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.

 

 

(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).

 

 

(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.”

 

 

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.

 

 

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.

 

 

(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

 

 

	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

 

 

	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