EXHIBIT 10.12
AMENDMENT NO. 6 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
AMENDMENT dated as of November 15, 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 ("Congress"), 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, Amendment No. 4 to Amended and
Restated Loan and Security Agreement, dated April 30, 1999 and Amendment No.
5 to Amended and Restated Loan and Security Agreement, dated July 16, 1999
(as amended by these Amendments 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, the Ridge Top Sellers (as hereinafter defined) are the
owners of certain assets located at and used in connection with mining
operations conducted by the Ridge Top Sellers in Pike County, Kentucky and
Borrower has entered into agreements to purchase the Ridge Top Assets (as
hereinafter defined) from the Ridge Top Sellers, as set forth in the Ridge
Top Purchase Agreements (as hereinafter defined);
WHEREAS, Guarantor has agreed to guarantee the Obligations of
Borrower to each of Xxxx (as hereinafter defined), Big Xxxxx (as hereinafter
defined), Citation (as hereinafter defined) and Provident (as hereinafter
defined) pursuant to the Xxxx Surface Agreement (as hereinafter defined), Big
Xxxxx Assignment (as hereinafter defined), the Citation Sublease (as
hereinafter defined) and the Provident Assignment (as hereinafter defined),
respectively;
WHEREAS, Borrower has requested that Agent and Lenders make certain
supplemental loans to Borrower;
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) "XXXX" shall mean Xxxx Land Company, a Kentucky
corporation, and its successors and assigns.
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(b) "XXXX SURFACE AGREEMENT" shall mean the Surface
Agreement, dated of even date with Amendment No. 6, by and among Xxxx,
Borrower and Guarantor, as the same now exists and may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(c) "AMENDMENT NO. 6" shall mean this Amendment No. 6 to
the Amended and Restated Loan and Security Agreement by and among Borrower,
Guarantor, Agent, Co-Agent and Lenders.
(d) "B&B" shall mean Xxxxxxx & Xxxxx Coal Company, Inc., a
Kentucky corporation, and its successors and assigns.
(e) "BIG XXXXX" shall mean Big Xxxxx Company, L.P., a
Delaware limited partnership, and its successors and assigns.
(f) "BIG XXXXX ASSIGNMENT" shall mean the Assignment,
Assumption and Guaranty Agreement, dated of even date with Amendment No. 6,
by and among B&B, Quaker, Big Xxxxx, Borrower and Guarantor, as the same now
exists and may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(g) "SUBORDINATED LOAN LETTER AGREEMENT" shall mean the
letter agreement, dated of even date with Amendment No. 6, by and among Renco
Group, Borrower, Guarantor, Co-Agent and Agent with respect to terms for
subordinated loans by Renco Group to Borrower, as the same now exists and may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(h) "CITATION" shall mean Citation Coal Corporation, a
Kentucky corporation, and its successors and assigns.
(i) "CITATION SUBLEASE" shall mean the Sublease Agreement,
dated of even date with Amendment No. 6, by and among Citation, Borrower and
Guarantor, as the same now exists and may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(j) "DEFERRED PAYMENT" shall mean a payment to be made by
Borrower in the amount of $600,000 to the Ridge Top Sellers on the first
anniversary of the Closing (as such term is defined in the Ridge Top Asset
Purchase Agreement).
(k) "EBITDA" shall mean, as to any Person, with respect to
any period, an amount equal to: (i) the Consolidated Net Income of such
Person and its Subsidiaries for such period determined in accordance with
GAAP, PLUS, (ii) depreciation, amortization, depletion of coal reserves and
other non-cash charges for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person), all in accordance
with GAAP, PLUS, (iii) Interest Expense for such period (to the extent
deducted in the computation of Consolidated Net Income of such Person), PLUS,
(iv) charges for Federal, State, local and foreign income taxes for such
period (to the extent deducted in the computation of Consolidated Net Income
of such Person), plus (v) the then outstanding principal amount of
Indebtedness of Borrower to Renco Group arising pursuant to the subordinated
loans made by Renco Group to Borrower pursuant to a request by Agent under
the Subordinated Loan Letter Agreement, if any, MINUS (vi) all income (plus
all charges, up to the amount of such income) attributable to any Subsidiary
of such Person, which is not wholly owned by Guarantor or its subsidiaries,
if and to the extent such income was not distributed to such Person in cash.
(l) "HIGHWALL MINER" shall mean the Equipment constituting
the Metec Highwall Miner and all associated components, including push beams,
generators and spare parts.
(m) "INTEREST EXPENSE" shall mean, for any period, as to
any Person and its Subsidiaries, all of the following as determined in
accordance with GAAP, total interest expense, whether paid or accrued
(including the interest component of Capitalized Lease Obligations for such
period), but excluding (i) interest paid in property other than cash, and
(ii) any other interest expense not payable in cash.
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(n) "LETTER OF CREDIT FACILITY LIMIT" shall mean
$33,000,000 from the date of Amendment No. 6 through the later of the
repayment of $3,350,000 in respect of the Obligations arising pursuant to the
Supplemental Loans (including without, limitation, principal, interest, fees,
costs, expenses and other charges in respect thereof payable by Borrower to
Lenders) or May 1, 2000, and shall mean $30,000,000, thereafter; PROVIDED,
THAT, in no event shall the aggregate face amount of the letters of credit
outstanding pursuant to the Letter of Credit Facility exceed $30,000,000 in
the aggregate.
(o) "MAXIMUM CREDIT" shall mean $120,000,000, PROVIDED,
THAT, in the event that Lenders do not (i) enter into participation
arrangements with a new Participant after the date of Amendment No. 6 on
terms and conditions and for amounts acceptable to each Lender AND (ii)
repurchase the participation interest of any existing Participant that has
not consented to the amendments provided for herein, on terms and conditions
acceptable to Lenders, Agent may, at its option, effective upon the date of
written notice by Agent to Borrower with respect to such subject, reduce the
Maximum Credit to an amount between $120,000,000 and $89,999,999.
(p) "PROVIDENT" shall mean Provident Commercial Group,
Inc., an Ohio corporation, and its successors and assigns.
(q) "PROVIDENT ASSIGNMENT" shall mean the Partial
Assignment and Assumption Agreement, dated of even date with Amendment No.6,
by and among B&B, Borrower, Guarantor and Provident.
(r) "QUAKER" shall mean Quaker Coal Company, Inc., a
Kentucky corporation, and its successors and assigns.
(s) "RENCO SUBORDINATION AGREEMENT" shall mean the
Subordination Agreement, dated of even date with Amendment No. 6, by and
among Agent, Borrower, Guarantor and Renco Group and acknowledged by
Borrower, as the same now exists and may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(t) "REVOLVING CREDIT FACILITY LIMIT" shall mean
$87,000,000 from the date of Amendment No. 6 through the later of the
repayment of $3,350,000 in respect of the Obligations arising pursuant to the
Supplemental Loans (including without, limitation, principal, interest, fees,
costs, expenses and other charges in respect thereof payable by Borrower to
Lenders) or May 1, 2000, and shall mean $90,000,000, thereafter, EXCEPT,
THAT, such limit may be further reduced at any time by an amount equal to the
amount of any reduction in the Maximum Credit in accordance with Section
1.1(o) of Amendment No. 6.
(u) "RIDGE TOP" shall mean the Ridge Top Coal Corporation,
a Kentucky corporation, and its successors and assigns.
(v) "RIDGE TOP ASSETS" shall mean all of the assets and
properties acquired by Borrower from the Ridge Top Sellers pursuant to the
Ridge Top Purchase Agreements, including, but not limited to, certain
contracts, coal leases, equipment, permits, records and surface leases as
described on EXHIBIT A hereto, including certain non-extracted minerals
(consisting of coal and coal reserves) located in, on or under the Ridge Top
Real Property, all buildings, fixtures and improvements on the Ridge Top Real
Property.
(w) "RIDGE TOP ASSET PURCHASE AGREEMENT" shall mean the
Asset Purchase Agreement, dated September 30, 1999, by and between the Ridge
Top Sellers and Borrower, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(x) "RIDGE TOP PURCHASE AGREEMENTS" shall mean,
individually and collectively, the Ridge Top Asset Purchase Agreement, the
Xxxx Surface Agreement, the Big Xxxxx Assignment, the Citation Sublease and
the Provident Assignment, 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
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replaced; PROVIDED, THAT, the term "Ridge Top Purchase Agreements" as such
term is defined herein shall not include any of the "Financing Agreements" as
such term is defined herein.
(y) "RIDGE TOP 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 Ridge Top Real Property, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(z) "RIDGE TOP REAL PROPERTY" shall mean the Real Property
of Borrower purchased from the Ridge Top Sellers or leased or subleased from
Xxxx or Citation and located in Pike County, Kentucky as more particularly
described on EXHIBIT B hereto.
(aa) "RIDGE TOP SELLERS" shall mean, collectively, each
of the following (and their respective successors and assigns): (1) B&B,
(2) Quaker and (3) Ridge Top.
(bb) "SUPPLEMENTAL LOANS" shall mean the loans hereafter
made by Agent and Lenders to or for the benefit of Borrower on a revolving
basis (involving advances, repayments and readvances) as set forth in Section
4.1 of Amendment No. 6.
(cc) "SUPPLEMENTAL LOAN LIMIT" shall mean $6,700,000, and
shall be reduced by $1,675,000 each quarter commencing February 1, 2000 until
the Supplemental Loan Termination Date, and shall mean zero at all times
after the Supplemental Loan Termination Date.
(dd) "SUPPLEMENTAL LOAN TERMINATION DATE" shall mean
October 31, 2000.
1.2 AMENDMENT TO DEFINITIONS.
(a) The term "Consolidated Net Worth" in the Loan Agreement
shall be amended to add to the end of clause (a) thereof, immediately before the
word "and":
"plus the then outstanding principal amount of Indebtedness of
Borrower to Renco Group arising pursuant to the subordinated loans made
by Renco Group to Borrower pursuant to a request by Agent under the
Subordinated Loan Letter Agreement, if any."
(b) All references to the term "Loans" herein and in the
Loan Agreement shall be deemed and each such reference is hereby amended to
include, in addition and not in limitation, the Supplemental Loans.
(c) All references to the term "Obligations" herein and in
the Loan Agreement shall be deemed and each such reference is hereby amended
to include, in addition and not in limitation, the Supplemental Loans as
defined herein.
1.3 INTERPRETATION. For purposes of this Amendment, all terms used
herein, including but not limited to, those terms used and/or defined herein
or in the recitals hereto shall have the respective meanings assigned thereto
in the Loan Agreement.
2. CONSENTS.
2.1 Subject to the terms and conditions contained herein, Agent and
Lenders hereby consent to the following:
(a) the purchase by Borrower of the Ridge Top Assets pursuant
to the Ridge Top Purchase Agreements (as in effect on the date hereof);
(b) the Indebtedness of Borrower to the Ridge Top Sellers in
respect of the Deferred Payment in an amount not to exceed $600,000;
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(c) the release of Agent's lien and security interests for
the benefit of Lenders with respect to the Highwall Miner; and
(d) the guarantee by Guarantor of the obligations of
Borrower to each of Xxxx, Big Xxxxx, Citation and Provident pursuant to the
Xxxx Surface Agreement (as in effect on the date hereof), the Big Xxxxx
Assignment (as in effect on the date hereof), the Citation Sublease (as in
effect on the date hereof) and the Provident Assignment (as in effect on the
date hereof), respectively.
2.2 The consents of Agent and Lenders set forth in
Section 2.1 above are subject to the satisfaction of each of the following
(in addition to those conditions set forth in Section 7 below):
(a) each of the foregoing shall have occurred by no later than
November 15, 1999; and
(b) notwithstanding anything to the contrary in the Loan
Agreement, none of the Ridge Top
Assets at, on or under the Ridge Top Real Property, 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: (i)
Agent shall have completed a field examination of the businesses, operations
and assets acquired by Borrower pursuant to the Ridge Top Purchase Agreement
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;
(ii) Agent shall have received written reports or appraisals of any or all of
the Collateral located on or under the Ridge Top Real Property, in form,
scope and methodology acceptable to Agent, by an appraiser acceptable to
Agent, addressed to Agent and on which Agent is expressly permitted to rely;
(iii) 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 (iv) 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).
3. AMENDMENTS TO NOTES. For the period from the date hereof through
and including the later of, the repayment of $3,350,000 in respect of the
Obligations arising pursuant to the Supplemental Loans (including without
limitation, principal, interest, fees, costs, expenses and other charges in
respect thereof payable by Borrower to Lenders) or May 1, 2000:
3.1 the Revolving Credit Notes shall be amended to reduce the
maximum amount of the Indebtedness arising pursuant to the Loans and
evidenced thereby from $90,000,000 to $87,000,000 and the Letter of Credit
Notes shall be amended to increase the maximum amount of the Indebtedness
arising pursuant to the Tranche B Letter of Credit Accommodations and the
Supplemental Loans and evidenced thereby from $30,000,000 to $33,000,000 and,
at all times thereafter, and until all of the Obligations are indefeasibly
paid in full, the Revolving Credit Notes shall be amended to increase the
maximum amount of the Indebtedness arising pursuant to the Loans and
evidenced thereby from $87,000,000 to $90,000,000 and the Letter of Credit
Notes shall be amended to reduce the maximum amount of the Indebtedness
arising pursuant to the Tranche B Letter of Credit Accommodations and the
Supplemental Loans and evidenced thereby from $33,000,000 to $30,000,000,
EXCEPT, THAT, the amount of the Revolving Credit Notes may be reduced at any
time in connection with a reduction in the amount of the Maximum Credit in
accordance with Section 1.1(o) of Amendment No. 6 and the resulting reduction
in the Revolving Credit Facility Limit in accordance with Section 1.1(s) of
Amendment No. 6; and
3.2 The Letter of Credit Notes shall be amended to add the words "and
the Supplemental Loans (as such term is defined in Amendment No. 6)" in each of
the following places:
(a) following the parenthetical in subsection (ii) of the
first paragraph of page 1;
(b) following the words the Loan Agreement in the fourth
line of the second paragraph of page 1; and
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(c) following the words "Tranche B Letter of Credit
Accommodations" each time such words appear in the first full paragraph and
the third paragraph on page 2.
.
4. AMENDMENTS TO LOAN AGREEMENT.
4.1 SUPPLEMENTAL LOANS.
(a) In addition to the Loans which may be made by Lenders
to Borrower pursuant to Sections 3.1 and 3.2 of the Loan Agreement on or
after the date hereof, upon the request of Borrower made at any time after
the date hereof and prior to the Supplemental Loan Termination Date, and
subject to and upon the terms and conditions contained herein and in the Loan
Agreement and the other Financing Agreements, Lenders agree to make the
Supplemental Loans to Borrower from time to time prior to the Supplemental
Loan Termination Date, in an amount requested by Borrower, up to the amount
equal to the Supplemental Loan Limit as then in effect.
(b) Except in Agent and Lenders' discretion, Borrower shall
not have any right to request, and Lenders shall not make any Supplemental
Loans in excess of the Supplemental Loan Limit or at any time on or after the
Supplemental Loan Termination Date.
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(c) The Supplemental Loans shall be secured by all
Collateral and evidenced by the Letter of Credit Notes. Notwithstanding
anything to the contrary contained herein or in the Loan Agreement or the
other Financing Agreements, (i) on each date when any reduction in the
Supplemental Loan Limit becomes effective, Borrower agrees absolutely and
unconditionally to automatically and without notice or demand to make a
payment in respect of the Supplemental Loans in an amount equal to the
excess, if any, of the aggregate unpaid principal amount of the Supplemental
Loans over the Supplemental Loan Limit as so reduced in immediately available
funds and (ii) unless sooner demanded by Lender in accordance with terms of
the Loan Agreement or the other Financing Agreements, Borrower further agrees
that all outstanding and unpaid Obligations arising pursuant to the
Supplemental Loans (including without limitation, principal, interest, fees,
costs, expenses and other charges in respect thereof payable by Borrowers to
Lenders) shall automatically, without notice or demand, be absolutely and
unconditionally due and payable and Borrower shall pay to Agent in
immediately available funds all such Obligations on the Supplemental Loan
Termination Date. Interest shall accrue and be due, until and including the
next business day, if amount paid by Borrowers to the bank account designated
by Agent for such purpose is received in such bank account later than 11:00
a.m., New York City time.
(d) Section 3.1(d) of the Loan Agreement is hereby amended
to add a new Section 3.1(d) (iv) thereto as follows:
", and (iv) the aggregate outstanding principal amount of the
Tranche B Letter of Credit Accommodations and the Supplemental Loans
shall not exceed the Letter of Credit Availability."
(e) Borrower and Guarantor each acknowledge and agree that,
notwithstanding anything to the contrary contained in the Loan Agreement or
the Financing Agreements, the failure of Borrower to pay such Obligations
arising pursuant to the Supplemental Loans on the effective date of any
reduction in the Supplemental Loan Limit to the extent set forth in Section
4.1(c) above or all of such Obligations arising pursuant to the Supplemental
Loans on or before the Supplemental Loan Termination Date, shall constitute
an Event of Default.
4.2 LETTER OF CREDIT ACCOMMODATIONS. Section 3.2 of the Loan
Agreement is hereby amended to add a new Section 3.2(k) thereto as follows:
"(k) Borrower shall cause an updated appraisal with respect to
the Eligible Equipment, in form scope and methodology acceptable to
Agent, and addressed to Agent and Lenders, and on which Agent and
Lenders are expressly permitted to rely, and prepared by MB Valuation
Services, Inc. (or other appraiser acceptable to Agent), to be
delivered to Agent on or before February 1, 2000 and a minimum of every
six (6) months thereafter."
4.3 INDEBTEDNESS. Section 7.3 of the Loan Agreement is hereby
amended by adding a new Section 7.3(u) thereto as follows:
"(u) Indebtedness of Borrower to Renco Group arising pursuant to
or in connection with the loans to be made by Renco Group to Borrower
pursuant to a request by Agent for such loans under the Subordinated
Loan Letter Agreement; PROVIDED, THAT, (i) such Indebtedness is and
shall only be unsecured, (ii) the terms and conditions of such
Indebtedness shall be acceptable in all respects to Agent, (iii) such
Indebtedness shall not exceed $6,000,000 at any time outstanding, (iv)
Borrower shall not, directly or indirectly, make any payments with
respect to such Indebtedness, EXCEPT THAT Borrower may make payments in
respect of such Indebtedness so long as the following conditions are
satisfied (or as permitted in accordance with Section 3(b) of the
Subordinated Loan Letter Agreement), as determined by Agent: (A) as of
the date of any such payment and after giving effect thereto, the
Excess Revolving Credit Availability shall not be less than
$12,000,000, and for each of the thirty (30) consecutive days
immediately prior to any such payment, Excess Revolving Credit
Availability shall not have been less than $12,000,000 and (B) as of
the date of any 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, without the prior written consent of Agent: (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 without the prior written
consent of Agent, 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
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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."
4.4 CONSOLIDATED NET WORTH. Section 7.10(b) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
"(b) On or after October 30, 1998 ($71,500,000)
and all times thereafter"
4.5 CAPITAL EXPENDITURES. Section 7.11 of the Loan Agreement is
hereby amended to add a new Section 7.11(d) thereto as follows:
" and (d) such limitation shall not apply to the Capital Expenditures
by Borrower of up to $6,700,000, paid pursuant to the Ridge Top
Purchase Agreements as in effect on the date of Amendment No. 6."
4.6 EBITDA. Section 7 of the Loan Agreement is hereby amended to add a
new section 7.25 thereto as follows:
"7.25 EBITDA. Borrower shall, for each month listed below, have
cumulative EBITDA of not less than the amount listed below opposite
each such month (and such covenant shall be reset each year thereafter
based upon projections delivered by Borrower to Agent and in a manner
reasonably acceptable to Borrower and Agent):
MONTH ENDING MINIMUM EBITDA
------------ --------------
November 30, 1999 $ 2,237,000
December 31, 1999 $ 4,313,000
January 31, 2000 $ 6,069,000
February 29, 2000 $ 8,933,000
March 31, 2000 $ 12,403,000
April 30, 2000 $ 15,241,000
May 31, 2000 $ 18,191,000
June 30, 2000 $ 21,011,000
July 31, 2000 $ 23,542,000
August 31, 2000 $ 27,592,000
September 30, 2000 $ 31,388,000
October 31, 2000 $ 35,204,000"
50 AMENDMENTS TO AMENDMENT NO. 5.
5.1 Section 2 (2) of Amendment No. 5 is hereby deleted in its entirety
and replaced with the following sentence:
"Notwithstanding anything to the contrary in the Loan Agreement,
(A) none of the Grand Valley Assets, Horizon Assets and White Oak
Assets, constituting Equipment, and located on the Grand Valley Real
Property shall constitute Eligible Equipment EXCEPT THAT such Equipment
will be considered Eligible Equipment, within ten (10) days after Agent
shall have received, an appraisal in form and substance satisfactory to
Agent, addressed to Agent and Lenders, on which Agent and Lenders are
expressly permitted to rely, and prepared by MB Valuation Services,
Inc. (or other appraiser acceptable to Agent) and to the extent that
such Equipment shall satisfy all of the criteria for eligibility so as
to constitute Eligible Equipment, AND (B) none of the Grand Valley
Assets, Horizon Assets and White Oak Assets which constitute Coal
Reserves shall be included in the calculation of Letter of Credit
Availability for purposes of Section 3.2(g) of the Loan Agreement
EXCEPT THAT such Coal Reserves shall be included in such calculation
within ten (10) days after Agent shall have received, an appraisal
setting forth the distressed sale value of such Coal Reserves, in form
and substance satisfactory to Agent, addressed to Agent and Lenders, on
which Agent and Lenders are expressly permitted to rely, and prepared
by Xxxxxxxx Xxxxxx & Associates (or other appraiser acceptable to
Agent)."
5.2 The term "Coal Inventory" as defined in Amendment No. 5 shall have
such meaning only with respect to the agreements and amendments to the Loan
Agreement set forth in Amendment No. 5.
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60 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.6
and shall be incorporated into and made a part of the Financing Agreements):
6.1 ACQUISITION OF RIDGE TOP ASSETS.
(a) The Ridge Top 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 Ridge Top
Purchase Agreements, Borrower has acquired good and marketable title or a
valid leasehold interest to the Ridge Top Assets. All amounts paid by
Borrower pursuant to the Ridge Top Purchase Agreements have been paid with
the proceeds of the Loans.
(b) All of the Ridge Top Assets to be acquired, leased or
subleased by Borrower pursuant to the Ridge Top Purchase Agreements are
located in Pike County, Kentucky on premises being acquired, leased or
subleased by Borrower from the Ridge Top Sellers and/or Xxxx, Citation, Big
Xxxxx and Provident. No consignees, processors or other third party is in
possession of any Coal Inventory, Inventory or other Collateral acquired
pursuant to the Ridge Top Purchase Agreements. Except as set forth on EXHIBIT
C hereto, the Ridge Top 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) All actions and proceedings required by the Ridge Top
Purchase Agreements, applicable law or regulation have been taken and the
transactions contemplated thereunder have been duly and validly consummated.
Except as set forth on Exhibit D hereto, Borrower has received all necessary
consents and approvals of third parties to the transactions contemplated by
the Ridge Top Purchase Agreements.
(d) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of
the transactions described in the Ridge Top 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 Ridge Top Purchase
Agreements.
(e) Borrower has delivered, or caused to be delivered, to
Agent true, correct and complete copies of the Ridge Top Purchase Agreements.
6.2 NO DEFAULT. No Event of Default exists on the date of
Amendment No. 6 (after giving effect to the amendment to the Loan
Agreement made by the provisions of Amendment No. 6).
6.3 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. 6 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.
6.4 ADDITIONAL ITEMS TO BE DELIVERED.
(a) 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 no later than November 30, 1999:
(i) 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 consisting of the Ridge Top Assets or to effect the
provisions or purposes of this consent or the other Financing Agreements;
PROVIDED, THAT, the foregoing shall not include the consents of lessors of
the Ridge Top Real Property to the Ridge Top Mortgages;
(ii) Agent shall have received evidence that the
Agent has a valid perfected first priority security interest in all of the
Collateral consisting of the Ridge Top Assets;
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(iii) Agent shall have received written reports or
appraisals of any or all of the Ridge Top Assets constituting Equipment, in
form, scope and methodology acceptable to Agent, by an appraiser acceptable
to Agent, addressed to Agent and on which Agent is expressly permitted to
rely including, the Caterpillar Model 5230 Hydraulic Shovel, S/N 77LL00022
and the 3516 Diesel Engine S/N 2PK00503;
(iv) Agent shall have received the Ridge Top
Mortgages, in each case as duly authorized, executed and delivered by
Borrower; and
(v) Agent shall have received UCC-1 financing
statements or UCC-3 amendments with respect to UCC-1 financing statements by
and between Agent, as secured party and Borrower, as debtor with respect to
the Ridge Top Assets consisting of fixtures and minerals for filing in the
appropriate government recording offices, as determined by Agent, in each
case as duly authorized, executed and delivered by Borrower.
(b) 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, written reports or
appraisals of any or all of the Ridge Top Assets constituting Collateral
(other than Equipment) located on or under the Ridge Top Real Property in
form, scope and methodology acceptable to Agent, by an appraiser acceptable
to Agent, addressed to Agent and on which Agent is expressly permitted to
rely, as soon as possible, but in any event, by no later than January 15,
1999.
(c) Borrower hereby agrees that, in addition to all other
terms, conditions and provisions set forth in the Financing Agreements,
Borrower shall use its best efforts (without the payment of money) to deliver
Collateral Access Agreements with respect to any of the premises of Borrower
acquired, leased or subleased pursuant to the Ridge Top Agreements, in each
case, duly executed and delivered by the owner, lessor or sublessor of such
premises (other than Xxxx, Big Xxxxx or Citation).
70 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:
7.1 the Subordinated Loan Letter Agreement and the Renco
Subordination Agreement, each duly authorized, executed and delivered by
Borrower;
7.2 evidence that the Ridge Top Purchase Agreements have been duly
executed and delivered by and to the appropriate parties thereto and the
transactions contemplated under the terms of the Ridge Top Purchase
Agreements have been consummated prior to or contemporaneously with the
execution of this consent;
7.3 Collateral Access Agreements with respect to any of the premises
of Borrower acquired, leased or subleased pursuant to the Ridge Top Purchase
Agreements, from Citation, Xxxx and Big Xxxxx, in each case, duly executed
and delivered by Citation, Xxxx and Big Xxxxx as the owner and lessor of such
premises;
7.4 UCC, Federal and State tax lien and judgment lien searches
against the Ridge Top Sellers in the jurisdictions in which any of the Ridge
Top Assets are located;
7.5 an environmental audit of the Ridge Top Property, dated
September 7, 1999, and conducted by Summit Engineering, Inc. and a letter,
dated November 2, 1999, addressed to Agent from such environmental engineer
permitting Agent and Lenders to rely on such environmental audit;
7.6 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 the Ridge Top Sellers; and
7.7 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 E hereto, as secured party and any of the Ridge Top Sellers, as the
case may be, as debtor, duly authorized, executed and delivered by such
secured parties and a release agreement executed by the judgment creditor
with respect the Notice of Judgment Lien, XXXXXXX XXXX, ET AL. V. S&L COAL
SALES, INC., Pike County Circuit Court, Division No. I, Civil Action No.
96-CI-00429.
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80 FEE. In consideration of Amendment No. 6, Borrower shall on the
date hereof, pay to Agent, for the ratable benefit of Lenders, and Agent may
at its option charge to the account of Borrower maintained by Agent, a fee in
the amount of $200,000, which fee is fully earned and payable as of the date
hereof and shall constitute part of the Obligations.
90 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).
100 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.
110 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.
120 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.
130 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.
140 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.
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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/ XXXXX XXX
--------------
Title: VICE PRESIDENT
-----------------
LODESTAR HOLDINGS, INC.
By: /s/ XXXXX XXX
--------------
Title: VICE PRESIDENT
-----------------
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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