THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD
AMENDMENT TO CREDIT AGREEMENT (the “Amendment”),
dated as of March 6, 2009, is made by and among ARCH COAL,
INC. , a Delaware corporation (the “Borrower”), the
BANKS party to the Credit Agreement (as hereinafter
defined), CITICORP USA, INC. , JPMORGAN CHASE BANK,
N.A. and WACHOVIA BANK, NATIONAL ASSOCIATION , each in
its capacity as co-syndication agent, and BANK OF AMERICA,
N.A . (successor by merger to FLEET NATIONAL BANK), as
documentation agent, and PNC BANK, NATIONAL ASSOCIATION , in
its capacity as administrative agent for the Banks.
WHEREAS ,
the parties hereto are parties to that certain Credit Agreement
dated as of December 22, 2004, as amended by that certain
First Amendment to Credit Agreement dated as of June 23, 2006, and
by that certain Second Amendment to Credit Agreement dated as of
October 3, 2006 (as so amended, the “Credit
Agreement”), pursuant to which the Banks provided a
$800,000,000 revolving credit facility to the Borrower;
and
WHEREAS ,
the Borrower, the Banks and the Administrative Agent desire to
amend the Credit Agreement as hereinafter provided.
NOW,
THEREFORE , the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending
to be legally bound hereby, covenant and agree as
follows:
Capitalized terms
used herein unless otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement, as amended by this
Amendment.
2.
Amendments to Credit Agreement .
(a) The
following definitions contained in Section 1.1 (Certain
Definitions) of the Credit Agreement shall be amended and restated
in its entirety:
“
Applicable Commitment Fee Rate shall mean the rate per annum
at the indicated rating level of Leverage Ratio in effect from time
to time as set forth in the pricing grid on
Schedule 1.1(A) below the heading “Commitment
Fee.” The Applicable Commitment Fee Rate shall be computed in
accordance with the parameters set forth on
Schedule 1.1(A) .”
“
Applicable Letter of Credit Fee Rate shall mean the rate per
annum at the indicated rating level of Leverage Ratio in effect
from time to time as set forth in the pricing grid on
Schedule 1.1(A) below the heading “Letter of
Credit
Fee.” The
Applicable Letter of Credit Fee Rate shall be computed in
accordance with the parameters set forth on
Schedule 1.1(A) .”
“
Applicable Margin ” shall mean:
(i)
the percentage spread to be added to Euro-Rate under the Euro-Rate
Option at the indicated rating level of Leverage Ratio in effect
from time to time as set forth in the pricing grid on
Schedule 1.1(A) below the heading “Revolving
Credit Euro-Rate Spread,” or
(ii)
the percentage spread to be added to the Base Rate under the Base
Rate Option at the indicated rating level of Leverage Ratio in
effect from time to time as set forth in the pricing grid on
Schedule 1.1(A) below the heading “Revolving
Credit Base Rate Spread”.
The Applicable
Margin shall be computed in accordance with the parameters set
forth on Schedule 1.1(A) .”
“ Base
Rate ” shall mean, for any day, a fluctuating per annum
rate of interest equal to the highest of (i) the interest rate
per annum announced from time to time by the Administrative Agent
at its Principal Office as its then prime rate, which rate may not
be the lowest rate then being charged commercial borrowers by the
Administrative Agent, (ii) the Federal Funds Open Rate plus 50
basis points ( 1 / 2
of 1%), and (iii) the Daily
LIBOR Rate plus 100 basis points (1%). Interest on borrowings at
the Base Rate is calculated on an actual/360 day basis and is
payable quarterly.
For purposes of
this definition, “Daily LIBOR Rate” shall mean, for any
day, the rate per annum determined by the Administrative Agent by
dividing (x) the Published Rate by (y) a number equal to
1.00 minus the percentage prescribed by the Federal Reserve
for determining the maximum reserve requirements with respect to
any eurocurrency funding by banks on such day. “Published
Rate” shall mean the rate of interest published each Business
Day in The Wall Street Journal “Money Rates” listing
under the caption “London Interbank Offered Rates” for
a one month period (or, if no such rate is published therein for
any reason, then the Published Rate shall be the eurodollar rate
for a one month period as published in another publication
determined by the Administrative Agent).”
“EBITDA”
for any period of determination shall mean with respect to any
Person: (i) consolidated net income (excluding non-cash
compensation expenses related to common stock and other equity
securities issued to employees, extraordinary gains and losses,
gains or losses on discontinued operations, equity earnings or
losses of Affiliates (other than earnings or losses of the Borrower
or any Subsidiary of the Borrower)), plus (ii) for such period
of determination the sum of the following, without duplication and
to the extent included in determining consolidated net income under
the immediately preceding clause (i): interest expense (net of
interest income), the sum of all income tax expense, depreciation,
depletion and amortization of property, plant, equipment and
intangibles, non-cash debt extinguishment costs,
2
non-cash
charges due to cumulative effects of changes in accounting
principles, plus (iii) cash dividends or distributions
received from Affiliates (other than received from the Borrower or
any Subsidiary of the Borrower) to the extent not included in
determining consolidated net income. All items included in the
definition of EBITDA shall be determined in each case for the
applicable Person for the period of determination on a consolidated
basis in accordance with GAAP.
For purposes of
determining the Leverage Ratio, the Senior Secured Leverage Ratio,
or the Interest Coverage Ratio under this Agreement, in the event
that the Borrower or any Subsidiary of the Borrower acquires in a
Permitted Acquisition any Person or business (the “Acquired
Person”) during any period of determination, then EBITDA of
the Borrower and its Subsidiaries shall be increased for such
period of determination by the EBITDA of the Acquired Person,
subject to the following:
(i) the EBITDA of
the Acquired Person shall be based upon financial statements
reasonably acceptable to the Administrative Agent (the “
Acquired Person’s EBITDA ”), and
(ii) EBITDA shall
include 100% of the Acquired Person’s EBITDA for the first
fiscal quarter ending after the date the applicable Permitted
Acquisition was consummated; 75% of the Acquired Person’s
EBITDA in the second fiscal quarter ending after the date the
applicable Permitted Acquisition was consummated; 50% of the
Acquired Person’s EBITDA in the third fiscal quarter ending
after the date the applicable Permitted Acquisition was
consummated; and 25% of the Acquired Person’s EBITDA in the
fourth fiscal quarter ending after the date the applicable
Permitted Acquisition was consummated.”
“ Federal
Funds Open Rate shall mean the rate per annum determined by the
Administrative Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the
“open” rate for federal funds transactions for federal
funds transactions among members of the Federal Reserve System
arranged by federal funds brokers on such day, as quoted by Garvin
Guybutler, any successor entity thereto, or any other broker
selected by the Administrative Agent, as set forth on the
applicable Bloomberg display page; provided , however
; that if such day is not a Business Day, the Federal Funds Open
Rate for such day shall be the “open” rate on the
immediately preceding Business Day, or if no such rate shall be
quoted by a federal funds broker at such time, such other rate as
determined by the Administrative Agent in accordance with its usual
procedures. The rate of interest charged shall be adjusted as of
each Business Day based on changes in the federal funds rate
without notice to the Borrower.”
(b) Section 1.1
[Certain Definitions] of the Credit Agreement is hereby amended to
insert therein, in alphabetical order, the following new
definitions:
“
Unsecured Senior Notes shall mean the unsecured senior notes
of the Borrower that are issued pursuant to any Unsecured Senior
Notes Indenture.”
3
“
Unsecured Senior Notes Indenture shall mean the any
indenture governing the issuance of certain unsecured notes in
favor the Borrower, and without regard to any restatement,
amendment, modification or supplement thereof, other than those
restatements, amendments modifications or supplements that may be
necessary to add a guarantor subsidiary thereto in accordance with
the terms thereof.”
“
Acquired Assets shall have that meaning set forth in
Section 7.2.14 (xvii) of this Agreement.”
“ Third
Amendment Effective Date shall mean the effective date of the
Third Amendment to the Credit Agreement.”
(c) Section 3.1.1
[Interest Rate Options] of the Credit Agreement is hereby amended
and restated in its entirely to read as follows:
“3.1.1
Interest Rate Options
The Borrower shall
have the right to select from the following Interest Rate Options
applicable to the Revolving Credit Loans (subject to the provisions
above regarding Swing Loans):
(i)
Base Rate Option : A fluctuating rate per annum (computed on
the basis of a year of 360 days and actual days elapsed) equal
to the Base Rate plus the Applicable Margin, such interest rate to
change automatically from time to time effective as of the
effective date of each change in the Base Rate; or
(ii)
Euro-Rate Option : A rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the
Euro-Rate plus the Applicable Margin.”
(d) The first
paragraph of Section 7.1.12 [Collateral; Further Assurances]
of the Credit Agreement is hereby amended and replaced in its
entirety to state the following:
“The
Borrower shall and shall cause each of the Loan Parties to execute
and deliver (subject to Section 10.19 [Release of Collateral;
Springing Collateral]) to the Collateral Agent for the benefit of
the Banks, the Collateral Documents necessary to grant first
priority perfected liens and security interests (subject only to
Permitted Liens) in favor of the Banks in substantially all of the
assets of the Loan Parties, other than: (i) those assets
which, in the discretion of the Administrative Agent, the taking of
Liens thereupon is impractical, prohibited by law or commercially
unreasonable, (ii) the equity interests in any Bonding
Subsidiary (subject however to the further provisions of this
Section 7.1.12 regarding a second position lien thereon),
(iii) titled vehicles, and (iv) all undeveloped land so
long as such land is not used in connection with or related to any
Mining Operation of any Loan Party and no Loan Party has any
logging or timber rights with respect to such land; and provided,
further, that with respect to deposit accounts of any Loan Party,
the Loan Parties will not be required to enter into any blocked
account agreements or control agreements with respect
thereto
4
unless
requested by the Administrative Agent or the Required Banks.
Notwithstanding the foregoing, the Loan Parties shall work
diligently with the Administrative Agent to confirm that all
documentation has been prepared, executed and recorded which is
necessary to grant a Lien on all Real Property, as-extracted
minerals and fixtures of the Loan Parties (other than such assets
as described in clauses (i) or (iv) above) in favor of
the Collateral Agent for the benefit of the Banks within: (a) one
hundred twenty (120) days for all such acquired Real Property,
as-extracted minerals and fixtures that have been acquired on or
before the Third Amendment Effective Date, and (b) ninety
(90) days after the delivery of the certificate of Borrower
pursuant to Section 7.3.3 [Certificate of Borrower] of this
Agreement for all such Real Property, as-extracted minerals and
fixtures that have been acquired after the Third Amendment
Effective Date.”
(e) Section 7.1.15
[Commitment Reduction Related to Certain Permitted Receivables
Financing] of the Credit Agreement is hereby amended to change the
reference from “$200,000,000” to
“$250,000,000”.
(f) Section 7.2.2
[Liens; Guaranties] of the Credit Agreement is hereby amended to
add the following paragraph at the end of such section:
“Notwithstanding
the foregoing the Loan Parties shall be permitted to (i) enter
into any Unsecured Senior Notes Indenture and (ii) agree to
any negative covenants contained therein that prohibits or
restricts the Loan Parties ability to grant a security interest or
Lien on any of its property or assets so long as such prohibition
or restriction does not restrict or prohibit the Loan
Parties’ ability t
|
