Exhibit 10.1
AMENDMENT NO. 5 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDMENT dated as of July 16, 1999 by and among Lodestar Energy, Inc., a
Delaware corporation ("Borrower"), Lodestar Holdings, Inc., a Delaware
corporation ("Guarantor"), the financial institutions from time to time parties
to the Loan Agreement (as hereinafter defined) as lenders (individually, a
"Lender" and collectively, the "Lenders"), Congress Financial Corporation, a
Delaware corporation, in its capacity as administrative agent and collateral
agent for the Lenders (in such capacity, the "Agent") and The CIT Group/Business
Credit, Inc., a New York corporation, in its capacity as co-agent for Lenders
(in such capacity, the "Co-Agent").
W I T N E S S E T H
WHEREAS, Agent, Co-Agent, Lenders, Borrower and Guarantor have entered
into financing arrangements pursuant to which Lenders, or Agent on behalf of
Lenders, have made and may make loans and advances and provide other financial
accommodations to Borrower as set forth in the Amended and Restated Loan and
Security Agreement, dated May 15, 1998, by and among Agent, Co-Agent, Lenders,
Borrower and Guarantor as amended pursuant to Amendment No. 1 to Amended and
Restated Loan and Security Agreement, dated October 22, 1998, Amendment No. 2 to
Amended and Restated Loan and Security Agreement, dated December 21, 1998,
Amendment No. 3 to Amended and Restated Loan and Security Agreement, dated
January 13, 1999 and Amendment No. 4 to Amended and Restated Loan and Security
Agreement, dated April 30, 1999 (as amended by this Amendment and as the same
may hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement") and the agreements, documents and
instruments at any time executed and/or delivered in connection therewith or
related thereto (collectively, together with the Loan Agreement, the "Financing
Agreements");
WHEREAS, Grand Valley (as hereinafter defined) is the owner of certain
assets located at and used in connection with mining operations formally
conducted by Grand Valley at the Xxxxxx Canyon Mine (a sealed mine) and XxXxxxx
Canyon Mine (a mine in active idle status) which mines are located in Garfield
and Mesa Counties in Colorado and Borrower has entered into agreements to
purchase the Grand Valley Assets (as hereinafter defined) from Grand Valley, as
set forth in the Grand Valley Purchase Agreements (as hereinafter defined);
WHEREAS, Horizon (as hereinafter defined) is the owner of certain assets
located at and used in connection with mining operations formally conducted by
Horizon at the Horizon Mine (a mine in active idle status) which mine is located
in Carbon County, Utah and Borrower has entered into agreements to purchase the
Horizon Assets (as hereinafter defined) from Horizon, as set forth in the
Horizon Purchase Agreements (as hereinafter defined);
WHEREAS, White Oak (as hereinafter defined) is the owner of certain assets
located at and used in connection with mining operations formally conducted by
White Oak at the White Oak Mine (a mine in active idle status) which mine is
located in Carbon and Xxxxx Counties, Utah and Borrower has entered into
agreements to purchase the White Oak Assets (as hereinafter defined) from White
Oak, as set forth in the White Oak Purchase Agreements (as hereinafter defined);
WHEREAS, on or about July 2, 1999, Borrower made a loan in the amount of
$1,000,000 to Renco Coal (as hereinafter defined) and Borrower has requested the
consent of Agent and Lenders to such loan;
WHEREAS, in connection with such transactions, Borrower has requested that
Agent and Lenders agree to certain amendments to the Loan Agreement and Agent
and Lenders are willing to agree to such amendments, subject to the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
and covenants set forth herein, and for other good and valuable consideration,
the adequacy and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
1.1 ADDITIONAL DEFINITIONS. As used herein, the following terms shall have
the respective meanings given to them below and the Loan Agreement shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:
(a) "AMENDMENT NO. 5" shall mean this Amendment No. 5 to the Amended
and Restated Loan and Security Agreement by and among Borrower, Guarantor,
Agent, Co-Agent and Lenders.
(b) "COAL INVENTORY" shall mean all coal inventory located on or
about the Grand Valley Real Property, Horizon Real Property and White Oak Real
Property.
(c) "EARTHFAX" shall mean EarthFax Engineering, Inc. and its
successors and assigns.
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(d) "EQUIPMENT LESSOR" shall mean The CIT Group/Equipment Financing,
Inc., and its successors and assigns.
(e) "FIRST AMERICAN" shall mean First American Title Insurance
Company and its successors and assigns, as escrowee pursuant to the Closing
Escrow Agreement, dated of even date herewith, by and among First American,
Borrower and the Xxxxxxxx Sellers.
(f) "GRAND VALLEY" shall mean Grand Valley Coal Company, a Colorado
corporation, and its successors and assigns.
(g) "GRAND VALLEY ASSETS" shall mean all of the assets and
properties acquired by Borrower from Grand Valley pursuant to the Grand Valley
Purchase Agreements, including, but not limited to, Coal Inventory, Coal Leases,
Contracts, Files and Records, Inventory, Fee Property, Mines, Permits, Personal
Property, Property Rights, Water Rights, all non-extracted minerals (including
but not limited to coal, coal reserves, oil, gas and other minerals) located in,
on or under the Grand Valley Real Property, all buildings, fixtures and
improvements on the Grand Valley Real Property and any other Purchased Assets,
as each such term is defined in Amendment No. 5 or in the Grand Valley Asset
Purchase Agreement (as in effect on the date of Amendment No. 5).
(h) "GRAND VALLEY ASSET PURCHASE AGREEMENT" shall mean the Grand
Valley Asset Purchase Agreement, dated of even date herewith, by and between the
Grand Valley and Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(i) "GRAND VALLEY MORTGAGES" shall mean, individually and
collectively, the deeds of trust, mortgages and other security agreements to be
entered into by Borrower, as grantor and Agent, as grantee, with respect to the
Grand Valley Real Property.
(j) "GRAND VALLEY PURCHASE AGREEMENTS" shall mean, individually and
collectively, the Grand Valley Asset Purchase Agreement, together with any bills
of sale, deed and assignments, assignment and assumption agreements, leases,
subleases and such other instruments of transfer or lease as are referred to
therein and all side letters with respect thereto, and all agreements, documents
and instruments executed and/or delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced; PROVIDED, THAT, the term "Grand Valley
Purchase Agreements" as such term is defined herein shall not include any of the
"Financing Agreements" as such term is defined herein.
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(k) "GRAND VALLEY REAL PROPERTY" shall mean the Real Property of
Borrower purchased from Grand Valley and located in Garfield County and Mesa
County, Colorado as more particularly described on Exhibit A hereto.
(l) "GVP" shall mean the Grand Valley Rural Power Lines, Inc., a
Colorado cooperative association, and its successors and assigns.
(m) "GVP AGREEMENT" shall mean the Agreement, dated August 25, 1992,
between GVP and Grand Valley.
(n) "GVP COLLATERAL" shall mean the equipment and real property as
described on Exhibit B hereto, PROVIDED, THAT, the term "GVP Collateral" shall
not include any Coal Inventory or other Inventory or any Accounts or any
proceeds of any of the foregoing.
(o) "HORIZON" shall mean Horizon Mining, LLC, a Utah limited
liability company, and its successors and assigns.
(p) "HORIZON ASSETS" shall mean all of the assets and properties
acquired by Borrower from Horizon pursuant to the Horizon Purchase Agreements,
including, but not limited to, Coal Inventory, Coal Leases, Contracts, Files and
Records, Inventory, Fee Property, Permits, Personal Property, Property Rights,
Water Rights, all non-extracted minerals (including but not limited to coal,
coal reserves, oil, gas and other minerals) located in, on or under the Horizon
Real Property, all buildings, fixtures and improvements on the Horizon Real
Property and any other Purchased Assets, as each such term is defined in
Amendment No. 5 or the Horizon Asset Purchase Agreement (as in effect on the
date of Amendment No. 5).
(q) "HORIZON ASSET PURCHASE AGREEMENT" shall mean the Horizon Mine
Asset Purchase Agreement, dated of even date herewith, by and between the
Horizon and Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(r) "HORIZON LEASED EQUIPMENT" shall mean one (1) continuous miner
and three (3) shuttle cars leased by Borrower from CIT pursuant to the Horizon
Equipment Lease.
(s) "HORIZON MORTGAGES" shall mean, individually and collectively,
the deeds of trust, mortgages and other security agreements to be entered into
by Borrower, as grantor and Agent, as grantee, and with respect to the Horizon
Real Property.
(t) "HORIZON PURCHASE AGREEMENTS" shall mean individually and
collectively, the Horizon Asset Purchase Agreement, the Horizon Equipment Lease,
together with any bills of sale, deed and assignments, royalty agreements,
assignment and assumption agreements, leases,
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subleases and such other instruments of transfer or lease as are referred to
therein and all side letters with respect thereto, and all agreements, documents
and instruments executed and/or delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced; PROVIDED, THAT, the term "Horizon
Purchase Agreements" as such term is defined herein shall not include any of the
"Financing Agreements" as such term is defined herein.
(u) "HORIZON REAL PROPERTY" shall mean the Real Property of Borrower
purchased from Horizon and located in Carbon County, Utah as more particularly
described on Exhibit C hereto.
(v) "HORIZON EQUIPMENT LEASE" shall mean the Master Lease Agreement,
dated December 2, 1998, by and between Equipment Lessor and Horizon as assigned
by Horizon to Borrower and as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed restated or replaced.
(w) "XXXXXXXX MORTGAGES" shall mean the Grand Valley Mortgages, the
Horizon Mortgages and the White Oak Mortgages.
(x) "XXXXXXXX PURCHASE AGREEMENTS" shall mean, collectively, the
Grand Valley Purchase Agreements, the Horizon Purchase Agreements and the White
Oak Purchase Agreements.
(y) "XXXXXXXX SELLERS" shall mean, collectively, each of the
following (and their respective successors and assigns): (i) White Oak, (ii)
Horizon and (iii) Grand Valley.
(z) "RENCO COAL" shall mean Renco Coal, Inc., a Delaware corporation
and a direct or indirect subsidiary of Renco Group, and its successors and
assigns.
(aa) "TBL" shall mean Tokyo Boeki, Ltd., a company organized under
the laws of Japan, and its successors and assigns.
(ab) "TERMINATION CHARGE" shall have the meaning for such term as
set forth in Schedule 14 to the Grand Valley Asset Purchase Agreement as it
exists on the date of Amendment No. 5.
(ac) "WHITE OAK ASSETS" shall mean all of the assets and properties
acquired by Borrower from White Oak pursuant to the White Oak Purchase
Agreements, including, but not limited to, Coal Inventory, Coal Leases,
Contracts, Fee Property (except as listed on Schedule 3.2 to the White Oak Asset
Purchase Agreement), Files and Records, Inventory, Permits, Personal Property,
Property Rights, Water Rights, all non-extracted minerals (including but not
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limited to coal, coal reserves, oil, gas and other minerals) located in, on or
under the White Oak Real Property, all buildings, fixtures and improvements on
the White Oak Real Property and any other Purchased Assets, as each such term is
defined in the White Oak Asset Purchase Agreement (as in effect on the date of
Amendment No.5).
(ad) "WHITE OAK ASSET PURCHASE AGREEMENT" shall mean the White Oak
Mine Asset Purchase Agreement, dated of even date herewith, by and between the
White Oak and Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(ae) "WHITE OAK MORTGAGES" shall mean, individually and
collectively, the deeds of trust, mortgages and other security agreements to be
entered into by Borrower, as grantor and Agent, grantee, with respect to the
White Oak Real Property.
(af) "WHITE OAK PURCHASE AGREEMENTS" shall mean, individually and
collectively, the White Oak Asset Purchase Agreement, together with any bills of
sale, deed and assignments, royalty agreements, assignment and assumption
agreements, leases, subleases and such other instruments of transfer or lease as
are referred to therein and all side letters with respect thereto, and all
agreements, documents and instruments executed and/or delivered in connection
therewith, as all of the foregoing now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced; PROVIDED, THAT,
the term "White Oak Purchase Agreements" as such term is defined herein shall
not include any of the "Financing Agreements" as such term is defined herein.
(ag) "WHITE OAK REAL PROPERTY" shall mean the Real Property of
Borrower purchased from White Oak and located in Carbon County and Xxxxx County,
Utah as more particularly described on Exhibit D hereto.
(ah) "WHITE OAK" shall mean White Oak Mining & Construction Co.,
Inc., a Nevada corporation, and its successors and assigns.
1.2 INTERPRETATION. For purposes of this Amendment, all terms used herein,
including but not limited to, those terms used and/or defined in the recitals
hereto shall have the respective meanings assigned thereto in the Loan
Agreement.
2. CONSENTS. Subject to the terms and conditions contained herein, Agent
and Lenders hereby consent to the following:
(a) the purchase by Borrower of the Grand Valley Assets pursuant to
the Grand Valley Purchase Agreements (as in effect on the date hereof);
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(b) the purchase by Borrower of the Horizon Assets pursuant to the
Horizon Purchase Agreements (as in effect on the date hereof);
(c) the purchase by Borrower of the White Oak Assets pursuant to the
White Oak Purchase Agreements (as in effect on the date hereof);
(d) the Indebtedness of Borrower to GVP not to exceed $600,000 of
the Termination Charge arising pursuant to the GVP Agreement (as in effect on
the date hereof) as assigned to Borrower pursuant to the Grand Valley Purchase
Agreements;
(e) the continuation of the security interests in and liens upon the
GVP Collateral in favor of GVP to secure up to $600,000 of the Termination
Charge;
(f) the Indebtedness of Borrower to the Equipment Lessor pursuant to
the Horizon Equipment Lease in an amount not to exceed $1,700,000;
(g) the amendment to the Schedules to the Loan Agreement as set
forth in Section 4 of this Amendment; and
(h) the loan in the amount of $1,000,000 from Borrower to Renco Coal
made on or about July 2, 1999;
PROVIDED, THAT, (1) each of the foregoing shall have occurred by no later than
July 30, 1999; and (2) notwithstanding anything to the contrary in the Loan
Agreement, none of the Grand Valley Assets, Horizon Assets and White Oak Assets
or other Collateral located at, on or under the Grand Valley Real Estate, the
Horizon Real Estate or the White Oak Real Estate, shall constitute Eligible
Accounts, Eligible Inventory or Eligible Equipment, as each such term is defined
in the Loan Agreement, EXCEPT, THAT, such Accounts, Inventory or Equipment will,
after the date hereof, be considered Eligible Accounts, Eligible Inventory or
Eligible Equipment, on and after each of the following conditions shall have
been satisfied as determined by Agent: (A) Agent shall have completed a field
examination of the businesses, operations and assets acquired by Borrower
pursuant to the Xxxxxxxx Purchase Agreements in accordance with Agent's
customary procedures and practices and as otherwise required by the nature and
circumstances of such businesses, operations and assets, the results of which
shall be satisfactory to Agent; (B) Agent shall have established such advance
rates and additional criteria for eligibility and such other terms and
conditions with respect to such Accounts, Inventory and Equipment as Agent may
determine (if any) based on the results of such field examination; and (C) such
Accounts, Inventory and Equipment shall satisfy all of the criteria for
eligibility so as to constitute Eligible Accounts, Eligible Inventory or
Eligible Equipment (including criteria set forth in the Loan Agreement as in
effect on the date hereof and such additional criteria as determined by Agent as
provided above).
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3. AMENDMENTS.
3.1 INDEBTEDNESS. Section 7.3 of the Loan Agreement is hereby amended by
adding new Sections 7.3(s) and (t) as follows:
"(s) Indebtedness of Borrower to Horizon arising pursuant to the
Horizon Equipment Lease as in effect on the date of Amendment No. 5;
PROVIDED, THAT, (i) such Indebtedness is and shall only be secured by the
security interests and liens upon the Horizon Lease Equipment as permitted
under Section 7.4(d) hereof, (ii) the terms and conditions of such
Indebtedness shall be acceptable in all respects to Agent, (iii) such
Indebtedness shall not exceed $1,700,000 (less the aggregate amount of all
repayments in respect thereof), (iv) Borrower shall not, directly or
indirectly, make any payments with respect to such Indebtedness,
including, but not limited to any prepayments or any non-mandatory
payments, EXCEPT THAT Borrower may make regularly scheduled monthly
payments in respect of the Horizon Equipment Lease as in effect on the
date of Amendment No. 5 so long as the aggregate amount of all such
payments shall not exceed $1,700,000 and as of the date of each such
payment and after giving effect thereto, no Event of Default or act,
condition or event which with notice or passage of time or both would
constitute an Event of Default shall exist or have occurred and be
continuing, (v) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change any terms of such Indebtedness or any other
provisions of any agreement, document or instruments to the extent such
provision governs or affects the Indebtedness as in effect on the date of
Amendment No. 5, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any
sums for such purpose, and (vi) Borrower shall furnish to Agent all
notices or demands in connection with such Indebtedness either received by
Borrower or on its behalf, promptly after the receipt thereof or sent by
Borrower or on its behalf concurrently with the sending thereof, as the
case may be; and
(t) Indebtedness of Borrower to GVP arising pursuant to the GVP
Agreement (as in effect on the date of Amendment No. 5), as assigned to
Borrower pursuant to the Grand Valley Purchase Agreements (as in effect on
the date of Amendment No. 5); PROVIDED, THAT, (i) such Indebtedness is and
shall only be secured by the security interests and liens upon the GVP
Collateral as permitted under Section 7.4(i) hereof, (ii) the terms and
conditions of such Indebtedness shall be acceptable in all respects to
Agent, (iii) such Indebtedness shall not exceed $600,000 (less the
aggregate amount of all repayments in respect thereof), (iv) Borrower
shall not, directly or indirectly, make any payments with
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respect to such Indebtedness, including, but not limited to any
prepayments or any non-mandatory payments, EXCEPT THAT Borrower may make
regularly scheduled monthly payments in respect of the Termination Charge
so long as the aggregate amount of all such payments shall not exceed
$600,000 and as of the date of each such payment and after giving effect
thereto, no Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default shall
exist or have occurred and be continuing, (v) Borrower shall not, directly
or indirectly, (A) amend, modify, alter or change any terms of such
Indebtedness or any other provisions of any agreement, document or
instruments related thereto as in effect on the date of Amendment No. 5,
or (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any sums for
such purpose, PROVIDED, THAT, the foregoing shall not be construed to
limit the right of Borrower to provide a Bond payable to GVP in respect of
such Indebtedness to the extent Borrower is permitted to incur
Indebtedness in connection with such Bond under Section 7.3 hereof, and
(vi) Borrower shall furnish to Agent all notices or demands in connection
with such Indebtedness either received by Borrower or on its behalf,
promptly after the receipt thereof or sent by Borrower or on its behalf
concurrently with the sending thereof, as the case may be."
3.2 LIMITATION ON LIENS. Section 7.4 of the Loan Agreement is hereby
amended to add an new Section 7.4(i) as follows:
"(i) the security interests in and liens upon the GVP Collateral in
favor of GVP to secure the obligations of Borrower to GVP arising pursuant
to the GVP Agreement (as in effect on the date of Amendment No 5), as
assigned to Borrower and permitted in Section 7.3(t) hereof; PROVIDED,
THAT, in no event shall the GVP Collateral include the Coal Inventory, any
other Inventory, any Accounts or any Equipment other than such Equipment
listed on Exhibit B to Amendment No. 5 or any proceeds of any of the
foregoing."
3.3 LOANS, INVESTMENTS, GUARANTEES. Section 7.7 of the Loan Agreement is
hereby amended to add an new Section 7.5(p) as follows:
"(p) the loan in the amount of $1,000,000 made on or about July 2,
1999 by Borrower to Renco Coal to be used for a deposit paid to a third
party in connection with the purchase of certain assets or stock by Renco
Coal from such third party."
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4. SCHEDULES. Schedules 1.68, 6.1(a), 6.5(c), 6.7, 6.22 and 6.23 of the
Loan Agreement are hereby supplemented by adding the material set forth on the
Supplement to Schedules 1.68, 6.1(a), 6.5(c), 6.7, 6.22 and 6.23 as set forth in
Exhibit E to this Amendment.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Lenders and Agent pursuant to the other Financing
Agreements, Borrower hereby represents, warrants and covenants with and to
Lenders and Agent as follows (which representations, warranties and covenants
are continuing and shall survive the execution and delivery of Amendment No.5
and shall be incorporated into and made a part of the Financing Agreements):
5.1 ACQUISITION OF CERTAIN ASSETS OF THE XXXXXXXX SELLERS.
(a) The Grand Valley Purchase Agreements, the Horizon Purchase
Agreements and the White Oak Purchase Agreements and the transactions
contemplated under each have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all respects,
including the fulfillment (not merely the waiver, except as have been disclosed
to Agent and consented to in writing by Agent) of all conditions precedent set
forth therein. After giving effect to the Grand Valley Purchase Agreements, the
Horizon Purchase Agreements and the White Oak Purchase Agreements, except as set
forth on Exhibit F, Borrower has acquired good and marketable title or a valid
leasehold interest to the Grand Valley Assets, the Horizon Assets and the White
Oak Assets. All amounts paid by Borrower pursuant to the Grand Valley Asset
Purchase Agreement, the Horizon Asset Purchase Agreement and the White Oak Asset
Purchase Agreement have been paid with the proceeds of the Loans.
(b) All of the Grand Valley Assets, the Horizon Assets and the White
Oak Assets (other than intangible property) to be acquired, leased or subleased
by Borrower pursuant to the Grand Valley Purchase Agreements, the Horizon
Purchase Agreements and the White Oak Purchase Agreements are on premises being
acquired, leased or subleased by Borrower from the Xxxxxxxx Sellers, and, except
as set forth on Exhibit G, the Grand Valley Assets, the Horizon Assets and the
White Oak Assets are free and clear of all liens, claims, encumbrances and
security interests other than any tax, mechanics, materialmen and landlord
statutory liens otherwise permitted under the Loan Agreement.
(c) Except as set forth on Exhibit H, all actions and proceedings
required by the Grand Valley Purchase Agreements, the Horizon Purchase
Agreements and the White Oak Purchase Agreements, applicable law or regulation
have been taken and the transactions contemplated thereunder have been duly and
validly consummated. Except as listed on Exhibit H hereto, Borrower has received
all necessary consents and approvals of third parties to the transactions
contemplated by the Grand Valley Purchase Agreements, the Horizon Purchase
Agreements and the White Oak Purchase Agreements.
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(d) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Grand Valley Purchase Agreements, the Horizon
Purchase Agreements and the White Oak Purchase Agreements and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify the transactions described in the Grand Valley Purchase Agreements, the
Horizon Purchase Agreements and the White Oak Purchase Agreements .
(e) Borrower has delivered, or caused to be delivered, to Agent
true, correct and complete copies of the Grand Valley Purchase Agreements, the
Horizon Purchase Agreements and the White Oak Purchase Agreements.
5.2 NO DEFAULT. No Event of Default exists on the date of Amendment No. 5
(after giving effect to the amendment to the Loan Agreement made by the
provisions of Amendment No. 5).
5.3 CORPORATE POWER AND AUTHORITY. This Amendment has been duly executed
and delivered by Borrower and Guarantor and is in full force and effect as of
the date of Amendment No. 5 and the agreements and obligations of Borrower and
Guarantor contained herein constitute legal, valid and binding obligations of
Borrower and Guarantor enforceable against Borrower and Guarantor in accordance
with their respective terms.
5.4 ADDITIONAL ITEMS TO BE DELIVERED. Borrower hereby agrees that, in
addition to all other terms, conditions and provisions set forth in the other
Financing Agreements, Borrower shall deliver or cause to be delivered to Agent,
the following items, each in form and substance satisfactory to Agent, as soon
as possible, but in any event, by the date referred to below with respect to
each such item:
(a) on or before August 31, 1999, agreements in writing, from each
consignee, processor or other third party in possession of any Coal Inventory,
Inventory or other Collateral at the locations acquired pursuant to the Xxxxxxxx
Purchase Agreements and pursuant to which such consignee, processor or other
third party acknowledges the first priority lien of Agent on Coal Inventory and
Inventory of Borrower in the possession of such consignee, processor or other
third person, agrees to waive any and all claims such person may at any time
have against such Inventory, and agrees to permit Agent access to, and the right
to remain on, the premises of the customer so as to exercise Agent's rights and
remedies and otherwise deal with the Collateral, in each case as duly
authorized, executed and delivered by each of such persons and Borrower;
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(b) on or before August, 31, 1999, UCC-1 financing statements
between Borrower, as secured party/consignor and each person who has possession
of any Inventory or other assets of Borrower, as debtor/consignee, indicating
Agent, as assignee, for filing in the appropriate government recording offices,
as determined by Agent, in each case as duly authorized, executed and delivered
by Borrower and each of such persons;
(c) on or before August 31, 1999, Agent shall receive, all other
consents, waiver, acknowledgments, releases, terminations and other agreements,
documents from third parties which Agent may deem necessary or desirable in
order to permit, protect and perfect security interests in and liens upon the
Collateral or to effect the provisions or purposes of this Amendment No. 5 or
the other Financing Agreements; PROVIDED, THAT, the foregoing shall not include
the consents of lessors of the Grand Valley Real Property, Horizon Real Property
and White Oak Real Property to the Xxxxxxxx Mortgages;
(d) on or before July 20, 1999, Agent shall have received evidence
that the Agent has a valid perfected first priority security interest in all of
the Collateral;
(e) on or before August 6, 1999, Agent shall have received written
reports or appraisals of any or all of the Collateral located on or under the
Grand Valley Real Property, the Horizon Real Property or the White Oak Real
Property by an appraiser acceptable to Agent;
(f) on or before August 6, 1999, Agent shall have received the
Xxxxxxxx Mortgages, in each case as duly authorized, executed and delivered by
Borrower;
(g) on or before August 6, 1999, Agent shall have received UCC-1
financing statements between Agent, as secured party and Borrower, as debtor
with respect to fixtures and minerals for filing in the appropriate government
recording offices, as determined by Lender, in each case as duly authorized,
executed and delivered by Borrower;
(h) on or before August 6, 1999, Agent shall have received a letter
addressed to Agent from EarthFax permitting Agent and Lenders to rely on the
environmental audits dated June 1999 with respect to the Grand Valley Real
Property, the Horizon Real Property and the White Oak Real Property;
(i) on or before July16, 1999, Agent shall have received copies of
the title insurance policy, dated of even date herewith, issued by South Eastern
Utah Title Company to Borrower with respect to the White Oak Real Property,
together with a Report, dated July 9, 1999, prepared by Xxxxxxx, Xxxxx & Xxxxxxx
for Borrower with respect to the Grand Valley Real Property based in part on the
Title Opinion dated June 30, 1995 issued by Xxxxxx, Xxxxxx & Xxxxxxxx to Horizon
with respect to the Horizon Real Property, and a Report, dated July 9, 1999,
prepared by Xxxxxxx, Xxxxx & Xxxxxxx for Borrower with respect to the Grand
Valley Real
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Property based in part on the Title Commitment dated June 8, 1999, issued by
Abstract & Title Co. of Mesa County, Inc. to Borrower and a Title Memorandum
prepared for Borrower by Mineral Land Services, Inc. with respect to the Grand
Valley Real Property;
(j) on or before August 6, 1999, Agent shall have received
Collateral Access Agreements with respect to any of the premises of Borrower
acquired, leased or subleased pursuant to the Xxxxxxxx Purchase Agreements by
Borrower from any owner or lessor (other than the Xxxxxxxx Sellers), in each
case, duly executed and delivered by such owner and lessor of such premises;
(k) on or before July 16, 1999, Agent shall have received UCC,
Federal and State tax lien searches against the Xxxxxxxx Sellers in the
following jurisdictions: Garfield and Mesa Counties in Colorado, Carbon and
Xxxxx Counties in Utah, Secretary of State and Pike County, Kentucky; and
(l) on or before July 16, 1999, Agent shall have received the Due
Diligence Report dated July 9, 1999, prepared by Xxxxxxx, Xxxxx & Xxxxxxx for
Borrower in connection with the acquisition of certain assets from the Xxxxxxxx
Sellers.
6. CONDITIONS PRECEDENT. The effectiveness of the consents, waivers and
other terms and conditions contained herein shall be subject to the receipt by
Agent of each of the following, in form and substance satisfactory to Agent:
6.1 evidence that the Xxxxxxxx Purchase Agreements have been duly executed
and delivered by and to the appropriate parties thereto and the transactions
contemplated under the terms of the Xxxxxxxx Purchase Agreements have been
consummated prior to or contemporaneously with the execution of this Amendment;
6.2 Collateral Access Agreements with respect to any of the premises of
Borrower acquired, leased or subleased pursuant to the Xxxxxxxx Purchase
Agreements, by Borrower from any of the Xxxxxxxx Sellers, in each case, duly
executed and delivered by the Xxxxxxxx Sellers as the owner and lessor of such
premises;
6.3 UCC, Federal and State tax lien and judgment lien searches against
Xxxxxxxx Sellers in the jurisdictions in which any of the Grand Valley Assets,
Horizon Assets and White Oak Assets are located (except as those jurisdictions
listed in Section 5.4(k) hereof);
6.4 UCC-1 financing statements between Agent, as secured party and
Borrower, as debtor with respect to the Collateral for filing in the appropriate
government recording offices, as determined by Lender, in each case as duly
authorized, executed and delivered by Borrower;
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6.5 a pay proceeds authorization letter, duly authorized, executed and
delivered by Borrower providing for the authorization of Agent to remit certain
proceeds of the Loans to First American;
6.6 UCC-3 termination statements for each of the UCC-1 financing
statements, filed of record, by and between each of the parties set forth on
Exhibit I hereof, as secured party and any of the Xxxxxxxx Sellers, as the case
may be, as debtor, duly authorized, executed and delivered by such secured
parties;
6.7 all releases, terminations and such other documents as Agent may
request to evidence the termination and release by TBL of any interest in and to
any of the Grand Valley Assets, duly authorized, executed and delivered by TBL,
including but not limited to, (i) UCC terminations statements for all UCC
financing statements previously filed by TBL, as secured party and Grand Valley,
as debtor and (ii) satisfactions and discharges of any mortgages, deeds of trust
or deeds to secured debt by Grand Valley in favor of TBL, in form acceptable for
recording in the appropriate government office;
6.8 certificates issued by each of the Colorado Secretary of State and
Utah Secretary of State indicating that Borrower is a foreign corporation duly
qualified to conduct business in such State and is in good standing in each such
State;
6.9 environmental audits of the Grand Valley Real Property, Horizon Real
Property and the White Oak Real Property, each dated June 1999 and conducted by
EarthFax;
6.10 the opinion letters of Borrower and opinion letters of counsel to the
Xxxxxxxx Sellers, each with respect to the Xxxxxxxx Purchase Agreements, upon
which Agent and Lenders are permitted to rely, and such other matters as Agent
and/or Lenders may request; and
6.11 an original of this Amendment, duly authorized, executed and
delivered by Borrower.
7. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge, confirm
and agree that the failure of Borrower to comply with the covenants, conditions
and agreements contained herein shall constitute an Event of Default under the
Financing Agreements (subject to the applicable cure period, if any, with
respect thereto provided for in the Loan Agreement as in effect on the date
hereof).
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8. EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto, no other
waivers, changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of
effective date hereof. Any acknowledgment or consent contained herein shall not
be construed to constitute a consent to any other or further action by Borrower
or to entitle Borrower to any other consent. The Loan Agreement and this
Amendment shall be read and construed as one agreement. To the extent of
conflict between the terms of this Amendment and the other Financing Agreements,
the terms of this Amendment shall control.
9. FURTHER ASSURANCES. The parties hereto shall execute and deliver such
additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment.
10. GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
11. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
12. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the date and year
first above written.
Very truly yours,
LODESTAR ENERGY, INC.
By: /s/ XXXXXXX XXXXXXX
Title: CHIEF FINANCIAL OFFICER
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LODESTAR HOLDINGS, INC.
By: /s/ XXXXXXX XXXXXXX
Title: CHIEF FINANCIAL OFFICER
AGENT:
CONGRESS FINANCIAL CORPORATION, for
itself and as Agent
By: /s/ XXXXXX X. XXXXXX
Title: ASSISTANT VICE PRESIDENT
CO-AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC., for
itself and as Co-Agent
By: /s/ XXXXXXXXXXX XXXX
Title: ASSISTANT VICE PRESIDENT
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