WAIVER AND AMENDMENT NO. 3 TO CREDIT AGREEMENTWaiver Agreement |
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ENERGY COAL RESOURCES, INC. | BOWIE RESOURCES MANAGEMENT PARTNER, LLC | BOWIE RESOURCES, LLC | COLORADO HOLDING COMPANY, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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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:
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Fiscal Month Ending: |
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Installment Amounts: |
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August 31, 2007 |
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$ |
2,000,000.00 |
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October 31, 2007 |
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$ |
2,000,000.00 |
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November 30, 2007 |
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$ |
3,000,000.00 |
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December 31, 2007 |
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$ |
3,000,000.00 |
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January 31, 2008 |
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$ |
2,000,000.00 |
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February 29, 2008, and each Fiscal Month ending thereafter through and including the Commitment Termination Date” |
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$ |
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:
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Period |
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Ratio |
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three-month period ending March 31, 2007 |
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1.2:1.0 |
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six-month period ending June 30, 2007 |
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1.2:1.0 |
2
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nine-month period ending September 30, 2007 |
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1.2:1.0 |
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twelve-month period ending December 31, 2007 |
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1.0:1.0 |
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twelve-month period ending March 31, 2008 |
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1.0:1.0 |
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Each twelve-month period ending each Fiscal Quarter thereafter |
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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 ”).
