Exhibit 10.25
LETTER OF CREDIT FACILITY AGREEMENT
This Letter of Credit Facility Agreement is dated as of this 2nd day of
October, 2001 by and between BANK OF THE LAKES, NATIONAL ASSOCIATION ("Lender"),
and ALLIANCE RESOURCE PARTNERS, L.P., a Delaware limited partnership
("Borrower").
RECITALS
A. Borrower has requested a $5,000,000 line of credit ("Loan") from
Lender for the issuance from time to time of Letters of Credit (defined below).
B. Subject to Borrower's compliance with all of the terms, conditions
and covenants hereinafter set forth and predicated on Borrower's representations
and warranties, each of which is material and is being relied upon by Lender,
Lender agrees to issue from time to time Letters of Credit for the account of
Borrower and for the benefit of Borrower and its subsidiaries in the amount and
on the terms hereinafter set forth up to the total of the Letter of Credit
Commitment.
AGREEMENT
For valuable consideration received and in consideration of the
premises and of the mutual covenants and agreements contained herein, the
parties hereto hereby agree to the following:
1. Definitions. The following terms shall have the meanings given.
1.1. "Advance" means the disbursement by Lender under a Letter
of Credit to the beneficiary thereof for the account of Borrower.
1.2. "Agreement" means this Letter of Credit Facility
Agreement, as amended, amended and restated, modified or supplemented
from time to time in accordance with the terms hereof.
1.3. "Alliance Resource GP, LLC" means Alliance Resource GP,
LLC, a Delaware limited liability company.
1.4. "Alliance Resource Master Credit Agreement" means the
Credit Agreement, dated as of August 16, 1999, among AROP, as borrower
and assignee of Alliance Resource GP, LLC, the banks, financial
institutions and other institutional lenders from time to time parties
thereto, the Swing Line Bank (as defined therein), The Chase Manhattan
Bank ("Chase"), as paying agent, Deutsche Bank AG, New York Branch, as
documentation agent, and Citicorp USA, Inc. and Chase as
co-administrative agents, as the same may be amended, amended and
restated, modified or supplemented from time to time in accordance with
the terms thereof.
1.5. "AROP" means Alliance Resource Operating Partners, L.P.,
a Delaware limited partnership.
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1.6. "Borrower Authority Documents" means the following
documents as to the Borrower: (i) Certificate of Good Standing, dated
within five (5) Business Days of the Effective Date, issued by the
State in which the Borrower was formed; (ii) Certificate of Good
Standing, dated within five (5) Business Days of the Effective Date,
issued by the State in which the General Partner was formed; and (iii)
Certificate, dated the Effective Date, from the managing general
partner of the Borrower, substantially in form and content as set forth
on Schedule "1.6" hereto, to which shall be attached (A) the
Certificate of Limited Partnership of the Borrower and the Certificate
of Formation of the General Partner, in each case certified by the
Secretary of State of the State of Delaware as of a date that is within
five (5) Business Days of the Effective Date, and (B) a copy of the
fully executed limited partnership agreement of the Borrower and the
Limited Liability Company Operating Agreement of the General Partner,
in each case together with all amendments thereto, if any.
1.7. "Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in Owasso, Oklahoma are
authorized or required to close under the laws of the State of
Oklahoma.
1.8. "Capital Stock" shall mean, with respect to any Person,
any and all shares, units representing interests, participations,
rights in or other equivalents (however designated) of such Person's
capital stock, including (a) with respect to partnerships, partnership
interests (whether general or limited) and any other interest or
participation that confers upon a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such
partnership, (b) with respect to limited liability companies, member
interests, and (c) with respect to any Person, any rights (other than
debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock.
1.9. "Cash Equivalents" means any of the following: (a)
marketable securities of any issuer (including, without limitation, any
corporation or governmental authority) and, if applicable, of any
duration; (b) cash; and (c) any other item determined by Borrower's
auditors to constitute cash or cash equivalents.
1.10. "Consolidated Subsidiary" means, with respect to any
Person at any time for any period, any Subsidiary the accounts of which
would be consolidated with those of such first Person in its
consolidated financial statements as of such time.
1.11. "Consolidated EBITDA" means, with respect to the
Borrower and its Consolidated Subsidiaries for any period, net income
plus (i) interest expense, (ii) depreciation, obsolescence and
amortization of property, (iii) capitalized lease expenses, (iv) the
non-cash portion of advance royalties and any non-cash employee
compensation expenses, and (v) tax expenses, all as determined in
accordance with GAAP; provided, however, that net income shall exclude
any net income or gain or loss during such period from (x) any change
in accounting principles in accordance with GAAP, (y) any prior period
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adjustments resulting from any change in accounting principles in
accordance with GAAP, and (z) any extraordinary or unusual items.
1.12. "Consolidated Funded Debt" means, with respect to the
Borrower and its Consolidated Subsidiaries, long-term and short-term
interest bearing obligations that would be required to be classified
and accounted for as such in the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries prepared in accordance with
GAAP.
1.13. "Cure Period" shall have the meaning set forth in
Section 7 hereof.
1.14. "Debtor Relief Laws" shall mean the Bankruptcy Code of
1978 (Title 11 of the United States Code), as the same may be amended
from time to time and any successor statute thereto (the "Federal
Bankruptcy Code"), together with other applicable federal and state
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization or similar laws affecting the rights and
remedies of creditors generally, as in effect from time to time.
1.15. "Default" shall mean the occurrence of any of the events
described in Section 6 below.
1.16. "Effective Date" shall have the meaning set forth in
Section 3 hereof.
1.17. "Federal Bankruptcy Code" shall have the meaning set
forth in the definition of Debtor Relief Laws contained herein.
1.18. "GAAP" means generally accepted accounting principles as
in effect from time to time.
1.19. "General Partner" means Alliance Resource Management GP,
LLC, a Delaware limited liability company.
1.20. "Governmental Requirements" means all laws, orders,
decrees, ordinances, rules and regulations of any Governmental
Authority.
1.21. "Guarantor" means Alliance Resource GP, LLC.
1.22. "Guarantor Authority Documents" means the following
documents as to the Guarantor: (i) Certificate of Good Standing, dated
within five (5) Business Days of the Effective Date, issued by the
state in which the Guarantor was formed; and (ii) Certificate, dated
the Effective Date, from the Secretary or Assistant Secretary of the
Guarantor, substantially in form and content as set forth on Schedule
"1.22" hereto, to which shall be attached a complete copy of the
Certificate of Formation of the Guarantor, certified by the Secretary
of State of the State of Delaware as of a date that is within five (5)
Business Days of the Effective Date, and a copy of the Operating
Agreement of the Guarantor, together with all amendments, if any.
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1.23. "Guaranty Agreement" means the Guaranty, dated on or
prior to the Effective Date, executed by the Guarantor, substantially
in form and content as set forth on Schedule "1.23" hereto, as the same
may be amended, amended and restated, modified or supplemented from
time to time in accordance with the terms thereof.
1.24. "Hereto," "herein," "hereby," "hereunder," "hereof," and
similar expressions refer to this Agreement and not to any particular
article, section, subsection, clause, subdivision, or other portion
hereof and include any and every amending agreement and agreement
supplemental or ancillary hereto.
1.25. "Letter of Credit" means any letter of credit issued
pursuant to Section 2.1, for which, when issued, a Letter of Credit Fee
shall be paid, as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
1.26. "Letter of Credit Action" means the issuance,
supplement, amendment, renewal, extension, modification or other action
(other than an Advance) relating to a Letter of Credit.
1.27. "Letter of Credit Application" means an application for
a Letter of Credit Action substantially in the form of Schedule "1.27"
hereto.
1.28. "Letter of Credit Commitment" means the commitment of
the Lender to issue Letters of Credit in an amount up to $5,000,000, as
the same may be reduced in accordance with Sections 2.4 and 7.1(iii)
hereof.
1.29. "Letter of Credit Fee" means, with respect to any Letter
of Credit, a fee of .95% per annum (calculated on the basis of a
360-day year and the actual number of days elapsed) on the daily
average of the maximum amount available to be drawn from time to time
under such Letter of Credit issued or renewed after the date hereof,
payable quarterly in advance.
1.30. "Letter of Credit Issuance Fee" means a fee equal to
that which is reasonable and customarily charged by Lender for issuing,
reviewing and generally processing Letters of Credit.
1.31. "Letter of Credit Usage" means, as of any date of
determination, the maximum amount available to be drawn under all
outstanding Letters of Credit plus the aggregate amount of all drawings
under the Letters of Credit honored by Lender and not reimbursed to
Lender by the Borrower.
1.32. "Leverage Ratio" means, as of any date of determination,
the ratio of Consolidated Funded Debt to Consolidated EBITDA of the
Borrower and its Consolidated
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Subsidiaries, calculated for the four (4) consecutive fiscal quarters
ending on the last day of the fiscal quarter most recently completed.
1.33. "Loan Documents" means this Agreement and the Note.
1.34. "Matured Default" means any Default provided that any
requirement for the giving of notice, the lapse of time, or both
(including the expiration of the Cure Period, if applicable), or any
other condition has been satisfied.
1.35. "Note" means the original, executed $5,000,000
Promissory Note, dated on or prior to the Effective Date, substantially
in form and content set forth on Schedule "1.35" attached hereto, as
the same may be amended, amended and restated, modified or supplemented
from time to time in accordance with the terms thereof.
1.36. "Opinion of Borrower's and Guarantor's Counsel" shall
mean an opinion from Borrower's and Guarantor's counsel, dated the
Effective Date and addressed to Lender, substantially in the form of
Schedule "1.36" hereto.
1.37. "Person" means any individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
1.38. "Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, joint venture,
association, trust or other entity of which (or in which) more than 50%
of (a) the issued and outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
( irrespective of whether at the time Capital Stock of any other class
or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interests in the capital or
profits of such partnership, limited liability, joint venture or
association with ordinary voting power to elect a majority of the board
of directors (or Person performing similar functions) of such
partnership, limited liability company, joint venture or association,
or (c) the beneficial interests in such trust or other entity with
ordinary voting power to elect a majority of the board of trustees (or
Persons performing similar functions) of such trust or other entity, is
at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its Subsidiaries, or by one or more
of such Person's Subsidiaries.
1.39. "Termination Date" shall mean the one-year anniversary
of the Effective Date.
2. LETTERS OF CREDIT.
2.1. The Letter of Credit Commitment; Letter of Credit Fee.
Subject to the terms and conditions hereof, at any time and from time
to time from the Effective Date through the date that is three (3)
Business Days prior to the Termination Date, the Lender shall take such
Letter of Credit Actions as the Borrower may request; provided,
however, that (i) the aggregate outstanding Letter of Credit Usage
shall not exceed the Letter of Credit
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Commitment at any time, and (ii) each Letter of Credit Action shall be
in a form reasonably acceptable to Lender and shall not violate any
policies of Lender. Each Letter of Credit will be a nontransferable
standby letter of credit to support payment and/or performance
obligations of the Borrower or any of its Subsidiaries. No Letter of
Credit shall expire more than 365 days after the date of issuance
except that, at the request of Borrower, such Letter of Credit shall
provide that it shall be automatically renewed for a one-year period
unless the Lender, as issuer of such Letter of Credit, shall give at
least 90 days advance notice to the beneficiary thereof that such
Letter of Credit shall not be automatically renewed. If any Letter of
Credit shall remain outstanding after the Termination Date or other
date upon which Lender's Letter of Credit Commitment expires pursuant
to the terms hereof, the Borrower shall, not later than sixty (60) days
thereafter with respect to all such then outstanding Letters of Credit,
(i) deposit Cash Equivalents in an amount equal to one hundred and two
percent (102%) of the Letter of Credit Usage as of the date such
deposit shall be required in a collateral account with the Lender
(which account shall, with respect to all cash collateral, bear
interest for the account of the Borrower or be invested in Cash
Equivalents (other than cash) at the direction, and for the account, of
the Borrower), or (ii) cause the then outstanding Letters of Credit to
be replaced and terminated. In the case of each Letter of Credit issued
hereunder, a Letter of Credit Issuance Fee shall be payable to the
Lender on the issuance date thereof and the Letter of Credit Fee with
respect thereto shall be payable quarterly in advance. At least two (2)
Business Days prior to the commencement of any quarterly period during
which any Letter of Credit shall remain outstanding, the Lender shall
deliver to the Borrower a statement showing the Letter of Credit Fee
due for the next quarterly period, and the Borrower shall pay the
Letter of Credit Fee then due not later than five (5) Business Days
following receipt of such statement (unless such statement shall be
delivered more than five (5) Business Days prior to the commencement of
any quarterly period, in which case the Borrower shall not be required
to pay the Letter of Credit fee then due prior to the first Business
Day of the quarterly period as to which such fee shall relate). In the
event that any Letter of Credit shall have terminated prior to the end
of any quarterly period as to which the Lender shall have received such
advance Letter of Credit Fee, the Lender shall refund to the Borrower
the unearned portion of the Letter of Credit Fee in respect of the
Letter of Credit that shall have early terminated.
2.2. Requesting Letter of Credit Actions. The Borrower may
irrevocably request a Letter of Credit Action by delivering a Letter of
Credit Application therefor to Lender, not later than 2:00 p.m. (Tulsa
time) on the date which is two (2) Business Days prior to the date of
the requested action therefor. Unless Lender determines that such
Letter of Credit action is contrary to any requirement of law or
policies of Lender or does not otherwise conform to the requirements of
this Agreement, Lender shall effect such Letter of Credit Action.
Notwithstanding anything to the contrary contained in any Letter of
Credit Application, this Agreement shall control in the event that any
term or provision of this Agreement shall conflict with any term or
provision contained in any Letter of Credit Application.
2.3. Reimbursement of Payments Under Letters of Credit. The
Borrower shall reimburse Lender for any payment that Lender makes under
a Letter of Credit on or, at the request of the Lender, not more than
three (3) Business Days before the date of such payment
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except to the extent that such payment resulted from the Lender's gross
negligence or willful misconduct.
2.4. Voluntary Reduction of Letter of Credit Commitment. At
the written request of the Borrower from time to time, the Borrower
shall have the right, at its option, to reduce the Letter of Credit
Commitment from the then current amount of the Letter of Credit
Commitment to an amount not less than $1,000,000.00; provided, however,
that (i) the Borrower shall be in compliance with the terms and
conditions contained herein and no Default shall have occurred and be
continuing, (ii) the Letter of Credit Commitment shall not be reduced
to an amount that is less than the Letter of Credit Usage then in
effect and (iii) the Letter of Credit Commitment, as so reduced, may
not thereafter be increased without the written consent of the Lender.
Any such reduction of the Letter of Credit Commitment shall effect a
reduction in the liquidity covenant required to be complied with on the
part of the Guarantor as contemplated by Section 6.8 hereof.
3. CONDITIONS PRECEDENT TO LENDER'S OBLIGATION TO ISSUE INITIAL LETTER
OF CREDIT. It is expressly agreed that Lender shall not be obligated to issue
the initial Letter of Credit hereunder until the date (which must be a Business
Day) on which all of the conditions set forth in Sections 3.1, 3.2 and 3.3
hereof shall have been satisfied, unless waived by Lender at its sole discretion
(such date the "Effective Date"); provided that such conditions shall be deemed
satisfied if the Lender shall have issued the initial Letter of Credit hereunder
except to the extent expressly reserved by the Lender in writing on or prior to
the Effective Date; provided, further, that if the Effective Date shall not have
occurred by October 15, 2001, the obligation of the Lender hereunder to issue
any Letter of Credit, and this Agreement, shall terminate. In the event Lender
elects to waive any requirements or conditions contemplated by this Section 3,
such waiver shall not preclude Lender from thereafter requiring full and
complete performance of all terms, conditions and requirements hereof with
regard to the issuance of any subsequent Letter of Credit.
3.1. Documents. Lender has received the following original,
executed documents:
3.1.1. The Note;
3.1.2. The Guaranty Agreement;
3.1.3. Borrower Authority Documents;
3.1.4. Guarantor Authority Documents; and
3.1.5. Opinion of Borrower's and Guarantor's Counsel.
3.2. Representations and Warranties. The representations and
warranties set forth under Section 5, below, shall be true and correct
in all material respects on and as of the Effective Date except to the
extent such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall be true
and correct in all material respects on and as of such earlier date.
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3.3. No Default. No Default exists under this Agreement or any
other Loan Documents.
4. FURTHER CONDITIONS PRECEDENT TO LENDER'S OBLIGATION TO ISSUE EACH
LETTER OF CREDIT. The obligation of the Lender to issue any Letter of Credit
hereunder shall be subject to the fulfillment of the conditions set forth in
Sections 4.1 and 4.2 hereof unless waived by the Lender at its sole discretion;
provided that such conditions shall be deemed satisfied if the Lender shall have
issued such Letter of Credit except to the extent expressly reserved by the
Lender in writing on or prior to the date of issuance of such Letter of Credit.
In the event the Lender elects to waive any such conditions contemplated by this
Section 4, such waiver shall not preclude Lender from thereafter requiring full
and complete performance of all terms, conditions and requirements hereof with
regard to the issuance of any subsequent Letter of Credit.
4.1. Representations and Warranties. The representations and
warranties set forth under Section 5, below, shall be true and correct
in all material respects on and as of the date of any Letter of Credit
Action with the effect as if made on such date except to the extent
such representations and warranties relate solely to an earlier date,
in which case such representations and warranties shall be true and
correct in all material respects on and as of such earlier date.
4.2. No Default. No Default exists under this Agreement or any
other Loan Documents.
5. BORROWER REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender as of the Effective Date as follows:
5.1. Financial Statements. All financial statements heretofore
delivered to Lender relating to the Borrower and Guarantor are true and
correct in all material respects, have been prepared in accordance with
Borrower's and Guarantor's past practices consistently applied, and
fairly present (subject to year-end audit adjustments) the financial
conditions reflected therein without material changes since the
respective dates thereof.
5.2. Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of Borrower, threatened against or
affecting Borrower, or involving the validity or enforceability of the
Loan Documents at law or in equity, or before or by any governmental
authority, except actions, suits and proceedings fully covered by
insurance or for which adequate reserves exist or which, if adversely
determined, would not substantially impair the ability of Borrower to
pay when due any amounts which may become payable in respect of the
Note; and to Borrower's knowledge, Borrower is not in default with
respect to any order, writ, injunction, decree or demand of any court
or any governmental authority.
5.3. Other Agreements. The consummation of the transaction
hereby contemplated and the performance of this Agreement and the other
Loan Documents by Borrower will not result in any breach of, or
constitute a default under, any indenture,
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mortgage, lease, loan or credit agreement or any other material
instrument or agreement to which Borrower is a party or by which
Borrower may be bound or affected.
5.4. No Default. No Default presently exists under this
Agreement or the Note and no event has occurred and is continuing
which, with notice or the passage of time, or both, would constitute a
Default under this Agreement or Note.
6. DEFAULT. The occurrence of any of the following shall constitute a
default hereunder:
6.1. Nonpayment of Draws or Note. Nonpayment when due of any
unpaid principal of or accrued interest under the Note.
6.2. Other Nonpayment. Nonpayment when due of any amount
payable to Lender under the terms of this Agreement and, except in the
case of any payment required to be made pursuant to Section 2.3 hereof,
Borrower shall have failed to cure such default within ten (10) days
following notice thereof from Lender, it being understood that a
failure to pay under Section 2.3 hereof automatically constitutes a
default.
6.3. Breach of Covenants. Nonsatisfaction by Borrower in the
performance or observation of any covenant contained in this Agreement,
or any other Loan Documents (other than as provided by Sections 6.1 and
6.2 hereof), following the Cure Period.
6.4. Representations and Warranties. Any representation,
statement, certificate, schedule or report made or furnished to Lender
by Borrower hereunder or pursuant hereto proves to be materially false
or materially misleading at the time of the making thereof, or any
warranty hereunder ceases to be complied with in any material respect,
and Borrower fails to take or cause to be taken corrective measures
satisfactory to Lender within fifteen (15) Business Days after receipt
of written notice from Lender relating to the particular default.
6.5. Insolvency. Borrower or Guarantor shall: (i) apply for or
consent to the appointment of a receiver, trustee or a liquidator of
Borrower or Guarantor or its or their properties; (ii) admit in writing
the inability to pay its or their debts as they mature; (iii) make a
general assignment for the benefit of creditors; (iv) commence any
proceeding relating to the bankruptcy, reorganization, liquidation,
receivership, conservatorship, insolvency, readjustment of debt,
dissolution or liquidation of Borrower or Guarantor or, if action shall
be taken against Borrower or Guarantor for the purpose of effecting any
proceeding described in this clause (iv), such proceeding is not
dismissed or stayed within sixty (60) calendar days of such proceeding
filing date, or (v) becomes insolvent.
6.6. Other Loans. Default by the Borrower of any other loan,
extension or credit which it may now or hereafter have with Lender
after taking into account any applicable cure period.
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6.7. Leverage Ratio. If the Leverage Ratio during any given
rolling twelve month period equals or exceeds 4 to 1.
6.8. Guarantor Liquidity. If at any time the sum of (x) the
then current market value of the Guarantor's Cash Equivalents plus (y)
the then current market value of the common units of the Borrower
beneficially owned by the Guarantor, in each case after deducting
therefrom the value of any encumbrances imposed on any thereof, shall
be less than 125% of the Letter of Credit Commitment then in effect
hereunder or $6,250,000, whichever is greater, unless the Borrower
shall have reduced the Letter of Credit Commitment in accordance with
Section 2.4 hereof, in which case the Borrower shall be in compliance
with this covenant so long as the sum of the amounts computed pursuant
to clauses (x) and (y) of this Section 6.8 shall not be less than 125%
of the Letter of Credit Commitment then in effect hereunder.
6.9. Guarantor Net Asset Position. If the Guarantor's total
assets less its total liabilities (excluding the liability account
entitled "Investments in Alliance Resource Partners, LP"), as
determined in a manner consistent with the balance sheet of the
Guarantor prepared as of April 2, 2001 and delivered to the Lender
prior to the date hereof, shall be less than $30,000,000.
6.10. Alliance Resource Master Credit Agreement. An "Event of
Default" occurs under the Alliance Resource Master Credit agreement
which is not cured within any applicable cure period permitted
thereunder.
6.11. Debt. An event of default occurs under (a) (i) the
letter of credit facility agreement entered into by the Borrower with
Bank of Oklahoma, dated as of June 29, 2001, as the same may be
amended, modified or supplemented from time to time in accordance with
the terms thereof, or (ii) the letter of credit facility agreement
entered into by the Borrower with Fifth Third Bank, dated as of August
30, 2001, as the same may be amended, modified or supplemented from
time to time in accordance with the terms thereof, or (b) any other
indenture, loan agreement, promissory note or other instrument of
indebtedness, in the principal amount of $10,000,000.00 or more, to
which Borrower or Guarantor is a party and which, in the case of clause
(a) or (b), is not cured within any applicable cure period permitted
thereunder.
7. REMEDIES. Upon the occurrence and continuance of a Default, Lender
may, following a written notice and cure period of sixty (60) days for
non-monetary defaults ("Cure Period"), at its option exercise any one (1) or
more of the following remedies unless following the expiration of the Cure
Period, but before the commencement of any such remedy, the Default shall have
been cured:
7.1. Acceleration of Note. Lender (i) may by notice to the
Borrower, declare the commitments to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, (ii) may by
notice to the Borrower, declare the maximum amount available to be
drawn under all Letters of Credit then outstanding, together with all
amounts owing under
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the Note, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon such maximum
amount available to be so drawn, such amounts owing under the Note, all
such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an
order for relief with respect to the Borrower under the Federal
Bankruptcy Code, (x) the Letter of Credit Commitment shall
automatically be terminated and (y) such maximum amount available to be
so drawn, such amounts owing under the Note, all such interest and all
such other amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower, or (iii) may, by
notice to Borrower, reduce the Letter of Credit Commitment.
7.2. Deposits; Setoff. Set off, regardless of the adequacy of
any other collateral, any deposits or other sums due from Lender to
Borrower against any and all liabilities, direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising,
of Borrower to Lender under any Loan Document. Such sums shall at all
times constitute collateral security for all indebtedness and
obligations of Borrower to Lender under any Loan Document. The rights
granted by this Section 7.2 shall be in addition to the rights of
Lender under any statutory and case authority (now or hereafter
existing) of the State of Oklahoma.
7.3. Selective Enforcement. In the event Lender shall elect to
selectively and successively enforce its rights, such action shall not
be deemed a waiver or discharge of any other lien, encumbrance or
security instrument securing payment of the Note until such time as
Lender shall have been paid in full all sums outstanding under the
Note.
7.4. Waiver of Default. Lender may, at its option, by an
instrument in writing signed by Lender, waive any Default which shall
have occurred and any consequences of such Default and, in such event,
Borrower and Lender shall be restored to their former respective rights
and obligations hereunder. Any Default so waived shall, for purposes of
this Agreement, be deemed to have been cured and not to be continuing;
but no such waiver shall extend to any subsequent or other Default or
impair any consequence of such subsequent or other Default or any of
Lender's rights relating thereto.
7.5. Cumulative Remedies. The remedies herein provided shall
be in addition to and not in substitution for the rights and remedies
which would otherwise be vested in Lender in law or equity, all of
which rights and remedies are specifically reserved by Lender. The
remedies herein provided or otherwise available to Lender shall be
cumulative and may be exercised concurrently. The failure to exercise
any of the remedies herein provided shall not constitute a waiver
thereof, nor shall use of any of the remedies hereby provided prevent
the subsequent or concurrent resort to any other remedy or remedies
which by this Agreement or by law or equity shall be vested in Lender.
8. GENERAL CONDITIONS. The following conditions shall be applicable
throughout the term of this Agreement.
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8.1. Notices. All notices, consents, waivers, and other
communications required or permitted to be given under this Agreement
must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to
the other parties):
To Borrower:
ALLIANCE RESOURCE PARTNERS, L.P.
c/o Alliance Resource Management GP, LLC
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxx, Director, Corporate Finance
Telefax: (000) 000-0000
with a copy to:
Alliance Resource Partners, L.P.
c/o Alliance Resource Management GP, LLC
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Senior Vice President - Law and
Administration, General Counsel and Secretary
Telefax: (000) 000-0000
and to:
Xxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxxxxx Xxxxxx, XX
Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Telefax: (000) 000-0000
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To Lender:
BANK OF THE LAKES, NATIONAL ASSOCIATION
00000 Xxxx 00xx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, President & Chief Executive Officer
Telefax: (000) 000-0000
with copy to:
Stuart, Biolchini, Xxxxxx & Givray
0000 Xxxxx Xxxxx Tower
00 Xxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telefax: (000) 000-0000
or at such other address of which it shall have notified the party
giving such notice in writing. Notices to in-house counsel or outside
counsel of a party hereto shall not constitute sufficient notice to
such party.
8.2. Amendment: Waiver. This Agreement may not be amended,
modified, waived, discharged or terminated in any way, except by an
instrument in writing executed by both parties hereto; provided,
however, Lender may, in a writing that shall be required to be executed
only by Lender: (i) extend the time for performance of any of the
obligations of Borrower; (ii) waive any Default by Borrower; and (iii)
waive the satisfaction of any condition that is precedent to the
performance of Lender's obligations under this Agreement. In the event
of a waiver of Default by Lender, such specific Default shall be deemed
to have been cured and not continuing, but no such waiver shall extend
to any subsequent or other Default or impair any consequence of such
subsequent or other Default.
8.3. Governing Law. This Agreement, the other Loan Documents
and all other documents issued and executed hereunder shall be deemed
to be a contract made under the laws of the State of Oklahoma, and
shall be construed by and governed in accordance with the laws of the
State of Oklahoma, without giving effect to principles of conflicts of
laws. Borrower hereby submits itself to the jurisdiction and venue of
the Tulsa Xxxxxx Xxxxxxxx Xxxxx, xx Xxxxxxx Xxxxx (Xxxxxxxx Xxxxxxxx)
situated in Oklahoma at Lender's election, except to the extent local
law (if different) is required in connection with a foreclosure action.
8.4. Entire Agreement. This Agreement, the Note, any Letter of
Credit Application executed in connection herewith, and the other
instruments, statements or documents described herein constitute the
entire agreement between Borrower and Lender, with any and all prior
agreements and understandings being merged herein.
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8.5. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns;
provided, however, that, without the consent of the Borrower, the
Lender shall not transfer or assign any of its rights or obligations
hereunder or all or any part of its Letter of Credit Commitment, the
Note or any Advance except to another commercial bank organized under
the laws of the United States having a combined capital and surplus and
retained earnings of not less than $500,000,000, except that Lender may
sell not more than four (4) participations to one or more Lender-chosen
banks or other entities in all or a portion of Lender's rights and
obligations under the Loan Documents with the understanding that (a)
each such participation shall be in an amount of not less than
$400,000, (b) any such sale or participation shall not affect the
rights and duties of Lender hereunder to the Borrower and the Borrower
shall deal exclusively with the Lender with respect to the Loan
Documents and the performance of the Lender's obligations and the
exercise of the Lender's rights hereunder, and (c) no such participant
under any participation shall have the right to approve any amendment
or waiver of any provision of any Loan Document, or any consent to or
departure by the Lender from any provision of any Loan Document, except
to the extent that such amendment, waiver or consent would have the
effect of reducing the principal of or interest on the Note or any fees
payable by Borrower hereunder.
8.6. Severability. Should any clause or provision of this
Agreement or any instrument, document or agreement provided by Borrower
to Lender hereunder be invalid or void for any reason, such invalid or
void clause shall not adversely affect the remainder of this Agreement
or any such instrument, document or agreement, and such remainder shall
remain in full force and effect.
8.7. Costs. Borrower shall pay all reasonable costs, expenses,
fees (e.g., reasonable attorney fees) incurred by Lender in connection
with this transaction, including, without limitation, the reasonable
fees of Stuart, Biolchini, Xxxxxx & Givray, and recording/filing fees,
taxes and related expenses, as well as other customary charges or
expenses incurred by Lender in connection with payment under or
performance of a Letter of Credit.
9. AFFIRMATIVE COVENANTS. So long as the Note shall remain unpaid or
Lender shall have any commitment to issue any Letter of Credit under this
Agreement or any Letter of Credit which has not been fully cash collateralized
remains outstanding, Borrower will comply with the following:
9.1. Maintenance of Existence. Preserve and maintain its
limited partnership existence and good standing under the laws of the
State of Delaware and remain in good standing as a foreign limited
partnership in the State of Oklahoma.
9.2. Maintenance of Records. Keep adequate records and books
of account.
9.3. Compliance with Laws. Comply in all material respects
with all laws, rules, regulations and orders applicable to Borrower,
such compliance to include, without
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limitation, paying before the same become delinquent all taxes,
assessments, and governmental charges imposed upon it or upon its
property, subject to the right to contest if adequate reserves are
established.
9.4. Notice of Litigation. Promptly after the commencement and
notice thereof, Borrower shall deliver to Lender notice of all actions,
suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting Borrower which, if determined adversely to Borrower,
could have a material adverse effect on the financial condition,
properties or operations of Borrower and its Subsidiaries, taken as a
whole.
9.5. Notice of Defaults. As soon as possible and in any event
within five (5) days after the occurrence of each Default, a written
notice setting forth the details of such Default and the action which
is proposed to be taken by Borrower with respect thereto.
9.6. General Information. Such other information respecting
the condition or operations, financial or otherwise, of Borrower as
Lender may from time to time reasonably request; provided, however,
that so long as the Lender shall be receiving copies of all proxy
statements, financial statements and reports that the Borrower sends to
its unitholders, partners or members, and copies of all regular,
periodic and special reports, and all registration statements, that the
Borrower files with the Securities and Exchange Commission of the
United States or any governmental authority that may be substituted
therefor, or with any national securities exchange, in each case
promptly after the sending or filing thereof, the Borrower shall have
no obligation to deliver any other financial statements to the Lender
hereunder. In addition, the Borrower shall deliver to the Lender, as
soon as available but within 60 days following the end of each of the
initial three quarters of the Borrower's fiscal year and within 150
days following the end of the Borrower's fiscal year, a statement
demonstrating and computing compliance by the Borrower with the
covenant required to be maintained by the Borrower pursuant to Section
6.7 (Leverage Ratio) hereof for the period then ended, together with a
certificate of the Chief Financial Officer or Treasurer of the General
Partner to the effect that the information contained therein is true
and accurate as of the date of such certificate.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Loan Agreement as of the day and year first above written.
"Borrower"
ALLIANCE RESOURCE PARTNERS, L.P.,
a limited partnership
By: ALLIANCE RESOURCE MANAGEMENT GP,
LLC, the managing general partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
__________________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President - Chief
Financial Officer and Treasurer
"Lender"
BANK OF THE LAKES, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxx
___________________________
Name: Xxxxx Xxxxxxx
Title:
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Schedule "1.6"
(Borrower Authority Documents)
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Schedule "1.22"
(Guarantor Authority Documents)
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Schedule "1.23"
(Guaranty Agreement)
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Schedule "1.27"
(Form of Letter of Credit Application)
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Schedule "1.35"
(Note)
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Schedule "1.36"
(Opinion of Borrower's and Guarantor's Counsel)
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