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Exhibit 99.1
April 30, 2001
VIA TELECOPY AND FEDERAL EXPRESS
Xx. Xxxx X. Xxxxxx
Chief Financial Officer
Pen Holdings, Inc.
Pen Coal Corporation
The Elk Horn Coal Corporation
River Marine Terminals, Inc.
Third Floor, Center Court Building
0000 Xxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxx 00000
Re: Amended and Restated Credit Agreement ("Credit Agreement")
dated as of June 3, 1998, as amended, entered into by and
among Pen Holdings, Inc. as Borrower (the "Borrower"), and
Mellon Bank, N.A., CIBC, Inc. and AmSouth Bank (the "Banks")
and Mellon Bank, N.A. as agent for the Banks (the "Agent")
Dear Xx. Xxxxxx:
Reference is made to the Credit Agreement and specifically to
Forbearance and Amendment No. 4 to Credit Agreement dated as of March 16, 2001
(the "Forbearance Agreement"). Terms which are used in this letter as defined
terms and are not otherwise defined in this letter shall have the meanings given
to those terms in the Credit Agreement.
The Banks and the Agent hereby agree to (i) substitute the date of "May
7, 2001" for the date "April 30, 2001" in Section 3 of the Forbearance
Agreement, and (ii) amend the definition of "Forbearance Period" to include the
period through and including May 7, 2001.
Furthermore, the Banks agree to amend the definition of "Known
Defaults" to delete the word "and" prior to "(iv)", delete the period and insert
a semicolon at the end of the definition, and add the following language after
the inserted semicolon: "(v) the failure of the Borrower to comply with Section
5.01(a) by delivering a "going concern opinion" rather than an unqualified
opinion of the Borrower's independent certified public accountants with the
audited financial statements of the Borrower and its Subsidiaries for the period
ended December 31, 2000."
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Except as specifically modified above, the Forbearance Agreement
remains in full force and effect.
The Agent and the Banks reserve all rights under the Loan Documents,
including but not limited to the right to demand payment in full of the
obligations of the Borrower evidenced by the Loan Documents upon the occurrence
of an Event of Default and the right to make no further Loans while any
Potential Default or Event of Default is in existence. No delay, omission or
action on the part of the Agent or the Banks in exercising any right or taking
any measure pursuant to the Loan Documents shall operate as a waiver of any such
rights, nor shall any delay or omission herein operate as a waiver for any
reason whatsoever.
Nothing contained in this letter shall be construed to impair the
security of the Agent or the Banks or their successors and assigns under the
Credit Agreement or any of the Loan Documents nor affect or impair any rights or
powers that the Agent or the Banks may have under the Credit Agreement or the
Loan Documents for the recovery of the indebtedness of the Borrower to the Banks
in case of nonfulfillment of the terms, provisions and covenants contained in
the Credit Agreement and the Loan Documents. All rights, powers and remedies of
the Agent and the Banks under any other agreement now or at any time hereafter
in force between the Agent and the Banks and the Borrower shall be cumulative
and not alternative and shall be in addition to all rights, powers and remedies
given to the Agent and the Banks by law.
Very truly yours,
MELLON BANK, N.A., in its capacity as Agent
under the Credit Agreement
By: /s/ Xxxx Xxxxxx Xxxxxx
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Title: Vice President
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Agreed to and accepted:
Banks:
CIBC, INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Executive Director
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AMSOUTH BANK
By: /s/ Xxx Xxxxxxxx
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Title: Commercial Banking Officer
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Borrower:
PEN HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
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Title: Secretary/Treasurer
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