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Exhibit 10.1

FOURTH AMENDMENT TO CREDIT AGREEMENT AND AMENDMENT TO
COLLATERAL AGENCY AND SHARING AGREEMENT

      THIS FOURTH AMENDMENT TO CREDIT AGREEMENT AND AMENDMENT TO COLLATERAL AGENCY AND SHARING AGREEMENT (the “Amendment”), dated as of August 27, 2009, is made by and among ARCH COAL, INC. , a Delaware corporation (the “Borrower”), the GUARANTORS (as defined in the Credit Agreement), 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, as amended by that certain Second Amendment to Credit Agreement dated as of October 3, 2006 and as amended by that certain Third Amendment to Credit Agreement dated as of March 6, 2009 (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 desires to have certain Banks extend the Expiration Date of their Revolving Credit Commitments and/or join new Banks to the Credit Agreement, amend certain financial covenants and amend the Collateral Agency and Sharing Agreement.

      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:

     1.  Definitions .

     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:

          “ Bank-Provided Commodity Hedge shall mean a Commodity Hedge which is provided by any Bank or an Affiliate of any Bank and which meets the following requirements: such Commodity Hedge (i) is documented in a standard International Swap Dealer Association Agreement or such other standard trading documentation, (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging purposes.”

 


 

     “ Corporate Credit Rating shall mean (a) the “Corporate Family Rating” by Moody’s and (b) the “Corporate Credit Rating” by Standard & Poor’s, as such terms are commonly used as a rating category by each rating agency.”

     “ Expiration Date shall mean (a) with respect to all Non-Extending Revolving Credit Commitments, June 23, 2011 (the “Non-Extended Expiration Date”) and (b) with respect to all Extending Revolving Credit Commitments, March 31, 2013 (the “Extended Expiration Date”).”

     “ Interest Period shall mean the period of time selected by the Borrower in connection with (and to apply to) any election permitted hereunder by the Borrower to have Revolving Credit Loans bear interest under the Euro-Rate Option. Subject to the last sentence of this definition, such period shall be one, two, three or six Months. Such Interest Period shall commence on the effective date of such Interest Rate Option, which shall be (i) the Borrowing Date if the Borrower is requesting new Revolving Credit Loans, or (ii) the date of renewal of or conversion to the Euro-Rate Option if the Borrower is renewing or converting to the Euro-Rate Option applicable to outstanding Revolving Credit Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (B) the Borrower shall not select, convert to or renew an Interest Period which commences prior to the Non-Extended Expiration Date and ends after the Non-Extended Expiration Date, and (C) the Borrower shall not select, convert to or renew an Interest Period that would end after the Extended Expiration Date.”

     “ Revolving Credit Commitment shall mean, as to any Bank at any time, the Non-Extending Revolving Credit Commitment or Extending Revolving Credit Commitment, as applicable, in the amount initially set forth opposite its name on Schedule 1.1 (B) in the column labeled ‘Amount of Commitment for Revolving Credit Loans,’ and thereafter as determined by the Administrative Agent after giving effect to each applicable Bank Joinder and Assignment and Assumption Agreement executed by such Bank and delivered to the Administrative Agent, and Revolving Credit Commitments shall mean the aggregate Revolving Credit Commitments of all of the Banks, which aggregate amount shall not exceed $860,000,000 as of the Fourth Amendment Effective Date.”

     (b) Section 1.1 [Certain Definitions] of the Credit Agreement is hereby amended to insert therein, in alphabetical order, the following new definitions:

     “ Extended Expiration Date shall have the meaning set forth in the definition of “Expiration Date”.”

     “ Extending Revolving Credit Commitment Utilization Fee shall have the meaning set forth in Section 2.3.2 [Extending Revolving Credit Commitment Utilization Fee].”

     “ Extending Revolving Credit Commitment Unused Fee shall have the meaning set forth in Section 2.3.3 [Extending Revolving Credit Commitment Unused Fee].”

 


 

     “ Extending Bank shall mean each Bank who is designated as having an “Extending Revolving Credit Commitment” on Schedule 1.1 (B) of this Agreement.”

     “ Extending Revolving Credit Commitment shall mean the Extending Revolving Credit Commitment of each Extending Bank as indicated on Schedule 1.1 (B) of this Agreement and Extending Revolving Credit Commitments shall mean the Extending Revolving Credit Commitments of all of the Extending Banks.”

     “ Fourth Amendment shall mean that certain Fourth Amendment to Credit Agreement and Amendment to Collateral Agency and Sharing Agreement, dated as of August 27, 2009, among the Borrower, the Guarantors, the Banks, the Administrative Agent and the other Agents.”

     “ Fourth Amendment Effective Date shall mean the effective date of the Fourth Amendment, which date is August 27, 2009.”

     “ Non-Extended Expiration Date shall have the meaning set forth in the definition of “Expiration Date”.”

     “ Non-Extending Revolving Credit Commitments shall mean all Revolving Credit Commitments other than Extending Revolving Credit Commitments.”

     (c) Article 2 [Revolving Credit and Swing Loan Facilities] of the Credit Agreement is hereby amended as follows:

          (i) Section 2.3 [Fees; Commitment Fees] is hereby amended as follows:

     (A) The title to Section 2.3 shall be amended from “ Fees, Commitment Fees ” to “ Fees ”;

     (B) The entire paragraph currently constituting Section 2.3 shall be identified as “2.3.1 Commitment Fees ”;

     (C) The following subsections shall be inserted into Section 2.3 immediately after the end thereof:

     “2.3.2 Extending Revolving Credit Commitment Utilization Fee.

     Accruing from the Fourth Amendment Effective Date until the Extended Expiration Date, the Borrower agrees to pay to the Administrative Agent for the account of each Extending Bank, as consideration for such Extending Bank’s Extending Revolving Credit Commitment hereunder, a nonrefundable extending revolving credit commitment utilization fee (the “ Extending Revolving Credit Commitment Utilization Fee ”) equal to the applicable rate per annum set forth below on the average daily balance of such Extending Bank’s outstanding Loans and Letters of Credit Outstanding.

 


 

 

 

 

 

 

Leverage Ratio and Corporate Credit Rating

 

Applicable Percentage

If (i) the Leverage Ratio is less than or equal to 4.00 to 1.00 and (ii) the Borrower’s Corporate Credit Rating from (a) Standard & Poor’s is BB- or higher and (b) Moody’s is Ba3 or higher.

 

 

0.50

%

 

 

 

 

 

If (i) the Leverage Ratio is greater than 4.00 to 1.00 and (ii) the Borrower’s Corporate Credit Rating from (a) Standard & Poor’s is BB- or higher and (b) Moody’s is Ba3 or higher.

 

 

0.75

%

 

 

 

 

 

If (i) the Leverage Ratio is less than or equal to 4.00 to 1.00 and (ii) the Borrower’s Corporate Credit Rating from (a) Standard & Poor’s is lower than BB- or (b) Moody’s is lower than Ba3.

 

 

1.00

%

 

 

 

 

 

If (i) the Leverage Ratio is greater than 4.00 to 1.00 and (ii) the Borrower’s Corporate Credit Rating from (a) Standard & Poor’s is lower than BB- or (b) Moody’s is lower than Ba3.

 

 

1.25

%

     All Extending Revolving Credit Commitment Utilization Fees shall be payable in arrears on the first Business Day of each July, October, January and April after the Fourth Amendment Effective Date and on the Extended Expiration Date or upon acceleration of the Loans. It is expressly agreed that commencing on the date immediately after the date of the delivery of the financial statements and related Compliance Certificate as required pursuant to Section 7.3.3 [Certificate of the Borrower] hereof, the Extending Revolving Credit Commitment Utilization Fee shall be determined based upon the applicable Leverage Ratio recomputed as of the end of each fiscal quarter based on the Leverage Ratio as of such quarter end and on the Corporate Credit Ratings as updated from time to time. Any increase or decrease in the Extending Revolving Credit Commitment Utilization Fee computed as of a quarter end shall be effective on the earlier of (i) the date on which the Compliance Certificate evidencing such computation is due to be delivered under Section 7.3.3 [Certificate of Borrower], together with the financial statements related thereto required to be delivered pursuant to Section 7.3.1 [Quarterly Financial Statements] or Section 7.3.2 [Annual Financial Statements], as the case may be or (2) the date on which the Corporate Credit Rating of the Borrower is updated; provided , however ; if the Borrower shall fail to timely deliver the financial statements required to be delivered pursuant to Section 7.3.1 [Quarterly Financial Statements] or 7.3.2 [Annual Financial Statements], as the case may be, together with the duly executed Compliance Certificate required by Section 7.3.3 [Certificate of the Borrower], the Leverage Ratio for such date from and including the date on which such statements are required to be delivered until the date on which such financial statements

 


 

     and related Compliance Certificate are delivered shall be deemed to be greater than 4.00 to 1.00.

     2.3.3 Extending Revolving Credit Commitment Unused Fee.

     Accruing from the Fourth Amendment Effective Date until the Extended Expiration Date, the Borrower agrees to pay to the Administrative Agent for the account of each Extending Bank, as consideration for such Extending Bank’s Extending Revolving Credit Commitment hereunder, a nonrefundable Extending Revolving Credit Commitment unused fee (the “ Extending Revolving Credit Commitment Unused Fee ”) equal to the applicable rate per annum set forth below on the average daily difference between the amount of (i) such Extending Bank’s Extending Revolving Credit Commitment as the same may be constituted from time to time, and (ii) the sum of such Extending Bank’s Loans outstanding plus its Revolving Credit Ratable Share of the Letters of Credit Outstanding.

 

 

 

 

 

Corporate Credit Rating

 

Applicable Percentage

If the Borrower’s Corporate Credit Rating from (i)Standard & Poor’s is BB- or greater and (ii) Moody’s is Ba3 or greater.

 

 

0.125

%

 

 

 

 

 

If the Borrower’s Corporate Credit Rating from (i)Standard & Poor’s is less than BB- or (ii) Moody’s is less than Ba3.

 

 

0.25

%

     All Extending Revolving Credit Commitment Unused Fees shall be payable in arrears on the first Business Day of each July, October, January and April after the date hereof and on the Expiration Date or upon acceleration of the Loans.”

          (ii) Clause (B) of the first paragraph of Section 2.9.1 [Issuance of Letters of Credit] is hereby amended and restated in its entirely to read as follows:

     “(B) in no event expire later than ten (10) Business Days prior to the Extended Expiration Date and provided that in no event shall (i) the Letters of Credit Outstanding with respect to all Letters of Credit exceed, at any one time, $700,000,000, (ii) after giving effect to all such Letters of Credit, the Revolving Facility Usage exceed the Revolving Credit


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