EXHIBIT 10.2
LETTER AMENDMENT NO. 1
Dated as of December 7, 2001
To the banks, financial institutions
and other institutional lenders
(collectively, the "Lenders") parties
to the Credit Agreement referred to
below and to JPMorgan Chase Bank
(formerly The Chase Manhattan Bank),
as Paying Agent, and JPMorgan Chase Bank
and Citicorp USA, Inc., as Co-Administrative Agents
for the Lenders
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of August 16, 1999 (as
amended, supplemented or otherwise modified through the date hereof, the "Credit
Agreement") among the undersigned and you. Capitalized terms not otherwise
defined in this Letter Amendment have the same meanings as specified in the
Credit Agreement.
We are currently negotiating a transaction to acquire the Beacon
Investors' controlling interest in Alliance Resource Management GP, LLC, the
managing general partner entity created to manage the partnership assets of the
Borrower, and have requested that the Lenders agree to amend the definition of
"Change of Control" set forth in Article I of the Credit Agreement and to make
such other amendments as may be necessary to permit the transfer of the
controlling interest to management.
1
In addition Toptiki Coal, LLC ("Toptiki"), a former direct subsidiary
of the Borrower, was a small surface and underground mining company whose mining
operations were discontinued due to uneconomic conditions. The Borrower has
continued to fund annual holding costs since closure including lease royalty
payments and reclamation bonding expenses. In November 2000, the Borrower sold
its member interest in Toptiki to Middlefork Land Company, Inc. for $25,000 plus
the assumption of outstanding Toptiki liabilities.
Pursuant to the Credit Agreement, Toptiki had entered into a Subsidiary
Guaranty in favor of the Lenders. As part of the divestiture transaction, the
Borrower indemnified the Toptiki buyer from any associated claims under said
guaranty. With the sale of Toptiki, the Borrower requests the Lenders terminate
and release the Subsidiary Guaranty issued by Toptiki.
You have indicated your willingness, on the terms and conditions stated
below, to so agree. Accordingly, it is hereby agreed by you and us as follows:
SECTION 1. The Credit Agreement is, effective as of the date
of this Letter Amendment, hereby amended as follows:
a. The definition of "Change of Control" set forth in Section 1.01 shall be
amended in full to read as follows:
"'CHANGE OF CONTROL' means the occurrence of either of
the following: (a) Management Investors,
Beacon Investors and/or the Beacon
Controlled Affiliates shall at any time for
any reason cease collectively to own,
directly or indirectly, at least 51% of the
managing ownership interest of the sole or
managing general partner, as the case may
be, of the Borrower or (b) the managing
general partner of the Borrower shall at any
time for any reason cease to be the sole or
managing general partner of Alliance
Resources Partners, L.P."
b. Section 1.01 is amended by adding the following definition in the appropriate
alphabetical order:
"'MANAGEMENT INVESTORS' means, collectively, certain
Persons contemplated to be formed by the
management, officers and/or directors of the
Borrower and named Alliance Management
Holdings, LLC, any of ARH II, LLC and/or
Alliance Resource Holdings II, LLC,
including the management, officers and/or
directors who are shareholders and/or
members of any of such Persons."
2
SECTION 2. The Lenders, by their signature below, hereby
consent to the release of Toptiki Coal, LLC, as a Subsidiary Guarantor.
This Letter Amendment (other than Section 1 hereof) shall become
effective as of the date first above written when, and only when, the Paying
Agent shall have received counterparts of this Letter Amendment executed by the
undersigned and all of the Lenders or, as to any of the Lenders, advice
satisfactory to the Paying Agent that such Lender has executed this Letter
Amendment. Section 1 of this Letter Amendment shall become effective as of the
date first above written when, and only when, the Paying Agent shall have
received counterparts of this Letter Amendment executed by the undersigned and
the Required Lenders or, as to any of the Lenders, advice satisfactory to the
Paying Agent that such Lender has executed this Letter Amendment. The
effectiveness of this Letter Amendment is conditioned upon the accuracy of the
factual matters described herein. This Letter Amendment is subject to the
provisions of Section 8.01 of the Credit Agreement.
On and after the effectiveness of this Letter Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the Notes
and each of the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement, as amended by this Letter Amendment.
The Credit Agreement, the Notes and each of the other Loan Documents,
as specifically amended by this Letter Amendment, are and shall continue to be
in full force and effect and are hereby in all respects ratified and confirmed.
The execution, delivery and effectiveness of this Letter Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or any Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
If you agree to the terms and provisions hereof, please evidence such
agreement by executing and returning at least one signature page of this Letter
Amendment by fax to Shearman & Sterling, fax no. x00 000 000 0000 Attn. Xxxxxx
Xxxxxx by 5:00p.m. (London time) on Wednesday, December 19, 2001 with an
original executed signature page to JPMorgan Chase Bank, 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000, Attn. Xxxxx X. Xxxxxx for delivery by 5:00p.m. (New
York time) on Friday, December 21, 2001.
This Letter Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of
3
an executed counterpart of a signature page to this Letter Amendment by
telecopier shall be effective as delivery of an original executed counterpart of
this Letter Amendment.
4
This Letter Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.
Very truly yours,
ALLIANCE RESOURCE OPERATING PARTNERS, L.P.
By: ALLIANCE RESOURCE MANAGEMENT GP, LLC,
its Managing General Partner
By /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President & Chief
Financial Officer
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
JPMORGAN CHASE BANK,
as Paying Agent, Co-Administrative Agent and Lender
By /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
JPMORGAN CHASE BANK,
as Paying Agent, Co-Administrative Agent and Lender
By /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Agreed as to the foregoing Letter Amendment
(other than Section 1 thereof) as of the date first
above written:
CITICORP USA, INC.,
as Co-Administrative Agent and Lender
By /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Director
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
CITICORP USA, INC.,
as Co-Administrative Agent and Lender
By /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Director
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
The Fuji Bank Ltd.
------------------------------
[NAME OF LENDER]
By /s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: V.P. & Manager
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
The Fuji Bank Ltd.
------------------------------
[NAME OF LENDER]
By /s/ Xxxx Xxxxxx
-------------------------
Name: Xxxx Xxxxxx
Title: V.P. & Manager
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
Bank of Montreal
------------------------------
[NAME OF LENDER]
By /s/ Xxx X. Xxxxxxx
-------------------------
Name: Xxx X. Xxxxxxx
Title: V.P. & Manager
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
Bank of Montreal
------------------------------
[NAME OF LENDER]
By /s/ Xxx X. Xxxxxxx
-------------------------
Name: Xxx X. Xxxxxxx
Title: V.P. & Manager
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
Fleet National Bank
------------------------------
By /s/ Xxxxxxx XxxxXxxx
-------------------------
Name: Xxxxxxx XxxxXxxx
Title: Vice President
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
Fleet National Bank
------------------------------
By /s/ Xxxxxxx XxxxXxxx
-------------------------
Name: Xxxxxxx XxxxXxxx
Title: Vice President
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
The Industrial Bank of Japan, Limited
-------------------------------------
[NAME OF LENDER]
By /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
Bank Trust Company
------------------------------
[NAME OF LENDER]
By /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director
Agreed as to the foregoing Letter Amendment (other than Section 1 thereof) as of
the date first above written:
Bank of Oklahoma, N.A.
---------------------------------
[NAME OF LENDER]
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
Agreed as to Section 1 of the foregoing Letter Amendment as of the date first
above written:
Bank of Oklahoma, N.A.
---------------------------------
[NAME OF LENDER]
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
CONSENT
Dated as of December 7, 2001
Each of the undersigned, as Guarantors under the Subsidiary Guaranty
dated August 16, 1999 (the "Guaranty") in favor of the Lender Parties and the
Agents, each as defined in the Credit Agreement referred to in the foregoing
Letter Amendment, hereby consents to such Letter Amendment and hereby confirms
and agrees that (a) notwithstanding the effectiveness of such Letter Amendment,
the Guaranty 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
effectiveness of such Letter Amendment, each reference in the Guaranty to the
"Credit Agreement", "thereunder", "thereof" or words of like import shall mean
and be a reference to the Credit Agreement, as amended by such Letter Amendment,
and (b) each Guarantor does, and shall continue to, absolutely, unconditionally
and irrevocably guarantee the punctual payment when due of all Guaranteed
Obligations (as defined in the Guaranty).
ALLIANCE COAL, LLC
By: Alliance Resource GP, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: SVP & CFO
ALLIANCE LAND, LLC
ALLIANCE PROPERTIES, LLC
BACKBONE MOUNTAIN, LLC
EXCEL MINING, LLC
XXXXXX COUNTY COAL, LLC
XXXXXXX COUNTY COAL, LLC
MCMINING, LLC
METTIKI COAL, LLC
METTIKI COAL (WV), LLC
MT. XXXXXX TRANSFER TERMINAL, LLC
PONTIKI COAL, LLC
XXXXXXX COUNTY COAL, LLC
WHITE COUNTY COAL, LLC
By: Alliance Coal, LLC
By: Alliance Resource GP, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: SVP & CFO
