EXECUTION VERSION

 

CONSENT TO FINANCING AGREEMENT

 

CONSENT, dated as of April 17, 2018 (this “Waiver”), to the Financing Agreement,
dated as of December 27, 2017 (as amended, supplemented, replaced or otherwise
modified from time to time, the “Financing Agreement”), by and among Rhino
Resource Partners LP, a Delaware limited partnership (the “Parent”), Rhino
Energy LLC, a Delaware limited liability company (“Rhino”), each subsidiary of
Rhino listed as a “Borrower” on the signature pages thereto (together with
Rhino, each a “Borrower” and collectively, the “Borrowers”), each subsidiary of
the Parent listed as a “Guarantor” on the signature pages thereto (together with
the Parent and each other Person that executes a joinder agreement and becomes a
“Guarantor” thereunder, each a “Guarantor” and collectively, the “Guarantors”),
the lenders from time to time party thereto (each a “Lender” and collectively,
the “Lenders”), Cortland Capital Market Services LLC (“Cortland”), as collateral
agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, the “Collateral Agent”), Cortland, as administrative
agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, the “Administrative Agent”) and CB Agent Services LLC,
as origination agent for the Lenders (in such capacity, together with its
successors and permitted assigns in such capacity, the “Origination Agent” and
together with the Collateral Agent and the Administrative Agent, each an “Agent”
and collectively, the “Agents”).

 

WHEREAS, the Borrowers and the Guarantors have requested that the Agents and the
Required Lenders consent to certain actions.

 

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:

 

1.       Definitions in Consent. Any capitalized term used herein and not
defined shall have the meaning assigned to it in the Financing Agreement.

 

2.       Consent.

 

(a)        Pursuant to the request by the Loan Parties, but subject to
satisfaction of the conditions set forth in Section 4 hereof, and in reliance
upon (A) the representations and warranties of Loan Parties set forth herein and
in the Financing Agreement and (B) the agreements of the Loan Parties set forth
herein, (x) the Agents and the Required Lenders hereby consent to (i) the Parent
paying a one time cash dividend and/or distribution to the Series A Preferred
Unitholders (as defined in the Partnership Agreement) in accordance with the
Partnership Agreement in an amount not to exceed $6,038,629 notwithstanding that
such amount is capped at $5,200,000 pursuant to clause (d) of the definition of
Permitted Restricted Payments in the Financing Agreement (it being understood
and agreed that such payment shall be made on or prior to April 30, 2018), (ii)
(A) the Loan Parties entering into a Sale and Leaseback Transaction with a
finance company identified in writing to the Origination Agent prior to the date
hereof with respect to certain surface equipment will results in Net Cash
Proceeds of $3,995,600 (the “Specific Sale and Leaseback Transaction”) and (B)
such Specific Sale and Leaseback Transaction not reducing the $2,000,000 per
Fiscal Year cap set forth in the definition of Permitted Disposition in the
Financing Agreement so long as 50% of the Net Cash Proceeds of the Specific Sale
and Leaseback Transaction are applied to pay principal and interest of the Term
Loan and Applicable Premium in the aggregate, (iii) only require the Loan
Parties to pay principal and interest of the Term Loan and Applicable Premium in
the aggregate with 50% of the Net Cash Proceeds received by the Loan Parties and
their Subsidiaries from the sales of shares of Mammoth Energy Securities, Inc.
that the Loan Parties own to the extent such sales occur within thirty (30) days
of the Consent Effective Date (it being understood and agreed that after such
thirty (30) day period, any such sales shall require that 100% of the Net Cash
Proceeds prepay the outstanding principal amount of the Term Loan in accordance
with the Financing Agreement) and (iv) the release of Clinton Stone LLC as a
Loan Party and (y) the Origination Agent hereby consents to extend the time
period set forth in Section 7.01(v) of the Financing Agreement for the Loan
Parties to use best efforts to obtain consents from the lessors under the
Material Leases set forth on Schedule 7.01(v) of the Financing Agreement until
June 30, 2018;

 

 

 

 

(b)        The consents in this Section 2 shall be effective only in these
specific instances and for the specific purposes set forth herein and do not
allow for any other or further departure from the terms and conditions of the
Financing Agreement or any other Loan Document, which terms and conditions shall
continue in full force and effect.

 

3.       Representations and Warranties. Each Loan Party hereby represents and
warrants to the Agents and the Lenders as follows:

 

(a)        Representations and Warranties; No Event of Default. The
representations and warranties herein, in Article VI of the Financing Agreement
and in each other Loan Document, certificate or other writing delivered by or on
behalf of the Loan Parties to any Agent or any Lender pursuant to the Financing
Agreement or any other Loan Document on or prior to the Consent Effective Date
are true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to materiality or “Material Adverse Effect”
in the text thereof, which representations and warranties shall be true and
correct in all respects subject to such qualification) on and as of the Consent
Effective Date as though made on and as of such date, except to the extent that
any such representation or warranty expressly relates solely to an earlier date
(in which case such representation or warranty shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations or warranties that already are qualified or
modified as to materiality or “Material Adverse Effect” in the text thereof,
which representations and warranties shall be true and correct in all respects
subject to such qualification) on and as of such earlier date), and no Default
or Event of Default has occurred and is continuing as of the Consent Effective
Date or would result from this Consent becoming effective in accordance with its
terms.

 

(b)        Organization, Good Standing, Etc. Each Loan Party (i) is a is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and to
execute this Consent and deliver each Loan Document to which it is a party, and
to consummate the transactions contemplated hereby and by the Financing
Agreement, and (iii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it
or in which the transaction of its business makes such qualification necessary,
except (solely for the purposes of this subclause (iii)) where the failure to be
so qualified and in good standing could reasonably be expected to have a
Material Adverse Effect.

 

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(c)        Authorization; Enforceability. The execution, delivery and
performance of this Consent by the Loan Parties, and the performance of the
Financing Agreement, (i) have been duly authorized by all necessary action and
(ii) have been duly authorized, executed and delivered by the Loan Parties and
constitute legal, valid and binding obligations of the Loan Parties, enforceable
in accordance with their respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally.

 

(d)        Governmental Approvals; No Conflicts. The execution, delivery and
performance of this Consent by each Loan Party, and the performance of the
Financing Agreement, (i) have been duly authorized by all necessary action, (ii)
do not and will not contravene (A) any of its Governing Documents, (B) any
applicable material Requirement of Law or (C) any material Contractual
Obligation binding on or otherwise affecting it or any of its properties, (iii)
do not and will not result in or require the creation of any Lien (other than
pursuant to any Loan Document) upon or with respect to any of its properties,
and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its properties,
except, in the case of clause (iv), to the extent where such contravention,
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal could not reasonably be expected to have a Material Adverse Effect.

 

4.       Conditions to Effectiveness. The effectiveness of this Consent is
subject to the fulfillment, in a manner satisfactory to the Origination Agent,
of the following condition precedent (the first date upon which such condition
shall have been satisfied being herein called the “Consent Effective Date”):

 

(a)        The Agents and the Required Lenders shall have executed this Consent
and received a counterpart of this Consent that bears the signatures of each
Loan Party.

 

(b)        The representations and warranties contained in this Consent and in
Article VI of the Financing Agreement and in each other Loan Document shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations or warranties that
already are qualified or modified as to materiality or “Material Adverse Effect”
in the text thereof, which representations and warranties shall be true and
correct in all respects subject to such qualification) on and as of the Consent
Effective Date as though made on and as of such date, except to the extent that
any such representation or warranty expressly relates solely to an earlier date
(in which case such representation or warranty shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations or warranties that already are qualified or
modified as to materiality or “Material Adverse Effect” in the text thereof,
which representations and warranties shall be true and correct in all respects
subject to such qualification) on and as of such earlier date).

 

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(c)        No Default or Event of Default shall have occurred and be continuing
on the Consent Effective Date or result from this Consent becoming effective in
accordance with its terms.

 

(d)        The Borrowers shall have paid on or before the Consent Amendment
Effective Date all fees, costs and expenses then payable pursuant to Section
2.06 and Section 12.04 of the Financing Agreement, including, without
limitation, the reasonable fees and expenses of Schulte Roth & Zabel LLP,
counsel to the Origination Agent.

 

5.       Release. Each Loan Party hereby acknowledges and agrees that: (a)
neither it nor any of its Affiliates has any claim or cause of action against
any Agent or any Lender (or any of their respective Affiliates, officers,
directors, employees, attorneys, consultants or agents) and (b) each Agent and
each Lender has heretofore properly performed and satisfied in a timely manner
all of its obligations to such Loan Party and its Affiliates under the Financing
Agreement and the other Loan Documents. Notwithstanding the foregoing, the
Agents and the Lenders wish (and each Loan Party agrees) to eliminate any
possibility that any past conditions, acts, omissions, events or circumstances
would impair or otherwise adversely affect any of the Agents’ and the Lenders’
rights, interests, security and/or remedies under the Financing Agreement and
the other Loan Documents. Accordingly, for and in consideration of the
agreements contained in this Consent and other good and valuable consideration,
each Loan Party (for itself and its Affiliates and the successors, assigns,
heirs and representatives of each of the foregoing) (collectively, the
“Releasors”) does hereby fully, finally, unconditionally and irrevocably release
and forever discharge each Agent, each Lender and each of their respective
Affiliates, officers, directors, employees, attorneys, consultants and agents
(collectively, the “Released Parties”) from any and all debts, claims,
obligations, damages, costs, attorneys’ fees, suits, demands, liabilities,
actions, proceedings and causes of action, in each case, whether known or
unknown, contingent or fixed, direct or indirect, and of whatever nature or
description, and whether in law or in equity, under contract, tort, statute or
otherwise, which any Releasor has heretofore had or now or hereafter can, shall
or may have against any Released Party by reason of any act, omission or thing
whatsoever done or omitted to be done on or prior to the Consent Effective Date
arising out of, connected with or related in any way to this Consent, the
Financing Agreement or any other Loan Document, or any act, event or transaction
related or attendant thereto, or the agreements of any Agent or any Lender
contained therein, or the possession, use, operation or control of any of the
assets of each Loan Party, or the making of any Loans or other advances, or the
management of such Loans or advances or the Collateral on or prior to the
Consent Effective Date.

 

As to each and every claim released hereunder, each Loan Party hereby represents
that it has received the advice of legal counsel with regard to the releases
contained herein, and having been so advised, specifically waives the benefit of
the provisions of Section 1542 of the Civil Code of California which provides as
follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

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As to each and every claim released hereunder, each Loan Party also waives the
benefit of each other similar provision of applicable federal or state law
(including without limitation the laws of the state of New York), if any,
pertaining to general releases after having been advised by its legal counsel
with respect thereto.

 

Each Loan Party acknowledges that it may hereafter discover facts different from
or in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agrees that this instrument shall be
and remain effective in all respects notwithstanding any such differences or
additional facts. Each Loan Party understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.

 

Each Loan Party, for itself and on behalf of its successors, assigns, and
officers, directors, employees, agents and attorneys, and any Person acting for
or on behalf of, or claiming through it, hereby absolutely, unconditionally and
irrevocably, covenants and agrees with and in favor of the Released Parties
above that it will not sue (at law, in equity, in any regulatory proceeding or
otherwise) the Released Parties on the basis of any claim released, remised and
discharged by such Person pursuant to the above release. Each Loan Party further
agrees that it shall not dispute the validity or enforceability of the Financing
Agreement or any of the other Loan Documents or any of its obligations
thereunder, or the validity, priority, enforceability or the extent of
Collateral Agent’s Lien on any item of Collateral under the Financing Agreement
or the other Loan Documents. If any Loan Party or any of its respective
successors, assigns, or officers, directors, employees, agents or attorneys, or
any Person acting for or on behalf of, or claiming through it violate the
foregoing covenant, such Person, for itself and its successors, assigns and
legal representatives, agrees to pay, in addition to such other damages as the
Released Parties may sustain as a result of such violation, all attorneys’ fees
and costs incurred by the Released Parties as a result of such violation.

 

Each Lender hereby acknowledges and agrees that, on the Consent Effective Date:
(a) neither it nor any of its Affiliates has any claim or cause of action
arising on or prior to the Consent Effective Date against Cortland Capital
Market Services LLC, Colbeck Capital Management, LLC or CB Agent Services LLC
(or any of their respective Affiliates, officers, directors, employees,
attorneys, consultants or agents) under the Financing Agreement and the other
Loan Documents and (b) each of Cortland Capital Market Services LLC, Colbeck
Capital Management, LLC, CB Agent Services LLC and their respective Affiliates
has, prior to the Consent Effective Date, properly performed and satisfied in a
timely manner all of its obligations prior to the Consent Effective Date to such
Lender and its Affiliates under the Financing Agreement and the other Loan
Documents. Notwithstanding the foregoing, Cortland Capital Market Services LLC,
Colbeck Capital Management, LLC, CB Agent Services LLC and their respective
Affiliates wish (and each Lender agrees) to eliminate, to the fullest extent
permitted under applicable law, any possibility that any past conditions, acts,
omissions, events or circumstances which occurred prior to the Consent Effective
Date would give rise to any claim by any Lender against Cortland Capital Market
Services LLC, Colbeck Capital Management, LLC, CB Agent Services LLC and their
respective Affiliates under the Financing Agreement and the other Loan
Documents. Accordingly, for and in consideration of the agreements contained in
this Amendment and other good and valuable consideration, each Lender (for
itself and its Affiliates and the successors, assigns, heirs and representatives
of each of the foregoing) (collectively, the “Lender Releasors”) does hereby
fully, finally, unconditionally and irrevocably release and forever discharge
Cortland Capital Market Services LLC, Colbeck Capital Management, LLC, CB Agent
Services LLC and each of their respective Affiliates, officers, directors,
employees, attorneys, consultants and agents (collectively, the
“Colbeck/Cortland Released Parties”) from any and all debts, claims,
obligations, damages, costs, attorneys’ fees, suits, demands, liabilities,
actions, proceedings and causes of action, in each case, arising on or prior to
the Consent Effective Date, whether known or unknown, contingent or fixed,
direct or indirect, and of whatever nature or description, and whether in law or
in equity, under contract, tort, statute or otherwise, which any Lender Releasor
has heretofore had or now or hereafter can, shall or may have against any
Colbeck/Cortland Released Party by reason of any act, omission or thing
whatsoever done or omitted to be done on or prior to the Consent Effective Date
and arising out of, connected with or related in any way to this Amendment, the
Financing Agreement or any other Loan Document, or any act, event or transaction
on or prior to the Consent Effective Date related or attendant thereto, or the
agreements of Cortland Capital Market Services LLC, Colbeck Capital Management,
LLC, CB Agent Services LLC or any of their respective Affiliates contained
therein, or the possession, use, operation or control of any of the assets of
each Loan Party, or the making of any Loans or other advances, or the management
of such Loans or advances or the Collateral on or prior to the Consent Effective
Date.

 

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As to each and every claim released hereunder, each Lender hereby represents
that it has received the advice of legal counsel with regard to the releases
contained herein, and having been so advised, specifically waives the benefit of
the provisions of Section 1542 of the Civil Code of California which provides as
follows:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

As to each and every claim released hereunder, each Lender also waives the
benefit of each other similar provision of applicable federal or state law
(including without limitation the laws of the state of New York), if any,
pertaining to general releases after having been advised by its legal counsel
with respect thereto.

 

6.       Miscellaneous.

 

(a)        Continued Effectiveness of the Financing Agreement and Other Loan
Documents. Each Loan Party hereby (i) acknowledges and consents to this Consent,
(ii) confirms and agrees that the Financing Agreement and each other 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 Consent Effective Date all references in any such Loan Document to
“the Financing Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder”
or words of like import referring to the Financing Agreement shall mean the
Financing Agreement as amended by this Consent, and (iii) confirms and agrees
that to the extent that any such Loan Document purports to assign or pledge to
the Collateral Agent for the benefit of the Agents and the Lenders, or to grant
to the Collateral Agent for the benefit of the Agents and the Lenders a security
interest in or Lien on, any Collateral as security for the Obligations of the
Loan Parties from time to time existing in respect of the Financing Agreement
(as amended hereby) and the other Loan Documents, such pledge, assignment and/or
grant of the security interest or Lien is hereby ratified and confirmed in all
respects. This Consent does not and shall not affect any of the obligations of
the Loan Parties, other than as expressly provided herein, including, without
limitation, the Loan Parties’ obligations to repay the Loans in accordance with
the terms of Financing Agreement, or the obligations of the Loan Parties under
any Loan Document to which they are a party, all of which obligations shall
remain in full force and effect. Except as expressly provided herein, the
execution, delivery and effectiveness of this Consent shall not operate as a
waiver of any right, power or remedy of the Agents or any Lender under the
Financing Agreement or any other Loan Document, nor constitute a waiver of any
provision of the Financing Agreement or any other Loan Document.

 

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(b)        Counterparts. This Consent 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 Consent by telefacsimile or electronic mail shall be equally as effective
as delivery of an original executed counterpart of this Consent.

 

(c)        Headings. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Consent for any other
purpose.

 

(d)        Governing Law. This Consent shall be governed by, and construed in
accordance with, the laws of the State of New York. The parties agree that all
actions or proceedings arising in connection with this Consent shall be tried
and litigated only in the state and to the extent permitted by applicable law,
federal courts located in the county of New York, state of New York. Each Loan
Party, each Agent and each Lender waives, to the extent permitted under
applicable law, any right each may have to assert the doctrine of forum non
conveniens or to object to venue to the extent any proceeding is brought in
accordance with this Section 6(d).

 

(e)        Costs and Expenses. The Borrowers 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 Consent or otherwise payable under
the Financing Agreement, including, without limitation, reasonable fees,
disbursements and other charges of counsel to the Agents.

 

(f)        Loan Document. Each Loan Party hereby acknowledges and agrees that
this Consent constitutes a “Loan Document” under the Financing Agreement.
Accordingly, it shall be an Event of Default under the Financing Agreement if
(i) any representation or warranty made by a Loan Party under or in connection
with this Consent shall have been untrue, false or misleading in any material
respect when made, or (ii) any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in this Consent. Any provision of this
Consent that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction.

 

(g)        Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS WAIVER OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Consent to be executed
and delivered as of the date set forth on the first page hereof.

 

  BORROWERS:         RHINO ENERGY LLC         By:

/s/ Richard A. Boone

  Name: Richard A. Boone   Title: President and CEO         RHINO EXPLORATION
LLC   RHINO TECHNOLOGIES LLC   SPRINGDALE LAND LLC   CAM MINING LLC   MCCLANE
CANYON MINING LLC   HOPEDALE MINING LLC   CAM-OHIO REAL ESTATE LLC  
CAM-KENTUCKY REAL ESTATE LLC   CAM-COLORADO LLC   TAYLORVILLE MINING LLC  
LEESVILLE LAND LLC   CAM AIRCRAFT LLC   CASTLE VALLEY MINING LLC   PENNYRILE
ENERGY LLC         By:

/s/ Richard A. Boone

  Name: Richard A. Boone   Title: President and CEO

 

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  GUARANTORS:         RHINO RESOURCE PARTNERS LP         By: Rhino GP LLC, its
general partner         By:

/s/ Richard A. Boone

  Name: Richard A. Boone   Title: President and CEO         RHINO TRUCKING LLC  
RHINO SERVICES LLC   RHINO OILFIELD SERVICES LLC   TRIAD ROOF SUPPORT SYSTEMS
LLC   RHINO COALFIELD SERVICES LLC   RHINO NORTHERN HOLDINGS LLC   CAM-BB LLC  
CAM COAL TRADING LLC         By:

/s/ Richard A. Boone

  Name: Richard A. Boone   Title: President and CEO

 

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  COLLATERAL AGENT AND ADMINISTRATIVE AGENT:       CORTLAND CAPITAL MARKET
SERVICES LLC       By:

/s/ Matthew Trybula

  Name: Matthew Trybula Title: Associate Counsel

 

 

 

 

  ORIGINATION AGENT:       CB AGENT SERVICES LLC       By:

/s/ Morris Beyda

  Name: Morris Beyda   Title: Partner & COO

 

 

 

 

  LENDER:       COLBECK STRATEGIC LENDING MASTER, L.P.       By: Colbeck Capital
Management, LLC, its investment manager       By:

/s/ Baabur Khondker

  Name: Baabur Khondker   Title: CFO

 

 

 

 

 
LENDER:       CION INVESTMENT CORPORATION       By:

/s/ Gregg Bresner

  Name: Gregg Bresner   Title: Chief Investment Officer

 

 

 

 

  LENDER:       33RD STREET FUNDING, LLC       By:

/s/ Gregg Bresner

  Name: Gregg Bresner   Title: Chief Investment Officer

 

Signature pages to Consent to Financing Agreement