EXECUTION COPY
EXHIBIT 10.43
$1,050,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
PEABODY ENERGY CORPORATION,
A DELAWARE CORPORATION,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
WACHOVIA BANK, NATIONAL ASSOCIATION AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS SYNDICATION AGENTS,
FLEET SECURITIES, INC.,
WACHOVIA SECURITIES, INC. AND
▇▇▇▇▇▇ BROTHERS INC.,
AS ARRANGERS,
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC. AND
U.S. BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENTS
DATED AS OF MARCH 21, 2003
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS.................................................................................... 2
1.1 Defined Terms.................................................................................. 2
1.2 Other Definitional Provisions.................................................................. 23
1.3 Interrelationship with First Restated Credit Agreement......................................... 23
1.4 Confirmation of Existing Obligations........................................................... 24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS...................................................... 24
2.1 Commitments.................................................................................... 24
2.2 Procedure for Borrowing........................................................................ 26
2.3 Commitment Fee................................................................................. 26
2.4 Termination or Reduction of Revolving Credit Commitments....................................... 27
2.5 Repayment of Loans; Evidence of Debt........................................................... 27
2.6 Optional Prepayments; Mandatory Prepayments and Reduction of Commitments....................... 29
2.7 Conversion and Continuation Options............................................................ 30
2.8 Minimum Amounts and Maximum Number of Tranches................................................. 31
2.9 Interest Rates and Payment Dates............................................................... 31
2.10 Computation of Interest and Fees............................................................... 31
2.11 Inability to Determine Interest Rate........................................................... 32
2.12 Pro Rata Treatment and Payments................................................................ 32
2.13 Illegality..................................................................................... 33
2.14 Requirements of Law............................................................................ 33
2.15 Taxes.......................................................................................... 34
2.16 Indemnity...................................................................................... 36
2.17 Replacement of Lenders......................................................................... 37
2.18 Certain Fees................................................................................... 37
2.19 Certain Rules Relating to the Payment of Additional Amounts.................................... 37
SECTION 3. LETTERS OF CREDIT.............................................................................. 38
3.1 L/C Commitment................................................................................. 38
3.2 Procedure for Issuance of Letters of Credit.................................................... 38
3.3 Fees, Commissions and Other Charges............................................................ 39
3.4 L/C Participation.............................................................................. 39
3.5 Reimbursement Obligation of the Borrower....................................................... 40
3.6 Obligations Absolute........................................................................... 40
3.7 Letter of Credit Payments...................................................................... 41
3.8 Application.................................................................................... 41
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................. 41
4.1 Financial Statements and Condition............................................................. 41
4.2 No Change...................................................................................... 41
4.3 Corporate Existence............................................................................ 42
4.4 Corporate Power; Authorization; Enforceable Obligations; No Conflict........................... 42
4.5 No Legal Bar................................................................................... 42
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4.6 Litigation; Compliance with Laws; Reserves..................................................... 42
4.7 No Default..................................................................................... 43
4.8 Ownership and Location of Property; Liens...................................................... 43
4.9 Intellectual Property.......................................................................... 44
4.10 Taxes.......................................................................................... 44
4.11 Federal Regulations............................................................................ 44
4.12 ERISA; Coal Act; Black Lung Act................................................................ 44
4.13 Investment Company Act; Other Regulations...................................................... 45
4.14 Subsidiaries and Other Investments............................................................. 45
4.15 Purpose of Loans............................................................................... 46
4.16 Environmental Matters.......................................................................... 46
4.17 Collateral Documents........................................................................... 47
4.18 Accuracy and Completeness of Information....................................................... 47
4.19 Solvency....................................................................................... 48
4.20 Labor Matters.................................................................................. 48
4.21 Insurance...................................................................................... 48
4.22 Coal Supply Agreements......................................................................... 48
4.23 Mines.......................................................................................... 48
4.24 Titled Equipment............................................................................... 48
4.25 Acts of God.................................................................................... 49
4.26 Surety Bonds................................................................................... 49
SECTION 5. CONDITIONS PRECEDENT........................................................................... 49
5.1 Effective Date................................................................................. 49
5.2 Conditions to a Credit Event................................................................... 52
SECTION 6. AFFIRMATIVE COVENANTS.......................................................................... 52
6.1 Financial Statements........................................................................... 52
6.2 Certificates; Other Information................................................................ 53
6.3 Payment of Obligations......................................................................... 54
6.4 Existence; Businesses and Properties........................................................... 54
6.5 Insurance...................................................................................... 55
6.6 Inspection of Properties; Books and Records; Discussions....................................... 56
6.7 Notices........................................................................................ 56
6.8 Mining and Environmental Laws.................................................................. 57
6.9 Further Assurances............................................................................. 57
6.10 Additional Collateral.......................................................................... 57
6.11 Foreign Jurisdictions.......................................................................... 60
6.12 Maintenance of Collateral; Alterations......................................................... 60
6.13 Use of Proceeds................................................................................ 60
6.14 Preparation of Environmental Reports........................................................... 60
6.15 Maintenance of Coal Reserves................................................................... 61
6.16 Coal Supply Agreements......................................................................... 61
6.17 Exploration and Reserves....................................................................... 61
6.18 Certain Long Term Liabilities and Environmental Reserves....................................... 61
6.19 Unrestricted Subsidiaries...................................................................... 61
6.20 Partner Support Percentage; Total Project Cost................................................. 61
6.21 Black Beauty................................................................................... 62
6.22 Liens.......................................................................................... 62
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6.23 Existing Notes................................................................................. 62
SECTION 7. NEGATIVE COVENANTS............................................................................. 62
7.1 Financial Condition Covenants.................................................................. 62
7.2 Limitation on Indebtedness..................................................................... 63
7.3 Limitation on Liens............................................................................ 65
7.4 Limitation on Guarantee Obligations............................................................ 67
7.5 Limitation on Fundamental Changes.............................................................. 68
7.6 Limitation on Sale of Assets................................................................... 68
7.7 Dividends and Distributions; Restrictions on Ability of Restricted Subsidiaries to Pay
Dividends...................................................................................... 70
7.8 Limitation on Capital Expenditures............................................................. 71
7.9 Limitation on Investments, Loans and Advances.................................................. 71
7.10 Limitation on Optional Payments and Modifications of Instruments and Agreements................ 73
7.11 Limitation on Transactions with Affiliates..................................................... 73
7.12 Limitation on Sale and Leaseback Transactions.................................................. 74
7.13 Limitation on Changes in Fiscal Year........................................................... 74
7.14 Limitation on Negative Pledge Clauses.......................................................... 74
7.15 Limitation on Lines of Business................................................................ 75
SECTION 8. EVENTS OF DEFAULT.............................................................................. 75
SECTION 9. THE AGENTS..................................................................................... 78
9.1 Appointment.................................................................................... 78
9.2 Delegation of Duties........................................................................... 79
9.3 Exculpatory Provisions......................................................................... 79
9.4 Reliance by Agents............................................................................. 79
9.5 Notice of Default.............................................................................. 79
9.6 Non-Reliance on Agents and Other Lenders....................................................... 79
9.7 Indemnification................................................................................ 80
9.8 Agents, in Their Individual Capacities......................................................... 80
9.9 Successor Administrative Agent, Syndication Agents and Documentation Agents.................... 80
9.10 Duties of Arrangers, Documentation Agents and Syndication Agents............................... 81
SECTION 10. MISCELLANEOUS.................................................................................. 81
10.1 Amendments and Waivers......................................................................... 81
10.2 Notices........................................................................................ 82
10.3 No Waiver; Cumulative Remedies................................................................. 85
10.4 Survival of Representations and Warranties..................................................... 85
10.5 Payment of Expenses and Taxes.................................................................. 85
10.6 Successors and Assigns; Participations and Assignments......................................... 86
10.7 Adjustments; Set-off........................................................................... 89
10.8 Counterparts................................................................................... 89
10.9 Severability................................................................................... 89
10.10 Integration.................................................................................... 89
10.11 GOVERNING LAW.................................................................................. 89
10.12 SUBMISSION TO JURISDICTION; WAIVERS............................................................ 90
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10.13 Acknowledgements............................................................................... 90
10.14 WAIVERS OF JURY TRIAL.......................................................................... 90
10.15 Confidentiality................................................................................ 91
10.16 Prudential Note................................................................................ 91
10.17 Existing Agreements Superseded................................................................. 91
10.18 Delivery of Lender Addenda..................................................................... 91
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EXHIBITS
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit A-3 Form of Swing Line Note
Exhibit B Form of Guarantee and Collateral Agreement
Exhibit C-1 Form of Legal Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit C-2 Form of Legal Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Certificate of Non-U.S. Lender
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Subordination Agreement
Exhibit H Form of Lender Addendum
SCHEDULES
Schedule I Pricing Grids
Schedule II Coal Act
Schedule III Black Lung Act
Schedule IV Retiree Welfare Benefits
Schedule V Unrestricted Subsidiaries
Schedule 4.4 Required Consents
Schedule 4.5 No Legal Bar
Schedule 4.6 Material Litigation
Schedule 4.8(a)(i) Owned Real Property
Schedule 4.8(a)(ii) Mortgages and Fixture Filings
Schedule 4.8(b) Leased Real Property
Schedule 4.9 Intellectual Property Claims
Schedule 4.14(a) Subsidiaries
Schedule 4.14(b) Joint Ventures
Schedule 4.15 Refinanced Indebtedness
Schedule 4.16 Environmental Matters
Schedule 4.17 Filing Jurisdictions
Schedule 4.21 Existing Insurance
Schedule 4.22 Coal Supply Agreements
Schedule 4.23 Mines
Schedule 7.2(e) Existing Indebtedness
Schedule 7.3(f) Existing Liens
Schedule 7.4 Existing Guarantee Obligations
Schedule 7.7 Operating Leases
Schedule 7.9(e) Existing Investments
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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
March 21, 2003, among Peabody Energy Corporation, a Delaware corporation (the
"Borrower"), the several lenders from time to time parties hereto (the
"Lenders"), Fleet Securities, Inc., Wachovia Securities, Inc. and ▇▇▇▇▇▇
Brothers Inc., each as arranger (in such capacity, the "Arrangers"), Wachovia
Bank, National Association and ▇▇▇▇▇▇ Commercial Paper Inc., each as syndication
agent (in such capacity, the "Syndication Agents"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior
Funding, Inc. and U.S. Bank National Association, each as documentation agents
(in such capacity, the "Documentation Agents") and Fleet National Bank, as
administrative agent for the Agents (as defined below) and the Lenders (in such
capacity, the "Administrative Agent"), AMENDS AND RESTATES IN FULL the Amended
and Restated Credit Agreement, dated as of June 9, 1998 (as amended prior to the
date hereof, the "First Restated Credit Agreement"), among the Borrower, the
lenders party thereto on the Effective Date (the "Original Lenders"), ▇▇▇▇▇▇
Commercial Paper Inc., as syndication agent, ▇▇▇▇▇▇ Brothers Inc., as arranger,
The First National Bank of Chicago, as administrative agent and Bank of America
National Trust & Savings Association and The Fuji Bank, Limited, each as
documentation agent; this amendment and restatement of the First Restated Credit
Agreement, as amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement".
W I T N E S E T H :
WHEREAS, the Original Lenders previously extended credit to
the Borrower under the First Restated Credit Agreement to (i) finance the
acquisition of certain subsidiaries and certain minority interests and related
fees and expenses, (ii) provide cash collateral for certain letters of credit of
the acquired subsidiaries and (iii) to finance the working capital and other
general corporate needs of the Borrower and its Restricted Subsidiaries in the
ordinary course of business and to make certain investments permitted
thereunder;
WHEREAS, on the Effective Date the Borrower intends to borrow
the Term Loans, a portion of the proceeds of which will be used to repay a
portion of the Indebtedness outstanding under the Existing Notes;
WHEREAS, the Borrower has requested that the First Restated
Credit Agreement be amended and restated in full as set forth herein;
WHEREAS, the Original Lenders are willing so to amend and
restate the First Restated Credit Agreement and to continue to extend credit to
the Borrower, upon and subject to the terms and conditions set forth herein;
WHEREAS, it is the intent of the Borrower, the Original
Lenders, the Lenders and the Agents that this Credit Agreement amend and restate
in its entirety the First Restated Credit Agreement and that, from and after the
Effective Date, the First Restated Credit Agreement shall be of no force and
effect except to evidence the terms and conditions under which the Borrower
heretofore has incurred obligations and liabilities to the Original Lenders and
the agents under the First Restated Credit Agreement (as evidenced by the First
Restated Credit Agreement and the books and records of the agents thereunder);
and
WHEREAS, this Credit Agreement is made in renewal, amendment,
restatement and modification of, but not in extinguishment of, the obligations
under the First Restated Credit Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Adjustment Date": the fifth day following the receipt by the
Administrative Agent of the financial statements for the most recently completed
fiscal period furnished pursuant to subsection 6.1(a) or (b), as the case may
be, and the compliance certificate with respect to such financial statements
furnished pursuant to subsection 6.2(c). For purposes of determining the
Applicable Margin and the Commitment Fee Rate, the first "Adjustment Date" shall
mean the date on which the financial statements for the fiscal quarter ended
June 30, 2003 furnished pursuant to subsection 6.1(b) and the related compliance
certificate furnished pursuant to subsection 6.2(c) are delivered to the
Administrative Agent pursuant to subsection 6.1(b) and 6.2(c), respectively.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Agents": the collective reference to the Arrangers, the
Syndication Agents, the Documentation Agents and the Administrative Agent.
"Aggregate Outstanding Extensions of Credit": as to any Lender
with respect to any Type of Loan at any time, an amount equal to the sum of (a)
the aggregate principal amount of all Loans of such Type made by such Lender
then outstanding and (b) in the case of Revolving Credit Loans, such Lender's
Commitment Percentage of the L/C Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Margin": at any time, the percentages set forth on
Schedule I under the relevant column heading opposite the level of the
Consolidated Total Obligations to Consolidated EBITDA Ratio most recently
determined; provided that (a) the Applicable Margins commencing on the Effective
Date shall be those set forth in Schedule I opposite a Consolidated Total
Obligations to Consolidated EBITDA Ratio captioned > or = 2.75x" until the first
Adjustment Date, (b) the Applicable Margins determined for any Adjustment Date
(including the first Adjustment Date) shall remain in effect until a subsequent
Adjustment Date for which the Consolidated Total Obligations to Consolidated
EBITDA Ratio falls within a different level and (c) if the financial statements
and related compliance certificate for any fiscal period are not delivered by
the date due pursuant to subsections 6.1 and 6.2, the Applicable Margins shall
be (i) for the first 35 days subsequent to such due date, the Applicable Margin
in effect prior to such due date and (ii) thereafter, those set forth opposite a
Consolidated Total Obligations to Consolidated EBITDA Ratio captioned
> or = 3.75x" in either case, until the date of delivery of such financial
statements and compliance certificate.
"Application": an application or request, in such form as the
Issuing Lender may specify from time to time and delivered by such means
(including, without limitation, by facsimile or other means of electronic
transmission or pursuant to a computerized system established by the Issuing
Lender) as the
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Issuing Lender and the Borrower may from time to time agree, requesting the
Issuing Lender to issue a Letter of Credit.
"Approved Project": as specified in a written notice delivered
by the Borrower to the Administrative Agent, either, but not both, of the
Thoroughbred Power Generation Project or the Prairie State Power Generation
Project.
"Asset Sale": any sale, sale and leaseback, or other
disposition by any Person or any Subsidiary thereof of any of its property or
assets, including the stock of any Subsidiary of such Person, except (i) sales
and dispositions permitted by subsection 7.6 (other than subsection 7.6(b), (e),
(k)(other than as set forth in clause (ii) of this definition) or (m)) and (ii)
a sale and leaseback of property or assets consummated within 180 days of the
initial acquisition of such property or assets by such Person or its Subsidiary.
"Assignee": as defined in subsection 10.6(c).
"Assignment and Acceptance": as defined in subsection 10.6(c).
"Attributable Debt": in respect of a sale and leaseback
transaction resulting in a Financing Lease, at the time of determination, the
present value (discounted at the rate of interest implicit in such transaction,
determined in accordance with GAAP) of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Available Commitment": as to any Lender and any Type of Loan,
at any time, an amount equal to the excess, if any, of (a) such Lender's
Commitment with respect to such Type of Loan minus (b) such Lender's Aggregate
Outstanding Extensions of Credit with respect to such Type of Loan.
"Base Rate": for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the per annum rate of interest in
effect for such day as announced from time to time by the Administrative Agent
as its "Base Rate" or the substantial equivalent of any thereof.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Black Beauty": Black Beauty Coal Company, an Indiana general
partnership.
"Black Beauty Acquisition": the acquisition by the Borrower or
one of its Restricted Subsidiaries of all of the outstanding Capital Stock of
Black Beauty Resources, Inc., which as of the Effective Date owns all of the
outstanding Capital Stock of Black Beauty not already owned by the Borrower or
such Restricted Subsidiary.
"Black Beauty Collateral Event": the grant of a perfected,
first priority Lien (subject only to Permitted Liens) to the Administrative
Agent for the ratable benefit of the Secured Parties on substantially all of the
assets and property of Black Beauty.
"Black Beauty Condition": as defined in subsection 6.10(e).
"Black Beauty Debt": the revolving credit facility of Black
Beauty, maturing in April 2004.
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"Black Lung Act": collectively, the Black Lung Benefits
Revenue Act of 1977, as amended and the Black Lung Benefits Reform Act of 1977,
as amended.
"Blanket Grantor": a Credit Party that has granted a
perfected, first priority Lien (subject only to Permitted Liens) on
substantially all of its assets to the Administrative Agent for the ratable
benefit of the Secured Parties.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.2 as a date on which the Borrower requests the Lenders
to make Loans hereunder.
"Business": as defined in subsection 4.16(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York, or Boston, Massachusetts,
are authorized or required by law to close and, if the applicable Business Day
relates to LIBOR Loans, any day on which dealings are carried on in the
applicable London interbank market.
"Capital Expenditures": for any fiscal period, the aggregate
of all expenditures that, in conformity with GAAP (but excluding capitalized
interest), are or are required to be included as additions during such period to
property, plant or equipment reflected on the consolidated balance sheet of the
Borrower and its Subsidiaries, excluding the non-cash component of any federal
coal lease obligations during such period.
"Capital Lease Obligations": of any Person as of the date of
determination, the aggregate liability of such Person under Financing Leases
reflected on a balance sheet of such Person under GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 90 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2 by S&P
or P-2 by ▇▇▇▇▇'▇, or carrying an equivalent rating by a nationally recognized
rating agency if both of S&P and ▇▇▇▇▇'▇ cease publishing ratings of
investments, (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by ▇▇▇▇▇'▇, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
principally in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change in Control": (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), excluding
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LBMBP II and its Affiliates shall (x) become, or obtain rights (whether by means
or warrants, options or otherwise) to become, the "beneficial owner" (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
a greater percentage of the outstanding common stock of the Borrower than the
percentage of such common stock owned by LBMBP II and its Affiliates or (y) have
the power to vote or direct the voting of securities having a majority of the
ordinary voting power for the election of directors or managers of the Borrower
(determined on a fully diluted basis) or (ii) a "Change of Control" (as defined
in the Senior Notes Indenture as in effect on the Effective Date).
"Class": (i) Lenders having Revolving Credit Loan Exposure and
(ii) Lenders having Term Loan Exposure.
"Coal": all of the coal owned or leased by any Credit Party
and (i) located on, under, or within, or (ii) produced and severed from, the
properties owned or leased by any Credit Party.
"Coal Act": the Coal Industry Retiree Health Benefits Act of
1992, as amended.
"Coal Supply Agreements": those contracts now in effect or
hereafter entered into by the Borrower or any of its Subsidiaries for the sale,
purchase, exchange, processing or handling of Coal with an initial term of more
than one year.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Credit Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by this
Agreement or any Security Document.
"Collateral Account": as defined in subsection 6.23.
"Collateral Amount": as defined in subsection 7.6.
"Commitment": as to any Lender, such Lender's Term Loan
Commitment and Revolving Credit Commitment.
"Commitment Fee Rate": at any time, the rate per annum set
forth on Schedule I under the relevant column heading opposite the level of the
Usage Ratio as of such date.
"Commitment Letter": the letter agreement dated as of March 3,
2003, among the Borrower, and the Arrangers, the Administrative Agent and the
Syndication Agents.
"Commitment Percentage": as to the Commitment of any Lender
with respect to any Type of Loan at any time, the percentage which the
Commitment of such Lender with respect to such Type of Loan then constitutes of
the aggregate Commitments with respect to such Type of Loan (or, at any time
after such Commitments shall have expired or terminated, the percentage which
the aggregate amount of the Aggregate Outstanding Extensions of Credit of such
Lender with respect to such Type of Loan constitutes of the aggregate amount of
the Aggregate Outstanding Extensions of Credit of all Lenders with respect to
such Type of Loan).
"Commitment Period": the period from and including the
Effective Date to but not including the Revolving Loan Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
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"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 (b) or (c) of the Code.
"Consolidated": consolidation in accordance with GAAP, but
excluding any Unrestricted Subsidiary.
"Consolidated Cash Interest Expense": as of the last day of
any fiscal quarter, the amount of interest expense and letter of credit fees and
commissions (in each case payable in cash) of the Borrower and its Restricted
Subsidiaries determined in accordance with GAAP, for the four fiscal quarters
ended on such date; provided that Consolidated Cash Interest Expense shall
exclude prepayment premiums and penalties in connection with the redemption of
the Existing Notes.
"Consolidated EBITDA": as of the last day of any fiscal
quarter, Consolidated Net Income for such quarter (excluding without
duplication, (w) noncash compensation expenses related to common stock and other
equity securities issued to employees, (x) extraordinary or non-recurring gains
and losses in accordance with GAAP, (y) gains or losses on discontinued
operations and (z) any FAS 121 writedowns, in each case for such quarter), plus
(i) consolidated interest expense for such quarter, determined in accordance
with GAAP, plus (ii) any minority interests share of income and losses, plus
(iii) to the extent deducted in computing such Consolidated Net Income, the sum
of all income taxes, depreciation, depletion and amortization of property,
plant, equipment and intangibles, plus (iv) any debt extinguishment costs plus
(v) non-cash charges due to cumulative effects of changes in accounting
principles, in each case for such quarter; provided, however that for the
purposes of this Agreement, EBITDA derived from broker and trading operations
shall not be included in Consolidated EBITDA as of the last day of any fiscal
quarter to the extent that such EBITDA derived from broker and trading
operations (accounted for on a ▇▇▇▇ to market basis) exceeded 20% of
Consolidated EBITDA as of the last day of any fiscal quarter.
"Consolidated EBITDA to Consolidated Cash Interest Expense
Ratio": as of any date of determination, the ratio of Consolidated EBITDA to
Consolidated Cash Interest Expense for the preceding four fiscal quarters ended
on such date.
"Consolidated Net Income": for any fiscal period, net income
of the Borrower and its Restricted Subsidiaries for such period, determined in
accordance with GAAP.
"Consolidated Secured Debt": at any date, all Consolidated
Total Obligations of the Borrower and its Consolidated Subsidiaries that are
secured by a Lien.
"Consolidated Secured Debt to Consolidated EBITDA Ratio": as
of any date of determination, the ratio of Consolidated Secured Debt to
Consolidated EBITDA for the preceding four fiscal quarters ended on such date.
"Consolidated Total Debt": at any date, all indebtedness of
the Borrower and its Restricted Subsidiaries outstanding on such date for
borrowed money, obligations pursuant to standby letters of credit (other than
Designated Letters of Credit), the deferred purchase price of property (other
than (i) current trade liabilities incurred in the ordinary course of business
and payable in accordance with customary practices and accrued expenses incurred
in the ordinary course of business, (ii) obligations under federal coal leases,
(iii) obligations under coal leases which may be terminated at the discretion of
the lessee and (iv) deferred purchase obligations in connection with the
acquisition of the ▇▇▇▇▇▇▇▇ mine)
6
and all obligations of the Borrower and its Restricted Subsidiaries in respect
of Financing Leases; provided, that Consolidated Total Debt shall not include,
in any event, Non-Recourse Debt.
"Consolidated Total Obligations": at any date, the sum of (a)
Consolidated Total Debt plus (b) Project Guarantee Obligations plus (c) amounts
due under securitization programs of any Credit Party (other than the Existing
Securitization) permitted pursuant to subsections 7.2 and 7.6.
"Consolidated Total Obligations to Consolidated EBITDA Ratio":
as of any date of determination, the ratio of Consolidated Total Obligations to
Consolidated EBITDA for the preceding four fiscal quarters ended on such date.
"Consolidated Working Capital": at any date, the excess of (a)
the sum of all amounts (other than cash and Cash Equivalents) that would, in
accordance with GAAP, be set forth opposite the caption "total current assets"
(or any like caption) on a consolidated balance sheet of the Borrower and its
Restricted Subsidiaries at such date minus (b) the sum of all amounts that
would, in accordance with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Restricted Subsidiaries on such date (excluding, to the extent
it would otherwise be included under current liabilities, any short-term
Consolidated Total Debt and the current portion of any long-term Consolidated
Total Debt).
"Constitutional Documents": as to any Person, the articles or
certificate of incorporation and by-laws, partnership agreement, limited
liability company agreement, shareholders agreement or other organizational
documents of such Person.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents": this Agreement, the Notes, the
Applications, the Subordination Agreement and the Security Documents.
"Credit Event": the obligation of any Lender to make a Loan or
of the Issuing Lender to issue a Letter of Credit.
"Credit Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Credit Document.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Default Rate": as defined in subsection 2.9(c).
"Designated Letters of Credit": letters of credit issued with
respect to mine reclamation, workers compensation and other employee benefit
liabilities.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": for any Person, as of the last day of any fiscal
quarter, Net Income of such Person for such quarter (excluding without
duplication, (w) noncash compensation expenses related to common stock and other
equity securities issued to employees, (x) extraordinary or non-recurring gains
and losses in accordance with GAAP, (y) gains or losses on discontinued
operations and (z) any FAS 121
7
writedowns, in each case, for such quarter), plus (i) consolidated interest
expense for such quarter, determined in accordance with GAAP, plus (ii) any
minority interests share of income and losses plus (iii) to the extent deducted
in computing such Net Income, the sum of all income taxes, depreciation,
depletion and amortization of property, plant, equipment and intangibles, in
each case, for such quarter plus (iv) any debt extinguishment costs plus (v)
non-cash charges due to cumulative effects of changes in accounting principles,
in each case for such quarter.
"Effective Date": the first date on which all of the
conditions precedent set forth in subsection 5.1 have been satisfied.
"EPC Contract": a turn-key engineering, procurement and
construction contract among the Borrower (or one of its Affiliates) and one or
more nationally recognized construction contractors that provides for a
guaranteed fixed price and completion date for the Approved Project, and that
contains performance and completion obligations that are usual and customary for
engineering, procurement and construction contracts for projects substantially
similar to the Approved Project (as reasonably determined by the Administrative
Agent).
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the net decrease, if any, in Consolidated Working Capital
during such fiscal year, (iii) to the extent deducted in computing such
Consolidated Net Income, non-cash interest expense, depreciation, depletion and
amortization for such fiscal year, (iv) extraordinary non-cash losses during
such fiscal year subtracted in the determination of Consolidated Net Income for
such fiscal year, (v) net decrease in deferred income tax assets or net increase
in deferred income tax liabilities of the Borrower and its Restricted
Subsidiaries for such fiscal year, (vi) non-cash losses in connection with asset
dispositions whether or not constituting extraordinary losses and (vii) non-cash
ordinary losses in excess of (b) the sum, without duplication, of (i) the
aggregate amount of permitted cash Capital Expenditures made by the Borrower and
its Restricted Subsidiaries during such fiscal year, (ii) the net increase, if
any, in Consolidated Working Capital during such fiscal year, (iii) the
aggregate amount of payments of principal in respect of any Indebtedness not
prohibited hereunder during such fiscal year (other than prepayments of
Revolving Credit Loans not accompanied by reductions of the Commitments and
prepayments of other short-term lines of credit), (iv) net increase in deferred
income tax assets or net decrease in deferred income tax liabilities of the
Borrower and its Restricted Subsidiaries for such fiscal year, (v) extraordinary
non-cash gains during such fiscal year added in the determination of
Consolidated Net Income for such fiscal year, (vi) non-cash gains in connection
with asset dispositions whether or not constituting extraordinary gains and
(vii) non-cash ordinary gains.
"Excess Cash Flow Payment Date": in respect of any fiscal
year, the date on which the Borrower is required to deliver audited financial
statements for such fiscal year to each Lender pursuant to subsection 6.1(a).
"Existing Notes": the Borrower's 8 7/8% Senior Notes, due 2008
and 9 5/8% Senior Subordinated Notes, due 2008.
8
"Existing Securitization": the accounts receivable
securitization financing of P&L Receivables Company LLC, existing as of the
Effective Date.
"Federal Funds Rate": means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighed
average of the per annum rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers as
published by the Federal Reserve Bank of New York for such day (or, if such rate
is not so published for any day, the average of the rates quoted by three
federal funds brokers to the Administrative Agent on such day on such
transactions).
"Final Maturity Date": March 21, 2010.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"First Restated Credit Agreement": as defined in the preamble
hereto.
"Foreign Subsidiary": any Subsidiary which is organized under
the laws of any jurisdiction outside the United States or under the laws of the
U.S. Virgin Islands, excluding any such Subsidiary that is, as of the date of
determination, treated as (i) a domestic entity or (ii) a partnership or a
division of a domestic entity, in each case for United States federal income tax
purposes.
"FRB": means the Board of Governors of the Federal Reserve
System, and any governmental authority succeeding to any of its principal
functions.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time; provided, that with respect to
Australian Subsidiaries of the Borrower, "GAAP" shall mean generally accepted
accounting principles in Australia to the extent such principles are permitted
to be applied in accordance with generally accepted accounting principles in the
United States of America. In the event that any "Accounting Change" (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee and Collateral Agreement": the Amended and Restated
Guarantee and Collateral Agreement, dated as of the date hereof, substantially
in the form of Exhibit B, among the Borrower, the Subsidiaries from time to time
party thereto and the Administrative Agent, for the benefit
9
of the Secured Parties, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to the
extent the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation in order to induce the creation of such obligation, in either
case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, reimbursement obligations under letters of credit and any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include (i) indemnification or reimbursement
obligations under or in respect of Surety Bonds or Designated Letters of Credit,
(ii) ordinary course performance guarantees by any Credit Party of the
obligations (other than for the payment of borrowed money) of any other Credit
Party and (iii) endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Hedge Agreement": any Interest Rate Agreement, and any
currency future or option contract, commodities future or option contract for
materials used in the ordinary course of business and other similar agreements.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices and accrued expenses incurred in the ordinary course of business), (b)
any other indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person under
Financing Leases, (d) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (e) all liabilities secured by
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, (f) all Attributable
Debt of such Person with respect to sale and leaseback transactions of such
Person, (g) obligations of such Person in respect of Hedge Agreements (on a net
basis with respect to any counterparty), (h) all obligations of such Person for
Production Payments from property operated by or on behalf of such Person and
(i) all Guarantee Obligations of such Person that have been deemed to be
Indebtedness in accordance with subsection 7.4(a).
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
10
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last Business Day of each March, June, September and December, (b) as to any
LIBOR Loan having an Interest Period of three months or less, the last Business
Day of such Interest Period, and (c) as to any LIBOR Loan having an interest
period longer than three months, (i) each Business Day which is three months or
a whole multiple thereof after the first day of such Interest Period and (ii)
the last Business Day of such Interest Period.
"Interest Period": with respect to any LIBOR Loan:
(a) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect to such
LIBOR Loan and ending one, two, three or six, and to the extent
available to all the Lenders, nine or twelve months thereafter, as
selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the
last day of the preceding Interest Period applicable to such LIBOR Loan
and ending one, two, three or six, and to the extent available to all
the Lenders, nine or twelve months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR
Loan would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period for any Loan that would
otherwise extend beyond the Termination Date of such Loan shall end on
the Termination Date of such Loan;
(iii) any Interest Period pertaining to a LIBOR
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month in which such Interest Period would otherwise be scheduled to
end) shall end on the last Business Day of the appropriate calendar
month; and
(iv) no Interest Period with respect to any
portion of any Term Loan shall extend beyond a date on which the
Borrower is required to make a scheduled payment of principal of Term
Loans unless the sum of (a) the aggregate principal amount of Term
Loans that are Base Rate Loans plus (b) the aggregate principal amount
of Term Loans that are LIBOR Rate Loans with Interest Periods expiring
on or before such date equals or exceeds the principal amount required
to be paid on Term Loans on such date.
"Interest Rate Agreement": any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
future or option contract, or other similar agreement or arrangement.
11
"Interest Rate Agreement Obligations": the obligations of the
Borrower or any of its Subsidiaries to make payments to counterparties under
Interest Rate Agreements in the event of the occurrence of a termination event
thereunder.
"Investments": as defined in subsection 7.9.
"Issuing Lender": such Lender or Lenders that agree to act as
Issuing Lender at the request of the Administrative Agent and the Borrower.
"Joint Venture": any Person (other than a Subsidiary) in which
the Borrower and its Subsidiaries collectively hold an ownership interest.
"LBMBP II": ▇▇▇▇▇▇ Brothers Merchant Banking Partners II L.P.,
a Delaware limited partnership.
"L/C Fee Payment Date": the last Business Day of each March,
June, September and December.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed pursuant to subsection 3.5.
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Lender" and "Lenders": as defined in the preamble hereto and
including the Issuing Lender and the Swing Line Lender; provided that the term
"Lenders", when used in the context of a particular Commitment, shall mean
Lenders having that Commitment.
"Lender Addendum": with respect to any Lender to be a party
hereto on the date hereof (other than by assignment) that is not an Original
Lender, a Lender Addendum, substantially in the form of Exhibit H, to be
executed and delivered by such Lender on the Effective Date as provided in
subsection 10.18.
"Letters of Credit": as defined in subsection 3.1(a).
"LIBOR": with respect to each day during each Interest Period,
the rate appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to commencement of such Interest Period, as
the rate of interest for dollar deposits in the approximate amount of the Loan
to be made or continued as, or converted into, a LIBOR Rate Loan and having a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then LIBOR shall be the rate of interest
per annum determined by the Administrative Agent to be the arithmetic mean
(rounded upward to the next 1/16th of 1%) of the rates of interest per annum
notified to the Administrative Agent by each Reference Bank as the rate of
interest at which dollar deposits in the approximate amount of the amount of the
Loan to be made or continued as, or converted into, a LIBOR Rate Loan by such
Reference Bank and having a maturity comparable to such Interest Period would be
12
offered to such Reference Bank in the London interbank market at its request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"LIBOR Loans": Loans the rate of interest applicable to which
is based upon the LIBOR Rate.
"LIBOR Rate": means, for any Interest Period, with respect to
LIBOR Loans comprising part of the same borrowing, the rate of interest per
annum (rounded upward to the next 1/16th of 1%) determined by the Administrative
Agent as follows:
LIBOR Rate = LIBOR
-----
1.00 - LIBOR Reserve Percentage
"LIBOR Reserve Percentage": for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities").
"Lien": any mortgage, deed of trust, charge, pledge,
hypothecation, assignment, easement, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"▇▇▇▇▇▇▇▇ mine": the closed deep mine located in ▇▇▇▇▇▇
County, West Virginia, also known as the Tygart River Mine.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, operations, property or condition (financial or otherwise)
of the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
validity or enforceability of this or any of the other Credit Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder or (c)
the value of the Collateral taken as a whole or the ability of the Agents and
the Lenders to realize thereon.
"Materials of Environmental Concern": any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under, or
that could give rise to liability under, any applicable Mining and Environmental
Law, including, without limitation, asbestos, polychlorinated biphenyls,
urea-formaldehyde insulation, gasoline or petroleum (including crude oil or any
fraction thereof) or petroleum products.
"Mine": any excavation or opening into the earth now and
hereafter made from which Coal is or can be extracted on or from any of the
properties owned or leased by any Credit Party, together with all appurtenances,
fixtures, structures, improvements, and all tangible property of whatsoever kind
or nature in connection therewith, including without limitation the Mines
described in Schedule 4.23.
"Mining and Environmental Laws": any and all applicable
current and future federal, state, local and foreign statutes, laws,
regulations, guidances, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions
13
or common law causes of action relating to mining operations and activities or
to the environment or to emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes or to the reclamation of lands. Mining and Environmental
Laws shall include, but not be limited to the Federal Coal Leasing Amendments
Act, the Surface Mining Control and Reclamation Act, all other land reclamation
and use statutes and regulations, the Federal Coal Mine Health and Safety Act,
the Comprehensive Environmental Response, Compensation, and Liability Act; the
Resource Conservation and Recovery Act; the Toxic Substances Control Act; the
Federal Water Pollution Control Act; the Hazardous Materials Transportation Act;
the Clean Air Act; the Safe Drinking Water Act; the Occupational Safety and
Health Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act, the Black Lung Act and the Coal Act, each as amended,
and their state and local counterparts or equivalents.
"Mining and Environmental Permits": any and all permits,
licenses, registrations, notifications, exemptions and any other authorization
required under any applicable Mining and Environmental Law.
"▇▇▇▇▇'▇": ▇▇▇▇▇'▇ Investor's Service, Inc., or any successor
entity.
"Mortgages": the collective reference to the mortgages, deeds
of trust, fixture filings (whether recorded as part of such mortgages or deeds
of trust or as separate instruments), assignments of rent, and any other
functionally similar instruments or agreements, securing the obligations under
the Credit Documents, and covering certain real property (whether owned or
leased) of the Borrower or the appropriate Restricted Subsidiary as contemplated
hereunder, to be executed and delivered by the Borrower or such Restricted
Subsidiary in form and substance reasonably satisfactory to the Agents, as the
same may be amended, supplemented or otherwise modified from time to time
(individually, a "Mortgage").
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 3(37) or Section 4001(a)(3) of ERISA.
"Net Income": for any Person for any fiscal period, net income
of such Person for such period, determined in accordance with GAAP.
"Net Proceeds": the aggregate cash proceeds (including Cash
Equivalents) received by the Borrower or any of its Restricted Subsidiaries in
respect of:
(a) any issuance after the Effective Date by the
Borrower or any of its Restricted Subsidiaries of (i) indebtedness for
borrowed money and (ii) any other indebtedness of the Borrower or its
Restricted Subsidiaries evidenced by a note, bond, debenture or similar
instrument;
(b) any Asset Sale by the Borrower or any
Restricted Subsidiary; and
(c) any cash payments received in respect of
promissory notes or other evidences of indebtedness delivered to the
Borrower or such Restricted Subsidiary in respect of any such Asset
Sale;
14
in each case net of (without duplication) (i) (A) in the case of an Asset Sale,
the amount required to repay any Indebtedness (other than the Loans) secured by
a Lien on any assets of the Borrower or a Subsidiary of the Borrower that are
sold or otherwise disposed of in connection with such Asset Sale and (B)
reasonable and appropriate amounts established by the Borrower or such
Subsidiary, as the case may be, as a reserve against liabilities associated with
such Asset Sale and retained by the Borrower or such Subsidiary, (ii) the
reasonable expenses (including legal fees and brokers' and underwriters'
commissions, lenders fees, credit enhancement fees, accountants' fees,
investment banking fees, survey costs, title insurance premiums and other
customary fees, in any case, paid to third parties or, to the extent permitted
hereby, Affiliates) incurred in effecting such issuance or sale and (iii) any
taxes reasonably attributable to such sale and reasonably estimated by the
Borrower or such Subsidiary to be actually payable.
"Non-Excluded Taxes": as defined in subsection 2.15(a).
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Borrower nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) other than a pledge of the equity interests of any
Unrestricted Subsidiary, (b) is directly or indirectly liable (as a guarantor or
otherwise) other than by virtue of a pledge of the equity interests of any
Unrestricted Subsidiary, or (c) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against any Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Obligations) of the Borrower or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders thereunder will not have any recourse to the Capital Stock or assets of
the Borrower or any of its Restricted Subsidiaries (other than the equity
interests of any Unrestricted Subsidiary).
"Non-U.S. Lender": as defined in subsection 2.15(b).
"Notes": the collective reference to the Term Notes, the
Revolving Credit Notes and the Swing Line Note, if any, evidencing Loans.
"Notice of Borrowing": as defined in subsection 2.2.
"Obligations": as defined in the Security Documents.
"Operating Equipment": all surface and subsurface machinery,
equipment, facilities and other property of every kind or nature now owned or
hereafter acquired (by purchase or lease) by the Borrower or any Subsidiary,
which are useful for the processing or transportation of Coal, including, but
not by way of limitation, all hoisting shafts, air shafts, draglines, miners,
longwall units, engines, boilers, dynamos, generators, belts and conveyor belts
and other electrical apparatus, drills, machinery and tipples, store houses and
other buildings of every kind, used in connection with the Mines; and all
trucks, shovels, endloaders, dozers, loaders, tools, supplies, equipment and
personal property of every kind or nature now owned or hereafter acquired by the
Borrower or any Subsidiary for use, or used in connection with the Mines or the
processing and transportation of Coal.
"Original Lender": as defined in the preamble to this
Agreement.
"Participants": as defined in subsection 10.6(b).
15
"Partner Support": the guarantee or such other credit support
as required by the Qualified Project Lenders provided by each of the Project
Partners in support of the Project Construction Financing.
"Partner Support Amount": the dollar amount of the aggregate
Partner Support.
"Partner Support Percentage": the Partner Support Amount
divided by the total dollar amount, including accrued interest and fees, of the
Project Construction Financing.
"Patent Security Agreements": the agreements dated as of June
9, 1998 by certain Credit Parties in favor of the Administrative Agent (as
defined in the First Restated Credit Agreement), for the benefit of the Agents
(as defined in the First Restated Credit Agreement) and the Original Lenders, as
amended, modified, restated, supplemented and in effect from time to time.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any successor thereto.
"Permitted Liens": Liens permitted to exist under subsection
7.3.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PHCI": Peabody Holding Company, Inc., a New York corporation.
"Plan": at a particular time, any employee benefit plan as
defined in Section 3(3) of ERISA which the Borrower or any Commonly Controlled
Entity maintains, administers, contributes to or is required to contribute to,
or under which the Borrower or any Commonly Controlled Entity could reasonably
be expected to incur any liability.
"Prairie State Power Generation Project" or "Prairie State":
that certain project to construct and operate an approximately 1,500 megawatt
capacity coal-fired electricity generation plant on an approximately 1,150 acre
reclaimed mine site owned by an Affiliate of the Borrower in Washington County,
Illinois. Prairie States shall be fueled with coal substantially extracted from
coal reserves owned or contributed by the Borrower or one of its Affiliates by a
coal mining facility to be constructed as part of the Prairie State Power
Generation Project, both of which shall be located immediately adjacent to the
power generation facility.
"Production Payments": with respect to any Person, all
production payment obligations and other similar obligations with respect to
coal and other natural resources of such Person that are recorded as a liability
or deferred revenue on the financial statements of such Person in accordance
with GAAP.
"Project Construction Financing": limited recourse loans,
advances or lease proceeds provided by the Qualified Project Lenders sufficient
to provide at least 70% of the Total Project Cost.
"Project Entity": the partnership or corporation formed for
the purpose of constructing and operating the Approved Project.
"Project Guarantee Obligation": the guarantee by one or more
of the Credit Parties in support of the Project Construction Financing, provided
that the amount of such Project Guarantee
16
Obligation shall represent no larger a percentage of the Partner Support Amount
than the Borrower's percentage equitable ownership interest in the Project
Entity.
"Project Guarantee Obligations Conditions Precedent": the
following conditions:
(i) the Borrower (or an Affiliate thereof) shall have
executed a partnership agreement reasonably
satisfactory to the Administrative Agent establishing
the Project Entity with one or more Qualified
Partners (together with the Borrower, the "Project
Partners"), at least one of which shall be a
Qualified Operating Partner with an economic interest
in the Project Entity of not less than 25%;
(ii) the Borrower shall hold no more than a 50% economic
and voting interest in the Project Entity;
(iii) the EPC Contract shall have been executed and
delivered by the Project Entity and each other party
thereto;
(iv) the Project Entity shall have received written
financing commitments from Qualified Project Lenders
for the Project Construction Financing, such
commitments subject only to provision of (a)
documented Partner Support as required by the
Qualified Project Lenders and (b) receipt of
financing commitments for permanent take-out
financing;
(v) the Project Entity shall have received documented
evidence reasonably satisfactory to the
Administrative Agent of Partner Support from each of
the Qualified Partners executed substantially
simultaneously with the Project Guarantee Obligation;
and
(vi) receipt by the Administrative Agent and the
Syndication Agents of a satisfactory report from a
reputable and experienced industry consultant,
reasonably satisfactory to the Administrative Agent
and the Syndication Agents, confirming the
feasibility and economic viability of the Approved
Project.
"Project Partners": as defined in the definition of "Project
Guarantee Obligations Conditions Precedent".
"Properties": as defined in subsection 4.16.
"Prudential Note": that certain 5% Subordinated Income Note
Due March 1, 2007, made by PHCI in favor of The Prudential Insurance Company of
America (as successor-in-interest to Kennecott Copper Corporation), dated June
30, 1977 (as amended by Amendment No. 1 dated as of February 8, 1991, and
Amendment No. 2 dated as of September 9, 1992), in a principal amount as of the
Effective Date of approximately $90,000,000.
"Purchase Agreement": the Purchase Agreement, dated as of
March 14, 2003, among the Borrower, the guarantors named therein, ▇▇▇▇▇▇
Brothers Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and the other initial
purchasers named therein.
"Qualified Operating Partner": a Qualified Partner that is a
nationally recognized operator of coal-fired power generation plants and
otherwise reasonably satisfactory to the Arrangers.
17
"Qualified Partner": a corporation or financial institution
rated at least BBB and Baa2 by S&P and ▇▇▇▇▇'▇, respectively, and otherwise
reasonably satisfactory to the Arrangers.
"Qualified Project Lenders": one or more financial
institutions rated at least BBB+ and Baa1 by S&P and ▇▇▇▇▇'▇, respectively, with
tangible capital of no less than $500,000,000 and with specific experience in
the financing of projects substantially similar to the Approved Project.
"Reference Bank": each of the Administrative Agent and
Wachovia Bank, National Association.
"Refinancing Indebtedness": as defined in subsection 7.2(i).
"Refunded Swing Line Loan": as defined in subsection
2.1(b)(iii).
"Register": as defined in subsection 10.6(d).
"Registration Rights Agreement": the Registration Rights
Agreement, dated as of March 21, 2003, among the Borrower, the guarantors named
therein and the initial purchasers named therein.
"Regulation H": Regulation H of the FRB as in effect from time
to time.
"Regulation U": Regulation U of the FRB as in effect from time
to time.
"Regulation X": Regulation X of the FRB as in effect from time
to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5 for amounts drawn under
Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under the regulations of the PBGC.
"Required Lenders": at any time, Lenders the Commitment
Percentages for all Types of Loans of which aggregate more than 50%.
"Requirement of Law": as to any Person, the Constitutional
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Requisite Class Lenders": at any time, (a) for the Class
Lenders having Term Loan Exposure, Lenders having or holding more than 50% of
the aggregate Term Loan Exposure of all Lenders and (b) for the Class Lenders
having Revolving Credit Loan Exposure, Lenders having or holding more than 50%
of the aggregate Revolving Credit Loan Exposure of all Lenders.
"Responsible Officer": the chief executive officer, the
president or any vice president of the Borrower or, with respect to financial
matters, the chief financial officer or treasurer of the Borrower.
18
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary. For the avoidance of
doubt, as of the Effective Date Black Beauty is a Restricted Subsidiary.
"Revolving Credit Commitment": the commitment of a Lender, as
set forth in the Register (with respect to any Original Lender that is also a
Lender hereunder on the Effective Date) or as set forth on Schedule 1 to the
Lender Addendum delivered by such Lender (or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof) to
make Revolving Credit Loans to the Borrower pursuant to subsection 2.1(a)(ii)
and, to issue and/or purchase participations in Letters of Credit pursuant to
Section 3; and "Revolving Credit Commitments" means such commitments of all
Lenders in the aggregate, which shall be $600,000,000.
"Revolving Credit Lender": any Lender having a Revolving
Credit Commitment or a Revolving Credit Loan outstanding.
"Revolving Credit Loans": the Loans made (or deemed made) by
Revolving Credit Lenders to the Borrower pursuant to subsection 2.1(a)(ii).
"Revolving Credit Loan Exposure": with respect to any Lender
as of any date of determination, (i) if there are no outstanding Letters of
Credit or Revolving Credit Loans, that Lender's Revolving Credit Commitment, and
(ii) otherwise, the sum of (a) the aggregate outstanding principal amount of the
Revolving Credit Loans of that Lender plus (b) in the event that Lender is an
Issuing Lender, the aggregate face amount in respect of all Letters of Credit
issued by that Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder) plus
(c) in the event that such Lender is the Swing Line Lender, the aggregate
principal amount of Swing Line Loans made by such Lender then outstanding (net
of any participations purchased by other Lenders in such Swing Line Loans) plus
(d) the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans or Letters of Credit or any unreimbursed drawings
under any Letters of Credit.
"Revolving Credit Note": as defined in subsection 2.5(g)(B).
"Revolving Loan Termination Date": March 21, 2008.
"S&P": Standard and Poor's Ratings Group, or any successor
entity.
"Secured Parties": collectively, the Agents, the Lenders and,
with respect to any Specified Hedge Agreement, any affiliate of any Lender party
thereto (or any Person that was a Lender or an affiliate thereof when such
Specified Hedge Agreement was entered into) that has agreed to be bound by the
provisions of Section 7.2 of the Guarantee and Collateral Agreement as if it
were a party thereto and by the provisions of Section 9 hereof as if it were a
Lender party hereto.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Patent Security Agreements, the
Trademark Security Agreement, the Mortgages and all other security documents now
or hereafter delivered to the Administrative Agent in connection with this
Agreement granting a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Borrower under the First Restated Credit
Agreement and/or this Agreement and under any of the other Credit Documents or
to secure any guarantee of any such obligations and liabilities.
19
"Senior Notes": $650,000,000 in aggregate principal amount of
the Borrower's 6 7/8% Senior Notes, due 2013 (the "Initial Senior Notes"),
issued on the Effective Date, and the senior notes of the Borrower, having the
same principal amount and other terms as the Initial Senior Notes, issued in
exchange for the Initial Senior Notes as contemplated by the Senior Notes
Documents.
"Senior Notes Documents": the Senior Notes Indenture, the
Registration Rights Agreement, the Purchase Agreement and the Senior Notes.
"Senior Notes Indenture": the Indenture, dated as of March 21,
2003, among the Borrower, the guarantors named therein and US Bank National
Association, as trustee, pursuant to which the Senior Notes are issued.
"Similar Business": coal production, coal mining, coal
brokering, coal transportation, mine development, electricity generation,
power/energy sales and other energy related businesses, coal supply contract
restructurings, ash disposal, environmental remediation, coal and coal bed
methane exploration, production, marketing, transportation and distribution,
real estate development and other related businesses, and activities of the
Borrower and its Subsidiaries as of the date hereof and any business or activity
that is reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Specified Hedge Agreement": any Hedge Agreement (a) entered
into by (i) the Borrower or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, or any Person that was a Lender or an affiliate thereof when
such Hedge Agreement was entered into as counterparty and (b) which has been
designated by such Lender and the Borrower, by notice to the Administrative
Agent and the Syndication Agents not later than 90 days after the execution and
delivery thereof by the Borrower or such Subsidiary, as a Specified Hedge
Agreement; provided that the designation of any Hedge Agreement as a Specified
Hedge Agreement shall not create in favor of any Lender or affiliate thereof
that is a party thereto any rights in connection with the management or release
of any Collateral or of the obligations of any Guarantor under the Guarantee and
Collateral Agreement.
"Specified Subsidiary": any Subsidiary whose EBITDA determined
for the fiscal quarter most recently ended prior to the time of determination
hereunder was greater than or equal to 20% of the Consolidated EBITDA of the
Borrower and its Subsidiaries for such fiscal quarter, as determined in
accordance with GAAP.
"Subordination Agreement": the Amended and Restated
Subordination Agreement, dated as of the date hereof, substantially in the form
of Exhibit G, among the Credit Parties, as subordinated creditors, in favor of
the Agents and the Lenders, as senior creditors, pursuant to which all
Indebtedness of any Credit Party to any other Credit Party is subordinated to
the Obligations.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, directly or indirectly, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
20
"Surety Bonds": surety bonds obtained by the Borrower or any
Restricted Subsidiary in the ordinary course of business consistent with past
practice and the indemnification or reimbursement obligations of the Borrower or
such Restricted Subsidiary in connection therewith as to which reserves with
respect to the underlying obligations are maintained in accordance with GAAP.
"Swing Line Lender": means Fleet National Bank or such other
Lender that agrees to act as Swing Line Lender at the request of the
Administrative Agent and the Borrower.
"Swing Line Loans": as defined in subsection 2.1(b).
"Swing Line Note": as defined in subsection 2.1(b)(ii).
"Tangible Assets": at any date, (a) the sum of all amounts
that would, in accordance with GAAP, be set forth opposite the caption "total
assets" (or any like caption) on a consolidated balance sheet of the Borrower
and its Restricted Subsidiaries at such date minus (b) the sum of all amounts
that would, in accordance with GAAP, be set forth opposite the captions
"goodwill" or other intangible categories (or any like caption) on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries on
such date.
"Term Lender": any Lender having a Term Loan Commitment or a
Term Loan outstanding.
"Term Loans": the Loans made by Term Lenders to the Borrower
pursuant to subsection 2.1(a)(i).
"Term Loan Commitment": the commitment of a Term Lender, as
set forth in the Register (with respect to any Original Lender that is also a
Lender hereunder on the Effective Date) or as set forth on Schedule 1 to the
Lender Addendum delivered by such Lender (or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof), to
make a Term Loan to the Borrower pursuant to subsection 2.1(a)(i); and "Term
Loan Commitments" means such commitments of all Term Lenders in the aggregate,
which shall be $450,000,000.
"Term Loan Exposure": with respect to a Lender of a Term Loan
as of any date of determination, (i) prior to the termination of all of a
Lender's Commitment with respect to the Term Loans, that Lender's Commitment
with respect to Term Loans (or any portion thereof that has not been terminated)
plus the outstanding principal amount of the Term Loan of that Lender, and (ii)
after the termination of all of a Lender's Commitment with respect to the Term
Loans, the outstanding principal amount of the Term Loan of that Lender.
"Term Loan Termination Date": March 21, 2010.
"Term Note": as defined in subsection 2.5(g)(A).
"Termination Date": (i) with respect to Term Loans, the Term
Loan Termination Date and (ii) with respect to Revolving Credit Loans and Swing
Line Loans, the Revolving Loan Termination Date.
"Thoroughbred Power Generation Project" or "Thoroughbred":
that certain project to construct and operate an approximately 1,540 megawatt
capacity coal-fired electricity generation plant on an approximately 4,100 acre
reclaimed mine site owned by an Affiliate of the Borrower in Muhlenberg
21
County, Kentucky. Thoroughbred shall be fueled with coal substantially extracted
from coal reserves owned or contributed by the Borrower or one of its Affiliates
at a coal mining facility to be constructed as part of the Thoroughbred Power
Generation Project, both of which shall be located immediately adjacent to the
power generation facility.
"Title Opinion": as defined in subsection 6.10(c).
"Title Policy": as defined in subsection 6.10(c).
"Total Assets": the total assets of the Borrower and its
Consolidated Subsidiaries, as shown on the most recently available Consolidated
balance sheet of the Borrower.
"Total Commitments": the sum of the Revolving Credit
Commitments and the Term Loan Commitments.
"Total Project Cost": the aggregate funds necessary to bring
the Approved Project into commercial operation, including, without limitation,
interest and other financing costs incurred during the construction period, as
specified in the EPC Contract.
"Trademark Security Agreement": the agreement dated as of June
9, 1998 by a certain Credit Party in favor of the Administrative Agent (as
defined in the First Restated Credit Agreement), for the benefit of the Agents
(as defined in the First Restated Credit Agreement) and the Original Lenders, as
amended, modified, restated, supplemented and in effect from time to time.
"Tranche": the collective reference to certain LIBOR Loans,
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day); Tranches may be identified as "LIBOR Tranches".
"Transferee": as defined in subsection 10.6(f).
"TXU Europe": TXU Europe Limited, a Company organized under
the laws of the England and Wales.
"Type": a Revolving Credit Loan, a Term Loan or a Swing Line
Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Unrestricted Subsidiary": any Subsidiary of the Borrower that
the Borrower notifies the Administrative Agent in writing is an "Unrestricted
Subsidiary", including, as of the Effective Date, those entities listed on
Schedule V hereto, but only to the extent that such Subsidiary (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not a party to any agreement,
contract, arrangement or understanding with the Borrower or any Restricted
Subsidiary of the Borrower except as expressly permitted by subsection 7.11; (c)
is a Person with respect to which neither the Borrower nor any of its Restricted
Subsidiaries has any direct or indirect obligation (x) to subscribe for
additional equity interests in such Person, except with respect to Investments
permitted under subsection 7.9(l), or (y) to maintain or preserve such Person's
financial condition (except with respect to performance guarantees expressly
permitted under subsection 7.4(f)) or to cause such Person to achieve any
specified levels of operating results; and (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any
22
Indebtedness of the Borrower or any of its Restricted Subsidiaries. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing requirements
as an Unrestricted Subsidiary (or is redesignated by the Borrower as a
Restricted Subsidiary), it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Agreement, any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Borrower as of
such date and any Investments in such Subsidiary shall be deemed to be
Investments in a Restricted Subsidiary of the Borrower as of such date (and, if
such Indebtedness or Investments are not permitted to be incurred hereunder the
Borrower shall be in default under this Agreement). At the time of any
designation by the Borrower of any Restricted Subsidiary as an Unrestricted
Subsidiary, such designation shall be deemed (A) an Investment in an
Unrestricted Subsidiary in an amount equal to the sum of (i) the net worth of
such designated Restricted Subsidiary immediately prior to such designation
(such net worth to be calculated without regard to any Guarantee Obligation
incurred by such designated Restricted Subsidiary with respect to the
Obligations) and (ii) the aggregate principal amount of any Indebtedness owed by
such designated Restricted Subsidiary to the Borrower or any other Restricted
Subsidiary immediately prior to such designation, all calculated, except as set
forth in the parenthetical to clause (i), on a consolidated basis in accordance
with GAAP and (B) an Asset Sale which must comply with the provisions of
subsections 7.6(b), (l) or (n).
"Upstream Payment": as defined in subsection 7.7.
"U.S. Taxes": any tax, assessment, or other charge or levy and
any liabilities with respect thereto, including any penalties, additions to tax,
fines or interest thereon, imposed by or on behalf of the United States or any
taxing authority thereof.
"Usage Ratio": as of any date, the ratio of (a) the principal
amount of all Revolving Credit Loans and L/C Obligations outstanding on such
date to (b) the aggregate Revolving Credit Commitments on such date, as
determined by the Administrative Agent.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in any Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any Credit Document, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Borrower and its Subsidiaries not defined in subsection
1.1 and accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
1.3 Interrelationship with First Restated Credit
Agreement. As stated in the preamble hereof, this Credit Agreement is intended
to amend and restate the provisions of the First Restated Credit Agreement and,
notwithstanding any substitution of Notes as of the Effective Date, except as
expressly modified herein, (a) all of the terms and provisions of the First
Restated Credit Agreement shall continue to apply for the period prior to the
Effective Date, including any determinations of payment dates, interest rates,
Events of Default or any amount that may be payable to the Agents (as defined in
the First Restated Credit Agreement) or the Original Lenders (or their assignees
or
23
replacements hereunder), and (b) the Obligations (as defined in the First
Restated Credit Agreement) under the First Restated Credit Agreement shall
continue to be paid or prepaid on or prior to the Effective Date, and be secured
by the Collateral, and shall from and after the Effective Date continue to be
owing and be subject to the terms of this Credit Agreement. All references in
the Notes and the other Credit Documents to (i) the First Restated Credit
Agreement or the "Credit Agreement" shall be deemed to include references to
this Credit Agreement and (ii) the "Lenders" or a "Lender" or to the "Agents" or
any Agent shall mean such terms as defined in this Credit Agreement. As of the
Effective Date all of the covenants set forth in the First Restated Credit
Agreement are of no further force and effect, it being understood that all
obligations of the Borrower with respect to the Obligations (as defined in the
First Restated Credit Agreement) shall be governed by this Credit Agreement from
and after the Effective Date.
1.4 Confirmation of Existing Obligations. The Borrower
hereby (i) confirms and agrees that it is truly and justly indebted to the
Lenders (as assignees of the Original Lenders) in the aggregate amount of the
Obligations (as defined in the First Restated Credit Agreement) outstanding
immediately prior to the Effective Date, including, without limitation, all
accrued and unpaid interest, fees and expenses that are due and owing in respect
thereto, (ii) reaffirms and admits the validity and enforceability of this
Agreement and the other Credit Documents (including the granting of liens and
security interests in the Collateral) and all of its obligations thereunder and
(iii) agrees and admits that, as of the date hereof, it has no defenses to, or
offsets or counterclaim against, any of its obligations to the Agents or any
Lender under the Credit Documents of any kind whatsoever.
Section 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make the loans described in
this subsection 2.1(a), as applicable, to the Borrower.
(i) Term Loans. Each Term Lender severally
agrees to make a term loan to the Borrower on the Effective Date in an aggregate
principal amount equal to such Lender's Term Loan Commitment. Amounts borrowed
under this subsection 2.1(a)(i) and subsequently repaid may not be reborrowed.
(ii) Revolving Credit Loans. To the extent that
any Revolving Credit Loans are outstanding under the First Restated Credit
Agreement on the Effective Date, each Revolving Credit Lender shall be deemed to
have made Revolving Credit Loans to the Borrower on the Effective Date in an
aggregate principal amount equal to such Lender's Commitment Percentage of all
Revolving Credit Loans outstanding on the Effective Date. In addition, subject
to the immediately following sentence, each Revolving Credit Lender severally
agrees to make revolving credit loans to the Borrower, from time to time during
the Commitment Period, in an aggregate principal amount at any one time
outstanding which, when added to the aggregate principal amount of outstanding
Swing Line Loans made by such Lender (or in which such Lender has purchased a
participation) and such Lender's Commitment Percentage of (A) the then
outstanding L/C Obligations and (B) any Revolving Credit Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment. During
the Commitment Period, the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans, in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) (i) Subject to the terms and conditions hereof,
the Swing Line Lender agrees to make swing line loans (individually, a "Swing
Line Loan"; collectively, the "Swing Line Loans") to the Borrower from time to
time during the Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed $50,000,000; provided, that no Swing Line Loan
shall be made if, after giving effect thereto and to the simultaneous use of the
proceeds thereof, the aggregate principal amount
24
of Revolving Credit Loans then outstanding plus the aggregate principal amount
of Swing Line Loans then outstanding, plus the aggregate amount of L/C
Obligations then outstanding would exceed the Revolving Credit Commitments of
the Revolving Credit Lenders. Until the Revolving Loan Termination Date, amounts
borrowed by the Borrower under this subsection 2.1(b) may be repaid and
reborrowed. All Swing Line Loans shall be made as Base Rate Loans and may not be
converted into LIBOR Loans. In order to borrow a Swing Line Loan, the Borrower
shall give the Swing Line Lender, with a copy to the Administrative Agent,
irrevocable notice (which notice must be received by the Swing Line Lender prior
to 12:00 Noon, New York City time) on the requested Borrowing Date specifying
the amount of the requested Swing Line Loan which shall be in a minimum amount
of $500,000 or whole multiples of $100,000 in excess thereof. The proceeds of
the Swing Line Loan will be made available by the Swing Line Lender to the
Borrower at the office of the Swing Line Lender by crediting the account of the
Borrower at such office with such proceeds.
(ii) If requested by the Swing Line Lender, the
Swing Line Loans shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-3 (the "Swing Line Note"), with
appropriate insertions, payable to the order of the Swing Line Lender and
representing the obligation of the Borrower to pay the unpaid principal amount
of the Swing Line Loans, with interest thereon as prescribed in subsection 2.9.
The Swing Line Note shall (i) be dated the Effective Date, (ii) be stated to
mature on the Revolving Loan Termination Date and (iii) bear interest, payable
on the dates specified in 2.9, for the period from the date thereof to the
Revolving Loan Termination Date on the unpaid principal amount thereof from time
to time outstanding at the applicable interest rate per annum specified in
subsection 2.9.
(iii) The Swing Line Lender, at any time in its
sole and absolute discretion, may on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf) request each
Lender, including the Swing Line Lender, to make a Revolving Credit Loan (which
shall be a Base Rate Loan) in an amount equal to such Lender's Commitment
Percentage with respect to Revolving Credit Loans of the Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in subsection 8(f) shall have occurred (in
which event the procedures of subsection 2.1(b)(iv) shall apply) each Lender
shall, not later than 12:00 P.M., New York City time, on the Business Day next
succeeding the date on which such notice is given, make available to the Swing
Line Lender in immediately available funds the amount equal to the Revolving
Credit Loan to be made by such Lender. The proceeds of such Revolving Credit
Loans shall be immediately applied to repay the Refunded Swing Line Loans. Upon
any request by the Swing Line Lender to the Lender pursuant to this subsection
2.1(b)(iii), the Administrative Agent shall promptly give notice to the Borrower
of such request.
(iv) If prior to the making of a Revolving Credit
Loan pursuant to subsection 2.1(b)(iii) one of the events described in
subsection 8(f) shall have occurred, each Lender will, on the date such Loan was
to have been made, purchase an undivided participating interest in the Swing
Line Loans in an amount equal to its Commitment Percentage with respect to
Revolving Credit Loans. Each Lender will immediately transfer to the Swing Line
Lender, in immediately available funds, the amount of its participation.
(v) Whenever, at any time after the Swing Line
Lender has received from any Lender such Lender's participating interest in a
Swing Line Loan, the Swing Line Lender receives any payment on account thereof,
the Swing Line Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by the Swing Line Lender is required to be returned, such
25
Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it.
(vi) Each Lender's obligation to purchase
participating interests pursuant to subsection 2.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender or the Borrower may have against the Swing Line Lender, any
other Lender or anyone else for any reason whatsoever, (b) the occurrence or
continuance of any Default or Event of Default; (c) any adverse change in the
condition (financial or otherwise) of the Borrower; (d) any breach of this
Agreement by the Borrower or any other Lender; or (e) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(c) Except for Swing Line Loans, which shall be Base Rate
Loans, the Loans may from time to time be (i) LIBOR Loans, (ii) Base Rate Loans
or (iii) a combination thereof, as determined by the Borrower and notified to
the Administrative Agent in accordance with subsections 2.2 and 2.7, provided
that no Revolving Credit Loan shall be made as a LIBOR Loan after the day that
is one month prior to the Termination Date with respect to such Loan.
2.2 Procedure for Borrowing. The Borrower may borrow
under the Commitments during the Commitment Period on any Business Day, provided
that the Borrower shall give the Administrative Agent irrevocable notice
substantially in the form attached as Exhibit D (a "Notice of Borrowing") (which
notice must be received by the Administrative Agent prior to (a) 11:00 A.M., New
York City time, three Business Days prior to the requested Borrowing Date, in
the case of LIBOR Loans, (b) 11:00 A.M., New York City time, one Business Day
prior to the requested Borrowing Date in the case of a Base Rate Loan and, (c)
11:00 A.M., New York City time, on the requested Borrowing Date in the case of a
Swing Line Loan), specifying (i) the amount to be borrowed of each Type of Loan,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of LIBOR
Loans, Base Rate Loans or a combination thereof and (iv) if the borrowing is to
be entirely or partly of LIBOR Loans, the respective lengths of the initial
Interest Periods therefor. Each borrowing under the Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans (other than Swing Line
Loans), $2,000,000 or a whole multiple of $100,000 in excess thereof (or, if the
then Available Commitments are less than $2,000,000, such lesser amount), (y) in
the case of Swing Line Loans, as provided in subsection 2.1(b)(i) and (z) in the
case of LIBOR Loans, $5,000,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each applicable Lender thereof. Each such Lender
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent specified in subsection 10.2 prior to 11:00 A.M., New York
City time (in the case of LIBOR Loans) or 2:30 P.M., New York City time (in the
case of Base Rate Loans), on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent. Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent. All notices given by the Borrower
under this subsection 2.2 may be made by telephonic notice promptly confirmed in
writing.
2.3 Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the first day of the Commitment
Period to and including the Revolving Loan Termination Date, computed at the
Commitment Fee Rate on the average daily amount of the Available Commitment of
such Revolving Credit Lender during the period for which payment is made,
payable in arrears within 15 days after the last Business Day of each March,
June, September and December and on the Revolving Loan Termination Date,
commencing on the first of such dates to occur after the date hereof.
26
2.4 Termination or Reduction of Revolving Credit
Commitments. The Borrower shall have the right, upon not less than three
Business Days' written notice to the Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments ratably among the Revolving Credit Lenders;
provided that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Credit Loans made
on the effective date thereof, the aggregate principal amount of the Revolving
Credit Loans then outstanding, when added to the then outstanding L/C
Obligations and the outstanding Swing Line Loans, would exceed the Revolving
Credit Commitments then in effect. Any such reduction shall be in an amount
equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and
shall reduce permanently the Revolving Credit Commitments then in effect.
2.5 Repayment of Loans; Evidence of Debt.
(a) Scheduled Payments of Term Loans. The Borrower shall
make principal payments on the Term Loans on March 31, June 30, September 30 and
December 31 of each year, commencing on June 30, 2003, in the amounts set forth
opposite the corresponding Payment Date as follows:
Scheduled Repayment of
Payment Date Term Loans
------------ ----------
6/30/03 $ 1,125,000
9/30/03 $ 1,125,000
12/31/03 $ 1,125,000
3/31/04 $ 1,125,000
6/30/04 $ 1,125,000
9/30/04 $ 1,125,000
12/31/04 $ 1,125,000
3/31/05 $ 1,125,000
6/30/05 $ 1,125,000
9/30/05 $ 1,125,000
12/31/05 $ 1,125,000
3/31/06 $ 1,125,000
6/30/06 $ 1,125,000
9/30/06 $ 1,125,000
12/31/06 $ 1,125,000
3/31/07 $ 1,125,000
6/30/07 $ 1,125,000
9/30/07 $ 1,125,000
12/31/07 $ 1,125,000
3/31/08 $ 1,125,000
6/30/08 $ 1,125,000
9/30/08 $ 1,125,000
12/31/08 $ 1,125,000
3/31/09 $ 1,125,000
6/30/09 $105,750,000
9/30/09 $105,750,000
12/31/09 $105,750,000
Termination Date $105,750,000
27
provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.6 (as provided in
such subsection); and provided further that the Term Loans and all other amounts
owed hereunder with respect to the Term Loans shall be paid in full no later
than the Termination Date, and the final installment payable by the Borrower in
respect of the Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts owing by
the Borrower under this Agreement with respect to the Term Loans.
(b) Payments on Revolving Credit Loans and Swing Line
Loans. The Borrower hereby unconditionally promises to pay to the Administrative
Agent on the Revolving Loan Termination Date (or such earlier date on which the
Loans become due and payable pursuant to Section 8) (i) for the account of each
Revolving Credit Lender the then unpaid principal amount of each Revolving
Credit Loan of such Lender and all other amounts owing to such Lender hereunder
with respect to such Revolving Credit Loan and (ii) for the account of the Swing
Line Lender (and each other Revolving Credit Lender that has purchased a
participation in then outstanding Swing Line Loans) the then unpaid principal
amount of Swing Line Loans and all other amounts owed to such Lender hereunder
with respect to the Swing Line Loans.
(c) Interest. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date such Loans are made until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 2.9.
(d) Recording. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(e) Register. The Administrative Agent shall maintain the
Register pursuant to subsection 10.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan and each
Obligation evidenced by a Note made hereunder, the Type thereof, whether each
such Loan is a Base Rate Loan or a LIBOR Loan and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(f) Prima Facie Evidence. The entries made in the
Register and the accounts of each Lender maintained pursuant to subsection
2.5(e) shall, to the extent permitted by applicable law, be prima facie evidence
of the existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.
(g) Notes. The Borrower agrees that upon the request to
the Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing (A) the Term Loans of
such Lender, substantially in the form of Exhibit A-1 with appropriate
insertions as to date and principal amount (a "Term Note"), and/or (B) the
Revolving Credit Loans of such Lender, substantially in the form of Exhibit A-2
with appropriate insertions as to date and principal amount ("Revolving Credit
Note").
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2.6 Optional Prepayments; Mandatory Prepayments and
Reduction of Commitments. (a) Subject to subsection 2.16, the Borrower may
at any time and from time to time prepay any Loans, in whole or in part, without
premium or penalty, upon irrevocable notice to the Administrative Agent prior to
11:00 A.M., New York City time, three Business Days prior to the date of
prepayment, specifying the date and amount of prepayment, the Type of Loan to be
prepaid (which loans shall be prepaid on a pro rata basis among the applicable
Lenders) and whether the prepayment is of LIBOR Loans, Base Rate Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Administrative Agent shall promptly
notify each applicable Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with any amounts payable pursuant to subsection 2.16. Partial
prepayments shall be in an aggregate principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
(b) (i) If, subsequent to the Effective Date, the
Borrower or any of its Subsidiaries shall incur or permit the incurrence of any
Indebtedness (other than Indebtedness permitted pursuant to subsection 7.2),
100% of the Net Proceeds thereof shall be promptly applied toward the prepayment
of the Loans as set forth in clause (iv) of this subsection 2.6(b). Nothing in
this paragraph (b) shall be deemed to permit any Indebtedness not permitted by
subsection 7.2.
(ii) If, subsequent to the Effective Date, the
Borrower or any of its Restricted Subsidiaries shall receive Net Proceeds from
any Asset Sale or series of related Asset Sales in excess of $500,000, such Net
Proceeds shall be promptly applied toward the prepayment of the Loans as set
forth in clause (iv) of this subsection 2.6(b); provided that Net Proceeds from
any Asset Sales shall not be required to be so applied to the extent that such
Net Proceeds are (A) used by the Borrower or such Restricted Subsidiary to
acquire assets to be employed in the business of the Borrower or its Restricted
Subsidiaries or a Similar Business of the Borrower or its Restricted
Subsidiaries or (B) used by the Borrower or such Restricted Subsidiary to the
extent permitted by subsection 7.9, to acquire (i) equity interests in a Person
engaged in a Similar Business or (ii) assets constituting a business unit of a
Person engaged in a Similar Business, in each case within 358 days of receipt
thereof, but if such Net Proceeds are not so used, 100% of the amount of such
Net Proceeds not so used shall be applied toward the prepayment of the Loans as
set forth in clause (iv) of this subsection 2.6(b) on the earlier of (x) the
359th day after receipt of such Net Proceeds and (y) the date on which the
Borrower has determined that such Net Proceeds shall not be so used.
(iii) If there is Excess Cash Flow for any fiscal
year and the Consolidated Total Obligations to Consolidated EBITDA Ratio as of
the last day of such fiscal year was greater than or equal to 3.0 to 1.0, 50% of
such Excess Cash Flow shall be applied toward the prepayment of the Loans as set
forth in clause (iv) of this subsection 2.6(b) on the Excess Cash Flow Payment
Date for such fiscal year, unless waived as provided below. If there is Excess
Cash Flow for any fiscal year and the Consolidated Total Obligations to
Consolidated EBITDA Ratio as of the last day of such fiscal year was less than
3.0 to 1.0 and greater than or equal to 2.0 to 1.0, 25% of such Excess Cash Flow
shall be applied toward the prepayment of the Loans as set forth in clause (iv)
of this subsection 2.6(b) on the Excess Cash Flow Payment Date for such fiscal
year, unless waived as provided below. Notwithstanding the foregoing, in the
case of Term Loans, each Term Lender shall have the right to waive such Lender's
right to receive any portion of any prepayment made under this subsection
2.6(b)(iii). The Borrower shall notify the Administrative Agent of the amount of
the prepayment from Excess Cash Flow at least three Business Days prior to the
related Excess Cash Flow Payment Date. In the event any such Term Lender desires
to waive such Lender's right to receive any such mandatory prepayment, such
Lender shall so advise the Administrative Agent no later than the close of
business on the Excess Cash Flow Payment Date. In the event that any such Lender
waives such Lender's right to any such mandatory prepayment, the Administrative
Agent shall apply the amount so waived to the repayment of outstanding Revolving
29
Credit Loans on a pro rata basis (without any permanent reduction in the
Revolving Credit Commitments) and shall then return any remainder of the amount
so waived to the Borrower.
(iv) Any mandatory prepayments of the Loans
pursuant to this subsection 2.6 (other than waived mandatory prepayments covered
by the preceding subsection 2.6(b)(iii)) shall be applied (y) first, to the Term
Loans to reduce the unpaid scheduled installments of principal of the Term Loans
on a pro rata basis and (z) thereafter to the repayment of Revolving Credit
Loans on a pro rata basis.
(v) If after giving effect to any reduction of
the Revolving Credit Commitments under subsection 2.4, the aggregate outstanding
principal amount of Swing Line Loans plus the aggregate outstanding principal
amount of Revolving Credit Loans plus the aggregate outstanding amount of L/C
Obligations, shall exceed the aggregate amount of the Revolving Credit
Commitments, such reduction shall be accompanied by prepayment in the amount of
such excess to be applied (x) first, to the outstanding Swing Line Loans and (y)
second, to outstanding Revolving Credit Loans (in each case, together with any
amounts payable under subsection 2.16); provided that if the aggregate principal
amount of Swing Line Loans and Revolving Credit Loans then outstanding is less
than the amount of such excess (because Letters of Credit constitute a portion
of such excess), the Borrower shall immediately, without notice or demand, to
the extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount (but in no event greater than such balance) in a cash
collateral account satisfactory to the Administrative Agent established for the
benefit of the Issuing Lender and the L/C Participants. The Borrower hereby
grants to the Administrative Agent, for the benefit of the Issuing Lender and
the L/C Participants, a security interest in such cash collateral account and
cash collateral to secure all obligations of the Borrower under this Agreement
and the other Credit Documents.
2.7 Conversion and Continuation Options. (a) The
Borrower may elect from time to time to convert LIBOR Loans to Base Rate Loans,
by giving the Administrative Agent prior irrevocable notice of such election at
or before 11:00 A.M. New York City time, on the Business Day immediately
preceding the date of the proposed conversion and of the amount and Type of Loan
to be converted, provided that any such conversion of LIBOR Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans (other than Swing Line
Loans) to LIBOR Loans by giving the Administrative Agent prior irrevocable
notice of such election at or before 11:00 A.M., New York City time, on the
third Business Day immediately preceding the date of the proposed conversion and
of the amount and Type of Loan to be converted. Any such notice of conversion to
LIBOR Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the Administrative Agent shall
promptly notify each applicable Lender thereof. All or any part of outstanding
LIBOR Loans and Base Rate Loans may be converted as provided herein, provided
that (i) no Loan may be converted into a LIBOR Loan when any Event of Default
has occurred and is then continuing and the Required Lenders have determined in
their sole discretion not to permit such conversion and (ii) no Loan may be
converted into a LIBOR Loan after the date that is one month prior to the
Termination Date with respect to such Loan.
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans and of
the amount and Type of Loan to be continued, provided that no LIBOR Loan may be
continued as such (i) when any Event of Default has occurred and is then
continuing and the Required Lenders have determined in their sole discretion not
to permit such continuation or (ii) after the date that is one month prior to
the Termination Date with respect to such Loan and provided, further, that if
the Borrower shall fail to give such notice or if such
30
continuation is not permitted such Loans shall be automatically converted to
Base Rate Loans on the last day of such then expiring Interest Period.
(c) All notices given by the Borrower under this
subsection 2.7 may be made by telephonic notice promptly confirmed in writing.
2.8 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each LIBOR Tranche shall be equal to $10,000,000
or a whole multiple of $1,000,000 in excess thereof. All Loans hereunder may be
converted or continued into Base Rate Loans without reference to the minimum
principal amount requirements for new Base Rate Borrowings set forth in
subsection 2.2 above. In no event shall there be more than 15 LIBOR Tranches
outstanding at any time.
2.9 Interest Rates and Payment Dates. (a) Each LIBOR
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the LIBOR Rate determined for such day plus
the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan,
(ii) any interest payable thereon, (iii) any commitment fee, (iv) any other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise) or (v) any other Event of Default has
occurred and is continuing and, in the case of this clause (v), the
Administrative Agent and one of the Syndication Agents together have notified
the Borrower of their intention to impose the Default Rate, the principal of the
Loans and any such overdue interest, commitment fee or other amount shall bear
interest at a rate per annum (the "Default Rate") which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of any such
overdue interest, commitment fee or other amount, the rate described in
paragraph (b) of this subsection plus 2%, in each case from the date of such
non-payment until such overdue principal, interest, commitment fee or other
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable with respect to each Loan
in arrears on each Interest Payment Date and on the Termination Date with
respect to such Loan, provided that interest accruing pursuant to paragraph (c)
of this subsection shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Interest on
Base Rate Loans and fees shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed; all other interest shall
be calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a LIBOR Rate. Any change in the interest rate
on a Loan resulting from a change in the Base Rate or the LIBOR Reserve
Percentage shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the
31
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 2.9(a) or (c).
2.11 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the eurodollar market, adequate
and reasonable means do not exist for ascertaining the LIBOR Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice
from the Required Lenders that the LIBOR Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any LIBOR Loans requested to be made on the first day of such Interest
Period shall be made as Base Rate Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to LIBOR Loans shall be
converted to or continued as Base Rate Loans and (z) any outstanding LIBOR Loans
shall be converted, on the first day of such Interest Period, to Base Rate
Loans. Until such notice has been withdrawn in writing by the Administrative
Agent (which the Administrative Agent agrees to do when the Administrative Agent
has determined, or has been instructed by the Required Lenders that, the
circumstances that prompted the delivery of such notice no longer exist), no
further LIBOR Loans shall be made or continued as such, nor shall the Borrower
have the right to convert Base Rate Loans to LIBOR Loans.
2.12 Pro Rata Treatment and Payments. (a) Each
borrowing by the Borrower from the Revolving Credit Lenders hereunder, each
payment by the Borrower on account of any commitment fee hereunder and any
reduction of the Revolving Credit Commitments of Revolving Credit Lenders shall
be made pro rata according to the respective Commitment Percentages of the
Revolving Credit Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on any Term Loans or the
Revolving Credit Loans, and any application by the Administrative Agent of the
proceeds of any Collateral, shall be made pro rata according to the respective
outstanding principal amounts of such Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder in respect
of any Loan, whether on account of principal, interest, Reimbursement
Obligations, fees, expenses or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 A.M., New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders
with respect to such Loans, at the Administrative Agent's office specified in
subsection 10.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the applicable Lenders
promptly upon receipt in like funds as received. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its Commitment Percentage of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent on such Borrowing Date, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the
32
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Rate for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Base Rate Loans hereunder, on
demand, from the Borrower. The failure of any Lender to make any Loan to be made
by it shall not relieve any other Lender of its obligation hereunder to make its
Loan on such Borrowing Date.
2.13 Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBOR Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make LIBOR Loans, continue LIBOR Loans as
such and convert Base Rate Loans to LIBOR Loans shall forthwith be cancelled and
(b) such Lender's Loans then outstanding as LIBOR Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a LIBOR Loan occurs on a
day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.16. If circumstances subsequently change so
that any affected Lender shall determine that it is no longer so affected, such
Lender will promptly notify the Borrower and the Administrative Agent, and upon
receipt of such notice, the obligations of such Lender to make or continue LIBOR
Loans or to convert Base Rate Loans into LIBOR Loans shall be reinstated.
2.14 Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any LIBOR Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes that are covered by subsection 2.15 and changes
in the rate of net income taxes (including branch profits taxes and
minimum taxes) or franchise taxes (imposed in lieu of net income taxes)
of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or issuing or participating in Letters of
Credit or to reduce any amount receivable hereunder in respect thereof, then, in
any such case, the Borrower shall promptly pay such Lender upon written demand
such
33
additional amount or amounts as will compensate such Lender for such increased
cost or reduced amount receivable; provided that before making any such demand,
each Lender agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, in its reasonable discretion, in any legal,
economic or regulatory manner) to designate a different LIBOR lending office if
the making of such designation would allow the Lender or its LIBOR lending
office to continue to perform its obligations to make LIBOR Loans or to continue
to fund or maintain LIBOR Loans and avoid the need for, or reduce the amount of,
such increased cost. If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower,
through the Administrative Agent, of the event by reason of which it has become
so entitled. If the Borrower so notifies the Administrative Agent within five
Business Days after any Lender notifies the Borrower of any increased cost
pursuant to the foregoing provisions of this Section, the Borrower may convert
all LIBOR Loans of such Lender then outstanding into Base Rate Loans in
accordance with the terms hereof.
(b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
prompt written request therefor, the Borrower shall promptly pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled; provided that the Borrower shall not be
required to compensate a Lender pursuant to this subsection for any increased
costs or reductions incurred more than 90 days prior to the date that such
Lender notifies the Borrower of the Requirement of Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Requirement of Law giving
rise to such increased costs or reductions is retroactive, then the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof. A certificate as to any additional amounts payable pursuant to
this subsection, showing the calculation thereof in reasonable detail, submitted
by such Lender to the Borrower (with a copy to the Administrative Agent) shall
be conclusive in the absence of manifest error. The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.15 Taxes. (a) Except as provided in this subsection
2.15, all payments made by the Borrower under this Agreement and any Notes shall
be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority ("Taxes"),
excluding Taxes on net income (including, without limitation, branch profits
taxes and minimum taxes) and franchise taxes (imposed in lieu of net income
taxes) imposed on any Agent or any Lender as a result of a present or former
connection between such Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
such Agent or such Lender having executed, delivered or performed its
obligations or received a
34
payment under, or enforced, this Agreement or any Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld or deducted from
any amounts payable to any Agent or any Lender hereunder or under any Note, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes) the amount of interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender that is not a United States person as defined in Section
7701(a)(30) of the Code with respect to any Taxes that are imposed on amounts
payable to such Lender at the time such Lender becomes a party to this Agreement
or that are attributable to such Lender's failure at any time to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are so required to be withheld or deducted, the Borrower shall make any
such required withholding or deduction and remit the full amount withheld or
deducted to the relevant authority in accordance with applicable law, and, as
promptly as possible thereafter, the Borrower shall send to the relevant Agent
for its own account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof or, if such official receipt was not received, any other proof
of payment reasonably satisfactory to such Agent and Lender.
(b) Each Lender, Assignee and Participant that is not a
United States person as defined in Section 7701(a)(30) of the Code (a "Non-U.S.
Lender") shall deliver to the Borrower and the Administrative Agent, and if
applicable, the assigning Lender (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) on or
before the date on which it becomes a party to this Agreement (or, in the case
of a Participant, on or before the date on which such Participant purchases the
related participation) either:
(A) two duly completed and signed copies of either
Internal Revenue Service Form W-8BEN (relating to such Non-U.S. Lender
and entitling it to a complete exemption from or a reduction in
withholding of U.S. Taxes on all amounts to be received by such
Non-U.S. Lender pursuant to this Agreement and the other Credit
Documents under an applicable treaty) or Internal Revenue Service Form
W-8ECI (relating to all amounts to be received by such Non-U.S. Lender
pursuant to this Agreement and the other Credit Documents), or
successor and related applicable forms, as the case may be; or
(B) in the case of a Non-U.S. Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that cannot
comply with the requirements of clause (A) hereof, (x) a statement in
the form of Exhibit E (or such other form of statement as shall be
reasonably requested by the Borrower (or, in the case of a Participant,
the applicable Lender) from time to time) to the effect that such
Non-U.S. Lender is eligible for a complete exemption from withholding
of U.S. Taxes under Code Section 871(h) or 881(c), and (y) two duly
completed and signed copies of Internal Revenue Service Form W-8BEN or
successor and related applicable form.
Further, each Non-U.S. Lender agrees (i) to deliver, upon request, to the
Borrower and the Administrative Agent, and if applicable, the assigning Lender
(or, in the case of a Participant, to the Lender from which the related
participation shall have been purchased) two further duly completed and signed
copies of such Internal Revenue Service Forms W-8BEN or W-8ECI, as the case may
be, or successor and related applicable forms, on or before the date that any
such form expires or becomes obsolete and promptly after the occurrence of any
event requiring a change from the most recent form(s) previously delivered by it
to the Borrower (or, in the case of a Participant, to the Lender from which the
related participation shall have been purchased) in accordance with applicable
U.S. laws and regulations and (ii) in the case of a Non-U.S. Lender that
delivers a statement in the form of Exhibit E (or such other form of statement
as shall
35
have been requested by the Borrower), to deliver to the Borrower and the
Administrative Agent, and if applicable, the assigning Lender, such additional
statements and forms as shall be reasonably requested by the Borrower (or, in
the case of a Participant, the applicable Lender) from time to time unless, in
any such case, any change in law or regulation has occurred subsequent to the
date such Lender (or Participant) became a party to this Agreement (or in the
case of a Participant, the date on which such Participant purchased the related
participation) which renders all such forms inapplicable or which would prevent
such Lender (or Participant) from properly completing and executing any such
form with respect to it and such Lender (or Participant) promptly notifies the
Borrower and the Administrative Agent (or, in the case of a Participant, the
Lender from which the related participation shall have been purchased) if it is
no longer able to deliver, or if it is required to withdraw or cancel, any form
or statement previously delivered by it pursuant to this subsection 2.15(b). The
Borrower hereby agrees that for so long as a Lender that is a Non-U.S. Lender
complies with this subsection 2.15(b), the Borrower shall not withhold any
amounts from any payments made pursuant to this Agreement to such Non-U.S.
Lender, unless the Borrower reasonably determines that it is required by law to
withhold or deduct any amounts from any payments made to such Non-U.S. Lender
pursuant to this Agreement.
(c) The Borrower will indemnify each Agent and each
Lender for the full amount of Non-Excluded Taxes paid by such Agent or such
Lender, as the case may be, and any liability for penalties, interest and
expenses (including reasonable attorney's fees and expenses) arising therefrom
or with respect thereto, whether or not such Non-Excluded Taxes were correctly
or legally asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability prepared by an Agent or a Lender, absent
manifest error, shall be final after the date such Agent or such Lender, as the
case may be, makes written demand therefor.
(d) If any Agent or any Lender receives a refund with
respect to Non-Excluded Taxes paid by the Borrower, which in the sole discretion
and good faith judgment of such Lender or Agent is allocable to such payment, it
shall promptly pay such refund to the extent allocable to payment of
Non-Excluded Taxes to the Borrower, net of all out-of-pocket expenses of such
Lender incurred in obtaining such refund, if all the payments due under this
subsection 2.15 have been paid in full; provided, however, that the Borrower
agrees to promptly return such amount, net of any incremental additional costs,
to the applicable Agent or Lender, as the case may be, if it receives notice
from the applicable Agent or Lender that such Agent or Lender is required to
repay such refund.
(e) In addition to its agreements under paragraph (b) of
this subsection, each Lender and each Agent shall, at the request of the
Borrower, use best efforts to provide any certificate or document that such
Lender or Agent could legally provide without any material burden on its part
and that would reduce (or avoid) any Non-Excluded Taxes on payments to it made
under this Agreement or any Notes.
(f) The agreements in this subsection 2.15 shall survive
the termination of this Agreement and the payment of all Loans and other amounts
payable hereunder.
2.16 Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of LIBOR Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of LIBOR Loans on
a day which is not the last day of an Interest Period with respect thereto (but
excluding loss of margin). Such indemnification under this subsection 2.16 may
include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so
36
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (but excluding loss of margin) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all amounts
payable thereunder.
2.17 Replacement of Lenders. If at any time (a) the
Borrower becomes obligated to pay additional amounts described in subsection
2.14 or 2.15 as a result of any condition described in such subsections, or any
Lender ceases to make LIBOR Loans pursuant to subsection 2.13, (b) any Lender
becomes insolvent and its assets become subject to a receiver, liquidator,
trustee, custodian or other Person having similar powers or (c) any Lender
becomes a "Nonconsenting Lender" (hereinafter defined), then the Borrower may,
on ten Business Days' prior written notice to the Administrative Agent and such
Lender, replace such Lender by causing such Lender to (and such Lender shall)
assign pursuant to subsection 10.6 all of its rights and obligations under this
Agreement to a Lender or other financial institution selected by the Borrower
and acceptable to the Administrative Agent for a purchase price equal to the
outstanding principal amount of such Lender's Loans and all accrued interest and
fees and other amounts payable hereunder (including amounts payable under
subsection 2.16 as though such Loans were being paid instead of being
purchased); provided that (i) neither the Administrative Agent nor any Lender
shall have any obligation to the Borrower to find a replacement Lender or other
such entity and (ii) in no event shall the Lender hereby replaced be required to
pay or surrender to such replacement Lender or other entity any of the fees
received by such Lender hereby replaced pursuant to this Agreement. In the case
of a replacement of a Lender to which the Borrower becomes obligated to pay
additional amounts pursuant to subsection 2.14 or 2.15, the Borrower shall pay
such additional amounts to such Lender prior to such Lender being replaced and
the payment of such additional amounts shall be a condition to the replacement
of such Lender. In the event that (x) the Borrower or the Administrative Agent
has requested the Lenders to consent to a departure or waiver of any provisions
of the Credit Documents or to agree to any amendment thereto, (y) the consent,
waiver or amendment in question requires the agreement of all Lenders in
accordance with the terms of subsection 10.1 and (z) the Required Lenders have
agreed to such consent, waiver or amendment, then any Lender who does not agree
to such consent, waiver or amendment shall be deemed a "Nonconsenting Lender."
2.18 Certain Fees. Borrower agrees to pay to the
Administrative Agent, for its own account, a non-refundable administration fee
in an amount previously agreed to with the Administrative Agent, payable in
advance on the Effective Date and annually in advance on each anniversary
thereof prior to the earlier of (x) the Final Maturity Date and (y) the payment
in full of all Loans and all other amounts owing under this Agreement and the
termination of all Commitments.
2.19 Certain Rules Relating to the Payment of Additional
Amounts. (a) Upon the request, and at the expense, of the Borrower, each
Lender to which the Borrower is required to pay any additional amount pursuant
to subsection 2.14 or 2.15 shall, at the option of such Lender, either (A)
forego payment of such additional amount from the Borrower or (B) reasonably
afford the Borrower the opportunity to contest, and reasonably cooperate with
the Borrower in contesting, the imposition of any Non-Excluded Taxes giving rise
to such payment; provided that (i) such Lender shall not be required to afford
the Borrower the opportunity to so contest unless the Borrower shall have
confirmed in writing to such Lender its obligation to pay such amounts pursuant
to this Agreement and (ii) the Borrower shall reimburse such Lender for its
out-of-pocket costs, including attorneys' and accountants' fees and
disbursements incurred in so cooperating with the Borrower in contesting the
imposition of such Non-Excluded Taxes.
37
(b) Each Lender agrees that if it makes any demand for
payment under subsection 2.14 or 2.15(a), or if any adoption or change of the
type described in subsection 2.13 shall occur with respect to it, it will use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its reasonable discretion) to designate a different lending office
if the making of such a designation would allow the Lender to continue to make
and maintain LIBOR Loans and would reduce or obviate the need for the Borrower
to make payments under subsection 2.14 or 2.15(a), or would eliminate or reduce
the effect of any adoption or change described in subsection 2.13.
Section 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the agreements of the
Revolving Credit Lenders set forth in subsection 3.4(a), agrees to issue letters
of credit ("Letters of Credit") for the account of the Borrower on any Business
Day during the Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall not issue any
Letter of Credit if, after giving effect to such issuance, the Available
Commitment with respect to Revolving Credit Loans of all Revolving Credit
Lenders less the aggregate principal amount of the Swing Line Loans then
outstanding would be less than zero.
(b) Each Letter of Credit shall (i) be denominated in
Dollars, (ii) be a standby letter of credit issued to support obligations of the
Borrower or any of its Restricted Subsidiaries, contingent or otherwise and
(iii) expire no later than the earlier of (x) the date that is 12 months after
the date of its issuance and (y) the fifth Business Day prior to the Revolving
Loan Termination Date; provided that any Letter of Credit with an expiration
date occurring up to twelve months after such Letter of Credit's date of
issuance may be automatically renewable for subsequent 12-month periods (but in
no event later than the fifth Business Day prior to the Revolving Loan
Termination Date).
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(d) The Issuing Lender shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law or any policies of the Issuing Lender.
3.2 Procedure for Issuance of Letters of Credit. The
Borrower may from time to time request that the Issuing Lender issue a Letter of
Credit at any time prior to the fifth Business Day prior to the Revolving Loan
Termination Date by delivering to the Issuing Lender with a copy to the
Administrative Agent at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request. Upon receipt of any Application, the Issuing Lender will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish a copy of such Letter
of Credit to the Borrower and the Administrative Agent (with copies for each
Lender) promptly following the issuance thereof.
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3.3 Fees, Commissions and Other Charges. (a) The
Borrower shall pay to the Administrative Agent, for the account of the Issuing
Lender and the L/C Participants, a letter of credit fee with respect to each
Letter of Credit, computed for the period from and including the date of
issuance of such Letter of Credit to the expiration date of such Letter of
Credit at a rate per annum equal to the Applicable Margin then in effect for
LIBOR Revolving Credit Loans, of the aggregate maximum drawable amount of
Letters of Credit outstanding from time to time, payable in arrears within 15
days following each L/C Fee Payment Date and on the Revolving Loan Termination
Date. Such fee shall be payable to the Administrative Agent to be shared ratably
among the Revolving Credit Lenders in accordance with their respective
Commitment Percentages with respect to Revolving Credit Loans. In addition, the
Borrower shall pay to the Administrative Agent, for the sole account of the
Issuing Lender, a fee equal to the greater of (i) $150 and (ii) 0.125% per annum
of the aggregate maximum drawable amount of Letters of Credit outstanding from
time to time, payable quarterly in arrears within 15 days following each L/C Fee
Payment Date and on the Revolving Loan Termination Date.
(b) In addition to the foregoing fees and commissions,
the Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing Lender in
issuing, effecting payment under, amending or otherwise administering any Letter
of Credit.
(c) The Administrative Agent shall, promptly following
its receipt thereof, distribute to the Issuing Lender and the L/C Participants
all fees and commissions received by the Administrative Agent for their
respective accounts pursuant to this subsection.
3.4 L/C Participation. (a) The Issuing Lender
irrevocably agrees to sell and hereby sells to each L/C Participant, and, to
induce the Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Commitment Percentage with respect to Revolving
Credit Loans from time to time in effect in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's then
Commitment Percentage with respect to Revolving Credit Loans of the amount of
such draft, or any part thereof, which is not so reimbursed; provided that, if
such demand is made prior to 11:00 A.M., New York City time, on a Business Day,
such L/C Participant shall make such payment to the Issuing Lender prior to the
end of such Business Day and otherwise such L/C Participant shall make such
payment on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to subsection 3.4(a) in respect of
any unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit is paid to the Issuing Lender within three Business Days after
the date such payment is due, such L/C Participant shall pay to the Issuing
Lender on demand an amount equal to the product of (i) such amount, times (ii)
the daily average Federal Funds Rate, as quoted by the Issuing Lender, during
the period from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to subsection 3.4(a) is not in fact made
available to the Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Issuing Lender shall be entitled to
recover from such L/C Participant, on demand,
39
such amount with interest thereon calculated from such due date at the rate per
annum applicable to Base Rate Loans hereunder. A certificate of the Issuing
Lender submitted to any L/C Participant with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has
made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with subsection
3.4(a), the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Issuing Lender will, if such payment is received prior to
11:00 A.M., New York City time, on a Business Day, distribute to such L/C
Participant its pro rata share thereof prior to the end of such Business Day and
otherwise the Issuing Lender will distribute such payment on the next succeeding
Business Day; provided, however, that in the event that any such payment
received by the Issuing Lender and distributed to the L/C Participants shall be
required to be returned by the Issuing Lender, each such L/C Participant shall
return to the Issuing Lender the portion thereof previously distributed by the
Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. (a) The
Borrower agrees to reimburse the Issuing Lender on the same Business Day on
which the Issuing Lender notifies the Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender provided
such notice is received by 1:00 P.M., New York City time, on such Business Day,
and the next Business Day if such notice is received after such time. The
Issuing Lender shall provide notice to the Borrower on each Business Day on
which a draft is presented and paid by the Issuing Lender indicating the amount
of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date a draft
presented under any Letter of Credit is paid by the Issuing Lender until payment
in full (i) at the rate which would be payable on any Loans that are Base Rate
Loans at such time until such payment is required to be made pursuant to
subsection 3.5(a), and (ii) thereafter, at the rate which would be payable on
any Loans that are Base Rate Loans at such time which were then overdue.
3.6 Obligations Absolute. (a) The Borrower's
obligations under subsection 3.5(a) shall be absolute and unconditional under
any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment which the Borrower may have or have had against the Issuing
Lender, any L/C Participant or any beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Lender that
the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under subsection 3.5(a) shall not be affected by,
among other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged (unless the Issuing Lender has actual knowledge of
such invalidity, fraud or forgery), or (ii) any dispute between or among the
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee.
(c) Neither the Issuing Lender nor any L/C Participant
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however
40
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted
by the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender or any L/C
Participant to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower and the Administrative Agent of the date and amount
thereof. If any draft shall be presented for payment under any Letter of Credit,
the responsibility of the Issuing Lender to the Borrower in connection with such
draft shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment appear on their face to be in conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall govern and control.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents, the Issuing Lender, the Swing Line
Lender and the Lenders to enter into this Agreement and to make (or continue to
make) the Loans and issue or participate in the Letters of Credit, the Borrower
hereby represents and warrants to the Agents, the Issuing Lender, the Swing Line
Lender and each Lender that:
4.1 Financial Statements and Condition. The audited
consolidated balance sheets of the Borrower and its consolidated Subsidiaries as
at December 31, 2002, December 31, 2001 and March 31, 2001, and the related
consolidated statements of income and of cash flows for the fiscal periods ended
on such dates, reported on by and accompanied by a report from Ernst & Young LLP
present fairly, in all material respects and on the basis disclosed in the
footnotes to such financial statements, the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal periods then ended. All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein). The Borrower and
its Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent financial
statements (or in the notes thereto) referred to in this paragraph. During the
period from December 31, 2002 to and including the date hereof there has been no
disposition by the Borrower and its Consolidated Subsidiaries of any material
part of its business or property and no purchase or other acquisition of any
business or property (including Capital Stock of any other Person) material in
relation to the consolidated financial condition of the Borrower and its
consolidated Subsidiaries at December 31, 2002.
4.2 No Change. Since December 31, 2002, there has been no
development, event or circumstance which has had or could reasonably be expected
to have a Material Adverse Effect.
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4.3 Corporate Existence. The Borrower and each of its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization (i) as of the Effective Date
and (ii) with respect to the Borrower and its Restricted Subsidiaries, on the
Effective Date and on each Borrowing Date, (b) has the corporate (or equivalent)
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged except, with respect to Unrestricted Subsidiaries, where
the failure to have such power, authority and legal right could not reasonably
be expected to have a Material Adverse Effect and (c) is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that the failure to
so qualify could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable
Obligations; No Conflict. The Borrower and each of its Restricted Subsidiaries
has the corporate (or equivalent) power and authority, and the legal right, to
make, deliver and perform the Credit Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder and has taken all necessary
corporate action to authorize the borrowings on the terms and conditions of this
Agreement and to authorize the execution, delivery and performance of such
Credit Documents. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Credit Documents to
which the Borrower and each other Credit Party is a party (including, without
limitation, the collateral assignment of the Coal Supply Agreements listed on
Schedule 4.22 to the Administrative Agent for the benefit of the Secured Parties
and the mortgaging of all real property intended by the Credit Agreement to be
mortgaged to the Administrative Agent for the benefit of the Secured Parties),
except those set forth on Schedule 4.4. This Agreement and each other Credit
Document have been duly executed and delivered on behalf of the Borrower and
each other Credit Party. This Agreement and each other Credit Document to which
it is a party constitute legal, valid and binding obligations of each Credit
Party party thereto enforceable against each such Credit Party, as the case may
be, in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4.5 No Legal Bar. Except as set forth on Schedule 4.5 or
as could not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, the execution, delivery and performance of each Credit
Document by the Borrower and each Restricted Subsidiary party thereto, the
borrowing and use of the proceeds of the Loans and the consummation of the
transactions contemplated by the Credit Documents and the Senior Notes
Documents: (a) will not violate any Requirement of Law or any Contractual
Obligation applicable to or binding, the Borrower or any Restricted Subsidiary
or any of their respective properties or assets and (b) will not result in the
creation or imposition of any Lien on any of its properties or assets pursuant
to any Requirement of Law applicable to it or any of its Contractual
Obligations, except for the Liens arising under the Credit Documents.
4.6 Litigation; Compliance with Laws; Reserves. (a)
There are not any actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any Subsidiary or any
business, property or rights of any such person (i) that expressly involve any
Credit Document or (ii) except to the extent set forth on Schedule 4.6, as to
which there is a reasonable possibility of any adverse determination and that,
in either case could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect.
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(b) To the extent required by GAAP, the Borrower and its
Subsidiaries maintain adequate reserves for (i) future costs associated with any
lung disease claim alleging pneumoconiosis or silicosis or arising out of
exposure or alleged exposure to coal dust or the coal mining environment, (ii)
future costs associated with retiree and health care benefits, (iii) future
costs associated with reclamation of disturbed acreage, removal of facilities
and other closing costs in connection with its mining operations and (iv) future
costs associated with other potential environmental liabilities.
(c) None of the Borrower or any of its Subsidiaries or
any of its respective material properties or assets is in violation of, nor will
the continued operation of its material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Mining and Environmental Law, ordinance, code or approval or any building or
mining permits), or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
4.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 Ownership and Location of Property; Liens. (a)
Schedule 4.8(a)(i) lists completely and correctly as of the Effective Date all
material real property (including surface rights and coal and other mineral
rights) owned by the Borrower and the other Credit Parties (other than Black
Beauty) and Schedule 4.8(a)(ii) sets forth reasonably specific locations of the
properties for which a Mortgage or fixture filing has been granted pursuant to
the First Restated Credit Agreement. As of the Effective Date, (i) with respect
to each parcel of real property listed on Schedule 4.8(a)(ii), the Borrower or
its applicable Restricted Subsidiary has good record title in fee simple to such
parcel, except for defects in title to such parcel which do not or will not have
a material adverse effect on the (A) marketability, (B) title insurability, or
(C) operation and intended use, of such parcel; and (ii) with respect to all
other real property listed on Schedule 4.8(a)(i), the Borrower and its
applicable Restricted Subsidiaries have good record title in fee simple, except,
with respect to this clause (ii), for defects in title which could not
reasonably be expected to result in a Material Adverse Effect.
(b) Schedule 4.8(b) lists completely and correctly as of
the Effective Date (A) all material real property (including surface rights and
coal and other mineral rights) leased by the Borrower and the other Credit
Parties (other than Black Beauty) and (B) the lessors thereof. As of the
Effective Date, (i)(A) with respect to each parcel of real property listed on
Schedule 4.8(b) for which a Mortgage has been granted pursuant to the First
Restated Credit Agreement, the Borrower or its applicable Restricted Subsidiary
has a valid and enforceable leasehold interest, except where such lack of
validity or enforceability does not or will not have a material adverse effect
on the (x) title insurability or (y) operation and intended use, of such parcel,
and (B) with respect to all other real property listed on Schedule 4.8(b), the
Borrower and its applicable Restricted Subsidiaries have valid and enforceable
leasehold interests, except, with respect to this clause (B), where such lack of
validity or enforceability could not reasonably be expected to have a Material
Adverse Effect; (ii)(A) with respect to each parcel of real property listed on
Schedule 4.8(b) for which a Mortgage has been granted pursuant to the First
Restated Credit Agreement, the Borrower or its applicable Restricted Subsidiary
possesses the leasehold interest(s) necessary for the operation of the
applicable Mine(s) currently being operated on such parcel, and each of its
rights under the applicable lease(s), contracts, rights-of-way and easements
necessary for the operation of such Mine(s) is in full force and effect, except
to the extent that failure to maintain such lease(s), contracts, rights of way
and easements in full force and effect does not and will not have a material
adverse effect on the operation and intended use of such parcel by the Borrower
or such Restricted Subsidiary, and (B) with respect to all other real property
listed on Schedule 4.8(b), the Borrower and its Restricted Subsidiaries possess
all leasehold interests necessary for the operation of the
43
Mines currently being operated by each of them, and each of their respective
rights under the leases, contracts, rights-of-way and easements necessary for
the operation of such Mines are in full force and effect, except to the extent,
with respect to this clause (B), that failure to maintain such leases,
contracts, rights of way and easements in full force and effect could not
reasonably be expected to have a Material Adverse Effect; (iii)(A) with respect
to each parcel of real property listed on Schedule 4.8(b) for which a Mortgage
is required hereunder, neither the Borrower nor its applicable Restricted
Subsidiary is in default under any of the applicable instruments or agreements
described in clauses 4.8(b)(i) and 4.8(b)(ii) above, except for any defaults
which, in the aggregate, do not or will not have a material adverse effect on
the operation and intended use of such parcel, and (B) with respect to all other
real property listed on Schedule 4.8(b), neither the Borrower nor its Restricted
Subsidiaries is in default under any of the applicable instruments or agreements
described in clauses 4.8(b)(i) and 4.8(b)(ii) above, except, with respect to
this clause (B), for any defaults which, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect; (iv) each of the Borrower and its
Restricted Subsidiaries possesses all licenses, permits (including, but not
limited to, all Mining and Environmental Permits necessary for the operation of
the Mines being operated by each of them in accordance with applicable Mining
and Environmental Laws) or franchises which are necessary to carry out its
business as presently conducted, except where failure to possess such licenses,
permits or franchises could not, in the aggregate, be reasonably expected to
have a Material Adverse Effect, and neither the Borrower nor any Restricted
Subsidiary is in violation in any material respect of any such license, permit
or franchise.
4.9 Intellectual Property. Each of the Borrower and its
Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). To the best of the Borrower's knowledge, and except as
set forth on Schedule 4.9, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim which could reasonably be
expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Borrower and its Restricted Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.10 Taxes. Each of the Borrower and its Subsidiaries, and
any other affiliate with joint and several liability for taxes, has filed or
caused to be filed all Federal, state, local and other material tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it pursuant thereto and all assessments received by
it (other than any taxes or assessments the amount or validity of which are
currently being contested in good faith and for which adequate reserves are
maintained on the books of the Borrower or such affiliate), except where the
failure to do any of the foregoing could not reasonably be expected to result in
a Material Adverse Effect; no tax Lien has been filed, and, to the knowledge of
the Borrower, no claim is being asserted, with respect to any such tax, fee or
other charge.
4.11 Federal Regulations. No part of the proceeds of any
Loans has been or will be used for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U
and Regulation X of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect.
4.12 ERISA; Coal Act; Black Lung Act. Except as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect: no Reportable Event has occurred with respect to any Single
Employer Plan; all contributions required to be made with respect to a Plan have
been timely made; none of the Borrower or any of its Subsidiaries nor any
Commonly Controlled
44
Entity has incurred any material liability to or on account of a Plan pursuant
to Section 409, 502(i), 502(1), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or, to the
knowledge of the Borrower, reasonably expects to incur any liability (including
any indirect, contingent or secondary liability) under any of the foregoing
Sections with respect to any Plan; no termination of, or institution of
proceedings to terminate or appoint a trustee to administer, a Single Employer
Plan has occurred; and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code (except that with respect to any
Multiemployer Plan, such representation is deemed made only to the knowledge of
the Borrower). No "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA), extension of any amortization
period (within the meaning of Section 412 of the Code) or Lien in favor of the
PBGC or a Plan has arisen or has occurred during the five-year period prior to
the date on which this representation is made or deemed made with respect to any
Single Employer Plan. Neither the Borrower nor any Commonly Controlled Entity
currently intends to undertake a complete or partial withdrawal (as described in
ERISA section 4203 and 4205, respectively) from any Multiemployer Plan for which
there is any outstanding liability; if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made, the Borrower anticipates that there would be a
withdrawal liability in an amount which would be reasonably likely to have a
Material Adverse Effect. To the best knowledge of the Borrower, no such
Multiemployer Plan is in Reorganization or Insolvent. The Borrower, its
Subsidiaries and its "related persons" (as defined in the Coal Act) are in
compliance in all material respects with the Coal Act and none of the Borrower,
its Subsidiaries or its related persons has any liability under the Coal Act
except with respect to premiums or other payments required thereunder which have
been paid when due and except to the extent that the liability thereunder could
not reasonably be expected to have a Material Adverse Effect. The Borrower and
its Subsidiaries are in compliance in all material respects with the Black Lung
Act, and neither the Borrower nor its Subsidiaries has any liability under the
Black Lung Act except with respect to premiums, contributions or other payments
required thereunder which have been paid when due and except to the extent that
the liability thereunder could not reasonably be expected to have a Material
Adverse Effect.
4.13 Investment Company Act; Other Regulations. Neither
the Borrower nor any Restricted Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935. None of the Borrower or any of its
Restricted Subsidiaries is subject to regulation under the Federal Power Act or
any other Federal or State statute or regulation (other than Regulation X) which
limits its ability to incur Indebtedness.
4.14 Subsidiaries and Other Investments. (a) Schedule
4.14(a) sets forth as of the Effective Date a list of all direct and indirect
Subsidiaries of the Borrower and the percentage ownership interest of the
Borrower (and each Subsidiary) therein. The shares of Capital Stock or other
ownership interests so indicated in Schedule 4.14(a) are owned by the Borrower
(or such Subsidiaries), directly or indirectly, and, with respect to Restricted
Subsidiaries only, are fully paid and non-assessable and free and clear of all
Liens, except for Permitted Liens.
(b) Schedule 4.14(b) sets forth as of the Effective Date
a list of all Joint Ventures and other minority investments to which the
Borrower or any Subsidiary is a party, including a listing of each other Person
party to such Joint Venture or investment and the Borrower's or such
Subsidiary's percentage interest therein. The shares of Capital Stock or other
ownership interests so indicated in Schedule 4.14(b) are owned by the Borrower
or such Subsidiary, directly or indirectly, and except with respect to
Unrestricted Subsidiaries, are fully paid and non-assessable and free and clear
of all Liens, except for Permitted Liens.
45
4.15 Purpose of Loans. The proceeds of the Loans shall be
used by the Borrower (i) (A) to refinance the existing Indebtedness of the
Borrower and Black Beauty listed on Schedule 4.15 and (B) on the Effective Date
to consummate a portion of a tender offer for the Existing Notes and (ii) for
working capital purposes and other general corporate purposes, including,
without limitation, to make Investments permitted under subsection 7.9. In
addition, a portion of the proceeds of the Term Loans may be used by the
Borrower to finance the Black Beauty Acquisition and related fees and expenses.
4.16 Environmental Matters.
Except as listed on Schedule 4.16, or as would not,
individually or in the aggregate, be expected to result in a Material Adverse
Effect:
(a) The facilities and properties currently or formerly
owned, leased or operated by the Borrower or any of its Subsidiaries
(the "Properties") do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations
which (i) constitute or constituted a violation of, or (ii) could
reasonably be expected to give rise to liability under, any applicable
Mining and Environmental Law.
(b) None of the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Mining and Environmental Laws with regard to any of the
Properties or the business operated by the Borrower or any of its
Subsidiaries (the "Business"), or any prior business for which the
Borrower has, or may reasonably be alleged to have, retained liability
under any Mining and Environmental Law, nor does the Borrower have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(c) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a
manner or to a location which could reasonably be expected to give rise
to liability under, any applicable Mining and Environmental Law, nor
have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give
rise to liability under, any applicable Mining and Environmental Law.
(d) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the Borrower,
threatened under any Mining and Environmental Law to which the Borrower
or any Subsidiary is or, to the knowledge of the Borrower, will be
named as a party or with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other similar administrative
or judicial requirements outstanding under any Mining and Environmental
Law with respect to the Properties or the Business.
(e) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that
could reasonably give rise to liability under any applicable Mining and
Environmental Laws.
(f) The Properties and all operations at the Properties
are in compliance in all respects with all applicable Mining and
Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any applicable Mining and Environmental
Law with
46
respect to the Properties or the Business that could interfere with the
continued operation of the Properties or materially impair the fair
saleable value thereof.
(g) The Borrower and its Subsidiaries hold and are in
compliance with all Mining and Environmental Permits necessary for
their operations.
(h) No Lien relating to or in connection with any Mining
and Environmental Law has been filed or has been attached to any
Property.
(i) The Borrower has delivered, or otherwise made
available, to the Lenders copies of all written environmental reports,
audits and assessments concerning the Properties and the Business in
the custody or control of the Borrower which are material to the
Business of the Borrower and the Subsidiaries taken as a whole,
including any prior business for which the Borrower or any of its
Subsidiaries has, or may reasonably be alleged to have, retained
liability under any Mining and Environmental Law.
4.17 Collateral Documents. (a) The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the pledged stock and other equity ownership
interests described therein and, when stock certificates representing or
constituting the pledged stock and other equity ownership interests described
therein are delivered to the Administrative Agent, such security interest shall,
subject to the existence of Permitted Liens, constitute a perfected first lien
on, and security interest in, all right, title and interest of the pledgor party
thereto in the pledged stock or other equity ownership interests described
therein.
(b) The Guarantee and Collateral Agreement is effective
to create in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein. Uniform Commercial Code financing statements have
been filed in each of the jurisdictions listed on Part I of Schedule 4.17 (which
lists fixture filings as well), or arrangements have been made for such filing
in such jurisdictions, and upon such filings, and upon the taking of possession
by the Administrative Agent of any such Collateral the security interests in
which may be perfected only by possession, such security interests will, subject
to the existence of Permitted Liens, constitute perfected first priority Liens
on, and security interests in, all right, title and interest of the debtor party
thereto in the collateral described therein.
(c) Any and all consents or approvals (whether pursuant
to Requirements of Law or any contract or other agreement or instrument) which
are required, necessary or prudent to perfect a security interest in each of the
Mortgages required hereunder, have been obtained. Each of the Mortgages is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable lien on the real
property or leasehold interest described therein and such liens constitute first
priority liens on the real property or leasehold interest described therein,
subject only to the existence of Liens as permitted by subsection 7.3(a), (e),
(f), (g) and (j).
4.18 Accuracy and Completeness of Information. No fact is
known to the Borrower or any of its Subsidiaries which has had or could
reasonably be expected to have a Material Adverse Effect, which has not been
disclosed to the Lenders by the Borrower or its Subsidiaries in writing prior to
the date hereof. No document furnished or statement made in writing to the
Lenders by the Borrower or any Subsidiary in connection with the negotiation,
preparation or execution of this Agreement or any of the other Credit Documents,
taken as a whole, contains any untrue statement of a material fact or omits to
state any such material fact necessary in order to make the statements contained
therein not misleading in
47
the context in which such statements are made. The Senior Notes Documents
constitute all of the material agreements relating to the Senior Notes.
4.19 Solvency. As of the Effective Date and after giving
effect to the Black Beauty Acquisition and the other transactions contemplated
by this Credit Agreement and the Senior Notes Documents, the Borrower was
"Solvent," in that (a) the property, at a fair valuation, of the Borrower and
its Subsidiaries, taken together as a single entity, exceeded their debts, (b)
the present fair salable value of the assets of the Borrower and its
Subsidiaries, taken together as a single entity, was greater than the amount
that will be required to pay their probable debts as such debts become absolute
and matured, and (c) the Borrower did not intend to, and did not believe that
the Borrower and its Subsidiaries, taken together as a single entity, would,
incur debts or liabilities beyond the their ability to pay as such debts and
liabilities mature. For purposes of this subsection, "debt" means "liability on
a claim" and "claim" means any (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured.
4.20 Labor Matters. There are no strikes, stoppages,
slowdowns or other labor disputes or controversies pending or, to the Borrower's
knowledge, overtly threatened against the Borrower or any of its Subsidiaries
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The hours worked and payments made to employees of the
Borrower and each of its Subsidiaries (and their predecessors) have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law, except to the extent such violations could not, or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
4.21 Insurance. Schedule 4.21 sets forth a true, complete
and correct description of all material insurance maintained by the Borrower or
by the Borrower for its Subsidiaries as of the Effective Date. As of such date,
such insurance is in full force and effect and all premiums have been duly paid
(unless such premium is being contested in good faith; provided that the policy
to which such premium relates is not canceled or in imminent danger of
cancellation as a result of such contest). The Borrower and its Restricted
Subsidiaries have insurance in such amounts and covering such risks and
liabilities as are in accordance with normal industry practice.
4.22 Coal Supply Agreements. Schedule 4.22 sets forth a
complete and accurate list of all Coal Supply Agreements to which the Borrower
or any other Credit Party is a party as of the Effective Date, including the
counterparty to each such agreement, which, by their terms, do not prohibit a
collateral assignment thereof to the Administrative Agent for the ratable
benefit of the Secured Parties or would not, upon such assignment or attempted
assignment require notice to any other party thereto. As of the Effective Date,
each such Coal Supply Agreement is in full force and effect, except to the
extent that the failure to be in full force and effect could not reasonably be
expected to have a Material Adverse Effect.
4.23 Mines. Schedule 4.23 sets forth a complete and
accurate list of all Mines (including addresses and the owner and operator
thereof) owned or operated by the Borrower or any of its Restricted Subsidiaries
as of the Effective Date.
4.24 Titled Equipment. The value of all vehicles, rolling
stock and other Operating Equipment owned by the Borrower or any of its
Restricted Subsidiaries as of the Effective Date and covered by certificates of
title is not, in the aggregate, material to the Borrower and its Subsidiaries
taken as a whole.
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4.25 Acts of God. Neither the Business nor the Properties
has been affected by any fire, explosion, accident, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), which could reasonably be expected to
have a Material Adverse Effect.
4.26 Surety Bonds. All surety, reclamation and similar
bonds required to be maintained by the Borrower or any of its Restricted
Subsidiaries under any Requirement of Law or Contractual Obligation are in full
force and effect and were not and will not be terminated, suspended, revoked or
otherwise adversely affected by virtue of the consummation of the financing
hereunder and under the Senior Notes Documents; provided that (i) self-bonding
permitted under Requirements of Law prior to the Effective Date may be required
to be replaced following the Effective Date with surety bonds, (ii) the cost of
such bonds may be increased and (iii) certain of such bonds may be terminated,
suspended or revoked, provided that, taken together, the events specified in
clauses (i), (ii) and (iii) above will not have a Material Adverse Effect. All
required guarantees of, and letters of credit with respect to, such surety,
reclamation and similar bonds are in full force and effect except where such
failure to be in full force and effect could not reasonably be expected to have
a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 Effective Date. The effectiveness of this Agreement
shall be subject to the satisfaction of each of the following conditions
precedent:
(a) The Administrative Agent shall have received (i) a
copy of the certificate of incorporation (or equivalent Constitutional
Document), including all amendments thereto, of each Credit Party,
certified as of a recent date by the Secretary of State of the state of
its organization, and a certificate as to the good standing of such
Credit Party as of a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Credit
Party dated the Effective Date and certifying (A) that attached thereto
is a true and complete copy of the by-laws (or equivalent
Constitutional Document) of such Credit Party as in effect on the
Effective Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors (or equivalent governing body) of such Credit Party
authorizing the execution, delivery and performance of the Credit
Documents to which such Credit Party is a party, the borrowings
hereunder (in the case of the Borrower), the granting by it of the
Liens created pursuant to the Security Documents to which it is a
party, and that such resolutions have not been modified or rescinded
and that the Constitutional Documents of such Credit Party have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (C) as to the incumbency and specimen signature of each officer
executing any Credit Document or any other document delivered in
connection herewith on behalf of the Borrower; and (iii) a certificate
of a Responsible Officer (other than the Secretary or Assistant
Secretary executing the certificate pursuant to clause (ii) above) as
to the incumbency and specimen signature of such Secretary or Assistant
Secretary.
(b) The Borrower and each Restricted Subsidiary that owns
or operates any of the real property Collateral (including any of the
mines located on or under such real property) or conducts any business
material to the Credit Parties taken as a whole shall be duly qualified
as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the
extent that the failure to so qualify could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, and the
Administrative Agent shall have received certificates of good
49
standing with respect to the Borrower and the other Credit Parties
issued by the Secretary of State (or other relevant officers) of each
such jurisdiction, each dated as of a recent date.
(c) The Administrative Agent shall have received from the
Borrower, the other Credit Parties, the Lenders and the Agents
duly-executed signature pages to each Credit Document to which each
such Person is a party (including, without limitation, this Agreement,
the Notes (if any), the Guarantee and Collateral Agreement and any
other Security Document) and each such Credit Document shall be in full
force and effect.
(d) The Administrative Agent shall have received the
following executed legal opinions:
(i) the executed legal opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Borrower and special New York
counsel to the other Credit Parties, substantially in the form of
Exhibit C-1;
(ii) the executed legal opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Esq., special Missouri counsel to the Borrower and in-house
counsel to the other Credit Parties, substantially in the form of
Exhibit C-2; and
(iii) the executed legal opinions of local counsel
to the Borrower and the other Credit Parties in the states of Illinois,
Kentucky, New Mexico, Wyoming, and West Virginia regarding perfection
of security interests in Collateral located in such jurisdictions.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agents may reasonably
require.
(e) The Administrative Agent shall have received UCC
financing statement amendments with respect to certain UCC-1 financing
statements and fixture filings originally executed and delivered by the
Credit Parties under the First Restated Credit Agreement and fully
executed amendments to the Mortgages originally executed and delivered
by the Credit Parties under the First Restated Credit Agreement, in
each case reflecting the amendment and restatement of the First
Restated Credit Agreement by this Agreement, as well as any other
instruments and documents in form and substance reasonably satisfactory
to the Administrative Agent necessary or, in the opinion of the
Administrative Agent, desirable to perfect, or continue the perfection
of, the Administrative Agent's security interest in any Collateral
granted by the Credit Parties pursuant to the Security Documents.
(f) The Administrative Agent shall have received (i)
evidence reasonably satisfactory to it that the Agents and the Lenders
have been named as additional insureds on all liability insurance
policies of the Borrower and its Restricted Subsidiaries and that the
Administrative Agent has been named as loss payee on all property and
casualty insurance policies of the Borrower and its Restricted
Subsidiaries and (ii) the other information required under subsection
6.5(b) to be delivered to the Administrative Agent on the Effective
Date.
(g) Each assignment of a Loan and/or a Commitment by the
Original Lenders to a Lender contemplated to occur on or prior to the
Effective Date shall have been consummated.
(h) The Lenders and the Agents shall have received
payment in full for all fees required to be paid and expenses for which
invoices have been presented on or before the
50
Effective Date (including, without limitation, the fees and expenses of
legal counsel to the Administrative Agent and the Syndication Agents).
(i) The Administrative Agent shall have received a
certificate, signed by a Responsible Officer of the Borrower, dated the
Effective Date and confirming that the representations and warranties
set forth herein and in the other Credit Documents are true and correct
in all material respects as of such date, except to the extent such
representations and warranties expressly relate solely to an earlier
date.
(j) On the Effective Date, no Default or Event of Default
shall have occurred and be continuing.
(k) No event shall have occurred since December 31, 2002
that could reasonably be expected to have a Material Adverse Effect.
(l) The Administrative Agent shall have received the
results of a recent lien, tax lien, judgment and litigation search in
each of the jurisdictions or offices in which UCC financing statements
or other filings or recordations should be made to evidence or perfect
(with the priority required under the Credit Documents) security
interests in all Collateral, and such search shall reveal no Liens on
any of the assets of the Borrower or its Subsidiaries except for (i)
Permitted Liens, (ii) Liens to be released on the Effective Date and
(iii) Liens subject to the provisions of subsection 6.22.
(m) The Administrative Agent shall have received the
certificates representing the shares of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
(n) The Lenders shall have received copies of the balance
sheets and statements of income and cash flows referred to in
subsection 4.1.
(o) The Lenders shall have received a report from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Associates confirming and validating the
methodology for establishing and calculating the coal reserves as
reported in the Borrower's Form 10-K for the period ending December 31,
2002, which shall be in form and substance reasonably satisfactory to
the Administrative Agent and the Syndication Agents.
(p) The Lenders shall have received financial projections
prepared by the Borrower for the Borrower and its Subsidiaries,
including, without limitation, income statements, balance sheets and
cash flow statements for the calendar years 2003 through 2007, which
shall be in form and substance reasonably satisfactory to the Lenders.
(q) On the Effective Date, the senior secured
Indebtedness of the Borrower shall be rated at least BB+ by S&P and Ba1
by ▇▇▇▇▇'▇.
(r) The Lenders shall have received evidence that, on and
after the Effective Date, Black Beauty shall be a guarantor of the
Obligations pursuant to the Guarantee and Collateral Agreement, Black
Beauty shall be a Restricted Subsidiary under this Agreement and all of
the Capital Stock of Black Beauty owned by any Credit Party shall be
pledged to the Administrative Agent for the ratable benefit of the
Secured Parties.
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(s) On the Effective Date, the Borrower shall have
consummated a portion of a tender offer for and retired a portion of
the Existing Notes on terms and conditions satisfactory to the
Administrative Agent.
(t) On the Effective Date, the Borrower shall have
received not less than $650,000,000 in gross proceeds from the sale of
the Senior Notes on terms and conditions reasonably satisfactory to the
Administrative Agent.
(u) The Administrative Agent and the Syndication Agents
shall have received such other documents, agreements, certificates and
information as it shall reasonably request.
5.2 Conditions to a Credit Event. The obligation of any
Lender or of the Issuing Lender on the occasion of any Credit Event is subject
to the satisfaction of the following conditions:
(a) The Administrative Agent shall have received a Notice
of Borrowing at least three (3) Business Days in advance of the date of
such Credit Event (subject to any shorter notice periods provided for
in subsection 2.2) or, in the case of the issuance of a Letter of
Credit, the Issuing Lender, the Administrative Agent shall have
received an Application requesting the issuance of such Letter of
Credit at least three (3) Business Days in advance of the date of such
Credit Event.
(b) On the date of such requested Credit Event, the
representations and warranties set forth herein and in the other Credit
Documents shall be true and correct in all material respects on and as
of such date, except for representations and warranties expressly
stated to relate solely to a specific earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects as of such earlier date.
(c) At the time of and immediately after such Credit
Event, no Default or Event of shall have occurred and be continuing.
(d) No event shall have occurred since the immediately
preceding Credit Event that could reasonably be expected to have a
Material Adverse Effect.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect or any amount is owing to any Lender or any Agent hereunder or
under any other Credit Document, the Borrower shall, and shall cause each of its
Subsidiaries (or, where specified, Restricted Subsidiaries) to:
6.1 Financial Statements. Furnish to the Administrative
Agent:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower beginning with the
fiscal year ending on December 31, 2003, a copy of the consolidated
balance sheet of (i) the Borrower and its consolidated Subsidiaries and
(ii) the Borrower and its Consolidated Subsidiaries, in each case as at
the end of such year and the related consolidated and Consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in comparative form the figures for
the previous year and, in the case of statements delivered under clause
(i), reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
independent certified public accountants of nationally recognized
standing and, in the case of statements delivered under clause (ii),
certified by a Responsible Officer;
52
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of
each fiscal year of the Borrower, (i) the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries and
(ii) the Consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, in each case as at the end of such quarter
and the related unaudited consolidated and Consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
applicable Subsidiaries for such quarter and the portion of the fiscal
year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in
all material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
6.2 Certificates; Other Information. Furnish to the
Administrative Agent:
(a) concurrently with the delivery of the financial
statements referred to in subsection 6.1(a)(i), a certificate of the
independent certified public accountants reporting on such financial
statements stating that, in performing their audit, nothing came to
their attention that caused them to believe that the Borrower failed to
comply with the provisions of subsection 7.1, except as specified in
such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a)(ii) and (b), a certificate
of a Responsible Officer stating that, to the best of such Officer's
knowledge, during such period (i) no Restricted Subsidiary has been
formed or acquired (or, if any such Subsidiary has been formed or
acquired, the Borrower has complied with the requirements of subsection
6.10 with respect thereto), (ii) neither of the Borrower nor any of its
Restricted Subsidiaries has changed its legal name or its jurisdiction
of organization without complying with the requirements of this
Agreement and the Security Documents with respect thereto and (iii)
such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate;
(c) concurrently with the delivery of financial
statements pursuant to subsection 6.1(a)(ii) (and, in the case of the
following clauses (ii) and (iii), concurrently with the delivery of the
financial statements referred to in subsection 6.1(b)), a certificate
of a Responsible Officer of the Borrower setting forth, in reasonable
detail, the computations, as applicable, of (i) Excess Cash Flow, (ii)
Capital Expenditures and (iii) the covenants set forth in subsection
7.1 and , as of such last day or for the fiscal period then ended, as
the case may be;
(d) not later than 60 days after the end of each fiscal
year of the Borrower, a copy of summary projections by the Borrower of
the operating budget and cash flow budget of the Borrower and its
Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect
that such projections have been prepared based on assumptions believed
by the Borrower to be reasonable;
(e) within five days after the same are sent, copies of
all financial statements and reports which the Borrower or any of its
Restricted Subsidiaries sends to its stockholders, and within five days
after the same are filed, copies of all financial statements and other
reports which
53
the Borrower or any of its Subsidiaries may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority; and
(f) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. With respect to the Borrower
and each of its Restricted Subsidiaries, pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, or otherwise in accordance
with customary industry practice, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or such Restricted Subsidiary, as the case may be.
6.4 Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect the legal existence of the Borrower and each Restricted Subsidiary,
except as otherwise expressly permitted under subsections 7.5 and 7.6.
(b) With respect to the Borrower and its Restricted
Subsidiaries, maintain, preserve, protect, and keep all Collateral and all other
property used or useful and necessary in the conduct of its business in good
condition (ordinary wear and tear and damage by fire or other casualty or taking
by condemnation excepted) and in compliance with all applicable material
Requirements of Law.
(c) Keep in full force and effect all of its material
leases and other material contract rights, and all material rights of way,
easements and privileges necessary or appropriate for the proper operation of
the Mines being operated by the Borrower or a Restricted Subsidiary.
(d) Obtain and comply with each permit, license,
authorization and other governmental approval necessary to recover Coal from any
Mine being operated by the Borrower or a Restricted Subsidiary and observe the
requirements thereof in all material respects, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(e) Cause each Mine being operated by the Borrower or a
Restricted Subsidiary to be operated, maintained, developed and mined and cause
the associated processing plants and other fixed and operating assets to be
operated and maintained, in a workmanlike manner, as would a prudent coal mine
operator, and in accordance with generally accepted mining practices and all
applicable Requirements of Law, including but not limited to applicable Mining
and Environmental Laws, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(f) Cause the Operating Equipment, the processing plants
associated with the Mines being operated by the Borrower or a Restricted
Subsidiary and other fixed and operating assets to be kept in effective
operating condition, and all repairs, renewals, replacements, addition and
improvements thereof or thereto needful to the production, processing and
transportation of Coal from any such Mine or associated properties to be
promptly made, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(g) Pay or cause to be paid when due all expenses
incurred in connection with the maintenance, development, operation and
protection of processing plants associated with the Mines being operated by the
Borrower or a Restricted Subsidiary and other fixed and operating assets, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
54
6.5 Insurance. (a) Maintain with financially sound
and reputable insurance companies insurance (including, without limitation, all
required surety, reclamation and similar bonds) on all its property in at least
such amounts and against at least such risks (but including in any event public
liability, cargo loss and business interruption) as are usually insured against
in the same general area by companies engaged in the same or a similar business;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried except to the extent that the failure to do any of
the foregoing with respect to any such property could not reasonably be expected
to result in a Material Adverse Effect, or, in the case of the Borrower and any
Restricted Subsidiary, materially adversely affect the value or usefulness of
such property; provided that in any event the Borrower will maintain, and will
cause each of its Restricted Subsidiaries to maintain, to the extent obtainable
on commercially reasonable terms, (i) property and casualty insurance on all
real and personal property on an all risks basis (including the perils of flood
and quake), covering the repair or replacement cost of all such property and
consequential loss coverage for business interruption and extra expense (which
shall be limited to fixed construction expenses and such other business
interruption expenses as are otherwise generally available to similar
businesses), and (ii) public liability insurance. All such insurance with
respect to the Borrower and its Restricted Subsidiaries shall be provided by
insurers or reinsurers which (x) in the case of United States insurers and
reinsurers, have an A.M. Best policyholders rating of not less than A- with
respect to primary insurance and B+ with respect to excess insurance and (y) in
the case of non-United States insurers or reinsurers, the providers of at least
80% of such insurance have either an ISI policyholders rating of not less than
A, an A.M. Best policyholders rating of not less than A- or a surplus of not
less than $500,000,000 with respect to primary insurance, and an ISI
policyholders rating of not less than BBB with respect to excess insurance, or,
if the relevant insurance is not available from such insurers, such other
insurers as the Administrative Agent may approve in writing. All insurance shall
provide that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof.
(b) The Borrower and its Restricted Subsidiaries will
deliver to the Administrative Agent on behalf of the Lenders, (i) on the
Effective Date a certificate dated such date showing the amount of insurance
coverage as of such date, (ii) upon request of any Lender through the
Administrative Agent from time to time full information as to the insurance
carried, (iii) promptly following receipt of notice from any insurer, a copy of
any notice of cancellation or material change in coverage from that existing on
the Effective Date, (iv) forthwith, notice of any cancellation or nonrenewal of
coverage by the Borrower or any Subsidiary, and (v) promptly after such
information is available to the Borrower, full information as to any claim for
an amount in excess of $2,500,000 with respect to any property and casualty
insurance policy maintained by the Borrower or any Restricted Subsidiary. The
Agents and the Lenders shall be named as additional insureds on all such
liability insurance policies of the Borrower and its Restricted Subsidiaries and
the Administrative Agent shall be named as loss payee on all property and
casualty insurance policies of the Borrower and its Restricted Subsidiaries. Any
proceeds from any such insurance policy in respect of any claim, or any
condemnation award or other compensation in respect of a condemnation (or any
transfer or disposition of property in lieu of condemnation) for which the
Borrower or any of its Restricted Subsidiaries receives a condemnation award or
other compensation shall be paid to the Borrower or the Restricted Subsidiary;
provided that any such proceeds paid to the Borrower or any Restricted
Subsidiary with respect to, and to the extent of, a loss attributable to any
Unrestricted Subsidiary or its property shall be paid to such Unrestricted
Subsidiary; provided further that: (A) the Borrower or the Restricted Subsidiary
will use such proceeds, condemnation award or other compensation to repair,
restore or replace the assets which were the subject of such claim within 12
months after receipt thereof (and a Responsible Officer shall deliver a
certificate specifying in reasonable detail such usage not later than the last
day of such relevant period), and (B) if, at the time of the receipt of such
proceeds, condemnation award or other compensation, an Event of Default has
occurred and is continuing, the aggregate amount of all such proceeds,
condemnation award or other compensation shall be paid to the Administrative
Agent and held as Collateral for application in accordance with the Security
55
Documents; and provided further that, to the extent that any amount of such
proceeds, condemnation award or other compensation are not used or committed
during the time period specified in proviso (A) above, then, if requested by
notice from the Required Lenders to the Borrower, all such remaining uncommitted
proceeds, condemnation award or other compensation shall be paid to the
Administrative Agent and held as Collateral for application in accordance with
the Security Documents.
6.6 Inspection of Properties; Books and Records;
Discussions. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of any Lender to visit and inspect any of
its properties and examine any of its books, records, agreements, contracts and
the like (except to the extent (i) any such access is restricted by a
Requirement of Law or (ii) any such agreements, contracts or the like are
subject to a written confidentiality agreement with a non-Affiliate that
prohibits the Borrower or any of its Subsidiaries from granting such access to
the Lenders; provided that, with respect to such confidentiality restrictions
affecting the Borrower or any of its Restricted Subsidiaries, a Responsible
Officer is made available to such Lender to discuss such confidential
information to the extent permitted) at any reasonable time and upon reasonable
notice on a Business Day and as often as may reasonably be desired by any Lender
and to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with its independent certified public
accountants; provided that the Administrative Agent or such Lender shall notify
the Borrower prior to any contact with such accountants and give the Borrower
the opportunity to participate in such discussions; provided, further, that the
Borrower shall notify the Administrative Agent of any such visits, inspections
or discussions prior to each occurrence thereof.
6.7 Notices. Promptly give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
material Contractual Obligation of the Borrower or any of its
Restricted Subsidiaries, (ii) litigation, investigation or proceeding
which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either case,
could reasonably be expected to have a Material Adverse Effect or (iii)
any material asset sale by the Borrower or a Restricted Subsidiary
(describing in reasonable detail the assets sold, the consideration
received therefor and the proposed use of the proceeds thereof);
(c) any other litigation or proceeding affecting the
Borrower or any of its Restricted Subsidiaries in which the amount
involved is $10,000,000 or more and not covered by insurance; and
(d) the following events that, individually or in the
aggregate, would be reasonably likely to have a Material Adverse
Effect, as soon as possible and in any event within 20 days after the
Borrower knows or has reason to know thereof: (i) the incurrence or
expected incurrence of an accumulated funding deficiency or the filing
or expected filing of an application to the Secretary of the Treasury
for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension or expected
extension of any amortization period under Section 412 of the Code with
respect to a Plan, the creation of any Lien or the expected creation of
any Lien in favor of the PBGC or a Plan, and the reassumption or
expected reassumption by the Seller of sponsorship of any Single
Employer Plan, (ii) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan (other than a Multiple
Employer Plan), or any withdrawal from or expected withdrawal from, or
the
56
termination, Reorganization or Insolvency, or expected termination,
Reorganization or Insolvency of, any Multiemployer Plan, or a failure
or reasonably expected failure to make any required contribution to a
Plan, (iii) the institution or the expected institution of proceedings
by the PBGC or any Person (including any employer) with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Single Employer Plan or Multiemployer Plan, (iv) the incurrence or
expected incurrence of any liability pursuant to (A) the Coal Act
(other than with respect to required premiums or other payments which
are timely paid), or (B) the Black Lung Act (other than with respect to
required premiums, contributions or other payments which are timely
paid), or (v) any adoption of, assumption of, amendment of, or
modification of any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees
(other than as required by Section 601 of ERISA or the Coal Act which
on a FAS 106 basis results in the incurrence or expected incurrence of
any increased liability with respect thereto).
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8 Mining and Environmental Laws. Except as would not
reasonably be expected to have a Material Adverse Effect: (a)(i) Comply in
all respects with all applicable Mining and Environmental Laws, and obtain,
comply in all respects with, and maintain any and all Mining and Environmental
Permits necessary for its operations as conducted and as planned; and (ii) take
all reasonable efforts to ensure that all of its tenants, subtenants,
contractors, subcontractors, and invitees comply in all respects with all
applicable Mining and Environmental Laws, and obtain, comply in all respects
with and maintain any and all Mining and Environmental Permits, applicable to
any of them. Notwithstanding the foregoing, upon learning of any actual or
suspected noncompliance covered above, the Borrower or one or more of its
Subsidiaries, as appropriate, shall promptly undertake all reasonable efforts to
achieve compliance; and
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions in each case
required under applicable Mining and Environmental Laws and promptly comply in
all respects with all lawful orders and directives of all Governmental
Authorities regarding applicable Mining and Environmental Laws except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.
6.9 Further Assurances. With respect to the Borrower and
its Restricted Subsidiaries, upon the reasonable request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Secured Parties, Liens on the Collateral that are duly
perfected in accordance with all applicable Requirements of Law.
6.10 Additional Collateral. (a) With respect to any
assets (other than (w) any assets described in subsection 6.10(b), (x) assets of
Black Beauty, which are governed by subsection 6.10(e), (y) immaterial assets a
Lien on which cannot be perfected by physical delivery to the Administrative
Agent or by filing UCC-1 financing statements, and (z) assets constituting
interests in real property) acquired on or after the Effective Date by the
Borrower or any of its Restricted Subsidiaries existing on the Effective Date or
owned by any Credit Party that becomes a Restricted Subsidiary after the
Effective Date and which has elected in writing to the Administrative Agent to
be irrevocably bound by the provisions of this
57
subsection 6.10(a), in each case which assets are not already subject to the
Lien created by any of the Security Documents, promptly (and in any event within
thirty (30) days after the acquisition thereof): (i) execute and deliver to the
Administrative Agent such amendments to the relevant Security Documents or such
other documents as the Administrative Agent shall deem necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
Lien on such assets, (ii) take all actions necessary or advisable to cause such
Lien to be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the delivery of the applicable assets to the
Administrative Agent or the filing of financing statements in such jurisdictions
as may be requested by the Administrative Agent, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clauses (i) and (ii) of this subsection
6.10(a), which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(b) With respect to any Person that, on or subsequent to
the Effective Date, (x) becomes a direct or indirect Restricted Subsidiary, (y)
ceases to be a Foreign Subsidiary but retains its Restricted Subsidiary status,
or (z) ceases to be an Unrestricted Subsidiary but retains its, or otherwise
qualifies hereunder for, Subsidiary status, as applicable: (i) no later than
thirty (30) days after the date such Person becomes such a Subsidiary, execute
and deliver to the Administrative Agent, for the benefit of the Secured Parties,
such amendments to the Guarantee and Collateral Agreement as the Administrative
Agent shall deem necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a Lien on the Capital Stock of such
Restricted Subsidiary which is owned by the Borrower or any of its Restricted
Subsidiaries, provided that with respect to any Restricted Subsidiary which is
not wholly owned by a Credit Party or any Affiliate thereof, a Lien on the
Capital Stock of such Restricted Subsidiary shall not be required to the extent
that the grant of such Lien is prohibited by the Constitutional Documents of
such Restricted Subsidiary, (ii) no later than thirty (30) days after the date
such Person becomes such a Subsidiary, deliver to the Administrative Agent the
certificates, if any, representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized officer of the
Borrower or such Restricted Subsidiary, as the case may be, (iii) cause such
Restricted Subsidiary no later than thirty (30) days after the date such Person
becomes such a Subsidiary, to become a party to the Guarantee and Collateral
Agreement (solely for the purpose of guaranteeing the Obligations and not for
the purpose of granting a Lien on the assets of such Restricted Subsidiary to
the Administrative Agent) and the Subordination Agreement, in each case pursuant
to documentation which is in form and substance reasonably satisfactory to the
Administrative Agent, and (iv) within thirty (30) days of the date such Person
becomes such a Subsidiary, if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described in
clauses (i), (ii) and (iii) of this subsection 6.10(b), which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent. Notwithstanding the foregoing, (1) no Foreign Subsidiary
of the Borrower shall be required to execute the Guarantee and Collateral
Agreement, (2) no more than 65% of the Capital Stock of or equity interests in
any direct Foreign Subsidiary of the Borrower or any of its Subsidiaries (and
none of the Capital Stock of or equity interests in any indirect Foreign
Subsidiary), or any other of its Subsidiaries if more than 65% of the assets of
such Subsidiary are securities of foreign companies (such determination to be
made on the basis of fair market value), shall be required to be pledged
hereunder, (3) no Unrestricted Subsidiary shall be required to become a party to
the Guarantee and Collateral Agreement and (4) the Capital Stock of Unrestricted
Subsidiaries pledged to the Administrative Agent pursuant to the Guarantee and
Collateral Agreement shall be released as provided in subsection 8.16 thereof.
(c) At all times after the Borrower and its Restricted
Subsidiaries have recognized, collectively, an asset "impairment loss" (as such
term is contemplated by and pursuant to F.A.S. 121 ("Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"))
(or more than one such asset impairment loss) with respect to Collateral
totaling in the aggregate Fifty
58
Million Dollars ($50,000,000.00) or more, as promptly as reasonably practical
but in any event no later than ninety (90) days after each such recognition in
excess of such initial $50,000,000, the Borrower at its sole cost and expense
shall have delivered or caused to be delivered to the Administrative Agent (i)
one or more Mortgages with respect to real property interests owned by Borrower
or any of its Restricted Subsidiaries (other than leased real property located
in the State of Arizona, the mortgaging of which would require the consent of
the lessor thereof and with respect to which the Borrower has determined in good
faith, after consultation with the Administrative Agent, that the seeking of
such consent would be materially disadvantageous to its business) which (A) are
not already subject to any Mortgage, (B) which have been selected by the
Administrative Agent in its reasonable discretion, and (C) have a total value
(as reasonably determined by the Administrative Agent) at least equal to the
dollar value of such "impairment loss" recognition, such Mortgages in each case
to be executed and delivered by a duly authorized officer of the mortgagor party
thereto, with a counterpart or a conformed copy for each Lender, (ii) a legal
opinion in form and substance, and from counsel licensed to practice in the
jurisdiction in which each such Mortgage is to be recorded, reasonably
satisfactory to the Administrative Agent, including, without limitation, an
opinion that such Mortgage is a legal, valid and binding instrument, enforceable
according to its terms, (iii) as selected by the Administrative Agent in its
reasonable discretion (the exercise of which shall take into account industry
practices in the area in which each such Mortgage is to be recorded), with
respect to each parcel covered by the applicable Mortgage encumbering such real
property, either (A) a mortgagee's title policy (or policies) (each such policy
satisfying the requirements of this subsection 6.10(c), a "Title Policy") dated
a date reasonably satisfactory to the Administrative Agent, which such
policy(ies) shall (1) be in an amount reasonably satisfactory to the
Administrative Agent; (2) ensure that the Mortgage insured thereby creates a
valid first Lien on such parcel free and clear of all defects and encumbrances,
except for liens permitted by subsections 7.3(a), (e), (f), (g), and (j) such
other liens and defects as may be approved in writing by the Administrative
Agent; (3) name the Administrative Agent for the benefit of the Secured Parties
as the insured thereunder; (4) be in the form of ALTA Loan Policy - 1992; (5)
contain such endorsements and affirmative coverage as the Administrative Agent
may reasonably request and (6) be issued by title companies reasonably
satisfactory to the Administrative Agent (including any such title companies
acting as co-insurers or reinsures, at the option of the Administrative Agent),
and the Administrative Agent shall have received evidence reasonably
satisfactory to it that all premiums in respect of each such policy, and all
charges for mortgage recording tax, if any, have been paid or (B) a legal
opinion from local counsel in the jurisdiction of such Mortgage, in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, including, without limitation, an opinion that the mortgagor who is named
in such Mortgage holds legal and valid title to the interests secured thereby,
free and clear of all defects and encumbrances, except for liens permitted by
subsections 7.3(a), (e), (f), (g) and (j), and such other liens and defects
approved by and/or acceptable to the Administrative Agent (a "Title Opinion")
and (iv) a certificate executed by an officer of the Borrower or the Restricted
Subsidiary, as applicable, issued to the Administrative Agent, certifying that
at the time of such certification the fair market value of the real property
interests which are being secured pursuant to this clause 6.10(c)(vii) equal or
exceed the amount of the applicable "impairment loss" recognition, and that such
recognition is in all other respects in accordance with GAAP.
(d) If required pursuant to Regulation H, the Borrower
shall deliver to the Administrative Agent (A) a policy of or certificate
evidencing flood insurance which (i) covers the parcel of improved real property
which is encumbered by the applicable Mortgage, (ii) is written in an amount not
less than the outstanding principal amount of the indebtedness secured by such
Mortgage which is reasonably allocable to such parcel of improved real property
or the maximum limit of coverage made available with respect to the particular
type of property under the National Flood Insurance Act of 1968, whichever is
less, and (iii) will be renewed annually at least for a series of terms ending
not earlier than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required pursuant to
Section 208(e)(3) of Regulation H.
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(e) If at any time following the consummation of the
Black Beauty Acquisition the Borrower's senior secured Indebtedness is rated BB-
or below by S&P or Ba3 or below by ▇▇▇▇▇'▇ (the "Black Beauty Condition"),
promptly (i) cause a Lien to be granted to the Administrative Agent for the
ratable benefit of the Secured Parties and perfected on substantially all of the
assets and property of Black Beauty, its wholly owned Subsidiaries and its
non-wholly owned Subsidiaries with respect to which any equity interests not
owned by Black Beauty are owned directly or indirectly by a Credit Party, (ii) a
Mortgage with respect to each of the real property interests held by Black
Beauty, its wholly owned Subsidiaries and its non-wholly owned Subsidiaries with
respect to which any equity interests not owned by Black Beauty are owned
directly or indirectly by a Credit Party, executed and delivered by a duly
authorized officer of the mortgagor party thereto, with a counterpart or a
conformed copy for each Lender, (iii) a legal opinion in form and substance, and
from counsel licensed to practice in the jurisdiction in which such Mortgage is
to be recorded, reasonably satisfactory to the Administrative Agent, including,
without limitation, an opinion that such Mortgage is a legal, valid and binding
instrument, enforceable according to its terms (subject to customary
exceptions), and (iv) either a Title Policy or a Title Opinion, to be selected
by the Administrative Agent in its reasonable discretion, the exercise of which
shall take into account industry practices in the area in which such Mortgage is
to be recorded .
(f) If at any time prior to the occurrence of the Black
Beauty Collateral Event (i) Black Beauty shall no longer be a Restricted
Subsidiary and (ii) the Black Beauty Condition shall exist, then the Borrower
shall promptly cause a Lien to be granted to the Administrative Agent for the
ratable benefit of the Secured Parties and perfected on assets of a Credit Party
whose aggregate value, in the reasonable opinion of the Administrative Agent
(after consultation with the Borrower), shall be equal to the value of assets on
which a Lien would have been granted to the Administrative Agent if Black Beauty
had been a Restricted Subsidiary upon the occurrence of the Black Beauty
Condition.
(g) The Borrower hereby represents and warrants that the
real property interests described on Schedule 4.8(a)(ii) constitute
substantially all of the real property interests owned or controlled by the
Borrower or any of its Restricted Subsidiaries with respect to (i) the operating
mines (including coal reserves) known or referred to by the Borrower or any of
its Restricted Subsidiaries as the Rawhide Mine, the Caballo Mine, the North
Antelope/▇▇▇▇▇▇▇▇ Mine Complex and the Black Mesa/Kayenta Mine Complex, and (ii)
the coal reserves known or referred to by the Borrower or its Restricted
Subsidiaries as the Belleville Reserves and the Beaver Dam Reserves.
6.11 Foreign Jurisdictions. Maintain qualification as a
foreign corporation in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to do so
qualify could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.12 Maintenance of Collateral; Alterations. Refrain from
committing any waste on any Collateral, except in the ordinary course of its
business, or make any material change in the use of any Collateral, provided
that, unless otherwise permitted by, and subject to the other provisions of,
this Agreement, any Credit Party may sell or lease to any other Person all or
any portion of any item of Collateral that the Borrower has determined in good
faith is not used or useful in such Credit Party's operating business.
6.13 Use of Proceeds. Use the proceeds of the Loans only
for the purposes specified in subsection 4.15.
6.14 Preparation of Environmental Reports. If an Event of
Default caused by reason of a breach of subsection 4.16 or 6.8 (with respect to
compliance with Mining and Environmental Laws)
60
shall have occurred and be continuing, at the reasonable request of the Required
Lenders through the Administrative Agent, the Borrower shall provide to the
Lenders within 60 days after such request, at the expense of the Borrower, an
environmental site assessment report for the Properties which are the subject of
such default prepared by an environmental consulting firm reasonably acceptable
to the Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or remedial action in
connection with such Properties.
6.15 Maintenance of Coal Reserves. Maintain at all times
available Coal reserves, or the rights to acquire coal from third parties,
sufficient to fulfill its requirements under existing Coal Supply Agreements.
6.16 Coal Supply Agreements. At all times comply fully
with all of the terms and conditions of its Coal Supply Agreements, the
nonperformance with which could reasonably be expected to have a Material
Adverse Effect. The Borrower and each of its Subsidiaries shall further perform
any and all actions necessary to maintain all Coal Supply Agreements material to
its business in full force and effect. To the extent practicable and
commercially reasonable (provided that in no circumstance shall the Borrower or
any of its Restricted Subsidiaries be required to incur any additional costs or
impair any existing or potential business relationship), neither the Borrower
nor any of its Restricted Subsidiaries shall after the Effective Date enter into
any Coal Supply Agreements which do not provide that such Coal Supply Agreements
are assignable to the Lenders without the consent of any other party to such
Coal Supply Agreement.
6.17 Exploration and Reserves. All primary and basic
exploration data and information pertaining to the Mines will be preserved where
reasonable in accordance with customary industry practice and in a sound and
careful manner for future use and review. All such information together with all
other reserve reports and maps, analysis and, upon reasonable notice,
engineering and operating data and similar information pertaining to the Mines
being operated by any Credit Party shall be available at all reasonable times
for inspection and review by authorized representatives of the Administrative
Agent (except to the extent (i) any such access is restricted by a Requirement
of Law or (ii) any such data, information or the like are subject to a written
confidentiality agreement with a non-Affiliate that prohibits the Borrower or
any of its Subsidiaries from granting such access to the Lenders; provided that,
with respect to the Borrower or any of its Restricted Subsidiaries, a
Responsible Officer is made available to such Lender to discuss such
confidential information to the extent permitted).
6.18 Certain Long Term Liabilities and Environmental
Reserves. To the extent required by GAAP, maintain adequate reserves for (i)
future costs associated with any lung disease claim alleging pneumoconiosis or
silicosis or arising out of exposure or alleged exposure to coal dust or the
coal mining environment, (ii) future costs associated with retiree and health
care benefits, (iii) future costs associated with reclamation of disturbed
acreage, removal of facilities and other closing costs in connection with its
mining operations and (iv) future costs associated with other potential
environmental liabilities.
6.19 Unrestricted Subsidiaries. No Restricted Subsidiary
may be owned in whole or in part by an Unrestricted Subsidiary.
6.20 Partner Support Percentage; Total Project Cost. Cause
(i) the Partner Support Percentage to represent the maximum recourse of the
Project Construction Lenders to the Project Partners, (ii) the Partner Support
Percentage to not exceed 60% of the Total Project Cost and (iii) the Total
Project Cost to not exceed $2,600,000,000 in the case of Thoroughbred and
$2,600,000,000 in the case of Prairie States, without the consent of the
Administrative Agent and Required Lenders.
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6.21 Black Beauty. (i) Endeavor in good faith to
consummate the Black Beauty Acquisition as promptly after the Effective Date as
commercially reasonable, (ii) on the Effective Date, issue a notice of
prepayment to the holders of the Black Beauty Debt and (iii) repay or cause to
be repaid in full all Black Beauty Debt within 45 days following the Effective
Date.
6.22 Liens. Cause the prompt release and discharge of, or
take other action as may be reasonably satisfactory to the Administrative Agent
with respect to, Liens (other than Permitted Liens) reflected in the results of
the lien searches required pursuant to subsection 5.1(l).
6.23 Existing Notes. (a) On the Effective Date, deposit
into a collateral account opened by the Administrative Agent (the "Collateral
Account") proceeds of the Term Loans (and/or the Senior Notes) in an amount
sufficient to repay in full all Existing Notes other than the Existing Notes
repaid on the Effective Date. The Borrower hereby grants to the Administrative
Agent, for the benefit of the Secured Parties, a security interest in such
proceeds and the Collateral Account to secure all obligations of the Borrower
under this Agreement and the other Credit Documents. From time to time upon the
written request of the Borrower, the Administrative Agent shall release funds
from the Collateral Account to be used within one Business Day of such release
to repay or redeem Existing Notes. Amounts in the Collateral Account shall be
invested by the Administrative Agent at the direction of the Borrower in Cash or
Cash Equivalents.
(b) The Borrower will (i) on or before April 15, 2003, deliver
(or cause the delivery of) notice to the holders of all outstanding Existing
Notes of the exercise of optional prepayment of all such Existing Notes and (ii)
cause the repayment in full of all Existing Notes on or before May 31, 2003. Any
amounts remaining in the Collateral Account after May 31, 2003, will be returned
to the Borrower unless any Existing Notes remain outstanding, in which case such
amounts may be applied by the Administrative Agent to prepay the Loans in
accordance with subsection 2.6(b)(iv).
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any portion of the
Commitments remain in effect or any amount is owing to any Lender or any of the
Agents hereunder or under any other Credit Document, the Borrower shall not, and
(except with respect to subsection 7.1) shall not permit any of its Restricted
Subsidiaries (and, with respect to subsections 7.2, 7.3 and 7.4, its
Unrestricted Subsidiaries) to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated EBITDA to Consolidated Cash Interest
Expense Ratio. Permit the Consolidated EBITDA to Consolidated Cash Interest
Expense Ratio at the last day of any fiscal quarter to be less than 2.50:1.00.
(b) Consolidated Total Obligations to Consolidated EBITDA
Ratio. Permit the Consolidated Total Obligations to Consolidated EBITDA Ratio at
the last day of any fiscal quarter to be greater than the ratio set forth below
opposite such date:
Fiscal Quarter Ending Ratio
--------------------- -----
6/30/03 4.25
9/30/03 4.25
12/31/03 4.25
3/31/04 4.25
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Fiscal Quarter Ending Ratio
--------------------- -----
6/30/04 4.00
9/30/04 4.00
12/31/04 4.00
3/31/05 4.00
6/30/05 3.75
9/30/05 3.75
12/31/05 3.75
3/31/06 3.75
6/30/06 3.50
Thereafter 3.50
(c) Consolidated Secured Debt to Consolidated EBITDA
Ratio. Permit the Consolidated Secured Debt to Consolidated EBITDA Ratio at the
last day of any fiscal quarter to be greater than 2.50:1.00.
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness (including in respect of Interest Rate
Agreements) except:
(a) (i) Indebtedness of the Borrower under the Credit
Documents and (ii) Indebtedness evidenced by the Senior Notes;
(b) Indebtedness of the Borrower and any Restricted
Subsidiary incurred to finance the acquisition by the Borrower or a
Restricted Subsidiary of fixed or capital assets (whether pursuant to a
loan, a Financing Lease or otherwise) in an aggregate principal amount
not exceeding $250,000,000 at any time outstanding;
(c) Indebtedness of a Person which becomes a Restricted
Subsidiary after the date hereof, provided that (i) such indebtedness
existed at the time such Person became a Restricted Subsidiary and was
not created in anticipation thereof, (ii) immediately after giving
effect to the acquisition of such Person by the Borrower or its
Restricted Subsidiary, no Default or Event of Default shall have
occurred and be continuing, (iii) immediately after giving effect to
the acquisition of such Person by the Borrower or its Restricted
Subsidiary, the Borrower and its Restricted Subsidiaries shall be in
pro forma compliance with the covenants contained in subsection 7.1,
calculated based on the relevant financial statements delivered
pursuant to subsection 6.1, as though such acquisition occurred at the
beginning of the period covered thereby, as evidenced by a certificate
of a Responsible Officer of the Borrower furnished to the
Administrative Agent demonstrating such compliance; and (iv) at no time
shall all such Indebtedness permitted under this subsection (c) exceed
$300,000,000 in the aggregate outstanding.
(d) additional Indebtedness of the Borrower and its
Restricted Subsidiaries not otherwise permitted hereunder not exceeding
an aggregate principal amount at any time outstanding equal to 15% of
Tangible Assets minus the aggregate amount of outstanding Project
Guarantee Obligations; provided, however, that immediately after giving
effect to the incurrence of any such Indebtedness by the Borrower or
its Restricted Subsidiary, (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Borrower and its
Restricted Subsidiaries shall be in pro forma compliance with the
covenants contained in subsection 7.1, calculated based on the relevant
financial statements delivered pursuant to subsection 6.1, as though
such incurrence occurred at the beginning of the period covered
thereby, as evidenced by
63
a certificate of a Responsible Officer of the Borrower furnished to the
Administrative Agent demonstrating such compliance; and
(e) Indebtedness of the Borrower and its Restricted
Subsidiaries (other than under subsection (a)) outstanding or committed
on the Effective Date and reflected on Schedule 7.2(e), provided that,
with respect to all Indebtedness of one Credit Party to another Credit
Party, such Credit Parties have complied with the provisions of
subsection 7.2(g);
(f) Indebtedness in respect of Hedge Agreements incurred
in the ordinary course of business and consistent with prudent business
practice (in any case, for the purpose of risk management only and not
for the purpose of speculation);
(g) unsecured Indebtedness of any Credit Party to any
other Credit Party that is a Blanket Grantor; provided, that (i) such
Credit Parties have complied with the provisions of Subsection 6.10(b)
and (ii) with respect to Indebtedness for borrowed money, there exists
an instrument or instruments evidencing such Indebtedness and such
instrument or instruments have been pledged to the Administrative
Agent, for the benefit of the Secured Parties, pursuant to the terms of
the Guarantee and Collateral Agreement;
(h) Indebtedness secured by Permitted Liens;
(i) extensions, renewals or refinancings of Indebtedness
under subsections 7.2(a)(ii) and 7.2(c) and (e) so long as (i) such
Indebtedness (the "Refinancing Indebtedness") is in an aggregate
principal amount not greater than the aggregate principal amount of the
Indebtedness being extended, renewed or refinanced plus the amount of
any premiums required to be paid thereon and fees and expenses
associated therewith, (ii) such Refinancing Indebtedness has a later or
equal final maturity and a longer or equal weighted average life than
the Indebtedness being extended, renewed or refinanced, (iii) the
interest rate applicable to such Refinancing Indebtedness is a market
interest rate (as determined in good faith by the Board of Directors of
the Borrower) as of the time of such extension, renewal or refinancing,
(iv) if the Indebtedness being extended, renewed or refinanced is
subordinated to the Obligations, such Refinancing Indebtedness is
subordinated to the extent of the Indebtedness being extended, renewed,
or refinanced, (v) the covenants, events of default and other
provisions thereof (including any guarantees thereof and security
therefor), taken as a whole, are no less favorable to the Lenders than
those contained in the Indebtedness being refinanced and (vi) at the
time and after giving effect to such extension, renewal or refinancing,
no Event of Default shall have occurred and be continuing;
(j) Indebtedness of any Unrestricted Subsidiary
consisting entirely of Non-Recourse Debt; provided, however, that if
any such Indebtedness ceases to be Non-Recourse Debt of such
Unrestricted Subsidiary, such event shall be deemed to constitute an
incurrence of Indebtedness by a Restricted Subsidiary of the Borrower
that was not permitted by this subsection 7.2(j);
(k) Guarantee Obligations that have been deemed to be
Indebtedness pursuant to subsection 7.4(a);
(l) Indebtedness incurred pursuant to the Existing
Securitization;
(m) Indebtedness incurred in connection with a
securitization transaction permitted by subsection 7.6(j);
64
(n) subject to the provisions of subsection 6.23,
Indebtedness under the Existing Notes not retired as of the Effective
Date;
(o) intercompany current liabilities incurred in the
ordinary course of business in connection with cash management
operations of the Borrower and its Subsidiaries; and
(p) Indebtedness of Peabody Energy Australia Pty Ltd and
Peabody COALTRADE Australia Pty Ltd to the Borrower in an aggregate
amount not to exceed $50,000,000; provided that there exists an
instrument or instruments evidencing such Indebtedness and such
instrument or instruments have been pledged to the Administrative Agent
for the benefit of the Secured Parties pursuant to the terms of the
Guarantee and Collateral Agreement.
7.3 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of
the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) (i) deposits to secure the performance of bids,
surety bonds, trade contracts (other than for borrowed money), leases
(other than Capital Lease Obligations), reclamation bonds, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business, (ii) Liens on assets not constituting Collateral to secure
obligations under surety bonds obtained as required in connection with
the entering into of new federal coal leases and (iii) Liens on other
assets not constituting Collateral with a value not in excess of
$100,000,000 at any time to secure obligations under other surety
bonds;
(e) easements, rights-of-way, zoning restrictions, other
restrictions and other similar encumbrances previously or hereafter
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or
such Subsidiary, or which are set forth in any Title Policy delivered
to the Administrative Agent pursuant to the terms of this Agreement;
(f) Liens in existence on the Effective Date and listed
on Schedule 7.3(f), securing Indebtedness permitted by subsection
7.2(e);
(g) Liens securing Indebtedness of the Borrower and its
Restricted Subsidiaries permitted by subsection 7.2(b) incurred to
finance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness (other than after acquired title in or on such property
and proceeds of the existing collateral in accordance with the
instrument creating such Lien) and
65
(iii) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed 100% of the original purchase price of such
property of such property at the time it was acquired;
(h) Liens on the property or assets of a Person which
becomes a Restricted Subsidiary after the date hereof securing
Indebtedness permitted by subsection 7.2(c), provided that (i) such
Liens existed at the time such entity became a Subsidiary and were not
created in anticipation thereof, (ii) any such Lien is not expanded to
cover any other property or assets of such Person (other than the
proceeds of the property or assets subject to such Lien) or of the
Borrower or any Restricted Subsidiary, and (iii) the amount of
Indebtedness secured thereby is not increased;
(i) Liens created pursuant to this Agreement and the
Security Documents;
(j) Liens on the property of the Borrower or any of its
Subsidiaries, as a tenant under a lease or sublease entered into in the
ordinary course of business by such Person, in favor of the landlord
under such lease or sublease, securing the tenant's performance under
such lease or sublease, as such Liens are provided to the landlord
under applicable law and not waived by the landlord;
(k) so long as no Default or Event of Default shall have
occurred and be continuing under subsection 8(h), attachment or
judgment Liens in an aggregate amount outstanding at any one time not
in excess of $35,000,000;
(l) Liens arising from precautionary Uniform Commercial
Code financing statement filings with respect to operating leases or
consignment arrangements entered into by the Borrower or any of its
Restricted Subsidiaries in the ordinary course of business;
(m) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of set-off)
held by such banking institutions incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry;
(n) Liens securing Refinancing Indebtedness, to the
extent that the Indebtedness being refinanced was originally secured in
accordance with this subsection 7.3; provided that such Lien does not
apply to any additional property or assets of the Borrower or any
Subsidiary (other than the proceeds of the property or assets subject
to such Lien);
(o) Production Payments, royalties, dedication of
reserves under supply agreements or similar rights or interests
granted, taken subject to, or otherwise imposed on properties
consistent with normal practices in the mining industry;
(p) Liens on assets of (and Capital Stock and other
equity interests in) Unrestricted Subsidiaries securing obligations of
Unrestricted Subsidiaries not otherwise prohibited hereunder;
(q) Liens (not otherwise permitted hereunder) which
secure obligations not exceeding $25,000,000 in the aggregate at any
time outstanding and which are not senior to the Liens created pursuant
to this Agreement and the Security Documents; and
(r) Liens on assets other than Collateral securing the
net amount of Indebtedness under Hedge Agreements that are not
Specified Hedge Agreements.
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7.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations not otherwise permitted under
this subsection 7.4 incurred after the Effective Date in an aggregate amount not
to exceed $100,000,000 at any one time outstanding for the Borrower and its
Restricted Subsidiaries; provided, however, that (i) any such Guarantee
Obligations incurred by the Borrower and any of its Restricted Subsidiaries with
respect to the same transaction shall be treated as a single transaction for the
purposes of calculating the amount of Guarantee Obligations outstanding under
this subsection 7.4(a) and (ii) to the extent that Guarantee Obligations
incurred by the Borrower and any of its Restricted Subsidiaries under this
subsection 7.4(a) exceed $50,000,000 at any one time outstanding, such excess
shall be deemed to constitute Indebtedness;
(b) guarantees made by the Subsidiaries of the Borrower
pursuant to the Senior Notes Documents; provided that such Subsidiaries
are parties to the Guarantee and Collateral Agreement;
(c) Guarantee Obligations of the Credit Parties created
under the Credit Documents;
(d) the L/C Obligations;
(e) Guarantee Obligations of the Borrower or any
Subsidiary in respect of obligations of a Restricted Subsidiary or the
Borrower permitted to be incurred by such Subsidiary or the Borrower by
this Agreement;
(f) Guarantee Obligations which are performance
guarantees by the Borrower or any of its Restricted Subsidiaries of the
ordinary course obligations (other than for the payment of borrowed
money) of any Unrestricted Subsidiary in an aggregate amount not to
exceed $150,000,000 at any one time outstanding; provided, however,
that any such performance guarantee incurred by the Borrower and any of
its Subsidiaries with respect to the same transaction shall be treated
as a single transaction for the purpose of calculating the amount of
obligations outstanding under this subsection 7.4(f);
(g) indemnities in favor of the companies issuing title
insurance policies insuring the Mortgages to induce such issuance;
(h) indemnities made in the Commitment Letter, the Credit
Documents and the Senior Notes Documents and in the Constitutional
Documents of the Borrower and its Subsidiaries;
(i) Guarantee Obligations of Unrestricted Subsidiaries in
respect of the obligations of other Unrestricted Subsidiaries not
otherwise prohibited hereunder;
(j) Guarantee Obligations in respect of a letter of
credit issued for the account of the Borrower and for benefit of the
PBGC in a face amount not to exceed $37,000,000 and for which TXU
Europe (or its successors) provides credit support;
(k) Project Guarantee Obligations (subject to the
satisfaction of the Project Guarantee Obligations Conditions Precedent)
in an aggregate amount at any one time outstanding not to exceed (i)
$375,000,000 minus (ii) the aggregate amount of Investments made in
accordance with subsection 7.9(o); and
67
(l) Guarantee Obligations in existence on the Effective
Date and listed on Schedule 7.4.
7.5 Limitation on Fundamental Changes. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business (other than as provided in subsection 7.15), except:
(a) any Restricted Subsidiary of the Borrower may be
merged or consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or with or
into any one or more wholly-owned Restricted Subsidiaries of the
Borrower (provided that the wholly owned Subsidiary or Subsidiaries
shall be the continuing or surviving corporations); provided that a
Credit Party may only be merged or consolidated with or into another
Credit Party and, if only one such Credit Party is a Blanket Grantor,
the Blanket Grantor must be the surviving entity of such merger or
consolidation;
(b) any wholly-owned Restricted Subsidiary may sell,
lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any other
wholly-owned Restricted Subsidiary of the Borrower that is a Credit
Party; provided that a Blanket Grantor shall not sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to a Credit Party that is not a Blanket
Grantor;
(c) the Black Beauty Acquisition; and
(d) any transaction which would be permitted as an
Investment pursuant to subsection 7.9.
7.6 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Restricted Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person other
than the Borrower or any wholly-owned Subsidiary that is a Credit Party and a
Blanket Grantor, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale for fair market value (as determined in good
faith by the Borrower (and evidenced in a resolution of the Board of
Directors of the Borrower delivered to the Administrative Agent with
respect to any such sale determined to have a fair market value in
excess of $100,000,000, provided that if the Board of Directors
receives a fairness opinion with respect to such sale, a copy of such
opinion shall be delivered to the Administrative Agent)) of any
property or assets not otherwise permitted by this subsection 7.6;
provided that the Net Proceeds thereof shall be applied pursuant to
subsection 2.6(b)(ii); provided, further, that the aggregate fair
market value of all such Asset Sales during each year does not exceed
ten percent (10%) of the Total Assets of the Borrower and its
Restricted Subsidiaries (determined immediately prior to the time of
each such sale);
(c) as permitted pursuant to subsection 7.5(b);
68
(d) the sale, lease, transfer or exchange of inventory
(including Coal and related products and mining equipment) in the
ordinary course of business;
(e) subject to subsection 6.5, transfers resulting from
any casualty or condemnation of property or assets;
(f) intercompany sales or transfers (among Credit Parties
(other than (a) to Black Beauty prior to the consummation of the Black
Beauty Acquisition and the occurrence of the Black Beauty Collateral
Event) and (b) with respect to Collateral, from a Blanket Grantor to a
Credit Party that is not a Blanket Grantor) of assets made in the
ordinary course of business;
(g) licenses, leases or subleases of tangible property in
the ordinary course of business;
(h) any consignment arrangements or similar arrangements
for the sale of assets in the ordinary course of business;
(i) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection with
the compromise or collection thereof;
(j) (A) the sale or discount of accounts receivable
without recourse arising in the ordinary course of business, (B) the
sale or discount of accounts receivable pursuant to the Existing
Securitization and (C) the sale or discount of accounts receivable
pursuant to a securitization involving any Credit Party, provided,
however, that in the case of clause (C), (i) all obligations of such
Credit Party arising pursuant to such securitizations shall be included
in the calculation of Consolidated Total Obligations and (ii) the
aggregate dollar value of all uncollected accounts receivable
transferred pursuant to such securitizations at any time shall not
exceed $50,000,000;
(k) the sale of any assets in connection with any sale
and leaseback transaction otherwise permitted by subsection 7.12;
(l) the sale or transfer of property or assets to the
extent constituting an Investment permitted under subsection 7.9;
(m) the restructuring, renegotiation or termination of
any Coal Supply Agreements resulting in the Borrower or its Restricted
Subsidiaries receiving in a single transaction, or series of related
transactions, cash proceeds of no greater than $75,000,000; and
(n) an exchange or "swap" of assets of the Borrower or
any of its Restricted Subsidiaries for the assets (including ownership
interests and excluding cash) of a Person other than the Borrower or a
Restricted Subsidiary; provided that (A) the assets received by the
Borrower or such Restricted Subsidiary will be used or useful in a
Similar Business and (B) the Borrower or such Restricted Subsidiary
receives reasonably equivalent value for such assets, such equivalent
value to be demonstrated to the Administrative Agent (i) in a
certificate of a Responsible Officer of the Borrower or such Restricted
Subsidiary if the fair market value of the assets received by the
Borrower or such Restricted Subsidiary is no greater than $100,000,000
or (ii) in a resolution of the Board of Directors of the Borrower or
such Restricted Subsidiary if the fair market value of the assets
received by the Borrower or such Restricted Subsidiary is greater than
$100,000,000, provided that if the Board of Directors receives a
fairness opinion with respect to such exchange or "swap", a copy of
such opinion shall be delivered to the
69
Administrative Agent; provided, further, that the fair market value of
all such assets exchanged or "swapped" in any fiscal year of the
Borrower does not exceed ten percent (10%) of the Total Assets of the
Borrower and its Restricted Subsidiaries (determined immediately prior
to the time of each such exchange or swap);
provided, however, that with respect to any conveyance, sale, lease, assignment,
transfer, exchange, "swap" or disposition of any assets of the Borrower or its
Restricted Subsidiaries that constitutes Collateral to Persons that are not
Blanket Grantors (including, without limitation, by virtue of the designation of
a Blanket Grantor as an Unrestricted Subsidiary as otherwise permitted
hereunder, but other than pursuant to subsections 7.6(a), (d), (e), (g), (h),
(i) or (j)), no more than the sum (the "Collateral Amount") of (i) 5% of the
Total Assets of the Borrower and its Restricted Subsidiaries (determined
immediately prior to the time of each such conveyance, sale, lease, assignment,
transfer, exchange, "swap", disposition or designation) and (ii) the net amount
by which the Total Commitments have been permanently reduced at such time, may
be so conveyed, sold, leased, assigned, transferred or disposed of in the
aggregate following the Effective Date and during the term of this Agreement
without the Borrower replacing within 90 days after the Collateral Amount is
exceeded (pursuant to subsections 2.6(b)(ii), 7.6(n) or otherwise) such assets
so conveyed, sold, leased, assigned, transferred, exchanged, "swapped," disposed
of or designated in excess of the Collateral Amount with other assets to be
included as Collateral on a dollar-for-dollar basis (as valued by the
Administrative Agent (or its experts) in its reasonable discretion (but at the
expense of the Borrower)) and provided further that to the extent such assets so
conveyed, sold, leased, assigned, transferred, exchanged, "swapped," disposed of
or designated in excess of the Collateral Amount constitute real property, the
Borrower shall either (A) replace such assets with other real property to be
included as Collateral on a dollar-for-dollar basis (as valued by the
Administrative Agent (or its experts) in its reasonable discretion (but at the
expense of the Borrower)) or (B) prepay the Term Loans in an amount equal to the
value of such real property (as valued by the Administrative Agent (or its
experts) in its reasonable discretion (but at the expense of the Borrower)),
which shall be applied first to the Term Loans to reduce the unpaid scheduled
installments of principal of the Term Loans on a pro rata basis and thereafter
to the repayment of Revolving Credit Loans on a pro rata basis.
7.7 Dividends and Distributions; Restrictions on Ability
of Restricted Subsidiaries to Pay Dividends. (a) Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its Capital Stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of its Capital Stock
or set aside any amount for any such purpose, except that, so long as no Default
or Event of Default has occurred and is continuing, the Borrower may (i) pay
dividends on its common stock in an amount not to exceed in any fiscal year
$50,000,000 plus 25% of the Borrower's cumulative Net Income for such fiscal
year, as reflected on the Borrower's most recent quarterly financial statements
and (ii) repurchase the Borrower's Capital Stock in an amount not to exceed
$100,000,000 during the term of this Agreement; provided, however, that (A) any
amounts available to pay dividends pursuant to the preceding clause (i) but not
used for such purpose and (B) 25% of the proceeds actually received by the
Borrower from the issuance of additional Capital Stock at any time following the
Effective Date, may be used to repurchase the Borrower's Capital Stock without
being counted against the $100,000,000 limit pursuant to clause (ii).
Notwithstanding any of the foregoing, any Restricted Subsidiary may declare and
pay dividends or make other distributions to its equity holders on a pro rata
basis.
(b) Permit its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Restricted Subsidiary to
(i) pay any dividends or make any other distributions on its Capital Stock or
any other interest or (ii) make or repay any loans or advances to the Borrower
or the parent of such Restricted
70
Subsidiary (subclauses (i) and (ii) are collectively referred to as an "Upstream
Payment"); provided, however, that the foregoing shall not restrict any
encumbrances or restrictions:
(i) existing on the Effective Date under
Indebtedness set forth on Schedule 7.2(e) or under Operating Leases set
forth on Schedule 7.7;
(ii) contained in any debt instrument relating to
a Person acquired after the Effective Date; provided that (A) such
encumbrances and restrictions are not applicable to any Person other
than such Person or property or assets acquired, (B) such instrument
was in existence at the time of such acquisition, and (C) the Borrower
reasonably believes at the time of such acquisition that the terms of
such instrument will not encumber or restrict the ability of such
acquired Person to make an Upstream Payment in manner that would
adversely affect the Borrower's ability to perform its obligations
under the Credit Documents when due;
(iii) incurred in connection with any Indebtedness
permitted pursuant to subsection 7.2 (including any permitted
extension, refinancing, renewal or replacement of Indebtedness
contemplated by clauses (i) and (ii) above); provided that, (A) the
Borrower reasonably believes at the time such Indebtedness is incurred
that the terms of such Indebtedness will not restrict the ability of
the Person incurring such Indebtedness to make an Upstream Payment in a
manner that would adversely affect the Borrower's ability to perform
its obligations under the Credit Documents when due and (B) such
Indebtedness (other than Non-Recourse Debt of Unrestricted
Subsidiaries) contains no express encumbrances or restrictions on the
ability of such Person to make an Upstream Payment;
(iv) contained in agreements relating to the sale
of a Subsidiary not prohibited hereunder pending such sale, provided,
that such encumbrances and restrictions apply only to the Subsidiary
that is to be sold and that such sale is otherwise permitted hereunder;
and
(v) existing under, or by reason of, applicable
law.
7.8 Limitation on Capital Expenditures. Make or commit to
make Capital Expenditures in respect of the purchase or other acquisition of
fixed or capital assets (excluding with respect to any such asset acquired in
connection with normal replacement and maintenance programs properly charged to
current operations, any assets acquired with the proceeds from insurance for
casualty or condemnation losses whether or not paid with the proceeds from
insurance policies, any assets purchased with the intent to enter into a
permitted sale and leaseback transaction resulting in an operating lease
pursuant to subsection 7.12(b) and reinvestments of the proceeds of Asset Sales
permitted by subsection 2.6(b)(ii)) except for Capital Expenditures in the
ordinary course of business not exceeding $350,000,000 in the aggregate for the
Borrower and its Restricted Subsidiaries during any fiscal year of the Borrower;
provided, that any amount for any fiscal year not so expended in such fiscal
year may be carried over for expenditure in the immediately following fiscal
year.
7.9 Limitation on Investments, Loans and Advances. Make
any advance, loan (excluding intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations of
the Borrower and its Subsidiaries), extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, or make any other investment in, any
Person ("Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
71
(c) loans and advances to employees of the Borrower or
its Restricted Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for
the Borrower and its Restricted Subsidiaries not to exceed $10,000,000
at any one time outstanding;
(d) Investments by the Borrower or its Restricted
Subsidiaries in Persons that are, or become by virtue of such
Investment (and compliance with subsection 6.10), Blanket Grantors and
investments by such Subsidiaries in the Borrower and in other
Subsidiaries that are Blanket Grantors;
(e) Investments in existence on the Effective Date set
forth on Schedule 7.9(e) and extensions, renewals, modifications,
restatements or replacements thereof; provided that no such extension,
renewal, modification or restatement shall increase the amount of the
original loan, advance or investment;
(f) promissory notes and other similar non-cash
consideration received by the Borrower and its Restricted Subsidiaries
in connection with the dispositions permitted by subsection 7.6(b);
(g) Investments (including debt obligations and Capital
Stock) received in connection with the bankruptcy or reorganization of
suppliers and customers of the Borrower and its Restricted Subsidiaries
and in settlement of delinquent obligations of, and other disputes
with, such customers and suppliers arising in the ordinary course of
business;
(h) so long as no Event of Default has occurred and is
continuing, in addition to the other Investments permitted by this
subsection 7.9, Investments in an aggregate amount not exceeding
$100,000,000 (net of dividends and any other distributions paid in
respect thereof), at cost, without regard to any write down or write up
thereof;
(i) Investments in the nature of Production Payments,
royalties, dedication of reserves under supply agreements or similar
rights or interests granted, taken subject to, or otherwise imposed on
properties with normal practices in the mining industry;
(j) (i) Investments in Joint Ventures in existence on the
Effective Date and set forth on Schedule 4.14(b) hereto and (ii) in
addition to the Investments permitted under clause (i) hereof, and,
with respect to Credit Parties that are not Blanket Grantors, under
subsection 7.9(l), Investments in Joint Ventures and Credit Parties
which are not Blanket Grantors in an amount not to exceed, in the
aggregate outstanding at any time (net of dividends and any other
distributions paid in respect thereof), five percent (5%) of the Total
Assets of the Borrower and its Restricted Subsidiaries (determined
immediately prior to the time of each such Investment);
(k) Investments in any assets constituting a business
unit received by the Borrower or its Restricted Subsidiaries by virtue
of an asset exchange or swap with a third party permitted by subsection
7.6(n) or acquired as a permitted Capital Expenditure under subsection
7.8;
(l) in addition to the Investments permitted by under
subsection 7.9(o), and, with respect to Credit Parties that are not
Blanket Grantors under subsection 7.9(j), Investments in Unrestricted
Subsidiaries and Credit Parties which are not Blanket Grantors, in an
amount not to exceed in the aggregate outstanding at any time (net of
dividends and any other distributions paid in respect thereof) and five
percent (5%) of the Total Assets of the Borrower and its Restricted
Subsidiaries (determined immediately prior to the time of each such
Investment);
72
(m) Hedge Agreements permitted under subsection 7.2(f);
(n) so long as no Event of Default has occurred and is
continuing, Investments consisting of purchases of Senior Notes
pursuant to the provisions of subsection 7.10(a);
(o) any Investment in the Project Entity in an amount not
to exceed at any time (i) the lesser of (A) $375,000,000 and (B) the
Credit Parties' pro rata share of 30% of Total Project Costs minus (ii)
the aggregate amount of Project Guarantee Obligations incurred in
accordance with subsection 7.4(k); and
(p) subject to the provisions of subsection 7.2(p),
Investments by the Borrower in Peabody Energy Australia Pty Ltd and
Peabody COALTRADE Australia Pty Ltd in an aggregate amount not to
exceed $50,000,000.
7.10 Limitation on Optional Payments and Modifications of
Instruments and Agreements. (a) Make any optional payment or prepayment on
or redemption or purchase of, or deliver any funds to any trustee for the
prepayment, redemption or defeasance of, the Senior Notes (whether upon
acceleration of the maturity thereof, upon a "Change of Control" (as defined in
the Senior Notes Indenture) or otherwise), provided that the Borrower may (i)
prepay the Senior Notes in connection with a refinancing of such notes on terms
no less favorable to the Borrower and the Lenders and (ii) make any other
optional payment, prepayment, redemption, purchase or defeasance during the term
of this Agreement in an aggregate amount not in excess of $100,000,000, or (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the material terms of any Senior Notes Documents (other than
any such amendment, modification or change which would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date for payment of interest thereon).
(b) Amend its Constitutional Documents in any manner
which could adversely affect the rights of the Lenders under the Credit
Documents or their ability to enforce the same.
(c) Modify or amend, or waive any provision or condition
contained in, any of the Senior Notes Documents in any manner that could
reasonably be expected to be adverse to the Lenders.
7.11 Limitation on Transactions with Affiliates. (a)
Enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (i) otherwise permitted under this
Agreement, (ii) in the ordinary course of the Borrower's or such Restricted
Subsidiary's business and (iii) upon fair and not materially less favorable
terms to the Borrower or such Restricted Subsidiary, as the case may be, than it
reasonably believes it would obtain in a comparable arm's length transaction
with a Person which is not an Affiliate; provided that satisfaction of the
foregoing clause (iii) shall be demonstrated to the Administrative Agent (i) in
a certificate of a Responsible Officer of the Borrower or such Restricted
Subsidiary if the fair market value of the property or service purchased, sold,
leased or exchanged by the Borrower or such Restricted Subsidiary is no greater
than $10,000,000 (ii) in a resolution of the Board of Directors of the Borrower
or such Restricted Subsidiary if the fair market value of the property or
service purchased, sold, leased or exchanged by the Borrower or such Restricted
Subsidiary is greater than $10,000,000 but no greater than $25,000,000 or (iii)
at the Borrower's expense in an opinion of an independent valuation firm
selected by the Administrative Agent and reasonably acceptable to the Borrower
if the fair market value of the property or service purchased, sold, leased or
exchanged by the Borrower or such Restricted Subsidiary is greater than
$25,000,000. Notwithstanding the foregoing, any such transaction which is
determined to be materially less favorable to the Borrower or a Restricted
Subsidiary than the Borrower or such Restricted Subsidiary reasonably believes
it would obtain in a
73
comparable arm's length transaction nevertheless shall be permitted if the
excess consideration being paid to such Affiliate would otherwise be permitted
at such time as an Investment in such Affiliate under subsection 7.9 and, upon
consummation of such transaction, such excess consideration being paid to such
Affiliate shall constitute an Investment for the purposes of calculating
compliance with subsection 7.9;
(b) In addition, notwithstanding the foregoing, the
Borrower and its Restricted Subsidiaries shall be entitled to make the following
payments and/or to enter into the following transactions:
(i) the payment of reasonable and customary fees
and reimbursement of expenses payable to directors of the Borrower;
(ii) the employment arrangements with respect to
the procurement of services of directors, officers and employees in the
ordinary course of business and the payment of reasonable fees in
connection therewith;
(iii) payments to directors and officers of the
Borrower and its Subsidiaries in respect of the indemnification of such
Persons in such respective capacities from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, as the case may be,
pursuant to the Constitutional Documents or other corporate action of
the Borrower or its Restricted Subsidiaries, respectively, or pursuant
to applicable law;
(iv) transactions described in the Senior Notes
Documents;
(v) Investments in Unrestricted Subsidiaries,
Joint Ventures and the Project Entity permitted by subsection 7.9.
(vi) transactions among Credit Parties; provided
that a Blanket Grantor may not transfer (by way of sale, investment,
dividend or otherwise) Collateral to a Credit Party that is not a
Blanket Grantor except pursuant to a provision of this Agreement that
would permit such sale, investment, dividend or other payment to be
made to a non-Credit Party.
7.12 Limitation on Sale and Leaseback Transactions. Enter
into any arrangement with any Person providing for the leasing by the Borrower
or any Restricted Subsidiary of real or personal property which has been or is
to be sold or transferred by the Borrower or such Restricted Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or such Restricted Subsidiary; provided that the Borrower or a
Restricted Subsidiary may enter into sale and leaseback transactions with sale
prices not to exceed $100,000,000 in the aggregate during the term of this
Agreement.
7.13 Limitation on Changes in Fiscal Year. Permit the
fiscal year of the Borrower to end on a day other than December 31.
7.14 Limitation on Negative Pledge Clauses. Enter into
with any Person any agreement, other than (a) this Agreement, (b) the Senior
Notes Documents and (c) any industrial revenue bonds, purchase money mortgages,
Financing Leases permitted by this Agreement or agreements evidencing
Indebtedness permitted by subsection 7.2(b), (c) or (i) (to the extent
refinancing Indebtedness incurred under subsection 7.2(c)) (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby other than after acquired title in or on such property and proceeds of
the existing collateral in accordance with the instrument creating such Lien),
which prohibits or limits the
74
ability of the Borrower or any of its Restricted Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into or engage
in any business, either directly or through any Subsidiary, except for Similar
Businesses.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Loan or any Reimbursement Obligation when due in accordance with the
terms thereof or hereof; or the Borrower shall fail to pay any interest
on any Loan, or any other amount payable hereunder, within five days
after any such interest or other amount becomes due in accordance with
the terms thereof or hereof; or
(b) any representation or warranty made or deemed made by
the Borrower or any other Credit Party herein or in any other Credit
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Credit Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) the Borrower or any other Credit Party shall default
in the observance or performance of any agreement contained in
subsection 6.4(a), 6.4(d), 6.5(a) (first sentence only), 6.7(d), 6.10
or 6.13 or Section 7 of this Agreement or subsection 5.5, 5.6, 5.7,
5.8(b), 5.9(a) or 5.10 of the Guarantee and Collateral Agreement; or
(d) the Borrower or any other Credit Party shall default
in the observance or performance of any other agreement contained in
this Agreement or any other Credit Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days (unless a shorter cure
period therefor is provided therein); or
(e) the Borrower or any of its Restricted Subsidiaries
shall (i) default (w) in any payment under any coal lease, (x) in any
payment of principal of or interest of any Indebtedness (other than the
Loans, the L/C Obligations and any intercompany debt) or the net
obligations under any Interest Rate Agreement or (y) in the payment of
any Guarantee Obligation (excluding any guaranties of the Obligations),
beyond the period of grace, if any, provided in the instrument or
agreement under which such lease, Indebtedness, Interest Rate Agreement
obligation or Guarantee Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating
to any such lease, Indebtedness, Interest Rate Agreement obligation or
Guarantee Obligation or contained in any instrument or agreement
evidencing, securing or relating thereto, or, other than with respect
to a lease, any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit
the lessor under such lease or the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such lease to be terminated (and such lease is actually
terminated), such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable; provided,
however, that no Default or Event of Default shall exist under this
paragraph unless (i) the aggregate amount of lease payment obligations,
Indebtedness, Interest Rate Agreement obligations and/or Guarantee
Obligations in respect of which any default or other event or condition
referred to in this
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paragraph shall have occurred shall be equal to at least $50,000,000,
(ii) such default continues for a period in excess of 10 days and (iii)
with respect to defaults under coal leases only, the termination of
such lease could reasonably be expected to result in a Material Adverse
Effect; or
(f) (i) the Borrower, any of its Restricted Subsidiaries
or any of its Specified Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, the Borrower, any
of its Restricted Subsidiaries or any of its Specified Subsidiaries
shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower, any of its
Restricted Subsidiaries or any of its Specified Subsidiaries, any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower, any of its Restricted Subsidiaries or any of its
Specified Subsidiaries, any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower, any of its Restricted
Subsidiaries or any of its Specified Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower, any of its Restricted Subsidiaries or
any of its Specified Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) the Borrower, any Subsidiary or any Commonly
Controlled Entity has incurred or is likely to incur a liability in
connection with any "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Administrative Agent is reasonably likely to, incur any liability
in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan, (vi) the Borrower, its
Subsidiaries or its "related persons" as defined in the Coal Act, shall
be required to make during any fiscal year payments pursuant to the
Coal Act that, in the aggregate, exceed the amount set forth on
Schedule II with respect to such fiscal year, (vii) the Borrower or its
Subsidiaries shall be required to make during any fiscal year payments
pursuant to federal and state Black Lung Act claims in excess of the
amount set forth on Schedule III with respect to such fiscal year,
(viii) the Borrower or its Subsidiaries shall be required to make
during any fiscal year payments pursuant to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees (other than as required by Section 601 of
ERISA or the Coal Act) that, in the aggregate, exceed the amount set
forth on Schedule IV with respect to such fiscal year or (ix) any other
similar event or condition shall occur or exist with respect to a Plan
that is not in the ordinary course; and in each case in clauses
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(i) through (ix) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered
against the Borrower or any of its Restricted Subsidiaries involving in
the aggregate a liability (not paid or fully covered by insurance
(which coverage has been acknowledged by the appropriate insurers)) of
$50,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) one or more surety, reclamation or similar bonds
securing obligations of the Borrower or any Subsidiary (or any required
guarantees thereof or required letters of credit with respect thereto)
with an aggregate face amount of $100,000,000 or more shall be actually
terminated, suspended or revoked and not replaced within 30 days of
such termination, suspension or revocation; provided that the Borrower
or any Subsidiary shall be permitted to replace such surety bonds with
self-bonding obligations to the extent permitted by any Person to which
the obligations secured by such bonds are owed) prior to full
satisfaction of the obligations secured by such bonds; or
(j) (i) any of the Security Documents shall cease, for
any reason, to be in full force and effect (unless released by the
Administrative Agent at the direction of the requisite Lenders or as
otherwise permitted under this Agreement or the other Credit
Documents), or the Borrower or any other Credit Party which is a party
to any of the Security Documents shall so assert or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby
(and, if such invalidity is such so as to be amenable to cure without
materially disadvantaging the position of the Administrative Agent and
the Lenders, as the case may be, as secured parties thereunder, the
Credit Party shall have failed to cure such invalidity within 30 days
after notice from the Administrative Agent); or
(k) the Guarantee Obligation of any Credit Party under
the Credit Documents shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Credit Party or any Person acting on behalf of
any Credit Party, shall deny or disaffirm its obligations under such
Guarantee Obligation; or
(l) there shall have occurred a Change in Control; or
(m) an event has occurred which entitles the beneficiary
of the Project Guarantee Obligation to make a demand for payment
thereunder, and such demand has actually been made,
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice of default to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without
77
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) and the Notes to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Upon an Event of Default
hereunder, the Agents and the Lenders shall also have all of the rights granted
to them under the Security Documents and applicable law. Upon an Event of
Default, and at the request of the Administrative Agent, for each real property
interest (including coal reserves) selected by the Administrative Agent which is
owned or leased by the Borrower or any of its Restricted Subsidiaries (other
than with respect to leased real property located in the State of Arizona, the
mortgaging of which would require the consent of the lessor thereof and with
respect to which the Borrower has determined in good faith, after consultation
with the Administrative Agent, that the seeking of such consent would be
materially disadvantageous to its business), the Borrower shall promptly (i)
deliver to the Administrative Agent, a Mortgage, executed and delivered by a
duly authorized officer of the mortgagor party thereto, with a counterpart or a
conformed copy for each Lender, and (ii) with respect to each such Mortgage,
comply with all other requirements in connection with the delivery thereof as
set forth in subsections 6.10(c)(i)(B) and 6.10(c)(i)(C).
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the L/C Participants, a security interest in such cash
collateral and cash collateral account to secure all obligations of the Borrower
under this Agreement and the other Credit Documents. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the Notes. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the Notes shall have
been paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower. The Borrower shall execute and deliver to the
Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, such further documents and instruments as the Administrative Agent
may request to evidence the creation and perfection of such security interest in
such cash collateral account.
EXCEPT AS EXPRESSLY PROVIDED ABOVE IN THIS SECTION,
PRESENTMENT, DEMAND, PROTEST AND ALL OTHER NOTICES OF ANY KIND ARE HEREBY
EXPRESSLY WAIVED.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably
designates and appoints each of the Agents as the agent of such Lender under
this Agreement and the other Credit Documents, and each such Lender irrevocably
authorizes each of the Agents, in such capacity, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated to
such Agent by the terms of this Agreement and the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, none
of the Agents shall have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Credit Document or otherwise exist
against any of the Agents.
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9.2 Delegation of Duties. The Agents may execute any of
their duties under this Agreement and the other Credit Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. None of the Agents shall be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any of the Agents nor
any of their officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Credit Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Credit Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by such Agent under or in connection with, this Agreement or
any other Credit Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Credit
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. None of the Agents shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of the Borrower.
9.4 Reliance by Agents. The Agents shall be entitled to
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by such Agent. The Agents may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with such
Agent. Except as expressly provided in this Agreement, the Agents shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agents shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
9.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that any Agent
receives such a notice, such Agent shall give notice thereof to the Lenders.
Each Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that
unless and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any of the Agents
hereafter taken, including any review of the affairs of the Borrower, shall be
deemed to
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constitute any representation or warranty by any of the Agents to any Lender.
Each Lender represents to each of the Agents that it has, independently and
without reliance upon any of the Agents or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Borrower and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any of the
Agents or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Credit Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and credit worthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by any of the
Agents hereunder (or copies of which have been provided to the Administrative
Agent pursuant to this Agreement), none of the Agents shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Credit Party which may come
into the possession of such Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify each
of the Agents in their respective capacities as such (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their respective Commitment Percentages with
respect to all Types of Loans in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against any of the Agents in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any of the
Agents under or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 Agents, in Their Individual Capacities. The Agents
and their respective Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Agents
were not acting in such capacities hereunder and under the other Credit
Documents. With respect to the Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued or participated in by it,
each Agent shall have the same rights and powers under this Agreement and the
other Credit Documents as any Lender and may exercise the same as though it were
not an Agent, and the terms "Lender" and "Lenders" shall include the Agents in
their individual capacities.
9.9 Successor Administrative Agent, Syndication Agents
and Documentation Agents. The Administrative Agent may resign as Administrative
Agent upon 30 days' notice to the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent (provided that it shall
have been approved by the Borrower, which approval shall not be unreasonably
withheld), shall succeed to the rights, powers and duties of the Administrative
Agent hereunder. 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 Administrative
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Agent's giving of notice of resignation, the retiring Administrative Agent may,
on behalf of the Required Lenders, appoint a successor Administrative Agent,
which shall be a Lender, and if no Lender shall be willing to serve, be a
commercial bank having a combined capital and surplus of at least $500,000,000.
Any Documentation Agent or any Syndication Agent may resign as Documentation
Agent or Syndication Agent, as the case may be, upon 30 days' notice to the
Administrative Agent, and upon such resignation, the Administrative Agent may
appoint a replacement Documentation Agent or Syndication Agent, as the case may
be, from among the Lenders, which shall succeed to the rights, powers and duties
of the Documentation Agent or Syndication Agent hereunder, as the case may be.
Effective upon such foregoing appointment and approval, the term "Administrative
Agent" or "Documentation Agent" or "Syndication Agent" as the case may be, shall
mean or include such successor agent, and the former Administrative Agent's or
Syndication Agent's or Documentation Agent's, as the case may be, rights, powers
and duties as Administrative Agent or Syndication Agent or Documentation Agent,
as the case may be, shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or Documentation Agent or
Syndication Agent, as the case may be, or any of the parties to this Agreement
or any holders of the Loans. After any retiring Administrative Agent's or
Documentation Agent's or Syndication Agent's resignation as Administrative Agent
or Documentation Agent or Syndication Agent, as the case may be, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent or Documentation Agent or
Syndication Agent, as the case may be, under this Agreement and the other Credit
Documents. In connection with the appointment of any successor Administrative
Agent hereunder, the Borrower shall, and shall cause each of the Credit Parties
to, promptly execute such documents, instruments, amendments and the like (such
as, without limitation, UCC-3 amendments) necessary to effect such succession
and preserve the Agents' and the Lenders' rights hereunder, under the other
Credit Documents and in the Collateral.
9.10 Duties of Arrangers, Documentation Agents and
Syndication Agents. Except as expressly set forth herein, each Arranger, each
Syndication Agent and each Documentation Agent, in its respective capacity as
such, shall have no duties or responsibilities, and shall incur no liabilities,
under this Agreement or the other Credit Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor
any other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the Borrower written amendments, supplements or modifications hereto
and to the other Credit Documents for the purpose of adding any provisions to
this Agreement or the other Credit Documents or changing in any manner the
rights of the Lenders or of the Borrower hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative
Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Credit Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i) reduce the amount or
extend any scheduled date of payment or maturity of any Loan or any L/C
Obligation under subsection 3.5, extend the expiration of any Letter of Credit
beyond the Revolving Loan Termination Date, or reduce the stated rate or amount
of any interest or fee payable hereunder or extend the scheduled date of any
payment thereof, in each case without the consent of each Lender directly
affected thereby, or increase any commitment of any Lender or extend the expiry
of any commitment of any Lender without the consent of such Lender, or (ii)
amend, modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders or Requisite Class Lenders, or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Credit Documents, in each case
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without the written consent of all the Lenders, or (iii) release all or
substantially all of the Collateral or release all or substantially all of the
Credit Parties from their Guarantee Obligations under the Credit Documents
without the consent of all Lenders, or (iv) amend, modify or waive any provision
of Section 9 without the written consent of the Administrative Agent and any
other Agent prejudiced thereby, (v) amend, modify or waive any provision of
subsection 2.1(b), any other provision of this Agreement relating to the Swing
Line Loans or the Swing Line Note without the written consent of the Swing Line
Lender, or (vi) amend, modify or waive any provision of this Agreement or any
other Credit Document which would directly and adversely affect the Arrangers or
the Agents or the Issuing Lender or the Swing Line Lender without the written
consent of the Arrangers, the Agents or the Issuing Lender or the Swing Line
Lender, as the case may be. In addition to the foregoing, no amendment,
modification, termination or waiver of any provision of subsection 2.5 or
subsection 2.6 which has the effect of changing any interim scheduled payments,
voluntary or mandatory prepayments (or the applications thereof or any right to
waive such payment) or Commitment reductions applicable to any Class (an
"Affected Class") in a manner that disproportionately disadvantages such Class
relative to the other Class shall be effective without the written concurrence
of the Requisite Class Lenders of the Affected Class (it being understood and
agreed that any amendment, modification, termination or waiver of any provision
which only postpones or reduces any interim scheduled payment, voluntary or
mandatory prepayment or Commitment reduction from those set forth in subsection
2.6 with respect to only one Class shall be deemed to not disproportionately
disadvantage the other Class and, therefore, shall not require the consent of
Requisite Class Lenders of such other Class). Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Borrower, the Lenders, the Agents and the Issuing
Lender and all future holders of the Loans. Any extension of a Letter of Credit
by the Issuing Lender shall be treated hereunder as an issuance of a new Letter
of Credit. In the case of any waiver, the Borrower, the Lenders and the Agents
and the Issuing Lender shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon. Notwithstanding the foregoing, this Agreement may
be amended (or amended and restated) with the written consent of the Required
Lenders, the Arrangers, the Administrative Agent, the Syndication Agents and the
Borrower (x) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof (collectively, the
"Additional Extensions of Credit") to share ratably in the benefits of this
Agreement and the other Credit Documents with the Term Loans and Revolving
Credit Loans and the accrued interest and fees in respect thereof and (y) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders and Requisite Class Lenders; provided,
however, that no such amendment shall permit the Additional Extensions of Credit
to share ratably with or with preference to the Term Loans in the application of
mandatory prepayments without the consent of the Requisite Class Lenders or
otherwise to share ratably with or with preference to the Revolving Credit Loans
without the consent of the Requisite Class Lenders.
10.2 Notices. Except as otherwise expressly set forth
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by hand, when delivered, (b) in
the case of delivery by mail, three days after being deposited in the mails,
postage prepaid, or (c) in the case of delivery by facsimile transmission, when
sent and receipt has been confirmed, addressed as follows in the case of the
Borrower, the Administrative Agent, either Syndication Agent or either
Documentation Agent, and to such other address as may be hereafter notified by
the respective parties hereto:
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The Borrower or any of its Subsidiaries:
Peabody Energy Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mailstop MADE10009H
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Documentation Agents:
U.S. Bank National Association
▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agents:
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ Commercial Paper Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Arrangers:
Fleet Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mailstop MADE10011
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Wachovia Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12 or 3.2 shall not
be effective until received, and provided further that any notices required to
be given to all the Lenders hereunder may be effected by delivery of notice to
the Administrative Agent as provided above, followed by distribution of such
notice by the Administrative Agent to the Lenders through IntraLinks (or another
similar electronic system customarily used by financial institutions).
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Credit Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees
(a) to pay or reimburse each Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees, charges and disbursements of a single counsel for the Agents
(in addition to any local and foreign counsel), (b) to pay or reimburse each
Lender and each Agent
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for all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Credit Documents and
any such other documents and any "workout" hereunder or thereunder, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to any Agent, (c) to pay, indemnify, and hold each Lender and each Agent
and each Issuing Lender harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Credit Documents and any such other
documents, and (d) to pay, defend, indemnify, and hold each Lender and each
Agent and each Issuing Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement or the other Credit Documents or the use of the proceeds of the Loans
in connection with the Black Beauty Acquisition, including, without limitation,
any of the foregoing relating to the violation of, noncompliance with or
liability under, any Mining and Environmental Law applicable to the activities
of the Borrower, any of its Subsidiaries or any of the Properties or Businesses
or any prior businesses for which the Borrower has, or may reasonably be alleged
to have retained liability (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"). The Borrower shall have no obligation hereunder
to any Agent or the Issuing Lender or any Lender with respect to otherwise
indemnified liabilities arising from the gross negligence or willful misconduct
of such Agent or the Issuing Lender or such Lender. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agents and their respective successors
and assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender.
(b) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender or any other interest of such Lender hereunder and under
the other Credit Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Credit Documents, and the Borrower and the Agents shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents. No
Lender shall be entitled to create in favor of any Participant, in the
participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Credit Document
except for those specified in clauses (i) and (ii) of the proviso to subsection
10.1. The Borrower agrees that if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement; provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
10.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of subsections 2.14, 2.15 and
2.16 with respect to its participation in the Letters of Credit, the Commitments
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and the Loans outstanding from time to time as if it was a Lender; provided that
in the case of subsection 2.15, such Participant shall have complied with the
requirements of said Section; provided, further, that no Participant shall be
entitled to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof (including, without
limitation, in the case of any Lender that is an investment fund which is
regularly engaged in making, purchasing or investing in loans or securities, any
other such fund which is under common (or affiliated) management with such
Lender or advised by the same investment advisor as such Lender), or, with the
consent of the Borrower, the Issuing Lender (with respect to assignments of
Revolving Credit Commitments and Revolving Credit Loans only) and the
Administrative Agent (which in each case shall not be unreasonably withheld or
delayed), to any other Person (an "Assignee") all or any part of its rights and
obligations under this Agreement and the other Credit Documents pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit F (an
"Assignment and Acceptance"), executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender or an affiliate
thereof (including, without limitation, in the case of a fund, another fund
under common (or affiliated) management therewith or advised by the same
investment advisor as a Lender), by the Borrower, the Issuing Lender (with
respect to assignments of Revolving Credit Commitments and Revolving Credit
Loans only) and the Administrative Agent or advised by the same investment
advisor as a Lender) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided that, (A) in the case of any
such assignment to a Person other than a Lender or any affiliate thereof
(including, without limitation, in the case of a fund, another fund under common
(or affiliated) management therewith), either (x) such assignment is of all the
rights and obligations of the assigning Lender or (y) the sum of the aggregate
principal amount of the Loans, the aggregate amount of the L/C Obligations and
the aggregate amount of the unused Commitments being assigned is not less than
$1,000,000 (in the aggregate, in the case of contemporaneous assignments to
affiliated funds) (or such lesser amount as may be agreed to by the Borrower and
the Administrative Agent), (B) in the case of any such assignment to a Person
other than a Lender or any affiliate thereof (including, without limitation, in
the case of a fund, another fund under common (or affiliated) management
therewith), each Assignee which is a Non-U.S. Lender shall comply with the
provisions of subsection 2.15(b) hereof and (C) any assignment to an Assignee as
to which the Borrower has no right of consent under this subsection shall not be
permitted if it would at the time of assignment thereof result in additional
cost to the Borrower under subsection 2.14 or 2.15. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment as set
forth therein and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (f) of this
subsection to the contrary, the consent of the Borrower shall not be required
for any assignment (i) of Term Loans or (ii) which occurs at any time when any
of the events described in Section 8 shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower,
shall maintain at the address of the Administrative Agent referred to in
subsection 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and Commitments of and principal amounts of the Loans of each Type owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest
87
error, and the Borrower, the Administrative Agent and the Lenders shall treat
each Person whose name is recorded in the Register as the owner of a Loan, any
Note evidencing such Loan or other Obligation hereunder as the owner thereof for
all purposes of this Agreement and the other Credit Documents, notwithstanding
any notice to the contrary. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of an Obligation evidenced by a Note shall
be registered in the Register only upon surrender for registration of assignment
or transfer of the Note evidencing such Obligation, duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the holder thereof and accompanied by a duly executed Assignment and Acceptance;
thereupon, at the request of the Assignee, one or more new Notes shall be issued
to the designated Assignee and the old Note shall be returned by the
Administrative Agent to the Borrower marked "cancelled."
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof (including, without
limitation, in the case of a fund, another fund under common (or affiliated)
management therewith), by the Borrower, the Issuing Lender (with respect to
assignments of Revolving Credit Commitments and Revolving Credit Loans only) and
the Administrative Agent) together with payment by the assigning Lender or the
Assignee to the Administrative Agent of a registration and processing fee of
$2,500 (provided that no such payment shall be required with respect to
assignments to an Assignee which is already a Lender; provided, further, that
with respect to one or more substantially concurrent assignments by a Lender to
an affiliate or affiliates thereof or to Persons under common (or affiliated)
management with such Lender, only one such fee shall be payable), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to
any Participant or Assignee (each, a "Transferee") and any prospective
Transferee, subject to the provisions of subsection 10.15, any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) If, pursuant to this subsection 10.6, any interest in
this Agreement or any Loan is transferred to any Transferee which would be a
Non-U.S. Lender upon the effectiveness of such transfer, the assigning Lender
shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the assigning Lender (for the benefit of the
assigning Lender, the Administrative Agent and the Borrower) that under
applicable law and treaties no U.S. Taxes will be required to be withheld by the
Administrative Agent, the Borrower or the assigning Lender with respect to any
payments to be made to such Transferee in respect of the Loans, (ii) to furnish
to the assigning Lender (and, in the case of any Assignee registered in the
Register, the Administrative Agent and the Borrower such Internal Revenue
Service Forms required to be furnished pursuant to subsection 2.15(b) and (iii)
to agree (for the benefit of the assigning Lender, the Administrative Agent and
the Borrower) to be bound by the provisions of subsection 2.15(b).
(h) For the avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection and subsection
2.5(g) concerning assignments of Loans and Notes relate only to absolute
assignments and that such provisions do not prohibit assignments creating
security interests, including, without limitation, (i) any pledge or assignment
by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law and (ii) the assignment or pledge by any
88
Lender that is a fund of all or any portion of its rights under this Agreement
to secure such Lender's Indebtedness; provided that, no such assignment under
this clause (h) shall release the assignor Lender from its obligations
hereunder.
10.7 Adjustments; Set-off. (a) If any Lender (a
"benefitted Lender") shall at any time receive any payment of all or part of its
Loans or the Reimbursement Obligations owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
subsection 8(f), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender's Loans or the Reimbursement Obligations owing to it, or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans or the
Reimbursement Obligations owing to it, or shall provide such other Lenders with
the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent 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.
10.8 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Credit
Documents represent the agreement of the Borrower, the Agents and the Lenders
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by any Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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10.12 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 10.2 OR
AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION; AND
(e) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
10.13 Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Credit Documents;
(b) none of the Arrangers, the Agents or the Lenders has
any fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Credit Documents, and the
relationship between any of the Agents and the Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Credit Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS, THE
LENDERS AND THE OTHER PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
90
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
10.15 Confidentiality. Each Lender agrees to keep
confidential all non-public information provided to it by the Borrower pursuant
to this Agreement that is designated by the Borrower in writing as confidential
(excluding any such information already in the possession of such Lender or
provided to such Lender by a third party not in violation of this Agreement
which, in either case, is not, to the knowledge of such Lender, subject to a
confidentiality agreement); provided that nothing herein shall prevent any
Lender from disclosing any such information (i) to any Agent or any other Lender
or any of its Affiliates, (ii) to any Transferee or prospective Transferee or to
any direct or indirect contractual counterparties in swap agreements or such
contractual counterparties' professional advisors which receives such
information and agrees to be bound by the confidentiality provisions hereof,
(iii) to its employees, directors, agents, attorneys, accountants and other
professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, (vii) to the National Association of Insurance
Commissioners or any similar organization or any nationally-recognized rating
agency that requires access to information about such Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or
(viii) in connection with the exercise of any remedy hereunder. Notwithstanding
the foregoing, each party hereto may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Credit Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure.
10.16 Prudential Note. For the avoidance of doubt, the
parties hereto hereby agree that the Obligations of the Borrower and the other
Credit Parties hereunder and under the other Credit Documents (including,
without limitation, all Indebtedness of the Borrower hereunder and of the other
Credit Parties (including, without limitation, PHCI) under the Guarantee and
Collateral Agreement) is "Senior Debt," as such term is defined in the
Prudential Note.
10.17 Existing Agreements Superseded. As set forth in
subsection 1.3 hereof, the First Restated Credit Agreement is superseded by this
Credit Agreement, which has been executed in renewal, amendment, restatement and
modification, but not in extinguishment of, the obligations under the First
Restated Credit Agreement.
10.18 Delivery of Lender Addenda. Each initial Lender that
is not an Original Lender shall become a party to this Agreement by delivering
to the Administrative Agent a Lender Addendum duly executed by such Lender, the
Borrower and the Administrative Agent.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
PEABODY ENERGY CORPORATION
as Borrower
By:_________________________________________
Name:
Title:
FLEET NATIONAL BANK,
as Administrative Agent and as a Lender
By:_________________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent
By:_________________________________________
Name:
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Syndication Agent
By:_________________________________________
Name:
Title:
FLEET SECURITIES, INC.,
as Arranger
By:_________________________________________
Name:
Title:
WACHOVIA SECURITIES, INC.,
as Arranger
By:_________________________________________
Name:
Title:
▇▇▇▇▇▇ BROTHERS INC.,
as Arranger
By:_________________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent
By:_________________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Documentation Agent
By:_________________________________________
Name:
Title:
Schedule I
to Credit Agreement
Pricing Grids
CONSOLIDATED REVOLVING REVOLVING
TOTAL CREDIT FACILITY CREDIT FACILITY TERM LOAN TERM LOAN
OBLIGATIONS TO APPLICABLE APPLICABLE APPLICABLE APPLICABLE
CONSOLIDATED MARGIN - MARGIN - BASE MARGIN - LIBOR MARGIN - BASE
EBITDA RATIO LIBOR RATE RATE RATE RATE
-------------- --------------- --------------- -------------- -------------
< or = 3.75x 2.500% 1.500% 2.500% 1.500%
< or = 3.25x 2.250% 1.250% 2.500% 1.500%
< or = 2.75x 2.000% 1.000% 2.500% 1.500%
< or = 2.25x 1.750% 0.750% 2.250% 1.250%
< or = 2.25x 1.500% 0.500% 2.250% 1.250%
USAGE RATIO COMMITMENT
FEE
------------- ----------
< or = 66.67% 0.250%
< or = 33.33% 0.375%
<33.33% 0.500%
S-IV-1