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Exhibit 10.15
AMENDMENT NO. 5 TO LOAN DOCUMENTS AND CONSENT
As of March 16, 2001
FOOTHILL CAPITAL CORPORATION
2450 Colorado Avenue
Suite 3000 West
Santa Monica, California 90404
Gentlemen:
Foothill Capital Corporation, as agent ("Agent"), the financial
institutions party to the Loan Agreement referred to herein (each, individually
a "Lender" and collectively, "Lenders") and certain Subsidiaries of Anker Coal
Group, Inc. (each, individually, a "Borrower" and collectively "Borrowers") have
entered into certain financing arrangements as set forth in the Loan and
Security Agreement, dated as of November 21, 1998, by and among Borrowers, Anker
Coal Group, Inc., Lenders and Agent, as amended by Amendment No. 1 to Loan
Documents, dated August 4, 1999, by and among Borrowers, Borrowers' Agent,
Guarantors, Lenders and Agent and Amendment No. 2 to Loan Documents, dated
August 27, 1999, by and among Borrowers, Borrowers' Agent, Guarantors, Lenders
and Agent, Amendment No. 3 to Loan Documents, dated as of October 1, 1999, by
and among Borrowers, Borrowers' Agent, Guarantors, Lenders and Agent and
Amendment No. 4 to Loan Documents, dated as of September 26, 2000, by and among
Borrowers, Borrowers' Agent, Guarantors, Lenders and Agent (as the same may
hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement"), and all other Loan Documents
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto. All capitalized terms used herein shall have the
meanings assigned thereto in the Loan Agreement, unless other defined herein.
Anker Coal Group, Inc. ("Parent") has made an offer to the 1999
Noteholders, pursuant to the Exchange Offer (as hereinafter defined), to
exchange up to 38,006 shares of Parent's Class E Preferred Stock (as hereinafter
defined) for up to $38,006,000 in an aggregate principal amount of
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outstanding 1999 Notes. The Class E Preferred Stock will accrue dividends from
the date of issuance at the rate of 14.25% per annum, payable quarterly in
arrears in cash, or at Parent's option, in shares of Class E Preferred Stock,
payment of which dividends would be jointly and severally guarantied by
Borrowers and all of the Guarantors (other than Parent). Each share of Class E
Preferred Stock will be convertible into shares of the Parent's common stock
and, as provided for in the Exchange Offer, if all of the 38,006 shares of Class
E Preferred Stock offered pursuant to the Exchange Offer are issued and
thereafter converted into Parent's common stock in accordance with the Exchange
Offer, such shares of Class E Preferred Stock would be convertible into 99.99%
of Parent's pro forma fully diluted common stock as of the effective date of the
Exchange Offer. To consummate the Exchange Offer, prior to the closing date
thereof, the Parent will amend its constituent documents to increase its
authorized capital stock, to create the Class E Preferred Stock, and to modify
the terms of its outstanding Class A, B and D Preferred Stock, all to have the
terms and rights as set forth in the constituent documents. In addition, on the
closing date of the Exchange Offer, Parent will (i) pay interest that has
accrued since October 1, 1999 on the 1999 Notes that are exchanged in the
Exchange Offer and (ii) deposit with the 1999 Note Trustee sufficient funds to
make the April 1, 2001 interest payment on all of the unexchanged 1999 Notes.
For purposes of this Amendment No. 5 to Loan Documents and Consent (this
"Amendment"), all of the foregoing transactions contemplated by the Exchange
Offer, on the terms and conditions set forth therein, are hereinafter
collectively referred to as the "Exchange Transactions".
Borrowers have requested that Agent and Lenders (a) consent to Parent,
Borrowers and the other Guarantors consummating the Exchange Transactions and
amend certain provisions of the Loan Agreement in connection therewith, and
Agent and Lenders are willing to agree to the foregoing on and subject to the
terms and conditions contained in this Amendment.
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In consideration of the foregoing and the respective agreements and
covenants herein, the parties hereto agree as follows:
1. Existing Definitions. All capitalized terms used herein shall have
the meanings given to them in the Loan Agreement, unless otherwise defined
herein.
2. Additional Definitions. As used herein, the following terms shall
have the respective meanings given to them below and Section 1 of the Loan
Agreement shall be deemed and is hereby amended to include, in addition and not
in limitation, each of the following definitions:
"Class E Preferred Stock" means the shares of Parent's Class E
Convertible Preferred Stock issued to certain 1999 Noteholders in
exchange for certain aggregate principal amount of their outstanding
1999 Notes, pursuant to and on the terms and conditions set forth in
the Exchange Offer.
"Class E Preferred Stock Dividend" means the dividend payable
by Parent in respect of Parent's Class E Convertible Preferred Stock at
the annual rate of 14.25%."
"'Amendment No. 5' means Amendment No. 5 to Loan Documents and
Consent, dated as of March 16, 2001, executed by and among Borrowers,
Borrowers' Agent, Guarantors, Agent and Lenders."
"'Amendment No. 5 Closing Date' means the date that each of
the conditions set forth in Section 12 of Amendment No. 5 have been
satisfied in full in a manner satisfactory to Agent."
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"'Exchange Offer' means Anker Coal Group, Inc. Exchange Offer
of Class E Convertible Preferred Stock for outstanding 14.25% Series B
Second Priority Senior Secured Notes due 2007 (PIK through April 1,
2000), dated February 23, 2001, as in effect on February 23, 2001."
3. Amendments to Definitions. The definition of "Change of Control" set
forth in Section 1.1 of the Loan Agreement is hereby amended by deleting both
clause (b)(iii) and clause (b)(iv) thereof in their entirety and substituting
the following therefor:
"(iii) [Intentionally Deleted], (iv) [Intentionally Deleted]"
(a) The definition of "Permitted Disposition" set forth in Section 1.1
of the Loan Agreement is hereby amended and restated by deleting the word "and"
between clauses (g) and (h) thereof and substituting a comma therefor and by
adding thereto the following new clause (i), as follows:
"and (i) the issuance of Class E Preferred Stock to 1999
Noteholders in exchange for 1999 Notes pursuant to, and on the terms
and conditions set forth in, the Exchange Offer and the sale and/or
other disposition, at any time after the Amendment No. 5 Closing Date,
of Class E Preferred Stock and/or of shares of Parent's common stock
into which any shares of Class E Preferred Stock are subsequently
converted."
4. Consent to Exchange Transactions. Agent and Lenders hereby consent
to the consummation of the Exchange Transactions and waive any Event of Default
that might otherwise occur by reason of the consummation of the Exchange
Transactions.
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5. Permitted Indebtedness. Section 7.1 of the Loan Agreement is hereby
amended by deleting the word "and" at the end of clause (e) thereof and
inserting such word at the end of clause (f) thereof and by adding thereto the
following new clause (g), as follows:
"(g) Indebtedness consisting of accrued Class E Preferred
Stock Dividends and the guaranty of Parent's payment obligation in
respect thereof by Borrowers and Guarantors (other than Parent)
pursuant to, and on the terms and conditions set forth in, the Exchange
Offer; except that, Class E Preferred Stock Dividends shall not be paid
except to the extent permitted by Section 7.11(a)."
6. Class E Preferred Stock Dividends. Section 7.11(a) of the Loan
Agreement is hereby amended and restated in its entirety to read as follows:
"(a) Parent's (i) payment of dividends in cash on Parent's
Class C Preferred Stock and Class D Preferred Stock in accordance with
the terms thereof as in effect on the Amendment No. 5 Closing Date and
(ii) payment of additional shares of Class E Preferred Stock on
Parent's Class E Preferred Stock in accordance with the terms thereof
as in effect on the Amendment No. 5 Closing Date;"
7. Minimum Excess Availability for 1999 Notes Interest Payments.
Section 7.13(c)(ix)(B)(2) the Loan Agreement is hereby amended and restated in
its entirety to read as follows:
"(2) in the case of all other Intercompany Loans proposed to
be made to Parent that will be used for any other purpose and all
Intercompany Loans proposed to be made to any other Guarantor,
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Borrowers shall have Excess Availability in an amount in excess of (x)
$5,000,000 if such proposed Intercompany Loan is to be made at any time
during the period from and after the Closing Date through and including
the Amendment No. 5 Closing Date, (y) $2,500,000 if such proposed
Intercompany Loan is to be made at any time during the period from and
after the Amendment No. 5 Closing Date through and including November
1, 2001 and (z) $5,000,000 if such proposed Intercompany Loan is to be
made at any time from and after November 2, 2001."
8. Intercompany Loans to Parent. Section 7.13(c)(ix) of the Loan
Agreement is hereby amended by amending and restating in its entirety clause (1)
of the chart set forth on page 80 therein to read as follows:
"(1) Parent (x) $18,100,000 during the period from and after the
Closing Date through and including December 31, 2001
and (y) $13,192,000 from and after January 1, 2002,
plus the aggregate amount of costs and expenses
(including, without limitation, federal, state and
local taxes) paid by Parent for its own account and
for the account of its Subsidiaries as consolidated
group expenses and the aggregate amount of
distributions permitted to be made by Parent pursuant
to Section 7.11"
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9. Amendment of EBITDA Financial Covenant. Section 7.20 of the Loan
Agreement is hereby amended by adding thereto a new Section 7.20(a)(iii) as
follows:
"(iii) In addition to, and not in limitation of, the
provisions of Section 7.20(a)(ii), commencing with Borrowers' fiscal
month ending June 30, 2001 and for each fiscal month thereafter through
and including the fiscal month ending October 31, 2001, EBITDA measured
on a cumulative basis, as of the end of each of such fiscal months, for
Borrowers' immediately preceding three (3) fiscal months (including the
fiscal month then ended) in the amount set forth opposite each such
month as follows:
MONTH EBITDA
----- ------
June, 2001 $3,435,000
July, 2001 $4,005,000
August, 2001 $4,381,000
September, 2001 $4,721,000
October, 2001 $4,882,000"
10. Representations, Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers and Guarantors to Lender Group pursuant to the Loan Documents,
each Borrower and Guarantor hereby jointly and severally represents, warrants
and covenants with and to Lender Group as follows (which representation,
warranties and covenants are continuing and shall survive the execution and
delivery hereof and shall be incorporated into and made a part of the Loan
Documents):
(a) No Default or Event of Default exists as of the date of this
Amendment after giving effect to the amendments set forth herein.
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(b) This Amendment has been duly executed and delivered by each
Borrower and each Guarantor, and the agreements and obligations of each Borrower
and each Guarantor contained herein constitute legal, valid and binding
obligations of Borrowers and Guarantors enforceable against each Borrower and
each Guarantor in accordance with their respective terms.
(c) All of the representations and warranties set forth in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date hereof as if made on the date hereof, except to
the extent any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
as of such date.
(d) Provided that the 1999 Noteholders have validly tendered and have
not withdrawn at least $34,205,000 aggregate principal amount of 1999 Notes, the
consent to the closing of the Exchange Offer has been obtained from all existing
classes of Parent's preferred Stock and the Amendment No. 5 Closing Date has
occurred, Parent will cause to be filed with the Delaware Secretary of State,
within one (1) Business Day thereafter, amended Certificates of Designation for
its Class A, B and D preferred Stock and a Certificate of Designation for the
Class E Preferred Stock and cause all other similar ministerial actions to be
taken that are required in order to fully consummate the Exchange Offer, and the
Exchange Offer will become legally effective no later than April 17, 2001 (such
date, the "Exchange Offer Effective Date").
11. Fees. In consideration of Agent's and Lenders' consent to the
consummation of the Exchange Transactions and the amendments to the Loan
Agreement provided for in this Amendment, Borrowers shall pay on the Amendment
No. 5 Closing Date to Agent, for the ratable benefit of Lenders, a fee in the
amount of $150,000, which fee is earned in full as of the date hereof and may be
charged by Agent, at its option, to any accounts of Borrowers maintained by
Agent.
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12. Conditions Precedent. The consent, waiver and amendments herein
shall be effective upon the satisfaction of each of the following conditions
precedent in a manner satisfactory to Agent:
(a) Agent shall have received an original of this Amendment, duly
authorized, executed and delivered by each Borrower, each Guarantor and each
Lender;
(b) No Default or Event of Default shall have occurred or be
continuing; and
(c) Agent's receipt on or before April 17, 2001 of a certificate
executed by Parent's chief financial officer and secretary, in form and
substance satisfactory to Agent, certifying to Agent that prior to the
expiration of the Exchange Offer, the 1999 Noteholders have validly tendered and
have not withdrawn at least $34,205,000 aggregate principal amount of 1999 Notes
and the consent to the closing of the Exchange Offer has been obtained from all
existing classes of Parent's preferred Stock.
13. Exchange Transactions Closing Certificate. Promptly after the
consummation of all of the Exchange Transactions, Parent shall deliver to Agent
a certificate executed by Parent's chief financial officer and secretary, in
form and substance satisfactory to Agent, certifying to Agent that all of the
Exchange Transactions have been fully consummated. If Agent shall not have
received such Certificate on or before April 17, 2001, then notwithstanding
anything to the contrary contained in this Amendment, including without
limitation, the occurrence of the Amendment No. 5 Closing Date, then this
Amendment (including the consent, waivers and amendments to the Loan Agreement
provided for herein) shall be deemed and shall thereupon become null and void,
with the same force and effect as if this Amendment had not been executed by the
parties hereto.
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14. Miscellaneous.
(a) Headings. The headings listed herein are for convenience only and
do not constitute matters to be considered in interpreting this Amendment.
(b) Effect of this Amendment. Except as modified pursuant hereto, the
Loan Documents are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent of a conflict
between the terms of this Amendment and the other Loan Documents, the terms of
this Amendment shall control.
(c) Governing Law. The validity, interpretation and enforcement of this
Amendment shall be governed by the laws of the State of New York.
(d) Further Assurances. Borrowers and Guarantors shall execute and
deliver such additional documents and take such additional action as may be
necessary or desirable, as determined by Agent, to effectuate the provisions and
purposes of this Amendment.
(e) Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement.
[SIGNATURE PAGES FOLLOW]
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Very truly yours,
ANKER ENERGY CORPORATION ANKER POWER SERVICES, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Vice President and CFO Title: Treasurer
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MARINE COAL SALES COMPANY BRONCO MINING COMPANY, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
---------------------------- -------------------------
ANKER WEST VIRGINIA MINING COMPANY, INC. VANTRANS, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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PATRIOT MINING COMPANY, INC. KING KNOB COAL CO., INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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VINDEX ENERGY CORPORATION HEATHER GLEN RESOURCES, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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ANKER VIRGINIA MINING COMPANY, INC. HAWTHORNE COAL COMPANY, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
---------------------------- -------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
JULIANA MINING COMPANY, INC. UPSHUR PROPERTY, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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ANKER COAL GROUP, INC., as Guarantor MELROSE COAL COMPANY, INC.
and Borrowers' Agent
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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ANKER GROUP, INC. NEW ALLEGHENY LAND HOLDING
COMPANY, INC.
By: /s/ David D. Struth By: /s/ David D. Struth
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Title: Treasurer Title: Treasurer
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SIMBA GROUP, INC.
By: /s/ David D. Struth
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Title: Treasurer
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[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AGREED AND ACKNOWLEDGED:
FOOTHILL CAPITAL CORPORATION as
Agent and as a Lender
By: /s/ Andrew T. Furlong III
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Title: Vice President
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CONGRESS FINANCIAL CORPORATION
By:
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Title:
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SUNROCK CAPITAL CORP.
By:
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Title:
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