Document:

Exhibit 10.1 - 2013 Q1 - Amendment to Magnetation Agreement

EXHIBIT 10.1

FIRST AMENDMENT
TO
AMENDED AND RESTATED OPERATING AGREEMENT
OF
MAGNETATION LLC

This First Amendment to Amended and Restated Operating Agreement (the “Amendment”) is made effective as of April 30, 2013, by and among Magnetation LLC, a Delaware limited liability company (the “Company”), Magnetation, Inc., a Minnesota corporation (“Magnetation”), and AK Iron Resources, LLC, a Delaware limited liability company (“AKS”).  This Amendment amends the Amended and Restated Operating Agreement of the Company dated as of October 4, 2011 (the “Existing Operating Agreement”).  

RECITALS

WHEREAS, Magnetation and AK Steel have agreed that in light of the additional liquidity that would be provided to Magnetation in the event of a future significant debt offering, the Company should not need AK Steel's Phase II Capital Contributions in the same time frame as the parties contemplated when the parties entered in the Existing Operating Agreement in October 2011; and,

WHEREAS, at the time the parties entered into the Existing Operating Agreement, the parties had contemplated constructing and operating two smaller iron ore additional concentrate plants, which are referred to as “Plant 4” and “Plant 5” in the Existing Operating Agreement; and,

WHEREAS, rather than constructing and operating “Plants 4 and 5” in the form contemplated when the parties entered in the Existing Operating Agreement, the parties now intend to construct and operate an additional large iron ore concentrate plant, which the parties currently refer to as “Plant 4,” which will be designed and constructed with the intent to have at least the same aggregate annual capacity as the combined capacity “Plants 4 and 5” that were contemplated at the time the parties entered into the Existing Operating Agreement.

AMENDMENT

In mutual consideration of the promises contained in this Amendment, and subject to the terms and conditions of this Amendment, the Company and the Members agree to amend the Existing Operating Agreement as follows:

		
	(1)
	Phase II Conditions Met; Changes to Timing of AKS Phase II Portion Capital Contributions.  Section 2.1(d) of the Existing Operating Agreement is hereby amended in its entirety as set forth below:

“(d)    The Parties acknowledge and agree that the Phase II Conditions were met as of April 16, 2013, and as a result, the Phase II Conditions are no longer a condition to the obligation of AKS to make the Phase II Portion Capital Contributions.  The Parties agree as follows as to the timing of the Phase II Portion Capital Contributions:
(1)    Prior to the first date after April 16, 2013 on which the Company and its Subsidiaries have raised at least $200,000,000 of gross proceeds from the issuance of indebtedness (determined without taking into account any proceeds raised from the issuance of indebtedness by the Company and its Subsidiaries prior to such date):
(A)    Other than as provided in Section 2.1(d)(1)(B) below, the obligation of AKS to make the Phase II Portion Capital Contribution is subject to its receipt of one or more written requests from the Board of Managers for all or a portion of the Phase II Portion as specified in such written requests.  Each such request of the Board of Managers (i) must be accompanied by a certificate executed on behalf of the Board of Managers to the effect that the Company has a present need for the cash funds specified in the request to meet its capital and operating expenses as they will become due and payable and (ii) may not direct AKS to make the specified 

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Capital Contribution prior to the date that is the tenth (10th) day following the date of AKS' receipt of such request.
(B)    Notwithstanding that AKS may not have received written requests pursuant to Section 2.1(d)(1)(A) above for the following amounts by the following times, AKS shall make the following Phase II Portion Capital Contributions no later than the corresponding dates indicated below:
	
		
	Amount
	Date of Capital Contribution

	$50 million
	Six (6) months after April 16, 2013

	$50 million
	Twelve (12) months after April 16, 2013

	$50 million
	Twenty Four (24) months after April 16, 2013

(C)     Phase II Portion Capital Contributions made by AKS pursuant to Section 2.1(d)(1)(A) above shall be credited against AKS' obligations pursuant to Section 2.1(d)(1)(B).
(2)From and after the first date after April 16, 2013 on which the Company and its Subsidiaries have raised at least $200,000,000 of gross proceeds from the issuance of indebtedness (determined without taking into account any proceeds raised from the issuance of indebtedness by the Company and its Subsidiaries prior to such date):

(A)    Pursuant to the terms set forth in this Section 2.1(d)(2), the obligation of AKS to make the Phase II Portion Capital Contribution is subject to its receipt of written requests from the Board of Managers for a portion of the Phase II Portion as specified in such written requests.  Each such request of the Board of Managers (i) must be accompanied by a certificate executed on behalf of the Board of Managers and delivered to the effect that on a date during the then-current calendar month, the consolidated cash and cash equivalents of the Company and its wholly-owned subsidiaries (determined in accordance with GAAP and in a consistent manner from month-to-month but exclusive of any cash or cash equivalents that are not unrestricted and available for use by the Company or its wholly-owned subsidiaries without the consent of any third party) total less than Fifty Million Dollars ($50,000,000.00); (ii) may not request a Capital Contribution in excess of Thirty Five Million Dollars ($35,000,000.00) for such month (without limiting any requests for future months other than such Thirty Five Million Dollars ($35,000,000) per month limit for future months); and (iii) may not direct AKS to make the specified Capital Contribution prior to the date that is the fifth (5th) business day of the calendar month immediately succeeding the then-current calendar month.
(B)    Notwithstanding that AKS may not have received written requests pursuant to Section 2.1(d)(2)(A) above for Phase II Portion Capital Contributions in the total amount of the Phase II Portion, AKS shall make all Phase II Portion Capital Contributions no later than five (5) business days after receiving written notice from the Chief Executive Officer of the Company certifying the occurrence of the First Pellet Production (as defined below). “First Pellet Production” shall mean the first day that thermally indurated iron ore flux pellets of any quality are produced by the Pellet Plant.
(C)    Phase II Portion Capital Contributions made by AKS pursuant to Section 2.1(d)(2)(A) above shall be credited against AKS' obligation pursuant to Section 2.1(d)(2)(B).  For purposes of clarification, regardless of the timing of the Phase II Capital Contributions pursuant to Sections 2.1(d)(2)(A) or 2.1(d)(2)(B), in no event shall AKS' Phase II Portion Capital Contributions exceed One Hundred Fifty Million Dollars ($150,000,000.00) in the aggregate.
(3)    Further, for the avoidance of doubt, payments made by AKS pursuant to Sections 2.1(d)(1) and 2.1(d)(2) shall in no event exceed One Hundred Fifty Million Dollars ($150,000,000.00) in the aggregate.”

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	2.
	Plant 5.  Section 1.3(c) of the Existing Operating Agreement is hereby amended to read as follows:

“(c)     identify, secure rights to, design, develop, construct, own and operate (1) at least one additional Plant that will be designed and constructed with the intent that it be capable of producing approximately 1.6 million dry metric tonnes of iron ore concentrate annually (“Plant 4”) and one (1) pellet plant (“Pellet Plant”) capable of producing approximately three million tons of iron ore flux pellets annually, or such other conversion plant as the Members may agree upon (collectively, “Phase II”), and (2) and possibly an additional Plant (“Plant 5”) after Phase II; and”

		
	3.
	All Other Terms Unchanged.  Except expressly as set forth in this Amendment, all terms and conditions of the Existing Operating Agreement are unchanged and in full force and effect.

		
	4.
	Defined Terms.  Capitalized terms used but not otherwise defined in this Amendment shall have the meaning assigned to them in the Existing Operating Agreement.

		
	5.
	Counterparts.  This Amendment and any amendment hereto may be executed in multiple counterparts, each of which is an original and all of which constitute one agreement or amendment, as the case may be, notwithstanding that all of the Parties are not signatories to the original or the same counterpart, or that signature pages from different counterparts are combined, and the signature of any Party to any counterpart is a signature to and may be appended to any other counterpart. The exchange of a fully executed Amendment (in counterparts or otherwise) by facsimile transmission, by electronic mail in “portable document format” (“.pdf” form), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall be sufficient to bind the Parties to the terms and conditions of this Amendment.

		
	6.
	Entire Agreement.  This Amendment, together with the Existing Operating Agreement (as expressly amended hereby), constitute the entire agreement between AKS and Magnetation and supersede any prior understanding and agreements, whether written or oral, between any of them with respect to the amendment of the Existing Operating Agreement. As of the date hereof, there are no agreements, arrangements or understandings, whether oral or written, between AKS and Magnetation relating to the amendment of the Existing Operating Agreement that are not set forth or expressly referred to herein. 

		
	7.
	Non Assignment.  Neither this Amendment nor any right or obligation hereunder shall be assigned by either party without the prior written consent of the other, which consent may be withheld by the non-assigning party in its sole discretion, and any purported transfer or assignment without the assigning party first obtaining such consent will be void. 

		
	8.
	Binding Nature.  Except as otherwise provided in this Amendment, this Amendment is binding upon and inures to the benefit of the parties and their respective successors, personal representatives, heirs, devisees, guardians and assigns. 

		
	9.
	No Third-Party Beneficiaries.  This Amendment is for the sole and exclusive benefit of the parties hereto and their respective successors and assigns.  No other Person, unless express provision is made herein to the contrary, is to have any rights, interests or claims hereunder, or be entitled to any benefits under or on account of this Amendment as a third-party beneficiary or otherwise.

		
	10.
	Governing Law.  This Amendment is governed by and is to be construed and enforced in accordance with the Laws of the State of Delaware without giving effect to its rules concerning conflicts of Laws.

(Signature Page Follows)

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IN WITNESS WHEREOF, the undersigned have caused their respective duly authorized officers to execute this First Amendment to Amended and Restated Operating Agreement as of the date first above written.

MAGNETATION LLC                MAGNETATION, INC.

By: /s/ Matthew Lehtinen                By: /s/ Joe Broking        
Its: President                    Its: Chief Financial Officer    

AK IRON RESOURCES, LLC

By: /s/ John F. Kaloski                
Its: Vice President                    

-4-form10q-exhibit10a.htm

Exhibit 10(a)

 

EXECUTION VERSION

 

 

AMENDMENT NO. 1 TO AMENDED AND RESTATED LETTER OF CREDIT AGREEMENT

 

AMENDMENT NO. 1 dated as of May 1, 2013 (this "Amendment") to the Amended and Restated Letter of Credit Agreement dated as of August 16, 2012 (the "Credit Agreement") among KENTUCKY UTILITIES COMPANY (the "Borrower"), the LENDERS from time to time party thereto (the "Lenders"), BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH ("BBVA"), as Administrative Agent and SUMITOMO MITSUI BANKING CORPORATION, NEW YORK BRANCH ("SMBC"), as Issuing Lender.

 

RECITALS:

 

WHEREAS, the parties hereto desire that BBVA shall resign as Administrative Agent and that SMBC shall be appointed as Administrative Agent, in each case as of the date hereof.

 

NOW THEREFOR, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section 1.  Defined Terms; References. Unless otherwise specifically defined herein, each term used herein that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.  Each reference to "hereof", "hereunder", "herein" and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Credit Agreement shall, after this Amendment becomes effective, refer to the Credit Agreement as amended hereby and each reference to "thereof", "thereunder", "therein" and "thereby" and each other similar reference to the Credit Agreement contained in any other Loan Document shall, after this treatment becomes effective refer to the Credit Agreement as amended hereby.

 

Section 2.  Resignation of Administrative Agent.  Pursuant to Section 8.09 of the Credit Agreement (notwithstanding any notice period set forth therein), the parties hereto agree that BBVA shall resign as Administrative Agent, effective as of the date hereof.  The rights, powers and duties of BBVA as Administrative Agent shall be terminated as of the date hereof, without any other or further act or deed on the part of BBVA or any of the parties to the Credit Agreement or any other Loan Document.  The provisions of Article VIII of the Credit Agreement shall inure to BBVA's benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Credit Agreement or any other Loan Document.

 

Section 3.  Appointment of Administrative Agent.  Pursuant to Section 8.09 of the Credit Agreement, SMBC and BBVA, constituting the Required Lenders, hereby appoint SMBC as Administrative Agent, the Borrower hereby approves such appointment, and SMBC hereby accepts such appointment, effective as of the date hereof.  SMBC shall succeed to and become vested with all the rights, powers and duties of BBVA as the retiring Administrative Agent, and the term "Administrative Agent" shall include such SMBC effective as of the date hereof.

 

Section 4.  Amendments of Credit Agreement.

 

(a)  The definition of "Fee Letter" set forth in Section 1.01 of the Credit Agreement is hereby amended to read in its entirety:

 

""Fee Letter" means the fee letter dated as of May 1, 2013 among the Borrower and SMBC, as amended, modified or supplemented from time to time."

 

(b)  Each of (i) the introductory paragraph of the Credit Agreement, (ii) the definition of "Administrative Agent" in Section 1.01 of the Credit Agreement, (iii) Exhibit B attached to the Credit Agreement and (iv) Exhibit D attached to the Credit Agreement are hereby amended to replace the words "Banco Bilbao Vizcaya Argentaria, S.A., New York Branch", in each instance, with the words "Sumitomo Mitsui Banking Corporation, New York Branch".

 

(c) Section 9.01 of the Credit Agreement is hereby amended by deleting the contact information for the Administrative Agent and inserting in its place the following:

 

"Sumitomo Mitsui Banking Corporation, New York Branch

Antoinette Pontecorvo

277 Park Avenue

New York, NY 10172

Phone: 212-224-4856"

 

Section 5.  Governing Law.  This Amendment  shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 6.  Full Force and Effect; Ratification.  Except as expressly modified herein, all of the terms and conditions of the Credit Agreement are unchanged, and, as modified hereby, the Borrower confirms and ratifies all of the terms, covenants and conditions of the Credit Agreement.  This Amendment constitutes the entire and final agreement among the parties hereto with respect to the subject matter hereof and there are no other agreements, understandings, undertakings, representations or warranties among the parties hereto with respect to the subject matter hereof except as set forth herein.

Section 7.  Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

Section 8.  Effectiveness.  This Amendment shall become effective on the date when (i) the Administrative Agent shall have received from each of the Borrower, SMBC and BBVA a counterpart hereof signed by such party or facsimile or other written confirmation (in form satisfactory to the Administrative Agent) that such party has signed a counterpart hereof and (ii) all costs, fees (including the Facility Fee and the Fronting Fee) and expenses due and/or accrued to the Administrative Agent and the Lenders on or before the date hereof shall have been paid or waived.

 

 

  

  

  

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

 

	  	  	
KENTUCKY UTILITIES COMPANY

	  	  	  
	  	  	  
	  	
By:  

	
/s/ Daniel K. Arbough

	  	  	
Name:  Daniel K. Arbough

	  	  	
Title:  Treasurer

 

  

  

  

 

 

	  	  	

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., NEW YORK BRANCH, as resigning Administrative Agent and Lender

	  	  	  
	  	  	  
	  	
By:  

	
/s/ Luca Sacchi

	  	  	
Name:  Luca Sacchi

	  	  	
Title:  Executive Director

 

	  	  	  
	  	  	  
	  	
By:  

	
/s/ Nurys Maleki

	  	  	
Name:  Nurys Maleki

	  	  	
Title:   Vice President

 

  

  

  

 

	  	  	

 

	  	  	  

SUMITOMO MITSUI BANKING CORPORATION, NEW YORK BRANCH, as successor Administrative Agent, Issuing Lender and Lender

	  	  	  
	 	 	 
	  	
By:  

	
/s/ James D. Weinstein

	  	  	
Name:  James D. Weinstein

	  	  	
Title:  ManagingDirector

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