exhibit10-1.htm


    
      

      

    

     

    EXHBIT
      10.1

     

    LIMITED
      CONSENT AND SECOND AMENDMENT

    TO
      AMENDED AND RESTATED CREDIT AGREEMENT

     

    This
      LIMITED CONSENT AND SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
      (this “Agreement”) is entered into as of July 19, 2007, by and
      among A. T. MASSEY COAL COMPANY, INC., a Virginia corporation
      (the
“Administrative Borrower”), individually and as agent on behalf
      of the other Loan Parties (such term and each other capitalized term used but
      not defined herein having the meaning given to it in
Article I
      of the Credit Agreement referenced
      below), the Required Lenders signatory hereto, UBS AG, STAMFORD
      BRANCH, as administrative agent
      (the “Administrative Agent”), and THE CIT GROUP/BUSINESS
      CREDIT, INC., as collateral agent and as security trustee (the “Collateral Agent”; and together with the
      Administrative Agent, the “Agents”) for the Secured
      Parties and Issuing Bank.

     

    RECITALS

     

    WHEREAS,
      the Administrative Borrower, the other Borrowers, the Guarantors, the
      Administrative Agent, the Collateral Agent and Lenders entered into that certain
      Amended and Restated Credit Agreement dated as of August 15, 2006 (as amended,
      supplemented, restated or otherwise modified from time to time, the
“Credit Agreement”);

     

    WHEREAS,
      the Administrative Borrower (on behalf of itself and each of the other Loan
      Parties), the Administrative Agent, the Collateral Agent, and the Required
      Lenders entered into that certain Limited Waiver, Consent and First Amendment
      to
      Credit Agreement effective as of March 12, 2007;

     

    WHEREAS,
      the Administrative Borrower has informed the Administrative Agent of its desire
      to form one or more corporations (each an “Insurance
      Subsidiary”), as direct or indirect Wholly-Owned Subsidiaries of the
      Administrative Borrower to engage in the Insurance Business (as defined in
      Section 2.1 hereof);

     

    WHEREAS,
      the parties acknowledge that federal and state insurance laws and regulations
      will impose certain restrictions on the business and activities of the Insurance
      Subsidiaries, including their ability to declare and issue Dividends, to grant
      or permit Liens on their assets, to guarantee Obligations of their parent
      corporations and to incur Indebtedness and such insurance laws and regulations
      may preclude or restrict any transfer or pledge of the Equity Interests of
      the
      Insurance Subsidiaries;

     

    WHEREAS,
      the Administrative Borrower (on behalf of itself and each of the other Loan
      Parties) has requested that Agents and the Required Lenders (i) consent to
      the
      formation of one or more Insurance Subsidiaries under Section 6.12 of the
      Credit Agreement as direct or indirect Wholly-Owned Subsidiaries of the
      Administrative Borrower, and (ii) amend certain Sections of the Credit Agreement
      to permit the capitalization of such Insurance Subsidiaries, to permit the
      incurrence of Indebtedness and other obligations by the Insurance Subsidiaries
      in the ordinary course of their business and the granting of Liens (except
      Liens
      on the Collateral) to secure such obligations and to relieve the Insurance
      Subsidiaries of certain covenants and restrictions otherwise applicable to
      Subsidiaries under the provisions of the Credit Agreement, all upon the terms,
      and subject to the limitations, set forth herein.

     

    NOW
      THEREFORE, in consideration of the foregoing recitals, mutual agreements
      contained herein and for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the Agents, the Required Lenders
      and the Administrative Borrower (on behalf of itself and each of the other
      Loan
      Parties) agree as follows:

     

    1  Limited
      Consent.  Subject to the satisfaction of each of the
      conditions to effectiveness set forth in Section 3 hereof, the
      Administrative Borrower (on behalf of itself and each of the other Loan
      Parties), the Agents and the Required Lenders hereby agree as
      follows:

     

    1.1  Immediately
      upon the effectiveness of this Agreement, the Agents and the Required Lenders
      hereby consent to the formation of one or more Insurance Subsidiaries pursuant
      to Section 6.12 of the Credit Agreement and to the issuance by any such
      Insurance Subsidiary of the Equity Interests therein to the Administrative
      Borrower or to any of its direct or indirect Wholly-Owned
      Subsidiaries.

     

    1.2  The
      limited consent set forth in Section 1.1 above is  effective
      solely for the purposes set forth herein and shall be limited precisely as
      written and shall not be deemed to be a consent to any amendment, waiver or
      modification of any term or condition of the Credit Agreement, Security
      Agreement or of any other Loan Document, except as expressly provided in this
      Agreement, or prejudice any right or rights that Administrative Agent or Lenders
      have or may have in the future under or in connection with the Credit Agreement,
      the Security Agreement or any other Loan Document.

     

    2  Agreements
      and Amendments to Credit
      Agreement.  Subject to the satisfaction
      of each of the conditions to effectiveness set forth in Section 3
      hereof, the Administrative Borrower (on behalf of itself and each of the other
      Loan Parties), the Agents and the Required Lenders hereby agree as
      follows:

     

    2.1  Immediately
      upon the effectiveness of this Agreement, the following sections of the Credit
      Agreement are amended as follows:

     

    2.1.1                      Section
      1.01 (Defined Terms) of the Credit Agreement is amended by adding the
      following additional defined terms:

     

    “Insurance
      Business” shall mean the business of (i) issuing surety bonds, reclamation
      bonds, performance bonds, workers’ compensation insurance policies, fronting
      policies for all risk general liability, casualty and property insurance and
      other similar obligations as a captive insurance/bonding company to support
      and/or insure reclamation and workers’ compensation obligations and all risk
      general liability, casualty and property risks customarily covered by fronting
      policies, in each case incurred by the Companies in the ordinary course of
      their
      businesses, and (ii) conducting all activities ancillary thereto, including
      entering into reinsurance arrangements, receiving premiums, establishing
      reserves for the payment of claims and for the return of unearned premiums
      and
      investing funds in support of such reserves, all as may be required or permitted
      by applicable insurance laws and regulations.

     

    “Insurance
      Subsidiary” shall mean any direct or indirect Wholly-Owned Subsidiary of the
      Administrative Borrower that is engaged solely in the Insurance
      Business.

     

    2.1.2                      Section
      5.04 (Insurance) of the Credit Agreement is amended by adding a new clause
      (c) as follows:

     

    “(c)           Notwithstanding
      any provision of this Section 5.04 to the contrary, no Insurance
      Subsidiary shall be permitted to provide any insurance coverage with respect
      to
      the Collateral without the prior written consent of each of the Administrative
      Agent and the Collateral Agent (as determined in their sole discretion) and
      the
      Required Lenders.  Subject to the provisions of the preceding
      sentence, the Loan Parties shall not be deemed to have breached any provision
      of
      this Section 5.04 solely as a result of maintaining insurance coverages
      with any Insurance Subsidiary.”

     

    2.1.3                      Section
      5.11 (Additional Collateral; Additional Guarantors) of the Credit Agreement
      is amended by inserting the following provision as new clause (d):

     

    “(d)           Notwithstanding
      any provision of this Section 5.11 to the contrary, clauses (a), (b) and
      (c) above shall not apply to any Insurance Subsidiary.”

     

    2.1.4                      Section
      6.01 (Indebtedness) of the Credit Agreement is amended by (i) deleting the
“and” at the end of existing clause (o) thereof, (ii) deleting the “.” at the
      end of existing clause (p) thereof and substituting “; and” in its place and
      (iii) inserting the following provision as new clause (q):

     

    “(q)           Indebtedness
      and other obligations incurred by any Insurance Subsidiary in the ordinary
      course of its Insurance Business.”

     

    2.1.5                      Section
      6.02 (Liens) of the Credit Agreement is amended by amending and restating
      clause (l) and (v) as follows:

     

    “(l)           claims
      of insureds against properties of any Insurance Subsidiary and Liens granted
      or
      incurred on properties of any Insurance Subsidiary in the ordinary course of
      its
      Insurance Business.”

     

    *                       *                         *

     

    “(v)           other
      Liens (not of a type set forth in clauses (a) through (u) above) incurred in
      the
      ordinary course of business of any Company with respect to obligations
      (including without limitation, any Capitalized Lease Obligations resulting
      from
      the conversion of operating leases existing on December 1, 2003, but excluding
      any other Indebtedness) or securing any surety bonds, reclamation bonds,
      performance bonds, workers’ compensation property, casualty or general liability
      insurance policies and other similar obligations issued or incurred by any
      Insurance Subsidiary in the ordinary course of its Insurance Business (but
      excluding any other Indebtedness) that do not in the aggregate exceed at any
      one
      time outstanding 5% of Consolidated Net Tangible Assets; provided that
      such Liens permitted under this clause (v) do not attach to any
      Collateral;”

     

    2.1.6                      Section
      6.04 (Investments, Loans and Advances) of the Credit Agreement is amended by
      amending and restating clauses (h) and (p) as follows:

     

    “(h)           Investments
      (other than as described in Section 6.04(e)) (i) by any Borrower in any
      Guarantor that is a Subsidiary, (ii) by any Company in any Borrower or any
      Guarantor that is a Subsidiary, (iii) by Holdings in any Borrower, (iv) by
      a
      Guarantor in another Guarantor, (v) by any Loan Party in a Company that is
      not a
      Loan Party (other than the Insurance Subsidiary); provided,
however, that the aggregate amount of all Investments permitted pursuant
      to this clause (v) shall not exceed $25 million at any time; and (vi) by any
      Loan Party in any Insurance Subsidiary; provided, however, that
      (A) the aggregate amount of Investments permitted pursuant to this clause (vi)
      with respect to the initial formation and capitalization of the Insurance
      Subsidiaries shall not exceed $60 million and (B) during any Fiscal Year,
      additional Investments from and after the initial formation and capitalization
      of any Insurance Subsidiary shall not exceed the sum of $20 million plus the
      cumulative unused amount, if any, otherwise permitted under clause (A) above
      or
      this clause (B); provided, that any Investment in one or more of the
      Insurance Subsidiaries shall not be permitted if, after giving effect to such
      Investment, (x) the aggregate amount of all Investments permitted pursuant
      to
      this clause (vi) would exceed $125 million at any time or (y) Excess
      Availability is less than $30,000,000 after giving effect to such
      Investment;”

     

    *                       *                         *

     

    “(p)           Each
      Borrower and its Subsidiaries may make or acquire Investments in connection
      with
      Permitted Acquisitions and each Insurance Subsidiary may make or acquire
      Investments permitted by applicable insurance laws and
      regulations;”

     

    2.1.7                      Section
      6.05 (Mergers, Consolidations, Sales of Assets and Acquisitions) of the
      Credit Agreement is amended by amending and restating the final paragraph
      thereof as follows:

     

    “To
      the
      extent the Required Lenders waive the provisions of this Section 6.05 with
      respect to the sale of any Collateral, or, subject in each case to Section
      11.02(b)(vii), any Collateral is sold, exchanged or otherwise disposed of as
      permitted by this Section 6.05, such Collateral (unless sold, exchanged or
      transferred to a Company) shall be sold, exchanged or otherwise disposed of
      free
      and clear of the Liens created by the Security Documents, and the Administrative
      Agent and the Collateral Agent shall take all actions deemed appropriate in
      order to effect the foregoing.”

     

    2.1.8                      Section
      6.07 (Transactions with Affiliates) of the Credit Agreement is amended by
      (i) deleting the “and” at the end of the existing clause (d) thereof,
      (ii) deleting the “.” at the end of the existing clause (e) thereof and
      substituting “; and” in its place and (iii) inserting the following provision as
      new clause (f):

     

    “(f)           any
      Company may pay insurance premiums to any Insurance Subsidiary so long as the
      proceeds of such payments are either (i) used to pay such Insurance Subsidiary’s
      franchise taxes, income taxes and other current period operating expenses
      (including any reinsurance premiums), (ii) used or invested by such Insurance
      Subsidiary to support loss reserves, or (iii) retained by such Insurance
      Subsidiary as capital; provided, however, that any such retained
      amount shall apply against the amounts permitted by Section
      6.04(h)(vi).”

     

    2.1.9                      Section
      6.10 (Limitation on Certain Restrictions on  Subsidiaries) of the
      Credit Agreement is amended by adding a new sentence at the end of Section
      6.10
      as follows:

     

    “Notwithstanding
      any provision of this Section 6.10 to the contrary, clauses (a) and (b)
      above shall not apply to any Insurance Subsidiary.”

     

    2.1.10                      Section
      6.13 (Business) of the Credit Agreement is amended by amending and restating
      clause (b) as follows:

     

    “(b)           With
      respect to the Borrowers and their Subsidiaries, engage (directly or indirectly)
      in any business other than those businesses in which the Borrowers and their
      Subsidiaries are engaged on the Restatement Date, whether in connection with
      a
      Permitted Acquisition or otherwise; provided that this Section shall not
      preclude (i) a Permitted Acquisition of any entity engaged in a Permitted
      Business or the formation of a Subsidiary of Holdings to be engaged in a
      Permitted Business or (ii) any Insurance Subsidiary from engaging in the
      Insurance Business.”

     

    2.1.11                      Section
      6.16 (Negative Pledges) is amended by adding a new clause (c) as
      follows:

     

    “(c)           Notwithstanding
      any provision of this Section 6.16 to the contrary, clauses (a) and (b)
      above shall not apply to any assets (other than Equity Interests) of any
      Insurance Subsidiary.”

     

    2.2  The
      parties acknowledge and agree that the financial performance of each Insurance
      Subsidiary shall be included in the calculations to determine compliance with
      the financial covenants in Section 6.08 of the Credit
      Agreement.

     

    3  Conditions
      to Effectiveness.  This Agreement shall
      be effective on the date on which all of the following conditions precedent
      are
      satisfied:

     

    3.1  This
      Agreement shall have been executed and delivered by the Administrative Agent,
      the Collateral Agent, the Required Lenders and the Administrative Borrower
      (on
      behalf of itself and each of the other Loan Parties).

     

    3.2  The
      representations and warranties contained herein shall be true and correct in
      all
      respects, and, after giving effect to this Agreement, no Event of Default or
      Default shall exist on the date hereof.

     

    4  Representations
      and Warranties.

     

    4.1  The
      execution, delivery and performance by Administrative Borrower (on behalf of
      itself and each of the other Loan Parties) of this Agreement has been duly
      authorized by all necessary corporate action and this Agreement is a legal,
      valid and binding obligation of the Administrative Borrower and each of the
      other Loan Parties enforceable against the Administrative Borrower and each
      of
      the other Loan Parties in accordance with its terms, except as the enforcement
      thereof may be subject to (i) the effect of any applicable bankruptcy,
      insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally and (ii) general principles of equity (regardless of whether
      such enforcement is sought in a proceeding in equity or at law);

     

    4.2  Each
      of
      the representations and warranties contained in the Credit Agreement is true
      and
      correct in all material respects on and as of the date hereof as if made on
      the
      date hereof, except to the extent that such representations and warranties
      expressly relate to an earlier date; and

     

    4.3  Neither
      the execution, delivery and performance of this Agreement by the Administrative
      Borrower (on behalf of itself and each of the other Loan Parties) nor the
      consummation of the transactions contemplated hereby does or shall result in
      a
      breach of, or violate (i) any provision of the Administrative Borrower’s or any
      other Loan Party’s articles of incorporation or bylaws, (iii) any law or
      regulation, or any order or decree of any court or government instrumentality,
      applicable to the Administrative Borrower or the other Loan Parties or binding
      upon any of their properties, or (iii) any indenture, mortgage, deed of trust,
      lease, agreement or other instrument to which the Administrative Borrower or
      any
      other Loan Party is a party or by which the Administrative Borrower or any
      other
      Loan Party or any of their property is bound, except in any such case to the
      extent such conflict or breach has been waived by a written waiver document,
      a
      copy of which has been delivered to the Agents on or before the date
      hereof.

     

    5  Reference
      to and Effect upon the Credit Agreement.

     

    5.1  Except
      as
      specifically set forth above, the Credit Agreement and the other Loan Documents
      shall remain in full force and effect and are hereby ratified and
      confirmed.

     

    5.2  The
      execution, delivery and effectiveness of this Agreement shall not operate as
      a
      waiver of any right, power or remedy of any Agent or any Lender under the Credit
      Agreement or any other Loan Document, nor constitute amendment of any provision
      of the Credit Agreement or any other Loan Document, except as specifically
      set
      forth herein.  Upon the effectiveness of this Agreement, each
      reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein” or words of similar import shall mean and be a reference to the Credit
      Agreement as amended hereby.

     

    5.3  The
      Administrative Borrower (on behalf of itself and each of the other Loan Parties)
      acknowledges and agrees that the execution and delivery by Agents and Required
      Lenders of this Agreement shall not be deemed (i) to create a course of dealing
      or otherwise obligate Agents or Lenders to forbear, waive, consent or execute
      similar amendments under the same or similar circumstances in the future, or
      (ii) to amend, relinquish or impair any right of Agents or Lenders to receive
      any indemnity or similar payment from any Person or entity as a result of any
      matter arising from or relating to this Agreement.

     

    5.4  The
      Administrative Borrower (on behalf of itself and each of the other Loan Parties)
      affirms and acknowledges that this Agreement constitutes a Loan Document under
      the Credit Agreement and any reference to the Loan Documents under the Credit
      Agreement contained in any notice, request, certificate or other document
      executed concurrently with or after the execution and delivery of this Agreement
      shall be deemed to include this Agreement unless the context shall otherwise
      specify.

     

    6  Costs
      and Expenses.  As provided in Section 11.03 of the
      Credit Agreement, Borrowers agree to reimburse Agents for all reasonable
      out-of-pocket expenses incurred by the Administrative Agent and the Collateral
      Agent in connection with the preparation, execution and delivery of this
      Agreement, including the fees, charges and disbursements of Latham &
Watkins, LLP, counsel for the Administrative Agent and Hahn & Hessen, LLP,
      counsel to the Collateral Agent.

     

    7  GOVERNING
      LAW.  THIS AGREEMENT SHALL BE GOVERNED
      BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS
      OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.

     

    8  Headings.  Section
      headings in this Agreement are included herein for convenience of reference
      only
      and shall not constitute a part of this Agreement for any other
      purposes.

     

    9  Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed an original, but all such counterparts shall constitute
      one and the same instrument.    In the event that any
      signature is delivered by facsimile transmission, such signature shall create
      a
      valid and binding obligation of the party executing (or on whose behalf the
      signature is executed) the same with the same force and effect as if such
      facsimile signature page were an original thereof, and such party shall promptly
      follow its facsimile signature page by mailing of a hard copy
      original.

     

    [Signature
      Pages Follow]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
      as of the date first written above.

     

    ADMINISTRATIVE
      BORROWER

    


    A.
      T.
      MASSEY COAL COMPANY, INC., individually and as agent for each of the other
      Loan
      Parties

    


    


    By:  /s/
      Philip W.
      Nichols                                                              

    Name:
      Philip W. Nichols

    Title:
      Treasurer

    


                                AGENTS

    


    UBS
      AG,
      STAMFORD BRANCH, as the Administrative Agent

    


    


    By:  /s/
      David B.
      Julie                                                              

    Name:
      David B. Julie

    Title:
      Associate Director

    


    


    By: 
      /s/ Irja R.
      Otsa                                                               

    Name:
      Irja R. Otsa

    Title:
      Associate Director

    


    


    


    LENDERS

    


    UBS
      LOAN
      FINANCE LLC,

    as
      Swingline Lender

    


    
 

    By:   /s/
      David B.
      Julie                                                             

    Name:
      David B. Julie

    Title:
      Associate Director

    


    


    By:  /s/
      Irja R.
      Otsa                                                              

    Name:
      Irja R. Otsa

    Title:
      Associate Director

    


    UBS
      LOAN
      FINANCE LLC,

    as
      a
      Lender

    


    


    By:  /s/
      David B.
      Julie                                                             

    Name:
      David B. Julie

    Title:
      Associate Director

    


    


    By: 
      /s/ Irja R.
      Otsa                                                                                                                             

    Name:
      Irja R. Otsa

    Title:
      Associate Director

     

                                    THE
      CIT
      GROUP/BUSINESS CREDIT, INC., as the Collateral Agent

    
       

      By:
        /s/ Eddy L.
        Milstein                                                             

          Name:
        Eddy L.
        Milstein

          Title:
        Vice
        President

    

     

    GENERAL
      ELECTRIC CAPITAL CORPORATION, as a Lender

    


    


    By:  /s/
      Meenoo
      Sameer                                                              

    Name:
      Meenoo Sameer

    Title:
      Duly Authorized Signatory

     

    BANK
      OF
      AMERICA, N.A., as a Lender

    


    


    By:  /s/
      Lawrence P.
      Garni                                                              

    Name:
      Lawrence P. Garni

    Title:
      Sr. Vice President

     

    PNC
      BANK,
      NATIONAL ASSOCIATION, as a Lender

    


    


    By:  /s/
      Scott
      O'Donnell                                                              

    Name:
      Scott O'Donnell

    Title:
      Credit Officer