Exhibit 10.4
WAIVER AND AMENDMENT NO. 3 TO
CREDIT AGREEMENT
This WAIVER AND AMENDMENT NO. 3
TO CREDIT AGREEMENT, dated as of October 23, 2007 (this
“Amendment” ), to that certain Credit Agreement,
dated as of December 20, 2006 (as amended, restated,
supplemented or otherwise modified from time to time prior to the
date hereof, the “Credit Agreement” ), by and
among BOWIE RESOURCES, LLC , a Delaware limited liability
company (the “ Borrower ”), COLORADO HOLDING
COMPANY, INC. , a Delaware corporation (“ CHC
”), BOWIE RESOURCES MANAGEMENT PARTNER, LLC , a Nevada
limited liability company (“ BRMP ” and together
with CHC sometimes collectively referred to as the “
Guarantors ”, and the Guarantors, together with the
Borrower, collectively, the “ Member Parties ”
) , and GENERAL ELECTRIC CAPITAL CORPORATION , as
agent for the lender (“ Lender ”) party to the
Credit Agreement (in such capacity, the “ Agent
”) and as a Lender under the Credit Agreement. Capitalized
terms used herein not otherwise defined herein or otherwise amended
hereby shall have the respective meanings ascribed thereto in the
Credit Agreement.
RECITALS:
WHEREAS , Section 1.1(a)(ii) of the Credit
Agreement requires that the Borrower shall repay the aggregate Term
Loan on the last day of each Fiscal Month commencing July 31,
2007 in the following monthly installments: (i) from
July 31, 2007 through and including December 31, 2007,
$2,000,000 and (ii) from January 31, 2008 through and
including the Commitment Termination Date, $1,000,000;
WHEREAS , the Borrower has failed to make the principal
portion of the Term Loan installment due July 31,
2007;
WHEREAS , the Borrower has failed to make the principal
portion of the Term Loan installment due September 30,
2007;
WHEREAS , Section 6.10 of the Credit Agreement
requires the Borrower to meet certain Financial Covenants, as set
forth in Annex E to the Credit Agreement;
WHEREAS , the Borrower has breached Section 6.10 of
the Credit Agreement, in respect of the Minimum Fixed Charge
Coverage Ratio set forth in Annex E to the Credit Agreement, for
the six month period ended June 30, 2007;
WHEREAS , the Borrower has breached Section 6.10 of
the Credit Agreement, in respect of the Maximum Leverage Ratio set
forth in Annex E to the Credit Agreement, for the Fiscal Quarter
ended June 30, 2007;
WHEREAS , the Member Parties have requested that the
Lender and Agent agree to waive the Term Loan Defaults, the FCCR
Default and the Leverage Ratio Default (each as defined below) and
agree to certain amendments to the Credit Agreement, as more
particularly
set forth herein; and
WHEREAS , the Lender and the Agent are willing to waive
the Term Loan Defaults, the FCCR Default and the Leverage Ratio
Default (each as defined below), and to agree to certain amendments
to the Credit Agreement, as more fully set forth
hereinafter;
NOW, THEREFORE
, in consideration of the premises
and the agreements, provisions and covenants herein contained, the
parties hereto agree as follows:
SECTION I.
AMENDMENTS AND WAIVERS
Subject to the terms and
conditions set forth herein, and in reliance on the representations
and warranties of the Member Parties set forth herein,
A.
Section 1.1(a)(ii) of
the Credit Agreement is hereby amended by deleting such section in
its entirety and inserting the following text in lieu
thereof:
“(ii)
Subject to
Section 1.1(a)(iii) below, the Borrower shall repay the
aggregate Term Loan in monthly installments on the last day of each
Fiscal Month commencing August 31, 2007, as
follows:
|
Fiscal Month Ending:
|
|
Installment Amounts:
|
|
|
August 31, 2007
|
|
$
|
2,000,000.00
|
|
|
October 31, 2007
|
|
$
|
2,000,000.00
|
|
|
November 30, 2007
|
|
$
|
3,000,000.00
|
|
|
December 31, 2007
|
|
$
|
3,000,000.00
|
|
|
January 31, 2008
|
|
$
|
2,000,000.00
|
|
|
February 29, 2008, and each
Fiscal Month ending thereafter through and including the Commitment
Termination Date”
|
|
$
|
1,000,000.00
|
”
|
B.
Clause (b) of Annex E to
the Credit Agreement is hereby amended by deleting such clause in
its entirety and inserting the following in lieu
thereof:
“ Minimum Fixed Charge
Coverage Ratio . Borrower and its Subsidiaries shall have on a
consolidated basis at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the period ending on the
last day of such Fiscal Quarter of not less than the
following:
|
Period
|
|
Ratio
|
|
three-month period ending
March 31, 2007
|
|
1.2:1.0
|
|
six-month period ending
June 30, 2007
|
|
1.2:1.0
|
2
|
nine-month period ending
September 30, 2007
|
|
1.2:1.0
|
|
twelve-month period ending
December 31, 2007
|
|
1.0:1.0
|
|
twelve-month period ending
March 31, 2008
|
|
1.0:1.0
|
|
Each twelve-month period ending each
Fiscal Quarter thereafter
|
|
1.2:1.0”
|
C.
The Agent and Lenders hereby waive
the Events of Default described as follows (collectively the
“ Waivers ”):
1. The Event of Default occasioned
by the failure of the Borrower to make the required principal
payment in respect of the Term Loan on July 31, 2007 (the
“ July Term Loan Default ”);
2. The Event of Default occasioned
by the failure of the Borrower to make the required principal
payment in respect of the Term Loan on September 30, 2007 (the
“ September Term Loan Default ” and,
together with the July Term Loan Default, the “ Term
Loan Defaults ”);
3. The Event of Default occasioned
by the Borrower and its Subsidiaries failing to have, as of
June 30, 2007 for the six-month period then ended, a Fixed
Charge Coverage Ratio of not less than 1.2 to 1.0 (the “
FCCR Default ”); and
4. The Event of Default occasioned
by the Borrower and its Subsidiaries failing to have, as of
June 30, 2007 for the twelve month period then ended, a
Maximum Leverage Ratio of not more than 10.0 to 1.0 (the “
Leverage Ratio Default ”).
SECTION II.
CONDITIONS PRECEDENT TO
EFFECTIVENESS OF AMENDMENT
The effectiveness of the amendments
and Waivers set forth in this Amendment is subject to the condition
that the Borrower, the other Member Parties, the Lender and the
Agent indicate their consent to such amendments and Waivers by
executing and delivering the signature pages hereof to the
Agent (the date on which the last of such deliveries is made is
referred to herein as the “ Amendment Effective Date
”).
SECTION III.
REPRESENTATIONS AND
WARRANTIES
A.
Corporate Power and
Authority. Each Member Party has all
requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement, as amended by
this Amendment (the “ Amended Credit Agreement ”).
B.
Authorization of Amendments.
The execution and
delivery of this Amendment have been duly authorized by all
necessary corporate, limited liability company or partnership (as
applicable) action on the par
