Document:

Exhibit 10.6

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT
(this “Amendment”), dated as of June 1, 2008, is made by
and among RHINO ENERGY LLC, a Delaware limited
liability company formerly known as CAM Holdings LLC (the “Borrower”), EACH OF THE GUARANTORS (as hereinafter defined), the LENDERS  PARTY HERETO,
and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as administrative agent for the Lenders under this Agreement
(hereinafter referred to in such capacity as the “Agent”).

 

WITNESSETH:

 

WHEREAS, the Borrower, the Guarantors (as
defined therein), the Lenders (as defined therein), and the Agent are parties
to that certain Credit Agreement, dated as of August 30, 2006, as amended
by that certain First Amendment to Credit Agreement, dated as of December 28,
2006, as amended by that certain Second Amendment to Credit Agreement and
Consent, dated as of March 8, 2007, as amended by that certain Third
Amendment to Credit Agreement, dated as of February 29, 2008, as amended
by that certain Fourth Amendment to Credit Agreement, dated as of May 15,
2008 (as so amended and as the same may be further amended, modified or
supplemented from time to time, the “Credit Agreement”);

 

WHEREAS, capitalized terms used herein and
not otherwise defined herein and defined in the Credit Agreement shall have the
meanings assigned to them in the Credit Agreement;

 

WHEREAS, Wexford Capital LLC and various
affiliates thereof (the “Wexford Investors”) hold 100% of the member
interests of the Borrower, and the Wexford Investors pledged such member
interests to the Agent, on behalf of the Lenders, pursuant to that certain
Pledge Agreement dated August 30, 2006 (the “Pledge Agreement”);

 

WHEREAS, the Wexford Investors propose to
transfer, pursuant to a series of transfers (collectively, the “Borrower
Equity Transfer”), all of the member interests in the Borrower (which
transfers shall be made subject to the lien created by the existing Pledge
Agreement) such that after giving effect to the Borrower Equity Transfer all of
the member interests in the Borrower shall be owned by the following Persons
(collectively, the “Restated Pledgors”): (i) Rhino Resources, Inc.
(“Resources”), an entity indirectly owned by the Wexford Investors,  (ii) Wexford Offshore CAM Preferred
Corp., an entity indirectly owned by certain Wexford Investors, and (iii) 
Wexford Offshore CAM Common Corp., an entity indirectly owned by certain
Wexford Investors;

 

WHEREAS, the above restructuring is done in
contemplation of the initial public offering by Resources of up to 25% of its
equity interest (the “IPO”); and

 

WHEREAS, the Loan Parties now request that
the Required Lenders agree to the amendments to the Credit Agreement, consents
and approvals set forth herein, and the Required Lenders are willing to
accommodate the request of the Loan Parties, subject to and on the terms and
conditions set forth herein.

 

 

NOW, THEREFORE, the parties hereto, in consideration
of their mutual covenants and agreements hereinafter set forth and intending to
be legally bound hereby, covenant and agree as follows:

 

1.             New Definitions.  Section 1.1
[Certain Definitions] of the Credit Agreement is hereby amended to insert the
following new definitions in the appropriate alphabetical order therein:

 

“Fifth Amendment shall mean that certain Fifth
Amendment to Credit Agreement, dated as of June 1, 2008, among the
Borrower, the Guarantors, the Lenders party thereto and the Agent.”

 

“Holdings shall mean Rhino Energy Holdings LLC,
a Delaware limited liability company.”

 

“Resources shall mean Rhino Resources, Inc.,
a Delaware corporation.”

 

2.             Amendment of Section 1.1
[Certain Definitions].  The
definition of the term “Change of Control” contained in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirely to read as
follows:

 

“Change of Control shall mean that Wexford
Capital LLC or any fund owned, managed or otherwise controlled by Wexford
Capital LLC (collectively, “Wexford”): (i) directly or indirectly fail to
control the Borrower, (ii) shall fail to own directly or indirectly, 51%
of any class of the voting member interests of the Borrower and 51% of the
economic ownership of the Borrower or (iii) shall make any public sale of
the direct member interests of the Borrower. 
Control, as used in this definition, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.”

 

3.             Amendment of Section 8.1.14
[Collateral and Additional Collateral, Etc.].  Section 8.1.14 of the Credit Agreement
is hereby amended as follows:

 

(a)  Clause (i) of
Section 8.1.14 of the Credit Agreement is amended by adding the following
sentence to the end thereof:

 

“Notwithstanding the foregoing, to the extent a Lien
is not granted on after-acquired Property by virtue of the Loan Documents, the
Loan Parties shall have thirty (30) calendar days from the date of such
acquisition to grant to the Agent, on behalf of the Lenders, a Lien, as more
fully described in subsections (i) and (ii), below.”

 

(b)  Clause (ii) of
Section 8.1.14 of the Credit Agreement is amended by replacing the phrase “within
five (5) Business Days” with the phrase “within thirty (30) calendar days”.  The remaining portions of Clause (ii) shall
remain unchanged.

 

2

 

(c)  Clause (iii) of
Section 8.1.14 of the Credit Agreement is amended by replacing the phrase “concurrently
with such creation or acquisition” with the phrase “within thirty (30) calendar
days of such creation or acquisition”. 
The remaining portions of Clause (iii) shall remain unchanged.

 

4.             Amendment of Section 8.2.5
[Dividends and Related Distributions].  Section 8.2.5(iii) of
the Credit Agreement is hereby amended and restated in its entirely to read as
follows:

 

“(iii)  other
dividends and distributions payable by the Borrower to its members in excess of
the Tax Distributions in the aggregate amount of up to $15,000,000 per fiscal
year, provided, however, that: 
(A) the Borrower shall deliver to the Agent at least five (5) Business
Days before such proposed dividend or distribution a certificate of the
Borrower in substantially the form of Exhibit 8.3.4 demonstrating
that the Borrower shall have, after giving effect to any such proposed dividend
or distribution, at least $25,000,000 of Availability, and (B) at the time
of any such dividend or distribution, no Event of Default or Potential Default
shall exist or shall result after giving effect thereto.”

 

Section 8.2.5 of the Credit Agreement is
hereby further amended by adding after clause (iii) thereof the following
new clause (iv):

 

“(iv)        other distributions
sufficient to enable Resources to pay the costs of salaries, benefits and
related expenditures for the employment of its senior management personnel.”

 

5.             Amendment of Section 8.2.6
[Liquidations, Mergers, Consolidations, Acquisitions].  Section 8.2.6
of the Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, dissolve, liquidate or wind-up its affairs,
or become a party to any merger or consolidation, or acquire by purchase, lease
or otherwise all or substantially all of the assets or capital stock of any
other Person, provided that

 

(1)           any Loan Party other than the Borrower
may consolidate or merge into another Loan Party (not including the Excluded
Subsidiaries) which is wholly-owned by one or more of the other Loan Parties,

 

(2)           with the Agent’s written consent, any
Subsidiary which is not a Material Subsidiary may dissolve, liquidate or
wind-up its affairs pursuant to Section 8.1.1 [Preservation of Existence,
Etc.], and

 

(3)           any 
Loan Party may acquire, whether by purchase or by merger, (A) all
of the ownership interests of another Person or (B) substantially all of
the assets of another Person or of a business or division of another Person
(each an “Permitted Acquisition”), provided that each of the following
requirements is met:

 

3

 

(i)            Reserved;

 

(ii)           Reserved;

 

(iii)          the board of directors or other equivalent governing
body of such Person shall have approved such Permitted Acquisition and, if the
Loan Parties shall use any portion of the Loans to fund such Permitted
Acquisition, the Loan Parties also shall have delivered to the Agent written
evidence of the approval of the board of directors (or equivalent body) of such
Person for such Permitted Acquisition;

 

(iv)          if the Loan Parties are acquiring substantially all of
the assets of another Person or of a business or division of another Person,
then the assets of such Person or the assets of such division shall be
substantially the same as, or shall support or be complementary to, the lines
of business conducted by the Loan Parties and shall comply with Section 8.2.10
[Continuation of or Change in Business];

 

(v)           if the Loan Parties are acquiring all of the ownership
interests of another Person, then the assets of such Person shall be
substantially the same as, or shall support or be complementary to, the lines
of business conducted by the Loan Parties and shall comply with Section 8.2.10
[Continuation of or Change in Business];

 

(vi)          no Potential Default or Event of Default shall exist
immediately prior to and after giving effect to such Permitted Acquisition;

 

(vii)         that the Borrower shall have, after giving effect to
such Permitted Acquisition and any Loan associated therewith, at least
$15,000,000 of Availability;

 

(viii)        the Borrower shall demonstrate that it shall be in
compliance with the covenants contained in Sections 8.2.17 and 8.2.18
after giving effect to such Permitted Acquisition (including in such
computation Indebtedness or other liabilities assumed or incurred in connection
with such Permitted Acquisition but excluding income earned or expenses
incurred by the Person, business or assets to be acquired prior to the date of
such Permitted Acquisition) by delivering at least five (5) Business Days
prior to such Permitted Acquisition a certificate in the form of Exhibit 8.2.6
evidencing such compliance; and

 

(ix)           the Loan Parties shall deliver to the Agent at least
five (5) Business Days before such Permitted Acquisition copies of any

 

4

 

agreements entered into or proposed to be entered into
by such Loan Parties in connection with such Permitted Acquisition and shall
deliver to the Agent such other information about such Person or its assets as
any Loan Party may reasonably require.”

 

6.             Amendment of Section 11.18
[Joinder of Guarantors].  Section 11.18
of the Credit Agreement is hereby amended by replacing the phrase “within five (5) Business
Days” with the phrase “within thirty (30) calendar days”.

 

Section 11.18 is
also amended by adding the following sentence at the end of such Section 11.18:

 

“Notwithstanding anything contained in this Section 11.18
or Section 8.2.9 of this Agreement, with respect to any Subsidiary created
or acquired by the Borrower subsequent to the Closing Date, the Loan Parties
shall deliver such Guarantor Joinder and related documents to the Agent within
thirty (30) calendar days after the date of such acquisition or creation;  provided that Rhino Oilfield Services LLC and
Rhino Exploration LLC shall be required to deliver such Guarantor Joinder
and related documents to the Agent within sixty (60) calendar days after the
date of such creation.”

 

7.             Conditions to Effectiveness. 
The amendments set forth herein shall become effective as set forth
below:

 

(a)        Effectiveness of Amendment to Section 11.18
[Joinder of Guarantors].  The amendment of Section 11.18
[Joinder of Guarantors] set forth in paragraph 6 hereof shall become effective
upon the date that each of the following conditions has been satisfied to the
satisfaction of the Agent (the “Joinder Amendment Effective Date”):

 

(i)            Execution and Delivery of Fifth Amendment. 
The Borrower, the other Loan Parties, the Required Lenders, and the
Agent shall have executed this Amendment, and all other documentation necessary
for effectiveness of this Amendment shall have been executed and delivered all
to the satisfaction of the Agent.

 

(ii)           Representations and Warranties; No Event of Default. 
The representations and warranties contained in Section 6 of the
Credit Agreement and in Section 11 of this Amendment, and of each Loan
Party in each of the other Loan Documents, are true and correct on and as of
the Joinder Amendment Effective Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties were true and correct on and as of the
specific dates or times referred to therein), each of the Loan Parties has
performed and complied with all covenants and conditions hereof and thereof,
and no Event of Default or Potential Default has occurred and is continuing or
exists as of the Joinder Amendment Effective Date; and by its execution and

 

5

 

delivery of this Amendment, the Borrower and each
other Loan Party certifies to each such effect.

 

(iii)          Legal Details.  All legal
details and proceedings in connection with the transactions contemplated by
this Amendment and the other Loan Documents are in form and substance
satisfactory to the Agent and counsel for the Agent, and the Agent has received
all such other counterpart originals or certified or other copies of such
documents and proceedings in connection with such transactions, in form and
substance satisfactory to the Agent and its counsel, as the Agent or its
counsel may reasonably request.

 

(b)        Effectiveness of Remaining Amendments. 
All other amendments contained in this Amendment shall become effective
upon the date that each of the following conditions has been satisfied to the
satisfaction of the Agent, which date shall be on or before December 31,
2008 (the “Equity Transfer Effective Date”), provided that on January 1,
2009 the amendments to Section 8.2.5(iii) set forth in Section 4
above shall be revoked and Section 8.2.5(iii) shall revert to its
prior form if the IPO has not been consummated on or prior to December 31,
2008:

 

(i)            Satisfaction of Conditions in Paragraph 7(a). 
All of the conditions set forth in Paragraph 7(a) of this Amendment
shall have been satisfied.

 

(ii)           Consummation of the Borrower Equity Transfer. 
Resources shall have consummated the Borrower Equity Transfer.

 

(iii)          Execution and Delivery of an Amended and Restated
Pledge Agreement.  The Restated Pledgors shall have executed and
delivered to the Agent for the benefit of the Lenders an amended and restated
Pledge Agreement (the “Amended and Restated Pledge Agreement”), in the
form of Exhibit A attached hereto, and such Amended and Restated
Pledge Agreement shall be ratified by the Borrower.

 

(iv)          Delivery of Secretary’s Certificate. 
The Secretary or Assistant Secretary of each Restated Pledgor shall have
delivered to the Agent for the benefit of the Lenders a certificate, dated as of
the date hereof and signed by such Secretary or Assistant Secretary, certifying
as to:

 

(A)          all authorizing action taken by such Restated Pledgor
in connection with the Amended and Restated Pledge Agreement, any other Loan
Document and this Amendment;

 

(B)           the names of the officer or officers of such Restated
Pledgor authorized to sign the Amended and Restated Pledge Agreement, other
documents executed in connection therewith and any other Loan Documents, and
the true signatures of such officer or officers and specifying the officer
authorized to act on behalf of such Restated Pledgor for purposes of the
Amended and Restated Pledge Agreement and any other Loan Documents

 

6

 

and the true signatures of such officers, on which the
Agent and each Lender may conclusively rely; and

 

(C)           copies of the organizational documents of such
Restated Pledgor, including its certificate of incorporation and bylaws as in
effect on the date hereof, certified by the appropriate state official where
such documents are filed in a state office together with certificates from the
appropriate state officials as to the continued existence and good standing
of  such Restated Pledgor in each state where
organized, all of which shall be reasonably satisfactory to the Agent.

 

(v)           Representations and Warranties; No Event of Default. 
The representations and warranties contained in Section 6 of the
Credit Agreement and in Section 11 of this Amendment, and of each Loan
Party in each of the other Loan Documents, are true and correct on and as of
the Equity Transfer Effective Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties were true and correct on and as of the
specific dates or times referred to therein), each of the Loan Parties has
performed and complied with all covenants and conditions hereof and thereof,
and no Event of Default or Potential Default has occurred and is continuing or
exists as of the Equity Transfer Effective Date; and by its execution and
delivery of this Amendment, the Borrower and each other Loan Party certifies to
each such effect.

 

8.             Consent to Borrower Equity Transfer. 
Effective as of the Equity Transfer Effective Date, the Agent and the
Required Lenders consent to the Borrower Equity Transfer.

 

9.             Consent to Updates to Schedule 6.1.2
[Capitalization].  The Required Lenders consent to the updated
Schedule 6.1.2 to the Credit Agreement in the form set forth on Schedule 6.1.2
hereof.

 

10.           Lien Termination Statements.  
Effective as of the Equity Transfer Effective Date, the Agent and the
Required Lenders hereby agree that (i) the UCC-1 financing statements
filed against each member of the Borrower that was a signatory to the Pledge
Agreement shall be deemed terminated and (ii) each such member, the
Borrower and the Borrower’s counsel are authorized to file UCC-3 financing
statements terminating such UCC-1 financing statements.

 

11.           Representations and Warranties. 
By its execution and delivery of this Amendment to the Agent, the
Borrower and each of the other Loan Parties represents and warrants to the
Agent and the Lenders as follows:

 

(a)           Authorization, Etc. 
Each Loan Party has duly authorized, executed and delivered this
Amendment.

 

(b)           Material Adverse Change. 
After giving effect to this Amendment, no Material Adverse Change shall
have occurred with respect to the Borrower or any of the other Loan Parties
since the Closing Date of the Credit Agreement.

 

7

 

(c)           Litigation.  After giving
effect to this Amendment, there are no actions, suits, investigations,
litigation or governmental proceedings pending or, to the Borrower’s or any
other Loan Party’s knowledge, threatened against any of the Loan Parties that
could reasonably be expected to result in a Material Adverse Change.

 

(d)           Organizational Documents Not Amended. 
The organizational documents of such Loan Party have not been amended or
modified since copies thereof were previously delivered to the Agent

 

12.           Miscellaneous.

 

(a)           Full Force and Effect. 
All provisions of the Credit Agreement remain in full force and effect
on and after the Joinder Amendment Effective Date and the Equity Transfer
Effective Date and the date hereof except as expressly amended hereby.  The parties do not amend any provisions of
the Credit Agreement except as expressly amended hereby.

 

(b)           Counterparts. 
This Amendment may be signed in counterparts (by facsimile transmission
or otherwise) but all of which together shall constitute one and the same
instrument.

 

(c)           Incorporation into Credit Agreement. 
This Amendment shall be incorporated into the Credit Agreement by this
reference.  All representations,
warranties, Events of Default and covenants set forth herein shall be a part of
the Credit Agreement as if originally contained therein.

 

(d)           Governing Law. 
This Amendment shall be deemed to be a contract under the Laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Pennsylvania without regard to its conflict of laws principles.

 

(e)           No Novation. 
Except as amended hereby, all of the terms and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and
effect.  The Borrower, the other Loan
Parties, each Lender, and the Agent acknowledge and agree that this Amendment
is not intended to constitute, nor does it constitute, a novation,
interruption, suspension of continuity, satisfaction, discharge or termination
of the obligations, loans, liabilities, or indebtedness under the Credit
Agreement or the other Loan Documents.

 

[SIGNATURE PAGES FOLLOW]

 

8

 

[SIGNATURE PAGE - FIFTH AMENDMENT
TO CREDIT AGREEMENT]

 

IN WITNESS
WHEREOF, the parties hereto, by their officers thereunto duly authorized, have
executed this Fifth Amendment as of the day and year first above written.

 

ATTEST:

 

	
  By: 

  	
  /s/ Stephanie Coker

  	
   

  	
  By: 

  	
  /s/ Joseph R. Miller 

  	
  (SEAL)

  
	
  Name: Stephanie Coker

  	
   

  	
  Name: Joseph R. Miller

  
	
  Title: Witness

  	
   

  	
  Title: Vice President
  of each of the following companies:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RHINO ENERGY LLC

  
	
   

  	
   

  	
  CAM
  MINING LLC

  
	
   

  	
   

  	
  CAM-BB
  LLC

  
	
   

  	
   

  	
  CAM-KENTUCKY
  REAL ESTATE LLC

  
	
   

  	
   

  	
  RHINO
  NORTHERN HOLDINGS LLC

  
	
   

  	
   

  	
  CAM
  COAL TRADING LLC

  
	
   

  	
   

  	
  LEESVILLE
  LAND, LLC

  
	
   

  	
   

  	
  CAM
  AIRCRAFT LLC

  
	
   

  	
   

  	
  HOPEDALE
  MINING LLC

  
	
   

  	
   

  	
  CAM-OHIO
  REAL ESTATE LLC

  
	
   

  	
   

  	
  SPRINGDALE
  LAND, LLC

  
	
   

  	
   

  	
  CAM-COLORADO
  LLC

  
	
   

  	
   

  	
  TAYLORVILLE
  MINING LLC

  
	
   

  	
   

  	
  CLINTON STONE LLC

  
	
   

  	
   

  	
  McCLANE CANYON MINING LLC

  
	
   

  	
   

  	
  RHINO COALFIELD SERVICES LLC

  
	
   

  	
   

  	
  RHINO RECLAMATION SERVICES LLC

  
	
   

  	
   

  	
  SANDS HILL MINING LLC

  
	
   

  	
   

  	
  RHINO SERVICES LLC

  
	
   

  	
   

  	
  RESERVE HOLDINGS LLC

  
	
   

  	
   

  	
  RHINO TRUCKING LLC

  

 

ATTEST:

 

	
  By: 

  	
  /s/ Faye E. Conn

  	
   

  	
  By: 

  	
  /s/ Elizabeth Branham 

  	
  (SEAL)

  
	
  Name:
  Faye E. Conn

  	
   

  	
  Name: Elizabeth Branham

  
	
  Title:
  Royalty Adminstrator

  	
   

  	
  Title: Vice President
  of each of the following companies:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RHINO OILFIELD SERVICES LLC

  
	
   

  	
   

  	
  RHINO EXPLORATION LLC

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION,

  individually and as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Richard Munsick

  
	
   

  	
  Name: Richard Munsick

  
	
   

  	
  Title: SVP

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jeffrey Rathkamp

  
	
   

  	
  Name: Jeffrey Rathkamp

  
	
   

  	
  Title: Managing
  Director

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  THE HUNTINGTON NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ L. Blair DeVan

  
	
   

  	
  Name: L. Blair DeVan

  
	
   

  	
  Title: Vice President

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David M. Metz

  
	
   

  	
  Name: David M. Metz

  
	
   

  	
  Title: Senior Vice
  President

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  RAYMOND JAMES BANK, FSB, individually and 

  as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Andrew D. Hahn

  
	
   

  	
  Name: Andrew D. Hahn

  
	
   

  	
  Title: Senior Vice
  President

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  ROYAL  BANK OF CANADA

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Don J. McKinnerney

  
	
   

  	
  Name: Don J.
  McKinnerney

  
	
   

  	
  Title: Authorized
  Signatory

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A.,

  individually and as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Bryan Read

  
	
   

  	
  Name: Bryan Read

  
	
   

  	
  Title: Vice President

  

 

 

[SIGNATURE
PAGE - FIFTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  WACHOVIA  BANK, NATIONAL
  ASSOCIATION, individually and as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jonathan R. Richardson

  
	
   

  	
  Name: Jonathan R.
  Richardson

  
	
   

  	
  Title: Vice PresidentExhibit 10.7

 

SIXTH
AMENDMENT TO CREDIT AGREEMENT AND

AMENDMENT
TO FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND
AMENDMENT TO FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”),
dated as of November 4th,
2008, is made by and among RHINO ENERGY LLC,
a Delaware limited liability company, formerly known as CAM Holdings LLC (“Borrower”),
EACH OF THE GUARANTORS (as hereinafter
defined), the LENDERS  PARTY HERETO,
and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as administrative agent for the Lenders under this Agreement
(hereinafter referred to in such capacity as “Agent”).

 

WITNESSETH:

 

WHEREAS, Borrower, Guarantors (as defined
therein), Lenders (as defined therein) and Agent are parties to that certain
Credit Agreement, dated as of August 30, 2006; as amended by that certain
First Amendment to Credit Agreement, dated as of December 28, 2006; as
amended by that certain Second Amendment to Credit Agreement and Consent, dated
as of March 8, 2007; as amended by that certain Third Amendment to Credit
Agreement, dated as of February 29, 2008; as amended by that certain
Fourth Amendment to Credit Agreement, dated as of May 15, 2008; as amended
by that certain Fifth Amendment to Credit Agreement, dated June 1, 2008
(as so amended and as the same may be further amended, modified or supplemented
from time to time, the “Credit Agreement”);

 

WHEREAS, capitalized terms used herein and
not otherwise defined herein and defined in the Credit Agreement shall have the
meanings assigned to them in the Credit Agreement;

 

WHEREAS, Borrower wishes to make an
investment in an oil and gas joint venture and drilling program and wishes to
engage in the servicing of oil and gas wells;

 

WHEREAS, the Wexford Investors propose to
transfer, pursuant to a series of transfers (collectively, the “Borrower
Equity Transfer”), all of the member interests in Borrower (which transfers
shall be made subject to the lien created by the existing Pledge Agreement)
such that, after giving effect to the Borrower Equity Transfer, all of the
member interests in Borrower shall be owned by the following Persons
(collectively, “Restated Pledgors”): (i) Rhino Resources, Inc.
(“Resources”), an entity indirectly owned by the Wexford Investors, (ii) Wexford
Offshore CAM Preferred Corp., an entity indirectly owned by certain Wexford
Investors, and (iii) Wexford Offshore CAM Common Corp., an entity
indirectly owned by certain Wexford Investors;

 

WHEREAS, the above restructuring is done in
contemplation of the initial public offering by Resources of up to 25% of its
equity interest (the “IPO”);

 

WHEREAS, Borrower wishes to extend the date
for completing the IPO established under the Fifth Amendment to Credit
Agreement from December 31, 2008 to June 30, 2009; and

 

WHEREAS, Borrower wishes to make certain
other changes to certain covenants contained in the Credit Agreement;

 

 

WHEREAS, the Loan Parties now request that
Required Lenders agree to the amendments to the Credit Agreement set forth
herein; and Required Lenders are willing to accommodate the request of the Loan
Parties, subject to and on the terms and conditions set forth herein.

 

NOW, THEREFORE, the parties hereto, in
consideration of their mutual covenants and agreements hereinafter set forth,
and intending to be legally bound hereby, covenant and agree as follows:

 

1.                                       Amendment of Section 1.1 [Certain
Definitions].

 

(a)                                  Section 1.1 [Certain Definitions] of
the Credit Agreement is hereby amended to insert the following new definition
in the appropriate alphabetical order therein:

 

“Sixth Amendment shall mean that certain Sixth Amendment to
Credit Agreement, dated as of November 4, 2008, among Borrower,
Guarantors, Lenders party thereto and Agent.”

 

(b)                                 The definition of “Excluded Subsidiary”
contained in Section 1.1 [Certain Definitions] of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

“Excluded Subsidiaries shall mean individually and collectively
Rhino Energy, and Rhino Energy WV LLC and any of their respective Subsidiaries
now existing or hereafter acquired.”

 

This amendment to the definition of Excluded Subsidiaries contained in Section 1.1
of the Credit Agreement shall be effective as of September 30, 2008

 

2.                                       Amendment of Section 8.1.10 [Use of
Proceeds].  Section 8.1.10(i) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

 

“(i)                               The proceeds of
the Revolving Credit Loans will be used by Borrower solely to repay Existing
Debt and for general corporate, limited liability company or partnership
purposes of Borrower and its Subsidiaries, including for working capital,
capital expenditures, distributions permitted hereunder, for Permitted
Acquisitions, for investments in an oil and gas joint venture and drilling
program and for certain costs and expenses related to servicing oil and gas
wells.”

 

3.                                       Amendment of Section 8.2.4 [Loans
and Investments].  Section 8.2.4 of the Credit Agreement is
hereby amended by adding the following paragraph thereto:

 

“(vi)                        investments in
an oil and gas joint venture and drilling program in amounts not to exceed
$25,000,000 for the period commencing the date of the Sixth Amendment and
ending December 31, 2008 and in amounts not to exceed $25,000,000
thereafter; and”

 

2

 

4.                                       Amendment of Section 8.2.9
[Subsidiaries, Partnerships and Joint Ventures].  The last
sentence of Section 8.2.9 shall be amended and restated in its entirety to
read as follows:

 

“Each of the Loan Parties shall not become or
agree to:  (1) become a general or
limited partner in any general or limited partnership, except that the Loan
Parties may be general or limited partners in other Loan Parties, (2) become
a member or manager of, or hold a limited liability company interest in, a
limited liability company (other than Rhino Energy and Rhino Energy WV LLC and
its Subsidiaries (now existing or hereafter acquired)), except that the Loan
Parties may be members or managers of, or hold limited liability company
interests in, other Loan Parties, or (3) become a joint venturer or hold a
joint venture interest in any joint venture (other than Rhino Energy and Rhino
Energy WV LLC and its Subsidiaries (now existing or hereafter acquired)),
except that the Loan Parties may become a joint venturer or hold a joint venture
in an oil and gas joint venture and drilling program.”

 

5.                                       Amendment of Section 8.2.10
[Continuation of or Change in Business].  Section 8.2.10
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:

 

“Each of the Loan Parties shall not, and
shall not permit any of its Subsidiaries to, engage in any business other than
the business substantially as conducted and operated or as proposed to be
conducted and operated by such Loan Party or Subsidiary on the Closing Date or
any business substantially related thereto, and such Loan Party or Subsidiary
shall not permit any material change in such business; provided, however,
that the Loan Parties and/or any of their Subsidiaries may engage in any
business related to Hydrocarbons or Hydrocarbon Interests that are supplemental
and ancillary to the business substantially as conducted and operated or as
proposed to be conducted and operated by such Loan Party or Subsidiary on the
Closing Date, which such business shall include entering into an oil and gas
joint venture, entering into a drilling program for oil and gas wells and
entering into a program for servicing oil and gas wells.”

 

6.                                       Elimination of Section 8.2.15
[Capital Expenditures].  Section 8.2.15 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

 

“8.2.15  Capital Expenditures.

 

Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, make any payments exceeding the amounts set forth below in the
aggregate in any period specified below on account of the purchase or lease of
any assets which if purchased would constitute fixed assets or which if leased
would constitute a capitalized lease. 
All such capital expenditures and capitalized leases shall be made under
usual and customary terms and in the ordinary course of business:

 

3

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  Closing Date through December 31, 2007

  	
   

  	
  $

  	
  65,000,000

  	
   

  
	
  January 1,
  2008 through December 31, 2008

  	
   

  	
  $

  	
  60,000,000

  	
   

  

 

7.                                       Amendment of Section 8.2.17 [Maximum
Leverage Ratio].  Section 8.2.17 of the Credit Agreement
is hereby amended and restated in its entirety and reads as follows:

 

“8.2.17            Maximum Leverage Ratio.

 

The Loan Parties shall not at any time permit (i) the Leverage
Ratio, calculated as of the end of each fiscal quarter commencing with the
fiscal quarter ending immediately after the Closing Date through the fiscal
quarter ending as of December 31, 2008, to exceed a ratio of 3.0 to 1.0; (ii) the
Leverage Ratio, calculated as of the end of each fiscal quarter ending as of March 31,
2009 to exceed a ratio of 2.75 to 1.0; and (iii) the Leverage Ratio,
calculated as of the end of each fiscal quarter ending as of June 30, 2009
and each fiscal quarter thereafter, to exceed a ratio of 2.50 to 1.0.  Notwithstanding the foregoing, for any fiscal
quarter in which a Permitted Acquisition occurs and:  (A) if such Permitted Acquisition occurs
during the first half of a fiscal quarter, the immediately succeeding two (2) fiscal
quarters or (B) if such Permitted Acquisition occurs during the second
half of such fiscal quarter, the immediately succeeding three (3) fiscal
quarters (such time periods being referenced to herein as the “Increased
Leverage Ratio Period”), the maximum permitted Leverage Ratio for such
Increased Leverage Ratio Period shall be 3.5 to 1.0, provided, however,
that an Increased Leverage Ratio Period shall not occur prior to the lapse of
two full consecutive quarters after the end of the most recent Increased Leverage
Ratio Period, unless the consideration for the subsequent Permitted Acquisition
is greater than $5,000,000.”

 

8.                                       Amendment of Section 7(b) of
the Fifth Amendment to Credit Agreement [Effectiveness of Remaining Amendments].  Section 7(b) of the Fifth Amendment
to Credit Agreement is hereby amended to read as follows:

 

“(b)                           Effectiveness
of Remaining Amendments.  All
other amendments contained in this Amendment shall become effective upon the
date that each of the following conditions has been satisfied to the
satisfaction of Agent, which date shall be on or before June 30, 2009 (the
“Equity Transfer Effective Date”), provided that on July 1,
2009 the amendments to Section 8.2.5(iii) set forth in Section 4
above shall be revoked and Section 8.2.5(iii) shall revert to its
prior form if the IPO has not been consummated on or prior to June 30,
2009.”

 

9.                                       Conditions to Closing. 
The amendment to the definition “Excluded Subsidiaries” contained in Section 1.1
of the Credit Agreement shall be effective as of September 30, 2008.  The remainder of the Amendment shall become
effective on the date of this Amendment provided that each of the following
conditions has been satisfied to the satisfaction of the Agent on such date:

 

4

 

(a)                      Execution and Delivery of Amendment. 
The Borrower, the other Loan Parties, the Required Lenders, and the
Agent shall have executed this Amendment, and all other documentation necessary
for effectiveness of this Amendment shall have been executed and delivered all
to the satisfaction of the Borrower, the Required Lenders and the Agent.

 

(b)                     Officer’s Certificate. 
There shall be delivered to the Agent a certificate of the Loan Parties,
dated the date of the Amendment and signed by the Chief Executive Officer,
President, Vice President or Chief Financial Officer of each Loan Party,
certifying that:  (i) the
representations and warranties of the Borrower contained in Article 6 of
the Credit Agreement shall be true and accurate on and as of the date of the
Amendment with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein); (ii) the Loan Parties shall have performed and
complied with all covenants and conditions of the Credit Agreement and this
Amendment; and (iii) no Event of Default or Potential Default under the
Credit Agreement shall have occurred and be continuing or shall exist.

 

(c)                      Representations and Warranties; No Event
of Default.  The representations and warranties contained
in Section 6 of the Credit Agreement and this Amendment, and of each Loan
Party in each of the other Loan Documents, are true and correct on and as of
the date of this Amendment with the same effect as though such representations
and warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which
representations and warranties were true and correct on and as of the specific
dates or times referred to therein), each of the Loan Parties has performed and
complied with all covenants and conditions hereof and thereof, and no Event of
Default or Potential Default has occurred and is continuing or exists as of the
date of this Amendment; and by its execution and delivery of this Amendment,
the Borrower and each other Loan Party certifies to each such effect.

 

(d)                     Payment of Fees. 
The Borrower has paid, or caused to be paid, (i) all fees, costs
and expenses payable to the Agent or for which the Agent is entitled to be
reimbursed, including but not limited to the reasonable fees and expenses of the
Agent’s legal counsel, and (ii) a closing fee equal payable to each Lender
that has executed this Amendment on or before the date hereof in an amount
equal to twenty-five (25) basis points of such Lender’s Commitment.

 

(e)                      Collateral
Documents for CAM Colorado LLC and Taylorville Mining LLC.  The Borrower shall deliver a joinder for
CAM-Colorado LLC and Taylorville Mining LLC which joins such entities as a
party to all of the Loan Documents to which they are not already a party too
and will cause to be delivered Mortgages for all of such entities’ real
property, together with any necessary UCC-1 filings and any updates to any
applicable schedules, within thirty days of the date hereof, all of which shall
be in form and substance satisfactory to the Agent.

 

5

 

(f)                        Consents.  All material
consents required to effectuate the transactions contemplated by this Amendment
have been obtained.

 

(g)                     Legal Details. 
All legal details and proceedings in connection with the transactions
contemplated by this Amendment are in form and substance satisfactory to the
Agent and counsel for the Agent, and the Agent has received all such other
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the Agent and its counsel, as the Agent or its counsel may
reasonably request.

 

10.                                 Representations and Warranties. 
By its execution and delivery of this Amendment to Agent, Borrower and
each of the other Loan Parties represents and warrants to Agent and Lenders as
follows:

 

(a)                                  Authorization, Etc. 
Each Loan Party has duly authorized, executed and delivered this
Amendment.

 

(b)                                 Material Adverse Change. 
After giving effect to this Amendment, no Material Adverse Change shall
have occurred with respect to Borrower or any of the other Loan Parties since
the Closing Date of the Credit Agreement.

 

(c)                                  Litigation.  After giving
effect to this Amendment, there are no actions, suits, investigations,
litigation or governmental proceedings pending or, to Borrower’s or any other
Loan Party’s knowledge, threatened against any of the Loan Parties that could
reasonably be expected to result in a Material Adverse Change.

 

(d)                                 Organizational Documents Not Amended. 
The organizational documents of such Loan Party have not been amended or
modified since copies thereof were previously delivered to Agent.

 

11.                                 Miscellaneous.

 

(a)                                  Full Force and Effect. 
All provisions of the Credit Agreement and the other Loan Documents
remain in full force and effect on and after the date of this Amendment and the
date hereof except as expressly amended hereby. 
The parties do not amend any provisions of the Credit Agreement or any other
Loan Document except as expressly amended hereby.

 

(b)                                 Counterparts. 
This Amendment may be signed in counterparts (by facsimile transmission
or otherwise), but all of which together shall constitute one and the same
instrument.

 

(c)                                  Incorporation into Credit Agreement. 
This Amendment shall be incorporated into the Credit Agreement by this
reference.  All representations,
warranties, Events of Default and covenants set forth herein shall be a part of
the Credit Agreement as if originally contained therein.

 

(d)                                 Governing Law. 
This Amendment shall be deemed to be a contract under the Laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and 

 

6

 

construed and enforced in accordance with the internal laws of the Commonwealth
of Pennsylvania without regard to its conflict of laws principles.

 

(e)                                  No Novation. 
Except as amended hereby, all of the terms and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and
effect.  Borrower, the other Loan
Parties, each Lender, and Agent acknowledge and agree that this Amendment is
not intended to constitute, nor does it constitute, a novation, interruption,
suspension of continuity, satisfaction, discharge or termination of the
obligations, loans, liabilities or indebtedness under the Credit Agreement or
the other Loan Documents.

 

[SIGNATURE PAGE FOLLOWS]

 

7

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

IN WITNESS WHEREOF, the parties hereto, by
their officers thereunto duly authorized, have executed this Sixth Amendment as
of the day and year first above written.

 

	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephanie Coker

  	
   

  	
  By:

  	
  /s/ Joseph R. Miller 

  	
  (SEAL)

  
	
  Name: Stephanie Coker

  	
   

  	
  Name: Joseph R. Miller

  
	
  Title: Witness

  	
   

  	
  Title: Vice President
  of each of the following companies:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RHINO ENERGY LLC

  
	
   

  	
   

  	
  CAM
  MINING LLC

  
	
   

  	
   

  	
  CAM-BB
  LLC

  
	
   

  	
   

  	
  CAM-KENTUCKY
  REAL ESTATE LLC

  
	
   

  	
   

  	
  RHINO
  NORTHERN HOLDINGS LLC

  
	
   

  	
   

  	
  CAM
  COAL TRADING LLC

  
	
   

  	
   

  	
  LEESVILLE
  LAND, LLC

  
	
   

  	
   

  	
  CAM
  AIRCRAFT LLC

  
	
   

  	
   

  	
  HOPEDALE
  MINING LLC

  
	
   

  	
   

  	
  CAM-OHIO
  REAL ESTATE LLC

  
	
   

  	
   

  	
  SPRINGDALE
  LAND, LLC

  
	
   

  	
   

  	
  CAM-COLORADO
  LLC

  
	
   

  	
   

  	
  TAYLORVILLE
  MINING LLC

  
	
   

  	
   

  	
  CLINTON STONE LLC

  
	
   

  	
   

  	
  McCLANE CANYON MINING LLC

  
	
   

  	
   

  	
  RHINO COALFIELD SERVICES LLC

  
	
   

  	
   

  	
  RHINO RECLAMATION SERVICES LLC

  
	
   

  	
   

  	
  SANDS HILL MINING LLC

  
	
   

  	
   

  	
  RHINO SERVICES LLC

  
	
   

  	
   

  	
  RESERVE HOLDINGS LLC

  
	
   

  	
   

  	
  RHINO TRUCKING LLC

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Faye E. Conn

  	
   

  	
  By:

  	
  /s/ Elizabeth Branham

  	
  (SEAL)

  
	
  Name: Faye E. Conn

  	
   

  	
  Name: Elizabeth Branham

  
	
  Title: Royalty
  Adminstrator

  	
   

  	
  Title: Vice President
  of each of the following companies:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RHINO OILFIELD SERVICES LLC

  
	
   

  	
   

  	
  RHINO EXPLORATION LLC

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION, individually and as Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard Munsick

  
	
   

  	
  Name:
  Richard Munsick

  
	
   

  	
  Title:
  Senior Vice President

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  THE HUNTINGTON NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  L. Blair DeVan

  
	
   

  	
  Name:
  L. Blair DeVan

  
	
   

  	
  Title:
  Vice President

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David M. Metz

  
	
   

  	
  Name: David M. Metz

  
	
   

  	
  Title: Senior Vice
  President

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  RAYMOND JAMES BANK, FSB, individually and as Co-Documentation
  Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew D. Hahn

  
	
   

  	
  Name: Andrew D. Hahn

  
	
   

  	
  Title: Senior Vice
  President

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  ROYAL  BANK OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Don J. McKinnerney

  
	
   

  	
  Name:
  Don J. McKinnerney

  
	
   

  	
  Title:
  Authorized Signatory

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A., individually and as Co-Documentation
  Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Bryan Read

  
	
   

  	
  Name:
  Bryan Read

  
	
   

  	
  Title:
  Vice President

  

 

 

[SIGNATURE
PAGE - SIXTH AMENDMENT TO CREDIT AGREEMENT]

 

 

	
   

  	
  WACHOVIA  BANK, NATIONAL
  ASSOCIATION, individually and as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jonathan R. Richardson

  
	
   

  	
  Name:
  Jonathan R. Richardson

  
	
   

  	
  Title:
  Vice President

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