Advances.................................... 11
SECTION 2.03 Fees................................................... 12
SECTION 2.04 Termination or Reduction of the Commitments............ 12
SECTION 2.05 Repayment of Advances.................................. 13
SECTION 2.06 Prepayments of Advances................................ 13
SECTION 2.07 Interest on Advances................................... 13
SECTION 2.08 Interest Rate Determination............................ 14
SECTION 2.09 Optional Conversion of Advances........................ 15
SECTION 2.10 Increased Costs........................................ 15
SECTION 2.11 Illegality............................................. 16
SECTION 2.12 Payments and Computations.............................. 16
SECTION 2.13 Taxes.................................................. 17
SECTION 2.14 Sharing of Payments, Etc............................... 18
ARTICLE III
CONDITIONS TO EFFECTIVENESS OF SECTIONS 2.01
SECTION 3.01 Conditions Precedent to Effectiveness of Sections 2.01. 19
SECTION 3.02 Conditions Precedent to Each Borrowing................. 20
SECTION 3.03 Determinations Under Section 3.01...................... 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower......... 21
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01 Affirmative Covenants.................................. 23
SECTION 5.02 Negative Covenants..................................... 25
SECTION 5.03 Financial Covenants.................................... 29
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 Events of Default...................................... 30
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ARTICLE VII
THE AGENT
SECTION 7.01 Authorization and Action............................... 31
SECTION 7.02 Agent's Reliance, Etc.................................. 32
SECTION 7.03 Citibank and Affiliates................................ 32
SECTION 7.04 Lender Credit Decision................................. 32
SECTION 7.05 Indemnification........................................ 32
SECTION 7.06 Successor Agent........................................ 33
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Amendments, Etc........................................ 33
SECTION 8.02 Notices, Etc........................................... 33
SECTION 8.03 No Waiver; Remedies.................................... 34
SECTION 8.04 Costs and Expenses..................................... 34
SECTION 8.05 Right of Set-off....................................... 35
SECTION 8.06 Binding Effect......................................... 35
SECTION 8.07 Assignments and Participations......................... 35
SECTION 8.08 Confidentiality........................................ 37
SECTION 8.09 Governing Law.......................................... 38
SECTION 8.10 Execution in Counterparts.............................. 38
SECTION 8.11 Jurisdiction, Etc...................................... 38
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Schedules
---------
Schedule I - List of Applicable Lending Offices
Schedule 3.01(b) - Disclosed Litigation
Schedule 5.02(a) - Existing Liens
Exhibits
--------
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Borrower
Exhibit D-2 - Form of Opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., counsel for the
Borrower
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CREDIT AGREEMENT
Dated as of October 11, 2000
THE NORTH AMERICAN COAL CORPORATION, a Delaware corporation
(the "BORROWER"), the banks, financial institutions and other institutional
lenders (the "INITIAL LENDERS") listed on the signature pages hereof, and
CITIBANK, N.A. ("CITIBANK"), as agent (the "AGENT") for the Lenders (as
hereinafter defined), agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"ADVANCE" means a Revolving Credit Advance or a Term Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 10% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"AGENT'S ACCOUNT" means the account of the Agent maintained by
the Agent at Citibank at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means as of any date, a percentage per
annum determined by reference to the Debt/EBITDA Ratio in effect on
such date as set forth below:
---------------------- ----------------------- ------------------------- --------------------------
Debt/EBITDA Ratio Applicable Margin for Applicable Margin for Applicable Margin for
Base Rate Advances Eurodollar Rate Eurodollar Rate Term
Revolving Credit Advances
Advances
---------------------- ----------------------- ------------------------- --------------------------
LEVEL 1
Less than or equal 0.00% 0.850% 1.000%
to 2.0 to 1.0
---------------------- ----------------------- ------------------------- --------------------------
LEVEL 2
Greater than 2.0 to 0.00% 0.925% 1.125%
1.0 but less than or
equal to 2.5 to 1.0
---------------------- ----------------------- ------------------------- --------------------------
LEVEL 3
Greater than 2.5 to 0.00% 1.000% 1.250%
1.0 but less than or
equal to 2.75 to 1.0
---------------------- ----------------------- ------------------------- --------------------------
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LEVEL 4
Greater than 2.75 to 0.00% 1.450% 1.750%
1.0 but less than
3.0 to 1.0
---------------------- ----------------------- ------------------------- --------------------------
LEVEL 5
Greater than or 0.00% 1.850% 2.250%
equal to 3.0 to 1.0
---------------------- ----------------------- ------------------------- --------------------------
The Applicable Margin for each Advance shall be determined by reference
to the ratio in effect from time to time; PROVIDED, HOWEVER, that (A)
through March 31, 2001, the Applicable Margin shall be at Level 5, (B)
no change in the Applicable Margin shall be effective until three
Business Days after the date on which the Agent receives the
certificate of a Responsible Officer of the Borrower demonstrating such
ratio required to be delivered pursuant to Section 5.01(h)(i) or (ii),
as the case may be, and (C) the Applicable Margin shall be at Level 5
for so long as the Borrower has not submitted to the Agent the
certificate described in clause (B) of this proviso as and when
required under Section 5.01(h)(i) or (ii), as the case may be.
"APPLICABLE PERCENTAGE" means, as of any date a percentage per
annum determined by reference to the Debt/EBITDA Ratio in effect on
such date as set forth below:
------------------------------------- -----------------------------------
Debt/EBITDA Ratio Applicable
Percentage
------------------------------------- -----------------------------------
LEVEL 1
Less than or equal to 2.0 to 1.0 0.150%
------------------------------------- -----------------------------------
LEVEL 2
Greater than 2.0 to 1.0 but less 0.200%
than or equal to 2.5 to 1.0
------------------------------------- -----------------------------------
LEVEL 3
Greater than 2.5 to 1.0 but less 0.250%
than or equal to 2.75 to 1.0
------------------------------------- -----------------------------------
LEVEL 4
Greater than 2.75 to 1.0 but less 0.300%
than 3.0 to 1.0
------------------------------------- -----------------------------------
LEVEL 5
Greater than or equal to 3.0 to 1.0 0.400%
------------------------------------- -----------------------------------
The Applicable Percentage shall be determined by reference to the ratio
in effect from time to time; PROVIDED, HOWEVER, that (A) through March
31, 2001, the Applicable Percentage shall be at Level 5, (B) no change
in the Applicable Percentage shall be effective until three Business
Days after the date on which the Agent receives the certificate of a
Responsible Officer of the Borrower demonstrating such ratio required
to be delivered pursuant to Section 5.01(h)(i) or (ii), as the case may
be, and (C) the Applicable Percentage shall be at Level 5 for so long
as the Borrower has not submitted to the Agent the certificate
described in clause (B) of this proviso as and when required under
Section 5.01(h)(i) or (ii), as the case may be.
"APPROPRIATE LENDER" means, at any time, with respect to
either of the Term or Revolving Credit Facilities, a Lender that has a
Commitment with respect to such Facility at such time.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the highest of:
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(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest 1/4 of 1%, to the next higher 1/4 of 1%)
of (i) 1/2 of 1% per annum, PLUS (ii) the rate obtained by
dividing (A) the latest three-week moving average of secondary
market morning offering rates in the United States for
three-month certificates of deposit of major United States
money market banks, such three-week moving average (adjusted
to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such rates
reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York in Federal Reserve
Statistical Release H.15(519) or, if such publication shall be
suspended or terminated, on the basis of quotations for such
rates received by Citibank from three New York certificate of
deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for Citibank with respect
to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time
deposits in the United States, PLUS (iii) the average during
such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal
Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BORROWING" means a Revolving Credit Borrowing or a Term
Borrowing.
"BUSINESS DAY" means a day of the year on which commercial
banks are not required or authorized by law to close in New York City
and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank
market.
"COMMITMENT" means a Term Commitment or a Revolving Credit
Commitment.
"CONFIDENTIAL INFORMATION" means information that the Borrower
furnishes to the Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to the Agent or such Lender from a source other than the
Borrower.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of such
Person's business and amounts owed to NACCO under the Tax Sharing
Agreement and/or in respect of state taxes paid by NACCO on behalf of
the Borrower and its Subsidiaries), (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (d)
all obligations of such Person created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or
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sale of such property), (e) all obligations of such Person as lessee
under leases that have been or should be, in accordance with GAAP,
recorded as capital leases, (f) all obligations, contingent or
otherwise, of such Person in respect of acceptances, letters of credit,
surety bonds or similar extensions of credit, (g) all net payment
obligations of such Person in respect of Hedge Agreements, (h) all Debt
of others referred to in clauses (a) through (g) above or clause (i)
below guaranteed directly or indirectly in any manner by such Person,
or in effect guaranteed directly or indirectly by such Person through
an agreement (1) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (2) to purchase, sell
or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make
payment of such Debt or to assure the holder of such Debt against loss,
(3) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or
(4) otherwise to assure a creditor against loss, and (i) all Debt
referred to in clauses (a) through (h) above secured by any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"DEBT/EBITDA RATIO" means, at any date of determination, the
ratio of Consolidated Recourse Debt of the Borrower and its
Subsidiaries as at the end of the most recently ended fiscal quarter of
the Borrower for which financial statements are required to be
delivered to the Lenders pursuant to Section 5.01(h)(i) or (ii), as the
case may be, to Consolidated EBITDA of the Borrower and its
Subsidiaries for such fiscal quarter and the immediately preceding
three fiscal quarters; PROVIDED that, except to the extent otherwise
provided in the definition of EBITDA, any Debt and/or EBITDA
attributable to Mississippi Lignite Mining Co. shall be excluded from
Consolidated Recourse Debt and Consolidated EBITDA, respectively, for
each fiscal quarter of fiscal year 2000.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DISCLOSED LITIGATION" has the meaning specified in Section
3.01(b).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"EBITDA" means, for any period, net income (or net loss) PLUS
the sum of (a) interest expense on Consolidated Recourse Debt
(including, without limitation, letter of credit fees in respect of
letters of credit included in Consolidated Recourse Debt), (b) income
tax expense, (c) depreciation, depletion and amortization expense of
the Borrower and all Non-Project Mining Subsidiaries, (d) negative
extraordinary items, (e) negative cumulative effect of accounting
changes, (f) loss from discontinued operations, (g) minority interest
charges, (h) the PRODUCT of (x) equity in earnings of unconsolidated
Affiliates MULTIPLIED BY (y) the tax rate of such unconsolidated
Affiliates DIVIDED BY (z) (1 minus such tax rate), (i) operating lease
payments under lease agreements subject to letters of credit included
in Consolidated Recourse Debt, (j) negative non-recurring items, (k)
equity contributions from, and subordinated Debt owing to, NACCO to the
extent not used for Investments pursuant to Section 5.02(e)(viii) and
(l) liquidated damages payments and any penalty payments received by
Mississippi Lignite Mining Co. ("MLMC") from Tractebel Power, Inc. in
accordance with the sales contract between MLMC and Tractebel Power,
Inc. dated April 1, 1998, LESS (i) positive extraordinary items, (ii)
positive cumulative effect of accounting changes, (iii) income from
discontinued operations, (iv) minority interest credits, (v) the
PRODUCT of (x) equity in loss of unconsolidated Affiliates MULTIPLIED
BY (y) the tax rate of such unconsolidated Affiliates DIVIDED BY (z) (1
minus such tax rate), and (vi) positive non-recurring items, in each
case for the Borrower and its Consolidated Subsidiaries and determined
in accordance with GAAP for such period; PROVIDED that, for purposes of
calculating the Debt/EBITDA Ratio or the Fixed Charge Coverage Ratio at
March 31, 2001, June 30, 2001 and September 30, 2001, Consolidated
EBITDA shall be deemed to be Consolidated EBITDA for the one, two or
three fiscal quarters then ended multiplied by 4, 2 or 4/3, as the case
may be.
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"EFFECTIVE DATE" has the meaning specified in Section 3.01.
"ELIGIBLE ASSIGNEE" means (i) a Lender, (ii) an Affiliate of a
Lender and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 8.07, the Borrower,
such approval, in either case, not to be unreasonably withheld or
delayed; PROVIDED, however, that neither the Borrower nor an Affiliate
of the Borrower shall qualify as an Eligible Assignee.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, Environmental Permit or Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response,
remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance
relating to pollution or protection of the environment, human health,
human safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the Borrower's controlled group, or under
common control with the Borrower, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30
days; (b) the application for a minimum funding waiver with respect to
a Plan; (c) the provision by the administrator of any Plan of a notice
of intent to terminate such Plan pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of the Borrower or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
by the Borrower or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA; (f) the conditions for the imposition
of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a
trustee to administer, a Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
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"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no such office
is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) appearing on Telerate Markets Page
3750 (or any successor page) as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a
period equal to such Interest Period or, if for any reason such rate is
not available, the rate per annum at which deposits in U.S. dollars are
offered by the principal office of the Reference Bank in London,
England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the Reference Bank's
Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period and for a period equal to such
Interest Period, SUBJECT, HOWEVER, to the provisions of Section 2.08 by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"FACILITY" means the Term Facility or the Revolving Credit
Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FIXED CHARGE COVERAGE RATIO" means the ratio set forth in
Section 5.03(b).
"GAAP" has the meaning specified in Section 1.03.
"HAZARDOUS MATERIALS" means (a) petroleum and petroleum
products, byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
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"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"INFORMATION MEMORANDUM" means the information memorandum
dated June 15, 2000 used by the Agent in connection with the
syndication of the Commitments.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, with respect to Eurodollar Rate
Advances, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, or if available by all Lenders, nine or twelve months, as the
Borrower may, upon notice received by the Agent not later than 12:00
noon (New York City time) on the third Business Day prior to the first
day of such Interest Period, select; PROVIDED, HOWEVER, that:
(i) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance that ends after
any principal repayment installment date unless, after giving
effect to such selection, the aggregate principal amount of
Base Rate Advances and of Eurodollar Rate Advances having
Interest Periods that end on or prior to such principal
repayment installment date shall be at least equal to the
aggregate principal amount of Advances due and payable on or
prior to such date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, PROVIDED, HOWEVER, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated
thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities or all or
substantially all of the assets of such Person, any capital
contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clauses (h) and (i) of
the definition of "DEBT" in respect of such Person.
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"LENDERS" means the Initial Lenders and each Person that shall
become a party hereto pursuant to Section 8.07.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"MARKETABLE SECURITIES" means any of the following, to the
extent owned by the Borrower or any of its Subsidiaries free and clear
of all Liens and having a maturity of not greater than 360 days from
the date of issuance thereof: (a) readily marketable direct obligations
of the Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates
of deposit of or time deposits or Eurodollar deposits with any
commercial bank that is a Lender or a member of the Federal Reserve
System, is organized under the laws of the United States or any State
thereof and has combined capital and surplus of at least $1 billion or
(c) commercial paper in an aggregate amount of no more than $1,000,000
per issuer outstanding at any time, issued by any corporation organized
under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors Service
or "A-1" (or the then equivalent grade) by Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise) or results of
operations, of the Borrower and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise) or results of
operations the Borrower and its Subsidiaries taken as a whole, (b) the
rights and remedies of the Agent or any Lender under this Agreement or
any Note or (c) the ability of the Borrower to perform its obligations
under this Agreement or any Note.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any ERISA Affiliate and at least one
Person other than the Borrower and the ERISA Affiliates or (b) was so
maintained and in respect of which the Borrower or any ERISA Affiliate
could have liability under Section 4064 or 4069 of ERISA in the event
such plan has been or were to be terminated.
"NACCO" means NACCO Industries, Inc., a Delaware corporation.
"NET CASH PROCEEDS" means, with respect to the incurrence or
issuance of any Debt by any Person, the aggregate amount of cash
received from time to time by or on behalf of such Person in connection
with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions and (b) the amount of taxes payable in
connection with or as a result of such transaction, in each case to the
extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of such Person and are properly attributable to such
transaction.
"NON-PROJECT MINING SUBSIDIARY" means a Subsidiary other than
a Project Mining Subsidiary.
"NONRECOURSE DEBT" means any Debt other than Recourse Debt.
"NOTE" means a Revolving Credit Note or a Term Note.
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"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability company or
other entity, or a government or any political subdivision or agency
thereof.
"▇▇▇▇▇▇▇▇ PURCHASE AGREEMENT" means the Purchase and Sale
Agreement dated the date hereof among ▇▇▇▇▇▇▇▇ Petroleum Company,
▇▇▇▇▇▇▇▇ Coal Company, North ▇▇▇▇▇▇▇▇ Limited Liability Company and The
North American Coal Corporation.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PROJECT MINING SUBSIDIARY" means any Subsidiary of the
Borrower (a) whose Debt is Non-recourse Debt and (b) the utility
customers of which finance or guarantee the financing and certain other
obligations of such Subsidiary.
"RECOURSE DEBT" of any Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a
Consolidated balance sheet of such Person (other than trade payables
incurred in the ordinary course of business and amounts owed to NACCO
under the Tax Sharing Agreement and/or in respect of state taxes paid
by NACCO on behalf of the Borrower and its Subsidiaries) plus Debt
comprised of letters of credit that support obligations under operating
leases, but shall not include indebtedness as to which no recourse may
be asserted against the Borrower or any of its Non-Project Mining
Subsidiaries except to the extent that such indebtedness is secured by
a Lien on specified assets of the Borrower or any of its Non-Project
Mining Subsidiaries.
"REFERENCE BANK" means Citibank.
"REGISTER" has the meaning specified in Section 8.07(d).
"REQUIRED LENDERS" means at any time Lenders owed at least 66
2/3% in interest of the then aggregate unpaid principal amount of the
Advances, or, if no such principal amount is then outstanding, Lenders
having at least 66 2/3% in interest of the Commitments.
"RESPONSIBLE OFFICER" means any of the following officers of
the Borrower: the chairman of the board of directors, chief executive
officer, president, secretary, any vice president and, with respect to
financial matters, the chief financial officer, treasurer or controller
of the Borrower.
"REVOLVING CREDIT ADVANCE" has the meaning specified in
Section 2.01(b).
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by each of
the Revolving Credit Lenders pursuant to Section 2.01.
"REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Revolving Credit
Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, set forth for such Lender in the Register maintained
by Agent pursuant to Section 8.07(d) as such Lender's "Revolving Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.04.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate
amount of the Revolving Credit Lender's Revolving Credit Commitments at
such time and the Revolving Credit Advances made thereunder.
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"REVOLVING CREDIT LENDER" means any Lender that has a
Revolving Credit Commitment.
"REVOLVING CREDIT NOTE" means a promissory note of the
Borrower payable to the order of any Revolving Credit Lender, in
substantially the form of Exhibit A-1 hereto, evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from the
Revolving Credit Advances made by such Lender.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of the Borrower or any ERISA Affiliate and no Person other
than the Borrower and such ERISA Affiliates or (b) was so maintained
and in respect of which the Borrower or any ERISA Affiliate could have
liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.
"SPC" has the meaning specified in Section 8.07(f) hereto.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"TAX SHARING AGREEMENT" means that certain Amended Tax Sharing
Agreement between NACCO and its Subsidiaries, dated May 14, 1997,
related to the allocation of federal tax liabilities among NACCO and
its Consolidated U.S. Subsidiaries, as amended, supplemented or
otherwise modified from time to time.
"TERM ADVANCE" has the meaning specified in Section 2.01(a).
"TERM BORROWING" means a borrowing consisting of simultaneous
Term Advances of the same Type made by the Term Lenders.
"TERM COMMITMENT" means, with respect to any Term Lender at
any time, the amount set forth opposite such Lender's name on Schedule
I hereto under the caption "Term Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set forth for such
Lender in the Register maintained by the Agent pursuant to Section
8.07(d) as such Lender's "Term Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.04.
"TERM FACILITY" means, at any time, the aggregate amount of
the Term Lenders' Term Commitments at such time and the Term Advances
made thereunder.
"TERM LENDER" means any Lender that has a Term Commitment.
"TERM NOTE" means a promissory note of the Borrower payable to
the order of any Term Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from the Term Advance made by such Lender, as amended.
"TERMINATION DATE" means the earlier of October 11, 2005 and
the date of termination in whole of the Commitments pursuant to Section
2.04 or 6.01.
"TYPE" means, as to any Advance, its nature as a Base Rate
Advance or Eurodollar Rate Advance.
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"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. (a) THE TERM ADVANCES. Each Term
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make a single advance (a "TERM ADVANCE") to the Borrower on the Effective Date
in an amount not to exceed such Lender's Term Commitment at such time. The Term
Borrowing shall consist of Term Advances made simultaneously by the Term Lenders
ratably according to their Term Commitments. Amounts borrowed under this Section
2.01(a) and repaid or prepaid may not be reborrowed.
(b) THE REVOLVING CREDIT ADVANCES. Each Revolving Credit
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "REVOLVING CREDIT ADVANCE") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Advance not to exceed such Lender's
unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing
shall be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Revolving Credit Advances made
simultaneously by the Revolving Credit Lenders ratably according to their
Revolving Credit Commitments. Within the limits of each Revolving Credit
Lender's unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(b), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(b).
SECTION 2.02. MAKING THE ADVANCES. (a) Each Borrowing shall be
made on notice, given not later than (x) 12:00 noon (New York City time) on the
third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances or (y) 12:00 noon (New York
City time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Agent, which shall give
to each Appropriate Lender prompt notice thereof by telecopier or telex. Each
such notice of a Borrowing (a "NOTICE OF BORROWING") shall be by telephone,
confirmed immediately in writing, or telecopier or telex in substantially the
form of Exhibit B hereto, specifying therein the requested (i) date of such
Borrowing, (ii) Facility under which such Borrowing is to be made, (iii) Type of
Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing, and
(iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Advance. Each Appropriate Lender shall, before
2:00 P.M. (New York City time) on the date of such Borrowing make available for
the account of its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's ratable portion of such Borrowing in
accordance with the respective Commitments under the applicable Facility of such
Lender and the other Appropriate Lenders. After the Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Agent will make such funds available to the Borrower at the Agent's
address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000
or if the obligation of the Lenders to make Eurodollar Rate Advances shall then
be suspended pursuant
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to Section 2.08 or 2.11 and (ii) the Eurodollar Rate Advances may not be
outstanding as part of more than ten separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Appropriate Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the
date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Agent shall have received notice from an
Appropriate Lender prior to the date of any Borrowing that such Lender will not
make available to the Agent such Lender's ratable portion of such Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date of such Borrowing in accordance with subsection (a) of this Section
2.02 and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the Agent, such
Lender and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to Advances comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. FEES. (a) FACILITY FEE. The Borrower agrees to
pay to the Agent for the account of each Revolving Credit Lender a facility fee
on the aggregate amount of such Lender's Revolving Credit Commitment from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date at a rate per annum
equal to the Applicable Percentage in effect from time to time, payable in
arrears quarterly on the last day of each March, June, September and December,
commencing September 30, 2000, and on the Termination Date.
(b) AGENT'S FEES. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Agent.
SECTION 2.04. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Borrower shall have the right, upon at least three Business Days'
notice to the Agent, to terminate in whole or reduce ratably in part the unused
portions of the Revolving Credit Commitments and the Term Commitments, PROVIDED
that each partial reduction of a Facility (i) shall be in the aggregate amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii)
shall be made ratably among the Appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) MANDATORY. On the date of the Term Borrowing, after giving
effect to such Term Borrowing, and from time to time thereafter upon each
repayment or prepayment of the Term Advances, the aggregate Term Commitments of
the Term Lenders shall be automatically and permanently reduced on a pro rata
basis by an amount equal to the amount by which (i) the aggregate Term
Commitments immediately prior to such reduction EXCEEDS (ii) the aggregate
unpaid principal amount of all Term Advances outstanding at such time.
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SECTION 2.05. REPAYMENT OF ADVANCES. (a) TERM ADVANCES. The
Borrower shall repay to the Agent for the ratable account of the Term Lenders
the aggregate outstanding principal amount of the Term Advances on the following
dates in the amounts indicated (which amounts shall be reduced as a result of
the application of prepayments in accordance with the order of priority set
forth in Section 2.06):
-------------------------------------- ------------------
DATE AMOUNT
-------------------------------------- ------------------
October 11, 2001 $15,000,000
-------------------------------------- ------------------
October 11, 2002 $15,000,000
-------------------------------------- ------------------
October 11, 2003 $15,000,000
-------------------------------------- ------------------
October 11, 2004 $15,000,000
-------------------------------------- ------------------
October 11, 2005 $55,000,000
-------------------------------------- ------------------
PROVIDED, HOWEVER, that the final principal installment shall be repaid on the
Termination Date and in any event shall be in an amount equal to the aggregate
principal amount of the Term Advances outstanding on such date.
(b) REVOLVING CREDIT ADVANCES. The Borrower shall repay to the
Agent for the ratable account of the Revolving Credit Lenders on the Termination
Date the aggregate principal amount of the Revolving Credit Advances then
outstanding.
SECTION 2.06. PREPAYMENTS OF ADVANCES. (a) OPTIONAL. The
Borrower may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 12:00
noon (New York City time) on the date of such prepayment, in the case of Base
Rate Advances, to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; PROVIDED, HOWEVER, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(c). Each such prepayment of any Term Advances shall be applied to
the installments thereof as the Borrower may direct.
(b) MANDATORY. The Borrower shall, on the date of receipt of
the Net Cash Proceeds by the Borrower or any of its Non-Project Mining
Subsidiaries from the incurrence or issuance by the Borrower or any such
Subsidiaries of any debt securities in the capital markets which is Recourse
Debt with a maturity in excess of one year and in an amount of $1,000,000 or
more, prepay an aggregate principal amount of the Term Advances comprising part
of the same Borrowings in an amount equal to the amount of such Net Cash
Proceeds. Each such prepayment shall be applied ratably to the Term Facility and
to the installments thereof in inverse order of maturity. All prepayments under
this subsection (b) shall be made together with accrued interest to the date of
such prepayment on the principal amount prepaid.
SECTION 2.07. INTEREST ON ADVANCES. (a) SCHEDULED INTEREST.
The Borrower shall pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(x) the Base Rate in effect from time to time PLUS (y) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March,
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June, September and December during such periods and on the date such
Base Rate Advance shall be paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x)
the Eurodollar Rate for such Interest Period for such Advance PLUS (y)
the Applicable Margin in effect from time to time, payable in arrears
on the last day of such Interest Period and, if such Interest Period
has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of
such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(a), the Borrower shall pay
interest on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.08. INTEREST RATE DETERMINATION. (a) The Reference
Bank agrees to furnish to the Agent timely information for the purpose of
determining each Eurodollar Rate. The Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the Agent
for purposes of Section 2.07(a)(i) or (ii), and the rate, if any, furnished by
the Reference Bank for the purpose of determining the interest rate under
Section 2.07(a)(ii). Any change in the interest rate on an Advance resulting
from a change in the Base Rate or the Eurocurrency Reserve Requirement shall
become effective as of the opening of business on the day on which such change
becomes effective.
(b) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, be Converted into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
(f) If Telerate Markets Page 3750 is unavailable and the
Reference Bank fails to furnish timely information to the Agent for determining
the Eurodollar Rate for any Eurodollar Rate Advances,
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(i) the Agent shall forthwith notify the Borrower and the
Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such
Advance will automatically, on the last day of the then existing
Interest Period therefor, be prepaid by the Borrower or be
automatically Converted into a Base Rate Advance (or if such Advance is
then a Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate
Advances or to Convert Advances into Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.
SECTION 2.09. OPTIONAL CONVERSION OF ADVANCES. The Borrower
may on any Business Day, upon notice given to the Agent not later than 12:00
noon (New York City time) on the third Business Day prior to the date of the
proposed Conversion and subject to the provisions of Sections 2.08 and 2.11,
Convert all Advances of one Type comprising the same Borrowing into Advances of
the other Type; PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate
Advances into Base Rate Advances shall be made only on the last day of an
Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate
Advances into Eurodollar Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.02(b) and no Conversion of any Advances
shall result in more separate Borrowings than permitted under Section 2.02(b).
Each such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for each such Advance. Each notice of Conversion shall
be irrevocable and binding on the Borrower.
SECTION 2.10. INCREASED COSTS. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances in an amount deemed by
such Lender to be material (excluding for purposes of this Section 2.10 any such
increased costs resulting from (i) Taxes or Other Taxes (as to which Section
2.13 shall govern) and (ii) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which such Lender is organized or has
its Applicable Lending Office or any political subdivision thereof), then the
Borrower shall from time to time, promptly after demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost; PROVIDED, HOWEVER, that before making any such demand, each
Lender agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate as to
the amount of such increased cost, submitted to the Borrower and the Agent by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender determines that compliance with the adoption
of or any change in any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) made after the date hereof affects or would affect the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type by an amount deemed by such Lender to be material,
then, promptly after demand by such Lender (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend hereunder;
PROVIDED that the Borrower shall not be required to compensate a Lender pursuant
to this Section 2.10(b) for any amounts incurred more than twelve months prior
to the date that such Lender notifies the Borrower of such Lender's intention to
claim compensation therefor; and PROVIDED FURTHER that if the circumstances
giving rise to such claim have a retroactive effect, then such twelve-month
period shall be extended to include the period of such retroactive effect. A
certificate as to such amounts
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submitted to the Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.11. ILLEGALITY. Notwithstanding any other provision
of this Agreement, if any Lender shall notify the Agent that the introduction of
or any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will
automatically, upon such demand, Convert into a Base Rate Advance and (b) the
obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist; PROVIDED, HOWEVER, that before making any such
demand, each Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.12. PAYMENTS AND COMPUTATIONS. (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any
counterclaim or set-off, not later than 12:00 noon (New York City time) on the
day when due to the Agent at the Agent's Account in same day funds. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or facility fees ratably (other than amounts
payable pursuant to Section 2.10, 2.13 or 8.04(c)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Notes held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall
be made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of facility fees shall be made by the Agent on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or facility fee, as
the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest
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thereon, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent, at the Federal Funds
Rate.
(f) If the Agent receives funds for application to the
obligations of the Borrower hereunder under circumstances for which this
Agreement does not specify the Advances or the Facility to which, or the manner
in which, such funds are to applied, the Agent may, but shall not be obligated
to, elect to distribute such funds to each Lender ratably in accordance with
such Lender's proportionate share of the principal amount of all outstanding
Advances, in repayment or prepayment of such of the outstanding Advances or
other obligations owed to such Lender, and for application to such principal
installments, as the Agent shall direct.
SECTION 2.13. TAXES. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, EXCLUDING, in the case of each Lender and the Agent, taxes
imposed on its overall net income, and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
of such Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.13) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performing under, or otherwise
with respect to, this Agreement or the Notes (hereinafter referred to as "OTHER
TAXES").
(c) The Borrower shall indemnify each Lender and the Agent for
and hold it harmless against the full amount of Taxes or Other Taxes (including,
without limitation, taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 2.13) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"UNITED STATES" and "UNITED STATES PERSON" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender and on the date of the
Assumption Agreement or the Assignment and Acceptance pursuant to which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter as requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide each of the Agent and the
Borrower with two original Internal Revenue Service forms W-8BEN or W-8ECI or
(in the case of a Lender that has certified in writing to the Agent that it is
not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue Code)
form W-8BEN or such other form as the Borrower, in its discretion, believes is
necessary under the Treasury Regulations (and, if such
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Lender has so certified that it is not a "bank", a certificate representing that
such Lender is not a "bank" for purposes of Section 881(c) of the Internal
Revenue Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
federal withholding tax on payments pursuant to this Agreement or the Notes or
(in the case of a Lender certifying that it is not a "bank"), certifying that
such Lender is a foreign corporation, partnership, estate or trust and is the
beneficial owner of the interest. If the form provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Lender provides
the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; PROVIDED, HOWEVER, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender assignee becomes a
party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date but at a rate not in
excess of the rate applicable to the Lender assignor as of such date. If any
form or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8BEN
or W-8ECI or other applicable form (or the related certificate described above),
that the Lender reasonably considers to be confidential, the Lender shall give
notice thereof to the Borrower and shall not be obligated to include in such
form or document such confidential information.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section 2.13(e)
(OTHER THAN if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under subsection (e) above), such Lender shall not be
entitled to indemnification under Section 2.13(a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; PROVIDED, HOWEVER, that
should a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.13 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
SECTION 2.14. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances owing to it (other
than pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share
of payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; PROVIDED, HOWEVER, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered, PROVIDED FURTHER that, so long as the
obligations of the Borrower under this Agreement and the Notes shall not have
been accelerated, any excess payment received by any Appropriate Lender shall be
shared on a pro rata basis only with other Appropriate Lenders. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.14 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
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SECTION 2.15. USE OF PROCEEDS. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such proceeds)
solely for general corporate purposes of the Borrower and its Subsidiaries,
including liquidity support for commercial paper and acquisition financing.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS OF
SECTIONS 2.01. Section 2.01 of this Agreement shall become effective on and as
of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 1999.
(b) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule
3.01(b) hereto (the "DISCLOSED LITIGATION") or (ii) purports to affect
the legality, validity or enforceability of this Agreement or any Note
or the consummation of the transactions contemplated hereby, and there
shall have been no adverse change in the status, or financial effect on
the Borrower or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 3.01(b) hereto.
(c) The Agent shall have completed a due diligence
investigation of the Borrower and its Subsidiaries in scope, and with
results, reasonably satisfactory to the Lenders, and nothing shall have
come to the attention of the Lenders during the course of such due
diligence investigation to lead them to believe that the Information
Memorandum was or has become misleading, incorrect or incomplete in any
material respect; without limiting the generality of the foregoing, the
Lenders shall have been given such access to the management, records,
books of account, contracts and properties of the Borrower and its
Subsidiaries as they shall have requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the Agent
in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all reasonable accrued fees
and expenses of the Agent (including the accrued reasonable fees and
expenses of counsel to the Agent).
(g) On the Effective Date, the following statements shall be
true and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated
the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
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(h) The Agent shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(i) The Notes to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board
of Directors of the Borrower approving this Agreement and the
Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the Notes and the other documents to be
delivered hereunder.
(iv) A reserve and operational audit, in form and
substance satisfactory to the Lenders, from ▇▇▇▇ ▇. ▇▇▇▇
Company.
(v) A favorable opinion of (A) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ &
▇▇▇▇▇, counsel for the Borrower, substantially in the form of
Exhibit D-1 hereto and (B) ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Vice
President-Law and Administration of the Borrower,
substantially in the form of Exhibit D-2 hereto and, in each
case, as to such other matters as any Lender through the Agent
may reasonably request.
(vi) A favorable opinion of Shearman & Sterling,
counsel for the Agent, in form and substance satisfactory to
the Agent.
(i) The Borrower shall have terminated the commitments, and
paid in full all Debt, interest, fees and other amounts outstanding,
under the $50,000,000 Credit Agreement dated as of September 21, 1991
among the Borrower, the lenders parties thereto and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as agent for such lenders, and each of the
Lenders that is a party to such $50,000,000 Credit Agreement hereby
waives, upon execution of this Agreement the three Business Days notice
required by Section 2.07 of such Credit Agreement relating to the
termination of commitments thereunder.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING. The
obligation of each Appropriate Lender to make an Advance on the occasion of each
Borrowing shall be subject to the conditions precedent that the Effective Date
shall have occurred and on the date of such Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of Borrowing and
the acceptance by the Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing such statements are true):
(a) the representations and warranties contained in Section
4.01 (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f)(i) thereof) are correct on
and as of such date, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though made on and
as of such date, and
(b) no event has occurred and is continuing, or would result
from such Borrowing or from the application of the proceeds therefrom,
that constitutes a Default.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by
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notice to the Lenders, designates as the proposed Effective Date, specifying its
objection thereto. The Agent shall promptly notify the Lenders of the occurrence
of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Borrower of
this Agreement and the Notes, and the consummation of the transactions
contemplated hereby, are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Borrower's charter or by-laws or (ii) any applicable
law or any material contractual restriction binding on or affecting the
Borrower.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery
and performance by the Borrower of this Agreement or the Notes.
(d) This Agreement has been, and each of the Notes when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with their
respective terms.
(e) The Consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at December 31, 1999, and the related
Consolidated statements of income and cash flows of the Borrower and
its Consolidated Subsidiaries for the fiscal year then ended,
accompanied by an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public
accountants, and the Consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as at March 31, 2000, and the related
Consolidated statements of income and cash flows of the Borrower and
its Consolidated Subsidiaries for the three months then ended, duly
certified by a Responsible Officer of the Borrower, copies of which
have been furnished to each Lender, fairly present, subject, in the
case of said balance sheet as at March 31, 2000, and said statements of
income and cash flows for the three months then ended, to year-end
audit adjustments, the Consolidated financial condition of the Borrower
and its Consolidated Subsidiaries as at such dates and the Consolidated
results of the operations of the Borrower and its Consolidated
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles consistently applied.
Since December 31, 1999, there has been no Material Adverse Change.
(f) There is no pending or, to the knowledge of the Borrower,
threatened action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, affecting the
Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect (other than the Disclosed Litigation) or (ii)
purports to materially adversely affect the legality, validity or
enforceability of this Agreement or any Note or the consummation of the
transactions contemplated hereby, and there has been no adverse change
in the status, or financial effect on the Borrower or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 3.01(b) hereto.
(g) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Advance will be used to
purchase or
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carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock, except to the extent of
advances or distributions made by the Borrower to NACCO to purchase
shares of NACCO capital stock.
(h) The Borrower is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(i) The operations and properties of the Borrower and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past material
non-compliance with such Environmental Laws and Environmental Permits
has been resolved without ongoing obligations or costs, and no
circumstances exist that could be reasonably likely to (i) form the
basis of an Environmental Action against the Borrower or any of its
Subsidiaries or any of their properties that could reasonably be
expected to have a Material Adverse Effect or (ii) cause any such
property to be subject to any restrictions on ownership, occupancy, use
or transferability under any Environmental Law that could reasonably be
expected to have a Material Adverse Effect.
(j) Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (i) none of the properties
currently or formerly owned or operated by the Borrower or any of its
Subsidiaries is listed or proposed for listing on the National
Priorities List under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("NPL") or on the Comprehensive
Environmental Response, Compensation and Liability Information System
maintained by the U.S. Environmental Protection Agency ("CERCLIS") or
any analogous foreign, state or local list or, to the best knowledge of
the Borrower, is adjacent to any such property; (ii) there are no and
never have been any underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed
of on any property currently or formerly owned or operated by the
Borrower or any of its Subsidiaries or, to the best of its knowledge,
on any property formerly owned or operated by the Borrower or any of
its Subsidiaries; (iii) there is no asbestos or asbestos-containing
material on any property currently owned or operated by the Borrower or
any of its Subsidiaries; and (iv) Hazardous Materials have not been
released, discharged or disposed of on any property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries
or, to the best of its knowledge, any adjoining property.
(k) Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (i) neither the Borrower
nor any of its Subsidiaries is undertaking, and has not completed,
either individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory
authority or the requirements of any Environmental Law; and (ii) all
Hazardous Materials generated, used, treated, handled or stored at or
transported to or from any property currently or formerly owned or
operated by the Borrower or any of its Subsidiaries have been disposed
of in a manner not reasonably expected to result in material liability
to the Borrower or any of its Subsidiaries.
(l) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(m) As of the last annual actuarial valuation date, the funded
current liability percentage, as defined in Section 302(d)(8) of ERISA,
of each Plan exceeds 90%; and there has been no material adverse change
in the funding status of any such Plan since such date.
(n) Neither the Borrower nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(o) Neither the Borrower nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the
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meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated, within
the meaning of Title IV of ERISA.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with
ERISA and Environmental Laws as provided in Section 5.01(i), except to
the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries (other than the Project Mining Subsidiaries) to pay
and discharge, before the same shall become delinquent, (i) all
material taxes, assessments and governmental charges or levies imposed
upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien (other than a Lien permitted by
Section 5.02(a)(iv)) upon its property; PROVIDED, HOWEVER, that neither
the Borrower nor any of such Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors. The Borrower will cause each Project
Mining Subsidiary to pay and discharge at or before the due date
thereof, all of its income tax liabilities and obligations under the
Tax Sharing Agreement.
(c) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Non-Project Mining Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which the Borrower or such Subsidiary operates.
(d) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause (or with respect to any Project Mining Subsidiary,
will use its best efforts to cause) each of its Subsidiaries to
preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises except, in the case of Subsidiaries, to the
extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect; PROVIDED, HOWEVER, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted under
Section 5.02(b) and PROVIDED FURTHER that neither the Borrower nor any
of its Subsidiaries shall be required to preserve any right or
franchise if the Board of Directors of the Borrower or such Subsidiary
shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lenders.
(e) VISITATION RIGHTS. At any reasonable time and from time to
time, permit the Agent or any of the Lenders or any agents or
representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent certified
public accountants at the expense of the Borrower only upon the
occurrence of and during the continuance of an Event of Default.
(f) KEEPING OF BOOKS. Keep proper consolidated books of record
and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the consolidated
accounts of the Borrower and its Subsidiaries in accordance with
generally accepted accounting principles in effect from time to time.
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(g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause (or with respect to any Project Mining Subsidiary, will use its
best efforts to cause) each of its Subsidiaries to maintain and
preserve, all of its properties that are used and necessary and useful
in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(h) REPORTING REQUIREMENTS. Furnish to the Lenders:
(i) as soon as available and in any event within 45
days after the end of each of the first three quarters of each
fiscal year of the Borrower, the Consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the end
of such quarter and Consolidated statements of income and cash
flows of the Borrower and its Consolidated Subsidiaries for
the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by a Responsible
Officer of the Borrower as having been prepared in accordance
with generally accepted accounting principles and certificates
of a Responsible Officer of the Borrower as to compliance with
the terms of this Agreement and setting forth in reasonable
detail (x) the calculations necessary to demonstrate
compliance with Section 5.03, (y) the Investments made
pursuant to Section 5.02(e)(e)(vi), (vii) and (viii) during
such fiscal quarter and (z) the Restricted Payments made
pursuant to Section 5.02(f) during such fiscal quarter,
PROVIDED that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall
also provide, if necessary for the determination of compliance
with Section 5.03, a statement of reconciliation conforming
such financial statements to GAAP;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, a copy
of the annual audit report for such year for the Borrower and
its Consolidated Subsidiaries, containing the Consolidated
balance sheet of the Borrower and its Subsidiaries as of the
end of such fiscal year and Consolidated statements of income
and cash flows of the Borrower and its Consolidated
Subsidiaries for such fiscal year, in each case accompanied by
an opinion reasonably acceptable to the Required Lenders by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public accountants
reasonably acceptable to the Required Lenders and certificates
of a Responsible Officer of the Borrower as to compliance with
the terms of this Agreement and setting forth in reasonable
detail (x) the calculations necessary to demonstrate
compliance with Section 5.03, (y) the Investments made
pursuant to Section 5.02(e)(e)(vi), (vii) and (viii) during
such fiscal year and (z) the Restricted Payments made pursuant
to Section 5.02(f) during such fiscal year, PROVIDED that in
the event of any change in GAAP used in the preparation of
such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section
5.03, a statement of reconciliation conforming such financial
statements to GAAP;
(iii) as soon as possible and in any event within
five days after the occurrence of each Default continuing on
the date of such statement, a statement of a Responsible
Officer of the Borrower setting forth details of such Default
and the action that the Borrower has taken and proposes to
take with respect thereto;
(iv) promptly after the sending or filing thereof,
copies of all reports, if any, that the Borrower sends to any
of its securityholders other than NACCO, and copies of all
reports and registration statements that the Borrower or its
Subsidiaries files with the Securities and Exchange Commission
or any national securities exchange;
(v) promptly after the commencement thereof, notice
of all actions and proceedings before any court, governmental
agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f);
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(vi) (A) promptly and in any event within 30 days
after the Borrower or any ERISA Affiliate knows or has reason
to know that any ERISA Event has occurred, a statement of a
Responsible Officer of the Borrower describing such ERISA
Event and the action, if any, that the Borrower or such ERISA
Affiliate has taken and proposes to take with respect thereto
and (B) on the date any records, documents or other
information must be furnished to the PBGC with respect to any
Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information;
(vii) promptly and in any event within two Business
Days after receipt thereof by the Borrower or any ERISA
Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed
to administer any Plan;
(viii) promptly and in any event within 30 days after
the receipt thereof by the Borrower or any ERISA Affiliate, a
copy of the annual actuarial report for each Plan the funded
current liability percentage (as defined in Section 302(d)(8)
of ERISA) of which is less than 90% or the unfunded current
liability of which exceeds $14,000,000;
(ix) promptly and in any event within five Business
Days after receipt thereof by the Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (A) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV
of ERISA, of any such Multiemployer Plan or (C) the amount of
liability incurred, or that may be incurred, by the Borrower
or any ERISA Affiliate in connection with any event described
in clause (A) or (B);
(x) promptly after the assertion or occurrence
thereof, notice of any Environmental Action against or of any
noncompliance by the Borrower or any of its Subsidiaries with
any Environmental Law or Environmental Permit that could
reasonably be expected to have a Material Adverse Effect; and
(xi) such other information respecting the Borrower
or any of its Subsidiaries as any Lender through the Agent may
from time to time reasonably request.
(i) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; PROVIDED, HOWEVER, that neither
the Borrower nor any of its Subsidiaries shall be required to undertake
any such cleanup, removal, remedial or other action to the extent that
its obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
(j) DELIVERY OF RECLAMATION PLANS. If an Event of Default
shall have occurred and be continuing, at the request of the Agent,
provide to the Lenders promptly, at the expense of the Borrower, the
reclamation plan for the properties described in such request
indicating the presence or absence of Hazardous Materials and the
estimated cost of any legally required compliance with applicable laws,
removal or remedial action in connection with any Hazardous Materials
on such properties.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not:
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(a) LIENS, ETC. Create or suffer to exist, or permit any of
its Non-Project Mining Subsidiaries to create or suffer to exist, any
Lien on or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any of its Non-Project Mining
Subsidiaries to assign, any right to receive income, other than:
(i) purchase money Liens upon or in any real property
or equipment or other fixed or capital assets acquired or held
by the Borrower or any Subsidiary in the ordinary course of
business to secure the purchase price of such property or
equipment or other fixed or capital assets or to secure Debt
incurred solely for the purpose of financing the acquisition
of such property or equipment or other fixed or capital
assets, or Liens existing on such property or equipment or
other fixed or capital assets at the time of its acquisition
(other than any such Liens created in contemplation of such
acquisition that were not incurred to finance the acquisition
of such property) or extensions, renewals or replacements of
any of the foregoing for the same or a lesser amount,
PROVIDED, HOWEVER, that no such Lien shall extend to or cover
any properties of any character other than the real property
or equipment or other fixed or capital assets being acquired,
and no such extension, renewal or replacement shall extend to
or cover any properties not theretofore subject to the Lien
being extended, renewed or replaced,
(ii) the Liens existing on the Effective Date and
described on Schedule 5.02(a) hereto,
(iii) Liens securing Debt other than Recourse Debt in
an aggregate principal amount not to exceed $1,000,000 at any
time outstanding,
(iv) such of the following as to which no
enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced: (A) Liens for taxes,
assessments and governmental charges or levies to the extent
not required to be paid under Section 5.01(B) hereof; (C)
Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar
Liens arising in the ordinary course of business securing
obligations that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate
proceedings and for which appropriate reserves are being
maintained in accordance with generally accepted accounting
principles; (C) pledges or deposits to secure obligations
under workers' compensation laws or similar legislation or to
secure public or statutory obligations including, without
limitation, unemployment insurance and other social security
legislation; and (D) easements, rights of way and other
encumbrances on title to real property that do not render
title to the property encumbered thereby unmarketable or
materially interfere with the use of such property for its
present purposes,
(v) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case for any
Non-Project Mining Subsidiaries and incurred in the ordinary
course of business,
(vi) legal or equitable encumbrances deemed to exist
by reason of the existence of any litigation or other legal
proceeding or arising out of a judgment or award with respect
to which an appeal is being prosecuted, to the extent the
amount thereof (in excess of applicable insurance coverage)
does not exceed, individually or in the aggregate,
$15,000,000, but only so long as such legal or equitable
encumbrances (A) are being actively contested in good faith by
appropriate proceedings or (B) are paid or otherwise
discharged within ten days after a Responsible Officer obtains
knowledge thereof,
(vii) environmental Liens with respect to liabilities
in an aggregate amount (in excess of applicable insurance
coverage) not exceeding $1,000,000 (A) to the extent such
liabilities are not yet due or which are being contested in
good faith by appropriate proceedings and with respect
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to which appropriate reserves have been established or (B)
which are released or otherwise discharged within ten days
after a Responsible Officer obtains knowledge thereof,
(viii) Liens arising pursuant to Section 412(n) of
the Internal Revenue Code or Section 4068(a) of ERISA with
respect to liabilities in an aggregate amount not exceeding
$1,000,000 if (A) the defaulted payments to which such Liens
relate are made within ten days after a Responsible Officer
obtains knowledge of such defaulted payments and such Liens
are released as promptly as practicable thereafter or (B) the
obligation to make such payments is being contested in good
faith by appropriate proceedings and with respect to which
appropriate reserves have been established,
(ix) any interest or title of a lessor under any
lease entered into by the Borrower or any other Subsidiary in
the ordinary course of its business and covering only the
assets so leased,
(x) options granted to the customer of any Project
Mining Subsidiary to acquire the capital stock of such Project
Mining Subsidiary pursuant to the mining or lignite sales
agreement relating to such Project Mining Subsidiary,
(xi) restrictions on the transferability of the
capital stock of any Project Mining Subsidiary without the
consent of the customers of such Project Mining Subsidiary,
(xii) options or rights granted to (A) the customer
of any Project Mining Subsidiary to acquire the capital stock
of such Project Mining Subsidiary and certain assets of such
Project Mining Subsidiary and (B) the Borrower to transfer to
the customer of any Project Mining Subsidiary the capital
stock of such Project Mining Subsidiary, in each case in
connection with the termination, if any, of the mining or
lignite sales agreement relating to such Project Mining
Subsidiary,
(xiii) rights of any Project Mining Subsidiary to
transfer to the customer of such Project Mining Subsidiary or
an affiliate of such customer any interest in real property
acquired by any Project Mining Subsidiary from such affiliate,
(xiv) rights of any customer of any other Project
Mining Subsidiary to acquire, or rights of the Borrower or
such Project Mining Subsidiary to transfer to such customer,
the capital stock of such Project Mining Subsidiary or the
assets of such Project Mining Subsidiary pursuant to any
mining agreement or coal sales agreement entered into after
the date hereof by such Project Mining Subsidiary and such
customer, to the extent that such rights are exercisable in
connection with the termination of such mining agreement or
coal sales agreement,
(xv) rights of any customer of the Borrower or any
Subsidiary to acquire, or rights of the Borrower or such
Subsidiary to transfer to such customer, certain assets or
other property of the Borrower (other than property that
constitutes capital stock of a Subsidiary) or such Subsidiary
acquired by the Borrower or such Subsidiary after the date
hereof and used solely in connection with the development and
operation of coal mines or the development and mining of coal
reserves (including the sale and delivery of coal therefrom)
by the Borrower or such Subsidiary and such customer, to the
extent that (A) such rights are exercisable in connection with
the termination of such mining agreement or coal sales and (B)
the aggregate book value of the assets and other property
subject to such rights does not exceed $7,500,000,
(xvi) other Liens securing Recourse Debt in an
aggregate principal amount not to exceed $1,000,000 at any
time outstanding, and
(xvii) the replacement, extension or renewal of any
Lien permitted by clause (ii) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal
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(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby.
The Borrower may at any time or from time to time request that
the amount under sub-clause (B) of clause (xv) above of the aggregate
book value of assets and other property permitted to be subject to the
rights described in such clause (xv) be increased to permit additional
assets or other property to be subject to such rights in connection
with a transaction entered into or proposed to be entered into with a
customer of the Borrower or a Subsidiary if such transaction would
cause the aggregate book value of all assets and other property subject
to such rights to exceed $7,500,000, such request to be made by notice
to the Agent and the Lenders setting forth information with respect to
the assets or other property (including, without limitation, the
estimated book value thereof) proposed to be subject to such rights and
the nature of such transaction and such rights. Each Lender agrees to
consider in good faith such request and shall use its best efforts to
respond to such request, whether affirmatively or negatively, within 30
days of its receipt for such request from the Borrower. Upon the
consent of the Required Lenders to any such transaction, such amount in
such sub-clause (B) shall thereupon, and for all purposes thereafter,
be deemed to be increased so as to permit such assets or other property
to be subject to such rights pursuant to such transaction, and the
Agent shall promptly so notify the Borrower.
(b) MERGERS, ETC. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to any Person, or
permit any of its Subsidiaries to do so, except that (i) any Subsidiary
of the Borrower may merge or consolidate with or into, or dispose of
assets to, any other Subsidiary of the Borrower, (ii) any Project
Mining Subsidiary may merge or consolidate with or into, or dispose of
assets to, its utility customers, (iii) any Subsidiary may merge or
consolidate with or into any Person if such Subsidiary is the surviving
entity and (iv) any Subsidiary of the Borrower may merge into or
dispose of assets to the Borrower, PROVIDED, in each case, that no
Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.
(c) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required or permitted by generally
accepted accounting principles.
(d) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof.
(e) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) Investments by the Borrower and its Subsidiaries
in the Consolidated Subsidiaries of the Borrower;
(ii) loans and advances to employees in the ordinary
course of the business (including for travel, entertainment
and relocation expenses) of the Borrower and its Subsidiaries
as presently conducted in an aggregate principal amount not to
exceed $1,000,000 at any time outstanding;
(iii) Investments in Marketable Securities;
(iv) Investments consisting of intercompany Debt
within the group of the Borrower and its Subsidiaries;
(v) Investments consisting of trade credit in the
ordinary course of business;
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(vi) Investments consisting of loans and advances to
NACCO made by the Borrower in the ordinary course of business
(which loans and advances are of the same kind and for the
same purposes as currently exist between the Borrower and
NACCO);
(vii) Investments made with the proceeds of
subordinated debt issued to NACCO and/or equity contributions
from NACCO; and
(viii) other Investments; PROVIDED that with respect
to Investments made under this clause (viii), (A) immediately
before and after giving effect thereto, no Default shall have
occurred and be continuing or would result therefrom, (B) any
company or business acquired or invested in pursuant to this
clause (viii) shall be in the same line of business as the
Borrower or any of its Subsidiaries or in power plants fueled
by coal (except that the Borrower may make Investments in
connection with the development of power plants (other than
nuclear power plants) in Mississippi to the extent of its
right to participate in such development as set forth in the
▇▇▇▇▇▇▇▇ Purchase Agreement) and (C) immediately after giving
effect to such Investment pursuant to this clause (viii), the
Debt/EBITDA Ratio as of the last day of the fiscal quarter
ending immediately prior to the date such Investment is made,
giving pro forma effect to such Investment as if it had been
made on the last day of such fiscal quarter, does not exceed
3.25 to 1.00, as evidenced by a certificate of a Responsible
Officer of the Borrower delivered to the Lenders demonstrating
such compliance.
(f) RESTRICTED PAYMENTS. Directly or indirectly, or permit any
of its Subsidiaries to (i) declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any equity interests of
the Borrower or any Subsidiary, whether now or hereafter outstanding,
or make any other distribution in respect thereof either directly or
indirectly, whether in cash or property or in obligations of the
Borrower or any Subsidiary or (ii) otherwise make any distribution to
NACCO, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (other than distributions
payable solely in common stock of the Person making such distributions)
(collectively, "RESTRICTED PAYMENTS"), except that:
(A) the Borrower or any Subsidiary may make any
Restricted Payment so long as the Debt/EBITDA Ratio as of the
last day of the fiscal quarter ending immediately prior to the
date of such Restricted Payment, giving pro forma effect to
such Restricted Payment as if it had occurred on the last day
of such fiscal quarter, does not exceed 3.25 to 1.00;
(B) notwithstanding the provisions of clause (A)
above, the Borrower may make Restricted Payments to NACCO (i)
in respect of the Borrower's allocable share of NACCO's
overhead and other selling, general and administrative
expenses (including legal, accounting, other professional fees
and costs) incurred in the ordinary course of business, (ii)
in respect of liabilities of NACCO arising from, in connection
with or relating to the closing of certain mining operations
of Bellaire Corporation, (iii) in respect of amounts due to
NACCO under the Tax Sharing Agreement and (iv) in respect of
state taxes paid by NACCO on behalf of the Borrower and its
Subsidiaries; and
(C) notwithstanding the provisions of clause (A)
above, any Subsidiary may make Restricted Payments to the
Borrower.
(g) OPERATING COVENANT. Permit the delivery or stockpile of
the Mississippi Lignite Mining Company to be less than 300,000 tons of
lignite in the fourth fiscal quarter of fiscal year 2000.
SECTION 5.03. FINANCIAL COVENANTS. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
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(a) DEBT/EBITDA RATIO. Maintain a Debt/EBITDA Ratio of not
more than 2.25:1.00 through December 31, 2000, 3.90:1.00 from January
1, 2001 through December 31, 2001 and 3.50:1 thereafter.
(b) FIXED CHARGE COVERAGE RATIO. Maintain a ratio of
Consolidated EBITDA of the Borrower and its Non-Project Mining
Subsidiaries to the sum of interest payable on, and amortization of
debt discount in respect of, all Consolidated Recourse Debt during such
period, by the Borrower and its Non-Project Mining Subsidiaries for
each period of four fiscal quarters of not less than 3.00:1 from
January 1, 2001 until December 31, 2001 and not less than 4.00:1
thereafter; PROVIDED that, for purposes of calculating the Fixed Charge
Coverage Ratio at March 31, 2001, June 30, 2001 and September 30, 2001,
the amount of such interest payable and amortization of debt discount
included in the denominator thereof shall be the amount thereof for the
period of one, two or three fiscal quarters then ended multiplied by 4,
2 or 4/3, as the case may be.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower shall
fail to pay any interest on any Advance or make any other payment of
fees or other amounts payable under this Agreement or any Note within
three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein
or by the Borrower (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(d), (e) or (h),
5.02 or 5.03 or (ii) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its
part to be performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall have been
given to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt (excluding any
Nonrecourse Debt or Debt of any Project Mining Subsidiary) that is
outstanding in a principal or net amount of at least $10,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of the Borrower or
such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(e) The Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or
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any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part
of its property) shall occur; or the Borrower or any of its
Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Judgments or orders for the payment of money in excess of
$10,000,000 in the aggregate shall be rendered against the Borrower or
any of its Subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii)
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 20 days from the entry thereof;
PROVIDED, HOWEVER, that any such judgment or order shall not be an
Event of Default under this Section 6.01(f) if and for so long as (i)
the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering
payment thereof and (ii) such insurer, which shall be rated at least
"A" by A.M. Best Company, has been notified of, and has not disputed
the claim made for payment of, the amount of such judgment or order; or
(g) NACCO shall cease to own, directly or indirectly, at least
51% of the Voting Stock of the Borrower; or
(h) Any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Borrower and the ERISA
Affiliates related to such ERISA Event) exceeds $14,000,000; or
(i) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower and the ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds $10,000,000
or requires payments exceeding $2,500,000 per annum; or
(j) The Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$10,000,000;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; PROVIDED, HOWEVER, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
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ARTICLE VII
THE AGENT
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; PROVIDED, HOWEVER, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the Borrower
or to inspect the property (including the books and records) of the Borrower;
(v) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. CITIBANK AND AFFILIATES. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. INDEMNIFICATION. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Advances then owed to each of them (or
if no Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by
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the Agent under this Agreement (collectively, the "INDEMNIFIED COSTS"), PROVIDED
that no Lender shall be liable for any portion of the Indemnified Costs
resulting from the Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
reasonable counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
to the extent that the Agent is not reimbursed for such expenses by the
Borrower. In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
SECTION 7.06. SUCCESSOR AGENT. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent with the consent, unless a Default has occurred and is
continuing, of the Borrower (which consent shall not be unreasonably withheld or
delayed). If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; PROVIDED, HOWEVER, that (a) no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders affected thereby, do any
of the following: (i) waive any of the conditions specified in Section 3.01,
(ii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Advances, or the number of Lenders, that shall be
required for the Lenders or any of them to take any action hereunder or (iii)
amend this Section 8.01 and (b) no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each Lender that has a Commitment
under the Term Facility or the Revolving Credit Facility if such Lender is
directly affected by such amendment, waiver or consent, (i) increase the
Commitments of the Lenders, (ii) reduce the principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender, (iii) postpone any date fixed for any payment of principal of, or
interest on, the Notes held by such Lender or any fees or other amounts payable
hereunder to such Lender or (iv) change the order of application of any
prepayment set forth in Section 2.06 in any manner that materially affects such
Lender; and PROVIDED FURTHER that (x) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note and (y) no amendment, waiver or consent of Section 8.07(f)
shall, unless in writing and signed by each Lender that has granted a funding
option to an SPC in addition to the Lenders required above to take such action,
affect the rights or duties of such Lender or SPC under this Agreement or any
Note.
SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered, if to the Borrower, at its address at Signature Place II, ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: K. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇; if to any Initial Lender, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Agent, at its address at Two Penns
▇▇
▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bank Loan Syndications Department;
or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Agent pursuant to Article II, III or VII shall not be
effective until received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. COSTS AND EXPENSES. (a) The Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or creditors
or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. The Borrower also agrees not to assert any claim for
special, indirect, consequential or punitive damages against the Agent, any
Lender, any of their Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, arising out of or
otherwise relating to the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender other than on the last day of the Interest Period for such Advance, as a
result of a payment or Conversion pursuant to Section 18(d) or (e), 2.09 or
2.12, acceleration of the maturity of the Notes pursuant to Section 6.01 or for
any other reason, or by an Eligible Assignee to a Lender other than on the last
day of the Interest Period for such Advance upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion, including, without limitation, any
loss, cost or expense
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incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. RIGHT OF SET-OFF. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and the Note held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender, PROVIDED
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender and its Affiliates may
have.
SECTION 8.06. BINDING EFFECT. This Agreement shall become
effective (other than Section 2.01, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may with the consent of the Agent and, unless an Event of Default has occurred
and is continuing at the time of such assignment, the Borrower (which consent,
in each case, shall not be unreasonably withheld or delayed) and, if demanded by
the Borrower (following (x) a demand by such Lender pursuant to Section 2.10 or
2.13, (y) a default by such Lender in the performance of its obligations
hereunder or (z) such Lender's refusal to approve any amendment or waiver to
this Agreement requested by the Borrower) upon at least five Business Days'
notice to such Lender and the Agent, will assign to one or more Persons all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under and in respect of one or more Facilities, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Lender or an assignment of all of a Lender's rights and obligations under
this Agreement, (x) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof
under each Facility for which a Commitment is being assigned and (y) no
assignment which would result in any Lender holding less than $5,000,000 under
any Facility shall be permitted, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Borrower pursuant to this Section 8.07(a) shall be arranged by the Borrower
after consultation with the Agent and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, and (vi) the parties
to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment and a processing and recordation fee of
$3,500 payable by the parties to each such
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assignment, PROVIDED, HOWEVER, that in the case of each assignment made as a
result of a demand by the Borrower, such recordation fee shall be payable by the
Borrower except that no such recordation fee shall be payable in the case of an
assignment made at the request of the Borrower to an Eligible Assignee that is
an existing Lender, and (vii) any Lender may, without the approval of the
Borrower and the Agent, assign all or a portion of its rights to any of its
Affiliates. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Section 2.10, 2.13 and 8.04
to the extent any claim thereunder relates to an event arising prior such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered Note or Notes a
new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it under each Facility pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder
under such Facility, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A-1 or A-2 hereto, as the case may be.
(d) The Agent, acting for this purpose (but only for this
purpose) as the agent of the Borrower, shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
36
41
(e) Each Lender may sell participations to one or more banks
or other entities (other than the Borrower or any of its Affiliates) in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Each Lender may grant to a special purpose funding vehicle
(an "SPC") the option to fund all or any part of any Advance that such Lender is
obligated to fund under this Agreement (and upon the exercise by such SPC of
such option to fund, such Lender's obligations with respect to such Advance
shall be deemed satisfied to the extent of any amounts funded by such SPC);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (iv) any such option granted to an SPC shall
not constitute a commitment by such SPC to fund any Advance, (v) neither the
grant nor the exercise of such option to an SPC shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including, without limitation, its obligations under Section
2.09) and (vi) no SPC shall have any right to approve any amendment or waiver of
any provision of this Agreement or any Note, nor any consent to any departure by
the Borrower therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
grant of funding option, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such grant of funding option. Each party to
this Agreement hereby agrees that no SPC shall be liable for any indemnity or
payment under this Agreement for which a Lender would otherwise be liable.
Subject to the foregoing provisions of this clause (f), an SPC shall have all
the rights of the granting Lender. An SPC may assign or participate all or a
portion of its interest in any Advances to the granting Lender or to any
financial institution providing liquidity or credit support to or for the
account of such SPC without paying any processing fee therefor and, in
connection therewith may disclose on a confidential basis any information
relating to the Borrower to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancements to such
SPC. In furtherance of the foregoing, each party hereto agrees (which agreements
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof.
(g) Any Lender may, in connection with any assignment,
participation or grant of funding option or proposed assignment, participation
or grant of funding option pursuant to this Section 8.07, disclose to the
assignee, participant or SPC or proposed assignee, participant or SPC any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; PROVIDED, HOWEVER, that, prior to any such disclosure, the
assignee, participant or SPC or proposed assignee, participant or SPC shall
agree to preserve the confidentiality of any Confidential Information received
by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
37
42
SECTION 8.08. CONFIDENTIALITY. Neither the Agent nor any
Lender or SPC shall disclose any Confidential Information to any other Person
without the consent of the Borrower, other than (a) to the Agent's or such
Lender's Affiliates and their officers, directors, employees, agents, attorneys,
accountants and advisors and, as contemplated by Section 8.07(f), to actual or
prospective assignees and participants, and then only on a confidential basis,
(b) as required by any law, rule or regulation or judicial process and (c) as
requested or required by any state, federal or foreign authority or examiner
regulating banks or banking.
SECTION 8.09. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed and interpreted in accordance with, the laws
of the State of New York.
SECTION 8.10. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in the Southern District
of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the Notes, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. The Borrower
hereby agrees that service of process in any such action or proceeding brought
in the any such New York State court or in such federal court may be made upon
CT Corporation System at its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "PROCESS AGENT") and the Borrower hereby irrevocably
appoints the Process Agent its authorized agent to accept such service of
process, and agrees that the failure of the Process Agent to give any notice of
any such service shall not impair or affect the validity of such service or of
any judgment rendered in any action or proceeding based thereon. The Borrower
hereby further irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the Borrower at its address specified pursuant to Section
8.02. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or the Notes in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
[Rest of page intentionally left blank]
38
43
SECTION 8.12. WAIVER OF JURY TRIAL. Each of the Borrower, the
Agent and the Lenders hereby irrevocably and unconditionally waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
Notes or the actions of the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE NORTH AMERICAN COAL CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: President and Chief Executive Officer
CITIBANK, N.A.,
as Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Managing Director
INITIAL LENDERS
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Managing Director
BANK ONE, NA
By /s/ ▇▇▇▇ ▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. Munisch
-----------------------------------------
Title: Managing Director
39
44
EXHIBIT A-1 - FORM OF
REVOLVING CREDIT
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, THE NORTH AMERICAN COAL
CORPORATION, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of _________________________ (the "LENDER") for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the
Revolving Credit Advances made by the Lender to the Borrower pursuant to the
Credit Agreement dated as of October 11, 2000 among the Borrower, the Lender and
certain other lenders parties thereto, and Citibank, N.A. as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"CREDIT AGREEMENT"; the terms defined therein being used herein as therein
defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of such Revolving Credit
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, as Agent, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in same day funds. Each Revolving Credit Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made
on account of principal thereof, shall be recorded by the Lender and, prior to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Promissory Note PROVIDED, HOWEVER, that the failure of the Lender to make any
such recordation or endorsement shall not affect the obligations of the Borrower
under this Promissory Note.
This Promissory Note is one of the Revolving Credit Notes
referred to in, and is entitled to the benefits of, the Credit Agreement. The
Credit Agreement, among other things, (i) provides for the making of Revolving
Credit Advances by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance being evidenced by this Promissory Note and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
THE NORTH AMERICAN COAL
CORPORATION
By
-------------------------------------
Title:
45
ADVANCES AND PAYMENTS OF PRINCIPAL
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AMOUNT OF
DATE AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
ADVANCE OR PREPAID BALANCE MADE BY
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2
46
EXHIBIT A-2 - FORM OF
TERM PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, THE NORTH AMERICAN COAL
CORPORATION, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of _________________________ (the "LENDER") for the account of its
Applicable Lending Office on the Termination Date (each as defined in the Credit
Agreement referred to below) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the Term
Advance made by the Lender to the Borrower pursuant to the Credit Agreement
dated as of October 11, 2000 among the Borrower, the Lender and certain other
lenders parties thereto, and Citibank, N.A. as Agent for the Lender and such
other lenders (as amended or modified from time to time, the "CREDIT AGREEMENT";
the terms defined therein being used herein as therein defined) on the dates and
in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal
amount of the Term Advance from the date of the Term Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, as Agent, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in same day funds. The Term Advance owing to the Lender by the
Borrower pursuant to the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note PROVIDED, HOWEVER, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
under this Promissory Note.
This Promissory Note is one of the Term Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of a single Term Advance by the
Lender to the Borrower in an amount not to exceed the U.S. dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such Term
Advance being evidenced by this Promissory Note and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
This Promissory Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.
THE NORTH AMERICAN COAL
CORPORATION
By __________________________
Title:
47
ADVANCES AND PAYMENTS OF PRINCIPAL
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AMOUNT OF
DATE AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
ADVANCE OR PREPAID BALANCE MADE BY
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2
48
EXHIBIT B - FORM OF NOTICE OF
BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, The North American Coal Corporation, refers
to the Credit Agreement, dated as of October 11, 2000 (as amended or modified
from time to time, the "CREDIT AGREEMENT", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________, 200_.
(ii) The Facility under which the Proposed Borrowing is
requested is the [Term][Revolving Credit] Facility.
(iii) The Type of Advances comprising the Proposed
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$_______________.
[(v) The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in Section
4.01 of the Credit Agreement (except the representations set forth in
the last sentence of subsection (e) thereof and in subsection (f)(i)
thereof) are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and
49
(B) no event has occurred and is continuing, or would result
from such Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default.
Very truly yours,
THE NORTH AMERICAN COAL CORPORATION
By
----------------------------------------
Title:
2
50
EXHIBIT C - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October
11, 2000 (as amended or modified from time to time, the "CREDIT AGREEMENT")
among The North American Coal Corporation, a Delaware corporation (the
"BORROWER"), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as agent for the Lenders (the "AGENT"). Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement as of the
date hereof equal to the percentage interest specified on Schedule 1 hereto of
all outstanding rights and obligations under the Credit Agreement Facility or
Facilities specified on Schedule 1 hereto. After giving effect to such sale and
assignment, the Assignee's Commitment and the amount of the Advances owing to
the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note or Notes held by
the Assignor and requests that the Agent exchange such Note or Notes for a new
Note or Notes payable to the order of the Assignee in an amount equal to the
Commitment assumed by the Assignee pursuant hereto or new Notes payable to the
order of such Assignee in an amount equal to the Commitments assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the Commitments
retained by the Assignor under the Credit Agreement, respectively, as specified
on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service forms required under Section 2.13 of
the Credit Agreement.
4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "EFFECTIVE DATE") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
51
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and facility fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
2
52
Schedule 1
to
Assignment and Acceptance
As to the Revolving Credit Facility:
Percentage interest assigned: _____%
Assignee's Revolving Credit Commitment: $______
Aggregate outstanding principal amount of Revolving Credit Advances assigned: $______
Principal amount of Revolving Credit Note payable to Assignee: $______
Principal amount of Revolving Credit Note payable to Assignor: $______
As to the Term Facility:
Percentage interest assigned: _____%
Assignee's Term Commitment: $______
Aggregate outstanding principal amount of Term Advances assigned: $______
Principal amount of Term Note payable to Assignee: $______
Principal amount of Term Note payable to Assignor: $______
Effective Date*: _______________, 200_
[NAME OF ASSIGNOR], as Assignor
By __________________________
Title:
Dated: _______________, 200_
[NAME OF ASSIGNEE], as Assignee
By __________________________
Title:
Dated: _______________, 200_
----------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
53
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted [and Approved]** this
__________ day of _______________, 200_
CITIBANK, N.A., as Agent
By _______________________
Title:
[Approved this __________ day
of _______________, 200_
THE NORTH AMERICAN COAL CORPORATION
By ]*
------------------------------------------
Title:
----------
** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
4
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EXHIBIT D-1 OPINION OF ▇▇▇▇▇ DAY
October __, 2000
Citibank, N.A., as Agent under the
Credit Agreement, as hereinafter
defined (the "Agent") and
The Lenders parties to
the Credit Agreement
Re: Credit Agreement, dated as of October __, 2000 (the "Credit
Agreement") among The North American Coal Corporation, a Delaware
corporation (the "company"), the lenders
identified in the Credit Agreement and the Agent
---------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special New York counsel for The North
American Coal Corporation, a Delaware corporation (the "Company"), in connection
with the preparation, execution and delivery of the Credit Agreement and the
Notes delivered to the Lenders on the date hereof (the "Notes"), the Credit
Agreement and the Notes being collectively referred to herein as the "Credit
Documents." This opinion is delivered to you pursuant to Section 3.01(h)(v)(A)
of the Credit Agreement. Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to such terms in the Credit Agreement. The
Uniform Commercial Code, as amended and in effect in the State of New York, is
referred to herein as the "NY UCC." With your permission, all assumptions and
statements of reliance herein have been made without any independent
investigation or verification on our part except to the extent otherwise
expressly stated, and we express no opinion with respect to the subject matter
or accuracy of the assumptions or items upon which we have relied.
In connection with the opinions expressed herein, we have
examined such documents, records and matters of law as we have deemed necessary
for the purposes of this opinion. We have examined, among other documents, the
following:
An executed copy of the Credit Agreement, signed by the
Company and by the Agent and certain of the Lenders;
An executed copy of each of the Notes; and
The Officer's Certificate of the Company delivered to us in
connection with this opinion, a copy of which is attached hereto as Annex A (the
"Officer's Certificate").
In all such examinations, we have assumed, without independent
investigation, the legal capacity of all natural persons executing documents,
the genuineness of all signatures, the authenticity of original and certified
documents and the conformity to original or certified copies of all copies
submitted to us as conformed or reproduction copies. As to various questions of
fact relevant to the opinions expressed herein, we have relied upon, and assume
the accuracy of, representations and warranties contained in the Credit
Documents and certificates and oral or written statements and other information
of or from representatives of the Company and others and assume compliance on
the part of all parties to the Credit Documents with their covenants and
agreements contained therein. As to the factual matters set forth therein, we
have relied solely upon certificates of public officials. With respect to the
opinions expressed in paragraph (a) below, our opinions are limited (x) to our
actual knowledge, if any, of the
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Company's specially regulated business activities and properties based solely
upon an officer's certificate in respect of such matters and without any
independent investigation or verification on our part and (y) to our review of
only those laws and regulations that, in our experience, are normally applicable
to transactions of the type contemplated by the Credit Documents.
To the extent it may be relevant to the opinions expressed
herein, we have assumed, without independent investigation, that the parties to
the Credit Documents other than the Company have the power to enter into and
perform such documents and to consummate the transactions contemplated thereby
and that such documents have been duly authorized, executed and delivered by,
and constitute legal, valid and binding obligations of, such parties.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that:
The execution and delivery to the Agent and the Lenders by the Company of the
Credit Documents and the performance by the Company of its obligations
thereunder, (i) do not require under present law any filing or registration by
the Company with, or approval or consent to the Company of, any governmental
agency or authority of the State of New York or of the United States of America
that has not been made or obtained except those required in the ordinary course
of business in connection with the performance by the Company of its obligations
under certain covenants contained in the Credit Documents, and (ii) do not
violate any present law, or present regulation of any governmental agency or
authority, of the State of New York or the United States of America known by us
to be applicable to the Company or its property.
The Credit Agreement constitutes, and each Note, upon delivery thereof and the
making of the applicable initial Advances evidenced thereby, will constitute a
valid and binding obligation of the Company enforceable in accordance with its
respective terms.
Assuming that the Company will comply with the provisions of the Credit
Agreement relating to the use of proceeds, the borrowings by the Company under
the Credit Agreement and the application of the proceeds thereof as provided in
the Credit Agreement will not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
The opinions set forth above are subject to the following
qualifications:
Our opinions above as to enforceability are subject to (i) applicable
bankruptcy, insolvency, reorganization, fraudulent transfer, voidable
preference, moratorium or similar laws, and related judicial doctrines, from
time to time in effect affecting creditors' rights and remedies generally and
(ii) general principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness, equitable defenses and
limits on the availability of equitable remedies), whether such principles are
considered in a proceeding at law or in equity.
In rendering this opinion, we have relied, with your permission, upon the
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., the Vice President - Law and Administration of
the Company, a copy of which has been furnished to you.
We express no opinion as to the enforceability of any provision in the Credit
Documents:
relating to indemnification, contribution or exculpation in connection with
violations of any statutory duties or public policy, or in connection with
reckless or unlawful acts of the indemnified or exculpated party or the party
receiving contribution;
providing that any person or entity purchasing a participation from a Lender or
other person or entity pursuant thereto may exercise set-off or similar rights
with respect to such participation;
relating to forum selection to the extent that the enforceability of any such
provision is to be determined by any court other than a court of the State of
New York;
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56
relating to choice of governing law to the extent that the enforceability of any
such provision is to be determined by any court other than a court of the State
of New York; or
specifying that provisions thereof may be waived only in writing, to the extent
that an oral agreement or an implied agreement by trade practice or course of
conduct has been created that modifies any provision of such Credit Documents.
Our opinions as to enforceability are subject to the effect of generally
applicable rules of law that:
may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of the contract to circumstances in which the
unenforceable portion is not an essential part of the agreed exchange; and
govern and afford judicial discretion regarding the determination of damages and
entitlement to attorneys' fees and other costs.
We express no opinion as to the enforceability of any purported waiver, release,
variation, disclaimer, consent or other agreement to similar effect (all of the
foregoing, collectively, a "Waiver") by the Company under any of the Credit
Documents to the extent that such a Waiver applies to a right, claim, duty,
defense or ground for discharge otherwise existing or occurring as a matter of
law (including judicial decisions), except to the extent that such a Waiver is
effective under and is not prohibited by or void or invalid under applicable law
(including judicial decisions).
For purposes of the opinions set forth in paragraph (b) above, we have assumed
that (i) the Company is a corporation validly existing in good standing under
the laws of the State of Delaware, has all requisite power and authority, and,
other than as specifically stated in the opinion set forth in paragraph (a)
above, has obtained all requisite corporate, shareholder, third party and
governmental authorizations, consents and approvals, and made all requisite
filings and registrations, necessary to execute, deliver and perform its
obligations under the Credit Documents, and, other than as specifically stated
in the opinion set forth in paragraph (a) above, that such execution, delivery
and performance will not violate or conflict under any law, rule, regulation,
order, decree, judgment, instrument or agreement binding upon or applicable to
it or its properties, and (ii) the Credit Documents have been duly executed and
delivered by the Company. For purposes of the opinion set forth in paragraph (c)
above, we have assumed that (i) neither the Agent nor any of the Lenders has or
will have the benefit of any agreement or arrangement (excluding the Credit
Documents) pursuant to which any extensions of credit are directly or indirectly
secured by Margin Stock, (ii) neither the Agent nor any of the Lenders nor any
of their respective affiliates has extended or will extend any other credit to
the Company directly or indirectly secured by Margin Stock and (iii) neither the
Agent nor any of the Lenders has relied or will rely upon any Margin Stock as
collateral in extending or maintaining any Advances pursuant to the Credit
Agreement.
The opinions expressed herein are limited to the federal laws
of the United States of America and the laws of the State of New York and, to
the extent relevant to the opinions expressed in paragraph (a) above, the
General Corporation Law of the State of Delaware, as currently in effect.
We express no opinion as to the compliance or noncompliance,
or the effect of the compliance or noncompliance, of each of the addressees or
any other person or entity with any state or federal laws or regulations
applicable to each of them by reason of their status as or affiliation with a
federally insured depository institution. Our opinions are limited to those
expressly set forth herein, and we express no opinions by implication.
The opinions expressed herein are solely for the benefit of
the addressees hereof in connection with the transaction referred to herein and
may not be relied on by such addressees for any other purpose or in any manner
or for any purpose by any other person or entity.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, a partner in ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, is
a Director of NACCO Industries, Inc., the parent of the Company, and a Director
of the Company.
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57
Very truly yours,
▇▇▇▇▇, DAY, ▇▇▇▇▇▇ & ▇▇▇▇▇
Rev'd by
---------------------------
4
58
THE NORTH AMERICAN COAL CORPORATION
OFFICER'S CERTIFICATE
---------------------
The undersigned officer of The North American Coal
Corporation, a Delaware corporation (the "Company"), hereby certifies, in
connection with the execution, delivery and performance by the Company of the
Credit Agreement, dated as of October __, 2000 (the "Credit Agreement"), among
the Company, the lending institutions identified in the Credit Agreement (the
"Lenders"), and Citibank, N.A. (the "Agent"), and with the consummation of the
transactions contemplated thereby and the opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
(the "Opinion") delivered in connection therewith, as follows (capitalized terms
used herein and defined in the Credit Agreement shall have such defined meanings
when used herein unless otherwise defined herein):
The nature of the Company's business and the purpose of the
Company is to engage in the following businesses and activities: ownership and
operation of lignite coal surface mines for use as fuel by electrical utilities
and for industrial purposes. In addition, the Company operates a dragline at a
limerock quarry in southern Florida. The Company is not engaged in any activity
or business not permitted pursuant to those provisions of its Certificate of
Incorporation, as amended, specifying the nature of the Company's business and
the purposes of the Company. The Company does not engage or propose to engage in
any industry or business or activity, or own any property or asset, that causes
or would cause it to be subject to special local, state or federal regulation
not applicable to business corporations generally.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of September, 2000.
By:
---------------------------------------
Name:
Title:
59
EXHIBIT D-2 - FORM OF
OPINION OF COUNSEL
FOR THE BORROWER
October __, 2000
Citibank, N.A., as Agent under the
Credit Agreement, as hereinafter
defined (the "Agent") and
The Lenders parties to the Credit Agreement
Re: Credit Agreement, dated as of October __, 2000 (the
"Credit Agreement") among The North American Coal
Corporation, a Delaware corporation (the "Company"),
the Lenders
identified in the Credit Agreement and the Agent
------------------------------------------------
Ladies and Gentlemen:
I am the Vice President - Law and Administration for The North
American Coal Corporation, a Delaware corporation (the "Company"), and have
acted as such in connection with the preparation, execution and delivery of the
Credit Agreement and the Notes delivered to the Lenders on the date hereof (the
"Notes"), the Credit Agreement and the Notes being collectively referred to as
the "Credit Documents." This opinion is delivered to you pursuant to Section
3.01(h)(v)(B) of the Credit Agreement. Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to such terms in the Credit
Agreement.
In connection with the opinions expressed herein, I have
examined such documents, records and matters of law as I have deemed necessary
for the purposes of this opinion. I have examined, among other documents, the
following:
An executed copy of the Credit Agreement, signed by the
Company and by the Agent and certain of the Lenders; and
An executed copy of each of the Notes.
I, or attorneys over whom I exercise supervision, have also
examined the originals, or copies certified to our satisfaction, of the
agreements, instruments and other documents, and all of the orders, writs,
judgments, awards, injunctions and decrees, which affect or purport to affect
the ability of the Company to perform its obligations under the Credit Documents
to which it is a party. In addition, I, or attorneys over whom I exercise
supervision, have examined the originals, or copies certified to our
satisfaction, of the Certificate of Incorporation and By-laws of the Company,
and such other corporate records of the Company, certificates of public
officials and of officers of the Company, and agreements, instruments and other
documents, as I have deemed necessary as a basis for the opinions hereinafter
expressed.
To the extent it may be relevant to the opinions expressed
herein, I have assumed that the parties to the Credit Documents other than the
Company have the power to enter into and perform such documents and to
consummate the transactions contemplated thereby and that such documents have
been duly authorized, executed and delivered by, and constitute legal, valid and
binding obligations of, such parties.
The opinions expressed below are limited to the federal laws
of the United States, and, to the extent relevant hereto, the General
Corporation Law of the State of Delaware, as currently in effect. I assume no
60
obligation to supplement this opinion if any applicable laws change after the
date hereof or if I become aware of any facts that might change the opinions
expressed herein after the date hereof.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
The Company (i) is a corporation duly incorporated, validly existing in good
standing under the laws of the State of Delaware and (ii) has the corporate
power and authority to enter into and to perform its obligations under the
Credit Documents and to obtain extensions of credit under the Credit Agreement
to the extent provided for therein. The Company possesses governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, the absence of which would have a Material Adverse Effect.
The execution, delivery and performance by the Company of the Credit Documents
are within the Company's corporate powers, have been duly authorized by all
necessary corporate action, require no action, consent or approval by or in
respect of, or filing with, any governmental body, agency or official or other
third party, do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Certificate of Incorporation or
By-laws of the Company or of any material agreement binding upon the Company or
any judgment, injunction, order, decree or other instrument binding upon the
Company, and will not result in the creation or imposition of any lien on any
asset of the Company or any of its Subsidiaries. The Credit Documents have been
duly executed and delivered on behalf of the Company.
There is no action, suit or proceeding pending against, or, to the best of my
knowledge, threatened against or affecting, the Company or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official that purports to affect the legality, validity, binding effect or
enforceability of the Credit Documents or the consummation of the transactions
contemplated thereby or that are likely to have a Material Adverse Effect.
This opinion is furnished by me, as counsel to the Company, to you solely for
your benefit and solely with respect to the transactions contemplated by the
Credit Documents upon the understanding that I am not hereby assuming any
professional responsibility to any other person whatsoever.
Very truly yours,
-----------------------------------------
Vice President - Law and Administration,
North American Coal Corporation
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