EXHIBIT 10.1
FIRST AMENDMENT TO FINANCING AGREEMENT
FIRST AMENDMENT, dated as of November 28, 2001 (this
"Amendment"), to the SECOND AMENDED AND RESTATED CREDIT Agreement, dated as
of May 31, 2001 (the "Financing Agreement"), by and among PEN HOLDINGS, INC., a
Tennessee corporation (the "Borrower"), the financial institutions from time to
time party thereto (the "Lenders"), ABLECO FINANCE LLC, as collateral agent for
the Lenders (in such capacity, the "Collateral Agent"), and FOOTHILL CAPITAL
CORPORATION, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"; together with the Collateral Agent, each an "Agent" and
collectively, the "Agents").
RECITALS
The Borrower, the Lenders and the Agents are parties
to the Financing Agreement, pursuant to which the Lenders agreed, subject to
the terms and conditions thereof, to extend to the Borrower credit consisting
of a term loan facility in an aggregate principal amount not to exceed
$32,000,000 and a revolving loan facility in an aggregate principal amount not
to exceed $15,000,000.
Notwithstanding the occurrence on or before August
31, 2001 and the continuance during the period from such date through the date
hereof of one or more Events of Default, and, accordingly, the fact that the
Lenders may at any time exercise any or all of their remedies under the Loan
Documents and the fact that the Lenders at no time since August 31, 2001 have
had any obligation to make any Revolving Loan or Term Loan under the Financing
Agreement, pursuant to the request of the Borrower, (i) the Revolving Loan
Lenders made Revolving Loans to the Borrower on or about September 18, 2001 in
the aggregate principal amount of $2,800,000, pursuant to the Financing
Agreement and a letter dated September 18, 2001 from the Collateral Agent to
the Borrower, (ii) the Lenders and the Agents agreed to the Borrower's use of
cash collateral as set forth in the letter agreement, dated as of September 28,
2001 (the "Cash Collateral Letter"), between the Collateral Agent, acting on
behalf of the Lenders and the Agents, and the Borrower and (iii) the Lenders,
on November 5, 2001, (A) made additional Revolving Loans to the Borrower in the
aggregate principal amount of $2,450,000 in accordance with the Financing
Agreement, (B) made a new term loan to the Borrower in the aggregate principal
amount of $3,000,000, the proceeds of which were used by the Borrower to
simultaneously pay the Bridge Fee (as defined below) and (C) agreed with the
Borrower in principle to certain amendments to the Financing Agreement, in each
case pursuant to a letter agreement, dated as of October 19, 2001 (the
"Amendment Letter"), between the Collateral Agent, acting on behalf of the
Lenders and the Agents, and the Borrower.
The Borrower has now requested (i) the Lenders to
extend the forbearance period that is described in the Amendment Letter and
(ii) the Revolving Loan Lenders to agree to make further Revolving Loans to the
Borrower from time to time in an aggregate principal
amount not to exceed $8,357,152 at any one time outstanding. The Borrower has
also asked the Lenders to agree to certain amendments to the financial
covenants and certain other provisions of the Financing Agreement. The Lenders
are willing to agree to the requested forbearance, and to the requested
amendments, but only upon the terms and subject to the conditions set forth
herein.
Accordingly, in consideration of the premises and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
A. Definitions.
All capitalized terms used herein and not otherwise
defined herein are used herein as defined in the Financing Agreement.
B. Forbearance.
Pursuant to the request of the Borrower, the Lenders
hereby agree to forbear, during the period from the date hereof through the
earlier of (i) the Final Maturity Date and (ii) the occurrence of a Potential
Default or Event of Default, from exercising their remedies under the Loan
Documents with respect to (a) any Event of Default referred to in the Cash
Collateral Letter and (b) any Event of Default that would otherwise occur under
Section 8.01(c) or 8.01(e) of the Financing Agreement by reason of the
Borrower's delivering to the Agents and the Lenders financial statements (1)
covering the period from May 1, 2001 through September 30, 2001 that
erroneously reported a $3,215,000 gain rather than a loss of $670,000 upon the
sale of certain coal reserves during such period and (2) covering the period
from September 1, 2001 through September 30, 2001 that failed (A) to disclose
the existence of a letter of intent pursuant to which Marine Terminals agreed
to sell to a third party its interest in a partnership that owns an
international marine terminal in Louisiana and (B) to reflect a loss of
$11,444,000 as a result of the adjustment, in such amount and as required by
GAAP, in the carrying value of such partnership interest due to the execution
of such letter of intent for such transaction.
C. Amendments.
1. Existing Defined Terms.
(a) The definition of the term
"Commitments" in Section 1.01 of the Financing Agreement is hereby amended in
its entirety to read as follows:
"Commitments" means, with respect to each Lender,
such Lender's Revolving Credit Commitment, Term Loan
A Commitment and Term Loan B Commitment.
(b) Each of the following defined
terms is hereby deleted in its entirety:
"Consolidated Adjusted Current Liabilities"
"Consolidated Current Assets"
"Consolidated Net Worth"
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"Consolidated Senior Debt to EBITDA Ratio"
"Consolidated Working Capital"
"Term Loan"
"Term Loan Borrowing Base"
"Term Loan Commitment"
"Term Loan Lender"
"Total Term Loan Commitment"
(c) The definition of the term "Final
Maturity Date" in Section 1.01 of the Financing Agreement is hereby amended in
its entirety to read as follows:
"Final Maturity Date" means January 28, 2002 (unless
extended pursuant to Section 2.03(a)), or such
earlier date on which any Loan shall become due and
payable, in whole or in part, in accordance with the
terms of this Agreement and the other Loan
Documents.
(d) The definition of the term "Pro
Rata Share" in Section 1.01 of the Financing Agreement is hereby amended by (i)
deleting the terms "Term Loan", "Term Loan Commitment and "Total Term Loan
Commitment" in paragraph (b) thereof and substituting in lieu thereof "Term
Loan A", "Term Loan A Commitment" and "Total Term Loan A Commitment",
respectively, (ii) deleting the word "and" at the end of paragraph (b) thereof,
(iii) redesignating existing paragraph (c) therein as new paragraph (d), and
(iv) adding after paragraph (b) the following new paragraph (c):
(c) with respect to a Lender's obligation to
make the Term Loan B and receive payments of
interest, fees, and principal with respect thereto,
the percentage obtained by dividing (i) such
Lender's Term Loan B Commitment by (ii) the Total
Term Loan B Commitment; provided that, if the Term
Loan B Commitments have been reduced to zero, the
numerator shall be the aggregate unpaid principal
amount of such Lender's Term Loan B and the
denominator shall be the aggregate unpaid principal
amount of the Term Loan B; and
(e) The definition of the term
"Revolving Loan Borrowing Base" in Section 1.01 of the Financing Agreement is
hereby amended by (i) redesignating clause (ii)(B) thereof as clause (ii)(C)
and (ii) adding immediately after clause (ii)(A) thereof, the following new
clause (ii)(B):
(B) the Liquidity Reserve plus.
(f) The definition of the term "Term
Loan Obligations" in Section 1.01 of the Financing Agreement is hereby amended
in its entirety to read as follows:
"Term Loan Obligations" means the Term Loan
A Obligations and the Term Loan B Obligations.
(g) The definition of the term "Total
Commitment" in Section 1.01 of the Financing Agreement is hereby amended in its
entirety to read as follows:
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"Total Commitment" means the sum of the
Total Revolving Credit Commitment, the Total Term
Loan A Commitment and the Total Term Loan B
Commitment.
2. New Defined Terms. The following defined
terms are hereby added in appropriate alphabetical order to Section 1.01 of the
Financing Agreement.
"Bridge Fee" means a fee payable by
the Borrower to the Administrative Agent, for the
ratable benefit of the Lenders, in the amount of
$3,000,000, which shall have been earned and due and
payable on the First Amendment Effective Date and
paid from the proceeds of the Term Loan B by
charging the Borrower's Loan Account in accordance
with Section 2.01(b)(iii) herein.
"Cash Collateral Letter" means the
letter agreement, dated as of September 28, 2001,
between the Collateral Agent, acting on behalf of
the Lenders and the Agents, and the Borrower.
"Consolidated Net Operating Cash
Flow" means, for any period, an amount equal to net
operating cash flow, as determined by subtracting
from the total receipts for such period the total
expenditures for such period, in each case for the
revenue and expense items set forth in the Revised
Projections, for the Borrower and its Consolidated
Subsidiaries, determined in accordance with GAAP for
such period.
"First Amendment" means First
Amendment, dated as of November 28, 2001, to the
Financing Agreement, among the Borrower, the Lenders
and the Agents.
"First Amendment Effective Date"
means November 5, 2001, upon satisfaction in full of
all of the conditions set forth in Section D of the
First Amendment.
"Liquidity Reserve" means a reserve
equal to the difference between (a) Availability and
(b) $8,357,152.
"Revised Projections" means the
projected financial information entitled "Pen
Holdings Inc. 26 Week Cash Flow Projection Beginning
October 12, 2001," provided by the Borrower to the
Lenders prior to the First Amendment Effective Date,
a copy of which is attached as Annex IV to the First
Amendment.
"Term Loan A" means a term loan
made by a Lender to the Borrower pursuant to Section
2.01(b)(ii).
"Term Loan A Commitment" means, as
to any Lender, the obligation of such Lender to make
a Term Loan A to the Borrower in a principal amount
not to exceed the amount set forth opposite such
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Lender's name under the heading Term Loan A
Commitment on Schedule 1.01(A) hereto, as the same
may be terminated or reduced in accordance with the
terms of this Agreement.
"Term Loan A Lender" means a Lender
with a Term Loan A Commitment.
"Term Loan A Obligations" means any
Obligations with respect to the Term Loans A
(including the principal thereof, the interest
thereon, and the fees and expenses specifically
related thereto).
"Term Loan B" means a term loan
made by a Lender to the Borrower pursuant to Section
2.01(b)(iii).
"Term Loan B Commitment" means, as
to any Lender, the obligation of such Lender to make
a Term Loan B to the Borrower in a principal amount
not to exceed the amount set forth opposite such
Lender's name under the heading Term Loan B
Commitment on Schedule 1.01(A) hereto, as the same
may be terminated or reduced in accordance with the
terms of this Agreement.
"Term Loan B Lender" means a Lender
with a Term Loan B Commitment.
"Term Loan B Obligations" means
any Obligations with respect to the Term Loans B
(including, without limitation, the principal
thereof, the interest thereon (including capitalized
interest), and the fees and expenses specifically
related thereto).
"Term Loans" means, collectively,
the Term Loan A and the Term Loan B.
"Total Term Loan A Commitment"
means the sum of the amounts of the Lenders' Term
Loan A Commitments.
"Total Term Loan B Commitment"
means the sum of the amounts of the Lenders' Term
Loan B Commitments.
3. Existing Loans; Commitments.
(a) Clause (i) of the second sentence
of Section 2.01(a) of the Financing Agreement is hereby amended by deleting the
word "Commitments" and inserting the words "Revolving Credit Commitments and
Term Loan A Commitments" in lieu thereof.
(b) Clause (ii) of the second sentence
of Section 2.01(a) of the Financing Agreement is hereby amended by deleting the
words "Term Loan" and inserting the words "Term Loan A" in lieu thereof.
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(c) Section 2.01(b) of the Financing
Agreement is hereby amended by (i) deleting the word "and" at the end of clause
(i) thereof, (ii) deleting clause (ii) thereof and inserting the following in
lieu thereof:
(ii) each Term Loan A Lender severally
agrees to make a Term Loan A within three (3)
Business Days after the Closing Date, in an
aggregate principal amount not to exceed the amount
of such Lender's Term Loan A Commitment; and
, and (iii) adding the following new clause (iii) at the end thereof:
(iii) each Term Loan B Lender severally
agrees to make a Term Loan B on the First Amendment
Effective Date, in an aggregate principal amount not
to exceed the amount of such Lender's Term Loan B
Commitment. The Term Loan B shall be charged to the
Borrower's Loan Account on the First Amendment
Effective Date.
(d) Section 2.01(c) of the Financing
Agreement is hereby amended by deleting the first sentence thereof and
inserting the following in lieu thereof:
(c) Notwithstanding the foregoing
provisions of this Section 2.01, the aggregate
principal amount of Revolving Loans outstanding at
any time to the Borrower shall not exceed the lowest
of (A) the Total Revolving Credit Commitment, (B)
the then current Revolving Loan Borrowing Base and
(C) $8,357,152.
(e) Section 2.01(d) of the Financing
Agreement is hereby deleted in its entirety and the following inserted in lieu
thereof:
(d) Notwithstanding the foregoing
provisions of this Section 2.01, (i) the aggregate
principal amount of the Term Loans A made shall not
exceed the Total Term Loan A Commitment and (ii) the
aggregate principal amount of the Term Loans B made
shall not exceed the Total Term Loan B Commitment.
Any principal amount of a Term Loan which is repaid
or prepaid may not be reborrowed.
4. Making the Loans.
(a) Clause (ii) of the second sentence
of Section 2.02(a) of the Financing Agreement is hereby amended by deleting the
term "Term Loan" and inserting the term "Term Loan A" in lieu thereof.
(b) Clause (iv) of the second sentence
of Section 2.02(a) of the Financing Agreement is hereby amended by (i) deleting
the term "Term Loan" and inserting the term "Term Loan A" in lieu thereof, and
(ii) inserting the following before the period at the end thereof:
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, and with respect to the Term Loan B, must be the
First Amendment Effective Date.
(c) Section 2.02(c)(i) of the
Financing Agreement is hereby amended by deleting the phrase "and the Total
Term Loan Commitment" and inserting ", the Total Term Loan A Commitment and the
Total Term Loan B Commitment" in lieu thereof.
5. Repayment of Loans; Evidence of Debt.
Section 2.03 of the Financing Agreement is hereby amended by (i) deleting
paragraph (a) thereof and inserting the following in lieu thereof:
(a) The aggregate outstanding
principal of all Loans shall be due and payable on
the Final Maturity Date, provided that the Final
Maturity Date shall be extended to April 12, 2002 if
(i) no Potential Default or Event of Default except
for the Events of Default referred to in the Cash
Collateral Letter shall occur and (ii) prior to
January 28, 2002, the Borrower or its financial
advisor has delivered to the Lenders (A) a letter of
intent, in form and substance satisfactory to the
Lenders in their reasonable discretion and executed
by the Borrower and a third party satisfactory to
the Lenders in their reasonable discretion, pursuant
to which such third party has agreed to acquire all
or substantially all of the business and assets of
the Borrower and its Consolidated Subsidiaries (by
merger, stock sale or asset sale or a combination of
the foregoing) pursuant to terms (including, without
limitation, the purchase price and the closing
conditions) satisfactory to the Lenders in their
reasonable discretion and in any case providing for
the payment in full of all the Obligations no later
than April 12, 2002 or (B) a definitive binding
purchase agreement executed by the Borrower and a
third party reasonably satisfactory to the Lenders
pursuant to which such third party has agreed to
acquire all or substantially all of the business and
assets of the Borrower and its Consolidated
Subsidiaries (by merger, stock sale or asset sale or
a combination of the foregoing) pursuant to terms
that provide that all of the Obligations are to be
repaid in full no later than April 12, 2002 and that
neither the Borrower nor the third party's
obligations to close such acquisition is subject to
any condition that is within the control of either
such Person or anyone controlled by either such
Person (other than the delivery of customary closing
certificates and customary closing documents).
, (ii) deleting paragraph (b) in its entirety and (iii) redesignating existing
paragraphs (c), (d), (e) and (f) therein as new paragraphs (b), (c), (d) and
(e), respectively.
6. Interest.
(a) Section 2.04(b) of the Financing
Agreement is hereby amended in its entirety to read as follows:
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"(b) Term Loan A. The Term Loan A shall
bear interest on the principal amount thereof from
time to time outstanding, from the date of such Loan
until such principal amount becomes due, at a rate
per annum equal to the Reference Rate plus the
Applicable Term Loan Margin."
(b) Section 2.04 of the Financing
Agreement is hereby amended by (i) redesignating existing paragraphs (c), (d)
and (e) therein as new paragraphs (d), (e) and (f), respectively, and (ii)
adding after paragraph (b) thereof, the following new paragraph (c):
(c) Term Loan B. The Term Loan B shall
bear interest on the principal amount thereof from
time to time outstanding, from the date of such Loan
until such principal amount becomes due, at a rate
per annum equal to the Reference Rate plus the
Applicable Term Loan Margin plus 4%.
(c) Section 2.04(d) of the Financing
Agreement is hereby amended in its entirety to read as follows:
(e) Interest Payment. Interest on each
Revolving Loan, the Term Loan A and the Term Loan B
shall be payable monthly, in arrears, on the first
day of each month, commencing on the first day of
the month following the month in which such Loan is
made and at maturity (whether upon demand, by
acceleration or otherwise). Interest at the
Post-Default Rate shall be payable on demand. The
Borrower hereby authorizes the Administrative Agent
to, and the Administrative Agent may, from time to
time, charge the Loan Account pursuant to Section
3.02 with the amount of any interest payment due
hereunder.
7. Reduction of Commitment; Prepayment of
Loans.
(a) Section 2.05(a) of the Financing
Agreement is hereby amended by (i) deleting clause (ii) thereof and inserting
the following in lieu thereof:
(ii) Term Loan A Commitments. The Term Loan A
Commitments shall terminate upon the making by the
Lenders of the Term Loan A to the Borrower in
accordance with Section 2.01(b)(ii).
and (ii) adding the following new clause (iii) at the end thereof:
(iii) Term Loan B Commitments. The Term Loan B
Commitments shall terminate upon the making by the
Lenders of the Term Loan B to the Borrower in
accordance with Section 2.01(b)(iii).
(b) Section 2.05(b) of the Financing
Agreement is hereby amended by (i) deleting clause (ii) thereof and inserting
the following in lieu thereof:
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(ii) Term Loan A. The Borrower may prepay,
without penalty or premium, the principal of the
Term Loan A, in whole, upon at least thirty (30)
days' prior written notice to the Administrative
Agent, or in part, upon at least five (5) Business
Days' prior written notice to the Administrative
Agent. Each prepayment made pursuant to this clause
(b)(ii) shall be accompanied by the payment of
accrued interest to the date of such payment on the
amount prepaid.
, and (ii) adding the following new clause (iii) at the end thereof:
(iii) Term Loan B. The Borrower may prepay,
without penalty or premium, the principal of the
Term Loan B in full, provided that (A) the
prepayment made pursuant to this clause (b)(iii)
shall (x) only be made concurrently with the
termination of the Revolving Credit Commitments and
the payment in full of the Obligations and (y) be
accompanied by the payment of accrued interest to
the date of such payment on the amount prepaid, and
(B) if such prepayment is made on or prior to
January 28, 2002 in accordance with clause (A)
above, then the principal amount of the Term Loan B
shall be forgiven as of the date of such prepayment
so that the principal amount of the Term Loan B to
be paid on such date of prepayment shall be
$2,000,000, plus the then accrued interest on the
Term Loan B (determined without giving effect to
such reduction).
(c) Section 2.05(c)(ii) of the
Financing Agreement is hereby amended in its entirety to read as follows:
(ii) The Borrower will immediately prepay the
outstanding principal amount of the Term Loans in
the event that the Total Revolving Credit Commitment
is terminated for any reason.
(d) Section 2.05(c)(iv) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.
(e) Section 2.05(c)(v) of the
Financing Agreement is hereby amended in its entirety to read as follows:
(v) Immediately upon any
Disposition or the sale of any Property by the
Borrower, any Surety or any Consolidated Subsidiary
pursuant to Section 7.08, the Borrower shall prepay
the outstanding principal amount of the Term Loan B
(or, if the Term Loan B has been paid in full, the
Term Loan A, or if the Term Loan A has been paid in
full, the Revolving Loans) in an amount equal to
100% of the Net Available Proceeds received by such
Person in connection with such Disposition or 100%
of the net proceeds received by such Person in
connection with such
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sale, as applicable. Nothing contained in this
subsection (v) shall permit the Borrower or any of
its Consolidated Subsidiaries to make a Disposition
of any Property other than in accordance with
Section 7.08. Upon any Disposition in accordance
with Section 7.08(iii) or (iv) of (A) the Borrower's
equity interest in Marine Terminals or any of Marine
Terminals' assets or properties (including without
limitation any sale of its interest in the
partnership that owns an international marine
terminal in Louisiana and any release of its
interest in funds held in escrow with respect to
funding payments of principal of and interest on
bonds issued in connection with such terminal) or
(B) the Borrower's interest in the office building
located at 0000 Xxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxx,
the Borrower shall apply the Net Available Proceeds
from such Disposition, concurrently with the receipt
thereof, (x) first, to prepay the outstanding
principal amount of the Revolving Loans in an amount
equal to 100% of such Net Available Proceeds in
connection with such sale and (y) second, if the
Revolving Loans have been paid in full, to fund
working capital and capital expenditures in
accordance with the Revised Projections, provided
that (1) the Borrower has commenced and is taking
good faith actions satisfactory to the Lenders in
their reasonable discretion to enter into a
transaction specified in Section 2.03(a) and (2) no
Potential Default or Event of Default except for the
Events of Default referred to in the Cash Collateral
Letter has occurred.
(f) The first sentence of Section
2.05(c)(vi) of the Financing Agreement is hereby amended by deleting the clause
"Term Loans (or, if the Term Loans have been paid in full, the Revolving
Loans)" and inserting the clause "Term Loan B (or, if the Term Loan B has been
paid in full, the Term Loan A, or if the Term Loan A has been paid in full, the
Revolving Loans)" in lieu thereof.
(g) Section 2.05(c)(vii) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.
(h) Section 2.05(c)(viii) of the
Financing Agreement is hereby amended by deleting the clause "Term Loans (or,
if the Term Loans have been paid in full, the Revolving Loans)" and inserting
the clause "Term Loan B (or, if the Term Loan B has been paid in full, the Term
Loan A, or if the Term Loan A has been paid in full, the Revolving Loans)" in
lieu thereof.
(i) Section 2.05(d) of the Financing
Agreement is hereby amended in its entirety to read as follows:
(d) Application of Payments.
Each prepayment pursuant to subsections (c)(iv),
(c)(v), (c)(vi), (c)(vii) and (c)(viii) above
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shall be applied, first, to the Term Loan B, second,
to the Term Loan A, and third to the Revolving
Loans.
8. Capitalization of Interest. Section 3.02(a)
of the Financing Agreement is hereby amended by adding at the end of the first
sentence thereof the following:
; provided, however, that interest on the Term Loan
B that is due on each monthly interest payment date
shall be capitalized and added on such date to the
principal amount of the Term Loan B unless an Event
of Default or Potential Default shall have occurred
and then be continuing.
9. Apportionment of Payments.
(a) Section 3.04(b) of the Financing
Agreement is hereby amended in its entirety to read as follows:
After the occurrence and during the continuance of
an Event of Default, the Administrative Agent may,
and upon the direction of the Required Lenders
shall, apply all payments in respect of any
Obligations and all proceeds of the Collateral,
subject to the provisions of this Agreement, (i)
first, ratably to pay the Obligations in respect of
any fees, expense reimbursements, indemnities and
other amounts then due to the Agents until paid in
full; (ii) second, ratably to pay the Term Loan B
Obligations in respect of any fees and indemnities
then due to the Term Loan B Lenders until paid in
full; (iii) third, ratably to pay interest due in
respect of the Term Loan B until paid in full; (iv)
fourth, ratably to pay principal of the Term Loan B
until paid in full; (v) fifth, ratably to pay the
Term Loan A Obligations in respect of any fees and
indemnities then due to the Term Loan A Lenders
until paid in full; (vi) sixth, ratably to pay
interest due in respect of the Term Loan A until
paid in full; (vii) seventh, ratably to pay
principal of the Term Loan A until paid in full,
(viii) eighth, ratably to pay the Revolving Loan
Obligations in respect of any fees and indemnitees
then due to the Revolving Loan Lenders until paid in
full; (ix) ninth, ratably to pay interest due in
respect of the Revolving Loans and Agent Advances
and until paid in full; (x) tenth, ratably to pay
principal of the Revolving Loans and Agent Advances
until paid in full, and (xi) eleventh, to the
ratable payment of all other Obligations then due
and payable.
(b) Section 3.04(c) of the Financing
Agreement is hereby amended by deleting the term "Term Loan" and inserting the
term "Term Loans" in lieu thereof.
10. Reporting and Information Requirements.
Section 6.01 of the Financing Agreement is hereby amended by (i) redesignating
existing paragraph (o) thereof as new paragraph (p) and (ii) adding immediately
after paragraph (n) thereof the following new paragraph (o):
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(o) Weekly Certificate. As
soon as available and in any event within three (3)
Business Days after the end of each week (beginning
with the week ending November 30, 2001), the
Borrower will furnish to the Agents and the Lenders
a certificate, substantially in the form of Exhibit
F, setting forth (i) the Consolidated Net Operating
Cash Flow and (ii) the number of tons of coal
produced by the Borrower and its Consolidated
Subsidiaries excluding the coal produced from the
Elk Horn reserves by Persons for their own account
pursuant to leases between the Borrower or any of
its Consolidated Subsidiaries as lessor and any such
Person as lessee, in each case for the period
commencing October 13, 2001 through the close of
business on the Friday of such week, supported by
schedules showing the derivation thereof and
containing such detail and information as either
Agent may reasonably request from time to time.
11. Use of Proceeds. Section 6.10 of the
Financing Agreement is hereby amended in its entirety to read as follows:
6.10 Use of Proceeds
(a) Revolving Loans. The
Borrower shall use the proceeds of the Revolving
Loans made pursuant to Section 2.01(b)(i) solely to
fund capital expenditures and other expenses of the
Borrower and the Eligible Subsidiaries in respective
amounts not to exceed the respective amounts set
forth therefor under the heading Expenditures in the
Revised Projections ; provided, however, that in the
event that Net Operating Cash Flow for any period
set forth in the Revised Projections exceeds the
amount set forth therein for such period, the excess
shall be used for (i) working capital of the
Borrower and its Eligible Subsidiaries and (ii) upon
request therefor made by the Borrower in writing
delivered to Agents and approved by the Agents in
their reasonable discretion, capital expenditures of
the Borrower and its Eligible Subsidiaries.
(b) Term Loan A. The
Borrower shall use the proceeds of the Term Loan A
made pursuant to Section 2.01(b)(ii) for any and all
of the following purposes: (i) for general working
capital or general corporate purposes of the
Borrower and the Eligible Subsidiaries, (ii) for
capital expenditures of the Borrower and the
Eligible Subsidiaries, provided that prior to using
any such proceeds for any such capital expenditure
with respect to the Fork Creek operations of the
Borrower and its Consolidated Subsidiaries, the
Borrower shall have delivered to the Agents a
capital expenditure and improvement plan, in
reasonable detail, and the Agents shall be satisfied
with such plan, (iii) for Qualified Acquisitions up
to the aggregate amount of $250,000 in any fiscal
year of the Borrower, and (iv) to relend proceeds to
Eligible Subsidiaries as permitted by Section
7.04(b), subject to the terms and conditions
contained in this Section 6.10. Any re-lending by
the Borrower of proceeds of the Term Loan A to an
Eligible Subsidiary shall not be in
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amounts which would cause any Eligible Subsidiary to
not be able to make the representation set forth in
Section 4.28, after giving effect to the relending
of any such proceeds.
(c) Term Loan B. The Borrower
shall use the proceeds of the Term Loan B made
pursuant to Section 2.01(b)(iii) solely to pay to
the Administrative Agent, for the ratable benefit of
the Lenders, the Bridge Fee.
(d) Limits on Use. In no
event shall the proceeds of the Revolving Loans or
the Term Loan A be used (i) for the purchase of coal
inventory produced outside of the United States,
(ii), except as permitted in paragraph (e) below,
for any purposes other than to support the coal
related businesses of the Borrower and the Eligible
Subsidiaries or (iii) for capital expenditures,
except as permitted in Section 7.13.
(e) Relending Proceeds.
Notwithstanding anything to the contrary contained
herein, the Borrower may relend proceeds of the
Revolving Loans and the Term Loan A to Marine
Terminals for the general working capital and
general corporate purposes of such Eligible
Subsidiary only up to the aggregate amount of
$250,000.
12. Consultants. Article VI of the Financing
Agreement is hereby amended by adding a new Section 6.27 to read in its
entirety as follows:
6.27 Consultants. The Borrower shall, no later
than November 9, 2001, retain at the Borrower's
expense, a mining/operational consultant that is
mutually acceptable to both the Borrower and the
Lenders. The scope of the engagement shall include
but not be limited to monitoring daily operations
and reporting requirements and shall be acceptable
to both the Borrower and the Lenders. The Lenders
hereby agree that five such acceptable consultants
are Xxxxx Xxxxxxx & Company, Xxxx International
Mining Consultants, XX Xxxx, Metals Strategies,
Inc., and Xxxxxxxx Xxxxxx & Associates.
13. Dispositions of Assets. Section 7.08 of the
Financing Agreement is hereby amended by (i) redesignating clause (iii) as
clause (v) and (ii) inserting immediately following clause (ii) the following:
, (iii) the sale for not less than the fair market
value thereof of (A) the Borrower's interest in
Marine Terminals or (B) Marine Terminals' interest
in the partnership that owns an international marine
terminal in Louisiana, in each case on terms that
take into account the ownership and application or
release, as the case may be, of funds held in escrow
with respect to funding payments of principal of and
interest on bonds issued in connection with such
terminal provided that the Net Available Proceeds of
such Disposition are paid to the Collateral Agent
for the benefit of the
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Lenders in accordance with Section 2.05(c)(v) or
(iv) the sale to a Person that is not an Affiliate
of the Borrower or any of its Subsidiaries for cash
in an amount not less than the fair market value
thereof of the Borrower's interest in the office
building located at 0000 Xxxxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxxx, provided that the Net Available Proceeds
of such Disposition are paid to the Collateral Agent
for the benefit of the Lenders in accordance with
Section 2.05(c)(v)
14. Capital Expenditures. Section 7.13 of the
Financing Agreement is hereby amended in its entirety to read as follows:
Without the prior written consent of the Lenders,
the Borrower shall not, and shall not permit any of
its Consolidated Subsidiaries to, make or commit to
make any expenditure (including, without limitation,
Capitalized Lease Obligations) that in accordance
with GAAP would be debited to fixed asset accounts
on a consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries during such period in
respect of the acquisition, construction,
improvement, replacement or betterment of land,
buildings, machinery, equipment or of any other
fixed assets or leaseholds during such period,
except for such expenditures in amounts not to
exceed the respective amounts set forth therefor in
the Revised Projections.
15. Financial Maintenance Covenants. Section
7.16 of the Financing Agreement is hereby amended in its entirety to read as
follows:
7.16 Financial Maintenance Covenants.
The Borrower shall not:
(a) Consolidated Debt to
EBITDA Ratio. Permit the Consolidated Debt
to EBITDA Ratio on September 30, 2001 for
the period from June 1, 2001 through
September 30, 2001 to be greater than 6.7
to 1.
(b) Consolidated EBITDA.
Permit Consolidated EBITDA for any period
set forth below to be less than the amount
set forth opposite such period below:
PERIOD MINIMUM EBITDA
------ --------------
June 1, 2001 through June 30, 2001 $380,000
June 1, 2001 through July 31, 2001 $2,200,000
June 1, 2001 through August 31, 2001 $5,160,000
June 1, 2001 through September 30, 2001 $7,540,000
(c) Minimum Tons Sold.
Permit the number of tons of coal sold by
the Borrower and its Consolidated
Subsidiaries for any period set forth below
to be less than the amount set forth
opposite such period below:
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PERIOD MINIMUM TONS SOLD
------ -----------------
June 1, 2001 through June 30, 2001 510,000
June 1, 2001 through July 31, 2001 930,000
June 1, 2001 through August 31, 2001 1,450,000
June 1, 2001 through September 30, 2001 1,950,000
(d) Consolidated Net
Operating Cash Flow. Permit Consolidated
Net Operating Cash Flow for any period set
forth below to be less than the amount set
forth opposite such period below:
MINIMUM
CONSOLIDATED NET
CUMULATIVE PERIOD FROM OCTOBER 13, 2001 THROUGH: OPERATING CASH FLOW
----------------------------------------------- -------------------
October 26, 2001 $1,763,876
November 30, 2001 $(4,821,050)
December 28, 2001 $(3,308,881)
January 25, 2002 $(2,463,704)
and if the Final Maturity Date is extended
in accordance with Section 2.03(a):
February 22, 2002 $(11,837,258)
March 29, 2002 $(12,741,574)
April 12, 2002 $(15,369,140)
(e) Minimum Tons Produced.
Permit the number of tons of coal produced
by the Borrower and its Consolidated
Subsidiaries excluding coal produced from
the Elk Horn reserves by Persons for their
own account pursuant to leases between the
Borrower or any of its Consolidated
Subsidiaries as lessor and any such Person
as lessee, for any period set forth below
to be less than the amount set forth
opposite such period below:
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MINIMUM
TONS
CUMULATIVE PERIOD FROM OCTOBER 13, 2001 THROUGH: PRODUCED
----------------------------------------------- --------
October 26, 2001 162,957
November 30, 2001 563,533
December 28, 2001 915,363
January 25, 2002 1,294,987
and if the Final Maturity Date is extended
in accordance with Section 2.03(a):
February 22, 2002 1,682,121
March 29, 2002 2,182,495
April 12, 2002 2,379,867
(f) Revolving Loan Borrowing
Base. Permit the Revolving Loan Borrowing
Base on each date set forth below to be
less than the amount set forth opposite
such date:
REVOLVING LOAN
DATE BORROWING BASE
---- --------------
October 19, 2001 $11,692,415
October 26, 2001 $9,847,045
November 2, 2001 $11,663,171
November 9, 2001 $12,505,663
November 16, 2001 $11,081,353
November 23, 2001 $10,843,335
November 30, 2001 $10,905,325
December 7, 2001 $11,561,940
December 14, 2001 $12,750,000
December 21, 2001 $12,721,569
December 28, 2001 $11,233,059
January 4, 2002 $12,292,802
January 11, 2002 $12,732,890
January 18, 2002 $11,894,444
January 25, 2002 $11,610,271
and if the Final Maturity Date is extended
in accordance with Section 2.03(a):
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February 1, 2002 $12,750,000
February 8, 2002 $12,750,000
February 15, 2002 $12,493,188
February 22, 2002 $12,741,799
March 1, 2002 $12,471,527
March 8, 2002 $12,420,989
March 15, 2002 $12,393,413
March 22, 2002 $12,750,000
March 29, 2002 $12,691,048
April 5, 2002 $12,750,000
April 12, 2002 $12,750,000
16. Notices, Etc. Section 11.01 of the
Financing Agreement is hereby amended by deleting any reference to Xxxxxxx Xxxx
& Xxxxx LLP as a Person to receive copies of notices sent to the Administrative
Agent.
17. Amendments. Section 11.02(a)(vii) of the
Financing Agreement is hereby amended by (a) deleting the comma after the term
"'Eligible Accounts Receivable'", (b) inserting the word "or" immediately
before the term "'Revolving Loan Borrowing Base'" and (c) deleting the phrase
"or 'Term Loan Borrowing Base'".
18. Schedules. Schedule 1.01(A) to the
Financing Agreement is hereby amended in its entirety to read as set forth on
Annex I attached to this Amendment.
19. Exhibits. (a) Exhibit D to the Financing
Agreement is hereby amended in its entirety to read as set forth on Annex II
attached to the Amendment.
(b) Exhibit F to the Financing Agreement is
hereby added to the Financing Agreement to read as set forth on Annex III
attached to this Amendment.
D. Conditions to Effectiveness. The
forbearance set forth in Section B and the amendments set forth in paragraphs 1
through 19 of Section C, of this Amendment shall become effective as of
November 5, 2001 (the "Amendment Effective Date") upon satisfaction in full of
the following conditions precedent:
(a) The representations and warranties
contained in this Amendment, Article VII of the Financing Agreement and the
other Loan Documents shall be correct in all material respects on and as of the
date of this Amendment as though made on and as of such date (except where such
representations and warranties relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date); no Potential Default or Event of Default shall have occurred and be
continuing on the date of this Amendment (other than the Events of Default
referred to in the Cash Collateral Letter), or result from this Amendment
becoming effective in accordance with its terms.
(b) The Collateral Agent shall have received
(i) counterparts of this Amendment that bear the signatures of each of the
Borrower and the Lenders and (ii) counterparts of an Acknowledgment and
Consent, in the form of Annex V to this Amendment, that bear the signature of
each Surety.
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(c) All legal matters incident to this
Amendment shall be satisfactory to the Agents and their counsel.
(d) The Administrative Agent shall have
received, for the ratable benefit of the Lenders, a bridge fee (the "Bridge
Fee") in an aggregate amount equal to $3,000,000, which shall have been deemed
to be fully earned and due and payable as of the Amendment Effective Date and
paid on such date from the proceeds of the Term Loan B (as defined in the
Financing Agreement, as amended by this Amendment) by charging the Borrower's
Loan Account in accordance with Section 2.01(b)(iii) of the Financing
Agreement, as amended hereby.
E. Representations and Warranties.
The Borrower represents and warrants to the
Lenders as follows:
(a) The Borrower (i) is duly organized, validly
existing and in good standing under the laws of the state of its organization
and (ii) has all requisite power, authority and legal right to execute, deliver
and perform this Amendment and to perform the Financing Agreement, as amended
hereby.
(b) The execution, delivery and performance by
the Borrower of this Amendment and the performance by the Borrower of the
Financing Agreement, as amended hereby (i) have been duly authorized by all
necessary action, (ii) do not and will not violate or create a default under
such Borrower's organizational documents, any applicable law or any contractual
restriction binding on or otherwise affecting the Borrower or any of the
Borrower's properties, and (iii) except as provided in the Loan Documents, do
not and will not result in or require the creation of any Lien, upon or with
respect to the Borrower's property.
(c) No authorization or approval or other
action by, and no notice to or filing with, any Official Body is required in
connection with the due execution, delivery and performance by the Borrower of
this Amendment or the performance by the Borrower of the Financing Agreement,
as amended hereby.
(d) This Amendment and the Financing Agreement,
as amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms
except to the extent the enforceability thereof may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect affecting generally the enforcement of creditors'
rights and remedies and by general principles of equity.
(e) The representations and warranties
contained in Article IV of the Financing Agreement are correct on and as of the
date hereof as though made on and as of the date hereof (except to the extent
such representations and warranties expressly relate to an earlier date), and
no Potential Default or Event of Default has occurred and is continuing on and
as of the date hereof, other than those referred to in the Cash Collateral
Letter.
F. Continued Effectiveness of Financing
Agreement.
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The Borrower hereby (a) confirms and agrees that
each Loan Document to which it is a party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that on and after the Amendment Effective Date all references in any such Loan
Document to "the Financing Agreement", the "Agreement", "hereto", "hereof",
"hereunder", "thereto", "thereof", "thereunder" or words of like import
referring to the Financing Agreement shall mean the Financing Agreement as
amended by this Amendment, and (b) confirms and agrees that to the extent that
any such Loan Document purports to assign or pledge to the Collateral Agent for
the ratable benefit of the Lenders, or to grant to the Collateral Agent for the
ratable benefit of the Lenders a security interest in or Lien on, any
collateral as security for the Obligations of the Borrower, or any of its
Consolidated subsidiaries or any surety from time to time existing in respect
of the Financing Agreement and the Loan Documents, such pledge, assignment
and/or grant of the security interest or Lien is hereby ratified and confirmed
in all respects.
G. Miscellaneous
(a) This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Amendment by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Amendment.
(b) Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
(c) This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
(d) Borrower will pay on demand all reasonable
fees, costs and expenses of the Agents and the Lenders in connection with the
preparation, execution and delivery of this Amendment or otherwise payable
under the Financing Agreement, including, without limitation, reasonable fees
disbursements and other charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to the
Agents.
(e) Upon the Amendment Effective Date, this
Amendment shall supersede the Amendment Letter, which thereupon shall have no
further force or effect.
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IN WITNESS WHEREOF, the parties hereto have caused
this Amendment, to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BORROWER:
PEN HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
COLLATERAL AGENT AND LENDER:
ABLECO FINANCE LLC
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: S.V.P./Chief Credit Officer
ADMINISTRATIVE AGENT AND LENDER:
FOOTHILL CAPITAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
LENDER:
REGIMENT CAPITAL II, L.P.
By: Regiment Capital
Management, L.L.C.,
its General Partner
By: Regiment Capital
Advisors, L.L.C.,
its Manager
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
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