Exhibit 10.2
 
WESTMORELAND MINING LLC
 
9540 South Maroon Circle, Suite 200
Englewood, CO  80112

AMENDMENT NO. 1
 
Dated as of June 28, 2012
 
To Each of the Several Institutional Investors
Listed on the Signature Pages of this Amendment

 
Ladies and Gentlemen:
 
Reference is made to the Note Purchase Agreement, dated as of June 26, 2008 (the
“Note Agreement”), by and among Westmoreland Mining LLC, a Delaware limited
liability company (the “Company”), each of the Guarantors referred to therein,
and each of the institutional investors identified in Schedule A thereto,
providing, inter alia, for the issuance and sale by the Company of the Company’s
8.02% Senior Guaranteed Secured Notes, due March 31, 2018 (the “Notes”) in the
original aggregate principal amount of $125,000,000.  Capitalized terms used and
not otherwise defined herein shall have the respective meanings attributed
thereto in the Note Agreement.
 
This Amendment No. 1 is hereinafter referred to as this “Amendment”.
 
Preliminary Statements
 
A.           The Company and the Guarantors (collectively, the “Obligors”) have
entered into (1) the Note Agreement with the original purchasers of the Notes
and (2) that certain Amended and Restated Credit Agreement, dated as of June 26,
2008 with the Banks (as defined therein) and the other parties thereto (as
amended, the “Credit Agreement”).
 
B.           The Obligors have requested that the holders of the Notes (the
“Noteholders”) amend certain of the covenants contained in the Note Agreement
and that the Banks amend the corresponding covenants contained in the Credit
Agreement.
 
C.           The Required Holders are willing, based upon certain statements,
representations and agreements of the Obligors, to make such amendments to the
Note Agreement.
 
The further provisions of this Amendment set forth the agreement of the Obligors
with the Noteholders regarding such amendments.

1.           Amendments to Note Agreement.
 
(a)           The definition of "Adequately Funded" contained in Schedule B of
the Note Agreement is hereby amended and restated in its entirety as follows:
 
 
 

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Adequately Funded shall mean a Plan's assets-to-liabilities relationship
described herein.  A Plan is Adequately Funded if, as of the last day of the
Plan Year which has most recently ended (the "Valuation Date") and based on an
actuarial valuation made as of the first day of such Plan Year by the Plan's
regular actuarial consultant, the value of the Plan's assets as determined under
Section 412(c)(2) of the Internal Revenue Code, including any contributions made
to the Plan within eight and 1/2 months of the Valuation Date, is not less than
80% of the Plan's Current Liability, as determined under Section 412(l)(7) of
the Code using the maximum allowable interest rate under such subsection, and
recognizing over three years any plan change, such as any plan amendment or
required statutory change in benefits, (but not changes in actuarial assumption
or normal plan experience).
 
(b)           Section 10.17 of the Note Agreement is hereby amended and restated
in its entirety as follows:
 
Section 10.17 Minimum Debt Service Coverage Ratio.
 
The Obligors shall not permit the Debt Service Coverage Ratio to be less than
1.30 to 1.00, calculated as of the end of each fiscal quarter after the Closing
Date based upon the immediately preceding four fiscal quarters with the
exception of the fiscal quarters ending June 30, 2012 and September 30, 2012,
during which periods the Debt Service Coverage Ratio shall not be permitted to
be less than 1.20 to 1.00.
 
(c)             Section 10.18 of the Note Agreement is hereby amended and
restated in its entirety as follows:
 
Section 10.18 Maximum Leverage Ratio.
 
The Obligors shall not permit the ratio of Consolidated Net Indebtedness of the
Company and its Subsidiaries to Consolidated EBITDA to exceed the ratio set
forth below for such period, calculated as of the end of each fiscal quarter
during each such period based upon the immediately preceding four fiscal
quarters:
 
Period
Ratio
Closing Date through June 30, 2010
3.00 to 1.00
   
July 1, 2010 through December 31, 2010
2.75 to 1.00
   
January 1, 2011 through December 31, 2011
2.50 to 1.00
   
January 1, 2012 through December 31, 2012
2.25 to 1.00
   
January 1, 2013 through March 31, 2013
2.25 to 1.00
   
April 1, 2013 through June 30, 2013
2.00 to 1.00
   
July 1, 2013 through September 30, 2013
1.75 to 1.00
   
October 1, 2013 and thereafter
1.50 to 1.00

 
 
 

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2.           Representations and Warranties.
 
The Company and each other Obligor hereby represents and warrants to each
Noteholder that, as of the date hereof and after giving effect to this
Amendment:

(a)           The representations and warranties of the Obligors contained in
the Note Agreement are true and correct on and as of the date hereof with the
same force and effect as though made by the Obligors on such date, except to the
extent that any such representation or warranty expressly relates solely to a
previous date (in which case such representation and warranty shall be true and
correct as of such previous date) or is the subject of transactions permitted
under the Note Agreement;

(b)           The Obligors have full power to enter into, execute, deliver and
carry out this Amendment, and such actions have been duly authorized by all
necessary proceedings on its part.  This Amendment has been duly and validly
executed and delivered by the Company and each other Obligor.  This Amendment
constitutes the legal, valid and binding obligation of the Company and each
other Obligor which is enforceable against Company and each other Obligor in
accordance with its terms, except to the extent that enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforceability of creditors' rights generally or by
general equitable principles limiting the availability of specific performance
or other equitable remedies.  Neither the execution and delivery of this
Amendment, nor the consummation of the transactions herein contemplated will
conflict with, constitute a default under or result in any breach of (i) the
terms and conditions of any organizational documents of Company or any other
Obligor or (ii) any Law or any agreement or instrument or other obligation to
which Company or any other Obligor is a party or by which it or any of the other
Obligors is bound, or result in the creation or enforcement of any Lien upon any
property of Company or any other Obligor other than as set forth in the Security
Documents;

(c)           No consent, approval, exemption, order or authorization of any
person or entity other than, as the case may be, the parties hereto is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Amendment;

(d)           The individual executing this Amendment on behalf of the Company
and each other Obligor, is authorized to execute and deliver this Amendment on
behalf of the Company and each other Obligor, and holds the office(s) with the
Company and each other Obligor, as the case may be, set forth below his
signature to this Amendment; and

(e)           No Event of Default or Potential Default has occurred and is
continuing or exists.

 
 
 

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4.           Effectiveness.
 
This Amendment shall not become effective until, and shall become effective
upon, (i) the Obligors and holders of Notes constituting the Required Holders
executing and delivering counterparts hereof, (ii) the execution and delivery of
an amendment to the Credit Agreement by all of the parties thereto, making
corresponding changes thereto and (iii) the payment of all costs and expenses of
each Noteholder in connection with this Amendment, including the fees and
disbursements of special counsel for the Noteholders.
 
5.           Miscellaneous.
 
(a)           In accordance with Section 15.1 of the Note Agreements, the
Obligors will pay all costs and expenses incurred by each Noteholder in
connection with this Amendment, including the fees and disbursements of special
counsel for the Noteholders.
 
(b)           The amendments provided for herein are limited to the
circumstances expressly referred to in this Amendment, and no other consents,
waivers, amendments or other modifications of the terms of the Note Agreement,
the Notes or the other Financing Documents shall be inferred from the terms
hereof.
 
(c)           The terms, covenants and conditions contained in the Note
Agreement, the Notes and the other Financing Documents, except to the extent
herein expressly waived, are hereby ratified and confirmed in all respects and
the Note Agreement, the Notes and the other Financing Documents, as expressly
amended hereby, shall remain in full force and effect, notwithstanding any
provision of this Amendment to the contrary or any consent given hereunder or
any action taken pursuant hereto.
 
(d)           Any and all notices, requests, certificates, and other instruments
executed and delivered subsequent to the effectiveness of this Amendment may
refer to the Note Agreement and/or any other Financing Document, as appropriate,
without making specific reference to this Amendment or to any prior amendment of
or other modification to the Note Agreement or any other Financing Document, and
all such references nevertheless shall be deemed to include, unless the context
otherwise requires, this Amendment and all such previously-effective amendments
and other modifications.
 
(e)           The descriptive headings of the sections and other subdivisions of
this Amendment shall not affect the meanings or construction of any of the
provisions hereof.
 
(f)           This Amendment may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument.  Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties
hereto.  Delivery of an executed counterpart of this Amendment by facsimile or
transmitted electronically in either Tagged Image File Format (“TIFF”) or
Portable Document Format (“PDF”) shall be equally effective as delivery of a
manually executed counterpart hereof.  Any party delivering an executed
counterpart of this Amendment by facsimile, TIFF or PDF shall also deliver a
manually executed counterpart hereof, but failure to do so shall not affect the
validity, enforceability, or binding effect of this Amendment.
 
 
 

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If you are in agreement with the foregoing, please sign the appropriate
signature block on the accompanying counterparts of this Amendment and return
one of the same to the Company.
 

 

 
WESTMORELAND MINING LLC
 
By:  /s/ Jennifer Grafton
Name: Jennifer Grafton
Title:  Secretary

 

 
WESTERN ENERGY COMPANY
 
By:  /s/ Jennifer Grafton
Name:  Jennifer Grafton
Title:  Secretary

 

 
DAKOTA WESTMORELAND CORPORATION
 
By:  /s/ Jennifer Grafton
Name:  Jennifer Grafton
Title:  Secretary

 

 
WESTMORELAND SAVAGE CORPORATION
 
By:  /s/ Jennifer Grafton
Name:  Jennifer Grafton
Title:  Secretary

 
 

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ACCEPTED AND AGREED:

TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
 
By /s/ Andrew M. Leicester
Name:  Andrew M. Leicester
Title:  Director
 
NEW YORK LIFE INSURANCE COMPANY
 
By /s/ Kathleen A. Haberkern
Name:  Kathleen A. Haberkern
Title:  Corporate Vice President
 
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By:  New York Life Investment Management LLC,
Its Investment Manager
 
By /s/ Kathleen A. Haberkern
Name:  Kathleen A. Haberkern
Title:  Director
 
NATIONWIDE MUTUAL FIRE INSURANCE
COMPANY
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
NATIONWIDE LIFE INSURANCE COMPANY
 
By /s/ Mary Beth Cadle
Name:  Mary Beth Cadle
Title:  Authorized Signatory
PRINCIPAL LIFE INSURANCE COMPANY
By: Principal Global Investors, LLC
      A Delaware limited liability
      Company, its authorized signatory
 
By /s/ Alan P. Kress
Name:  Alan P. Kress
Title:  Counsel
 
By /s/ Colin Pennycooke
Name:  Colin Pennycooke
Title:  Counsel
 
GENWORTH LIFE AND ANNUITY INSURANCE COMPANY
 
By /s/ John R. Eudres
Name:  John R. Eudres
Title:  Investment Officer
 
GENWORTH LIFE INSURANCE COMPANY OF NEW YORK
 
By /s/ John R. Eudres
Name:  John R. Eudres
Title:  Investment Officer
 
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:  Babson Capital Management LLC
        As Investment Sub-Advisor
 
By /s/ John Wheeler
Name:  John Wheeler
Title:  Managing Director
 

 
 

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ACCEPTED AND AGREED:

C.M. LIFE INSURANCE COMPANY
    By:  Babson Capital Management LLC
              As Investment Sub-Advisor

By /s/ John Wheeler
Name:  John Wheeler
Title:  Managing Director