Exhibit 10.40
WESTMORELAND ENERGY LLC
FIRST AMENDMENT, CONSENT AND RELEASE
Dated As Of August 22, 2007
to
NOTE PURCHASE AGREEMENT AND RELATED NOTE DOCUMENTS,
Each Dated As Of June 29, 2006
Re:
$30,000,000 Floating Rate Senior Notes
FIRST AMENDMENT, CONSENT AND RELEASE
This First Amendment, Consent and
Release dated as of August 22, 2007 (the or this “
First Amendment ”) to the Note Agreements each dated
as of June 29, 2006 is among Westmoreland Energy LLC, a
Delaware limited liability company (the “ Company
”), Westmoreland Power, Inc., a Delaware corporation (“
WPI ”), Westmoreland Power Operations, LLC, a Virginia
limited liability company (“ WPO ”), and
Westmoreland Utility Operations, LLC, a Virginia limited liability
company (“ WUO ”), Westmoreland — North
Carolina Power, L.L.C., a Virginia limited liability company
(“ Westmoreland-NC ”) and Westmoreland-Roanoke
Valley, L.P., a Delaware limited partnership (“
Westmoreland-RV ”, and together with the Company, WPI,
WPO, WUO and Westmoreland-NC, the “ Obligors ”),
SOF Investments, L.P., a Delaware limited partnership, as
collateral agent (the “ Collateral Agent ”) and
each of the purchasers whose names appear at the end hereof (each,
a “ Purchaser ” and, collectively, the “
Purchasers ”).
RECITALS:
A. The Company and each of the
Purchasers are parties to a Note Purchase Agreement dated as of
June 29, 2006 (collectively, the “ Note Purchase
Agreement ”). The Company has issued pursuant to the Note
Purchase Agreement $30,000,000 aggregate principal amount of its
Floating Rate Senior Notes (the “ Notes ”, such
term to include any such notes issued in substitution therefor
pursuant to Section 13 of the Note Purchase Agreement). The
Purchasers are the holders of 100]% of the outstanding principal
amount of the Notes.
B. As security for the Note
Purchase Agreement, the Company and the other Obligors have entered
into the following agreements: (i) a Pledge and Security
Agreement, dated as of June 29, 2006 (the “ Company
Pledge Agreement ”), by the Company, as pledgor and the
Collateral Agent, as collateral agent for its benefit and the
benefit of the other Secured Parties (as defined therein),
(ii) a Guaranty, Pledge and Security Agreement, dated as of
June 29, 2006 (the “ WPO/WUO Pledge Agreement
”), by WPI, WPO, and WUO, each as pledgor and the Collateral
Agent, as collateral agent for its benefit and the benefit of the
other Secured Parties (as defined therein), and (iii) a
Guaranty, Distribution Pledge, Collateral Assignment and Security
Agreement, dated as of June 29, 2006 (the “ WNC/WRV
Pledge Agreement ”), by and among Westmoreland-NC and
Westmoreland-RV and the Collateral Agent, as collateral agent for
its benefit and the benefit of the other Secured Parties (as
defined therein).
C. The Company has advised the
Collateral Agent and the Purchasers that the Company and the other
Obligors desire to (A) sell, transfer and assign to North
American Energy Services Company (“ NAES ”)
their respective interests in (i) the Facility Operating
Agreement, dated as of November 22, 2000, between Virginia Electric
and Power Company (“ VEPCO ”) and LG&E Power
Services LLC, a Delaware limited liability company (“
LPS ” as predecessor in interest to WPO and WUO (by
assignment to, and assumption by, respectively) immediately
following the Closing) with respect to VEPCO’s power
production facility located in or near Southampton, Virginia;
(ii) the Facility Operating Agreement, dated as of
November 22, 2000, between VEPCO and LPS with respect to
VEPCO’s power production facility located in or near
Altavista, Virginia; (iii) the Facility Operating Agreement,
dated as of November 22, 2000, between VEPCO and LPS with
respect to VEPCO’s power production facility located in or
near Hopewell, Virginia, as amended pursuant to Amendment
No. 1 dated March 4, 2002; (iv) the Operations and
Maintenance Agreement, dated as of April 19, 2004, between
VEPCO and LPS with respect to VEPCO’s power production
facility located in or near Gordonsville, Virginia; and
(B) terminate that certain the Amended and Restated Facility
Operating Agreement, dated as of December 1, 1993, between the
Project Partnership and LPS (as successor in interest in UC
Operating Services) and concurrently with the termination thereof.
LPS shall enter into a new operating contract with NAES (the
“ New NAES Operating Contract ”), all of the
foregoing of which constitute “ O&M Agreements
” under the Note
Purchase
Agreement and the other Note Documents (the foregoing collectively
being referred to as the “ Transactions
”).
D. The Collateral Agent and the
Purchasers have agreed to consent to the Transactions and to
release any and all interests, including, without limitation, any
security interests, which they may have in or to such O&M
Agreements, and to amendment the Note Documents or remove any
further obligations with respect to the O&M Agreements.
E. The Company, the other
Obligors, the Collateral Agent and the Purchasers now desire to so
amend, modify and release the provisions of the Note Documents as
of the date hereof (the “ Effective Date ”) in
the respects, but only in the respects, hereinafter set
forth.
F. Capitalized terms used herein
shall have the respective meanings ascribed thereto in the Note
Purchase Agreement unless herein defined or the context shall
otherwise require.
G. All requirements of law have
been fully complied with and all other acts and things necessary to
make this First Amendment a valid, legal and binding instrument
according to its terms for the purposes herein expressed have been
done or performed.
NOW, THEREFORE , upon the
full and complete satisfaction of the conditions precedent to the
effectiveness of the First Amendment set forth in Section 3.1
hereof, and in consideration of good and valuable consi
