Exhibit 10.24
GUARANTY
THIS GUARANTY is dated August 30, 2001 (the "Guaranty"), and made by
ALLIANCE RESOURCE GP, LLC, a Delaware limited liability company ("Guarantor"),
in favor of the FIFTH THIRD BANK, an Ohio banking corporation ("Lender").
PRELIMINARY STATEMENT. Alliance Resource Partners, L.P., a Delaware
limited partnership (the "BORROWER"), is party to a Letter of Credit Facility
Agreement, dated as of August 30, 2001 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
the capitalized terms defined therein and not otherwise defined herein being
used herein as therein defined) with Lender. Guarantor shall receive, directly
or indirectly, a benefit from the issuance of the Letters of Credit under the
Credit Agreement and will derive substantial direct and indirect benefits from
the transactions contemplated by the Credit Agreement. It is a condition
precedent to issuing from time to time the Letters of Credit by the Lender under
the Credit Agreement that Guarantor shall have executed and delivered this
Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender to issue Letters of Credit from time to time, Guarantor, hereby
agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Guarantor hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all obligations of the Borrower now or
hereafter existing under or in respect of the Credit Agreement (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing obligations) (such obligations being the
"Guaranteed Obligations"), and agrees to pay any and all reasonable expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by the Lender in enforcing any rights under this Guaranty or the Credit
Agreement. To the extent permitted by law, without limiting the generality of
the foregoing, Guarantor's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by any other party to
Lender under or in respect of the Credit Agreement but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other party.
(b) Guarantor and, by its acceptance of this Guaranty, Lender
hereby confirm that it is the intention of all such Persons that this Guaranty
and the Guaranteed Obligations of Guarantor hereunder not constitute a
fraudulent transfer or conveyance for purposes of or under any Debtor Relief
Laws (including the Uniform Fraudulent Conveyance Act and the Uniform Fraudulent
Transfer Act) to the extent applicable to this Guaranty and the Guaranteed
Obligations of Guarantor hereunder. To effectuate the foregoing intention, the
Lender and the Guarantor hereby irrevocably agree that the Guaranteed
Obligations of Guarantor under this Guaranty at any time shall be limited to the
maximum amount as will result in the Guaranteed Obligations of such Guarantor
under this Guaranty not constituting a fraudulent transfer or conveyance.
Section 2. Guaranty Absolute. To the extent permitted by law, Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Credit
Agreement, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of Lender with
respect thereto. To the extent permitted by law, the obligations of Guarantor
under or in respect of this Guaranty are independent of the Guaranteed
Obligations, and a separate action or actions may be brought and prosecuted
against Guarantor to enforce this Guaranty, irrespective of whether any action
is brought against the Borrower or any other Person guarantying or pledging
assets as collateral security for the Guaranteed Obligations or whether the
Borrower or any such other Person is joined in any such action or actions. To
the extent permitted by law, the liability of Guarantor under this Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:
(a) any lack of validity or enforceability of the Credit
Agreement or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations under or in
respect of the Credit Agreement, or any other amendment or waiver of or any
consent to departure from the Credit Agreement, including, without limitation,
any increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of any collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Guaranteed
Obligations;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower;
(f) any failure of Lender to disclose to the Borrower any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower now or
hereafter known to Lender (Guarantor waiving any duty on the part of the Lender
to disclose such information); or
(g) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
Lender that might otherwise constitute a defense available to, or a discharge
of, the Borrower or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
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Section 3. Waivers and Acknowledgments. (a) To the extent permitted by
law, Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that Lender protect, secure, perfect or insure any lien or any
property subject thereto or exhaust any right or take any action against
Borrower or any other Person or any collateral.
(b) To the extent permitted by law, Guarantor hereby
unconditionally and irrevocably waives any right to revoke this Guaranty and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
(c) To the extent permitted by law, Guarantor hereby
unconditionally and irrevocably waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by Lender that in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of Guarantor
or other rights of Guarantor to proceed against Borrower, any other guarantor or
any other Person or any collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Guaranteed Obligations of
Guarantor hereunder.
(d) To the extent permitted by law, Guarantor hereby
unconditionally and irrevocably waives any duty on the part of Lender to
disclose to Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower or any of its subsidiaries now or hereafter known by
Lender.
(e) Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Credit Agreement and that the waivers set forth in Section 2 hereof and this
Section 3 are knowingly made in contemplation of such benefits.
Section 4. Subrogation. Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower that arise from the existence, payment, performance
or enforcement of Guarantor's obligations under or in respect of this Guaranty
or the Credit Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of Lender against the Borrower, or
any other insider guarantor whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from the Borrower, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Letter of Credit Commitment shall have expired or
been terminated. If any amount shall be paid to Guarantor in violation of the
immediately preceding sentence at any time prior to the later of (a) the payment
in full in cash of the Guaranteed Obligations and all other amounts payable
under this Guaranty, and (b) the Termination Date, such amount shall be received
and held in trust for the benefit of Lender, shall be segregated from other
property and funds of Guarantor and shall forthwith be paid or delivered to the
Lender in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to
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the Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement, or to be held as collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) Guarantor shall
make payment to Lender of all or any part of the Guaranteed Obligations, (ii)
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, and (iii) the Termination Date
shall have occurred, the Lender will, at Guarantor's request and expense,
execute and deliver to Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to Guarantor of an interest in the Guaranteed Obligations resulting
from such payment made by such Guarantor pursuant to this Guaranty.
Section 5. Representations and Warranties. Guarantor hereby represents
and warrants that Guarantor has, independently and without reliance upon Lender
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Guaranty, and Guarantor
has established adequate means of obtaining from the Borrower on a continuing
basis information pertaining to, and is now and on a continuing basis will be
completely familiar with, the business, condition (financial or otherwise),
operations, performance, properties and prospects of the Borrower. In addition,
the Guarantor further represents and warrants to the Lender as follows:
(a) All financial statements heretofore delivered to Lender
relating to Guarantor are true and correct in all material respects, have been
prepared in accordance with 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;
(b) There are not actions, suits or proceedings pending or, to
the knowledge of Guarantor, threatened against or affecting Guarantor, or
involving the validity or enforceability of this Guaranty 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
Guarantor to pay when due any amounts which may become payable in respect of
this Guaranty; and to Guarantor's knowledge, Guarantor is not in default with
respect to any order, writ, injunction, decree or demand of any court or any
governmental authority;
(c) The consummation of the transaction hereby contemplated
and the performance of this Guaranty by Guarantor will not result in any breach
of, or constitute a default under, any indenture, mortgage, lease, loan or
credit agreement or any other material instrument or agreement to which
Guarantor is a party or by which Guarantor may be bound or affected; and
(d) No default presently exists under this Guaranty and no
event has occurred and is continuing which, with notice or the passage of time,
or both, would constitute a default under this Guaranty.
Section 6. Covenants; Delivery of Financial Information. Guarantor
covenants and agrees that, so long as any part of the Guaranteed Obligations
shall remain unpaid or the Letter of Credit Commitment shall be in effect,
Guarantor will:
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(a) perform and observe all of the terms, covenants and
agreements set forth in the Credit Agreement on its part to be
performed or observed or that the Borrower has agreed to cause
Guarantor to perform or observe;
(b) deliver to the Lender, as soon as available but within 60
days following the end of each of the Guarantor's fiscal quarters
(other than the last fiscal quarter of any fiscal year), an internally
prepared balance sheet, income statement and statement of cash flows of
the Guarantor for the fiscal quarter then ended, prepared in accordance
with GAAP except to the extent deviated therefrom in accordance with
the Guarantor's past practices;
(c) deliver to the Lender, as soon as available but within 120
days following the end of the Guarantor's fiscal year, an internally
prepared balance sheet, income statement and statement of cash flows of
the Guarantor for the fiscal year then ended, prepared in accordance
with GAAP except to the extent deviated therefrom in accordance with
the Guarantor's past practices; and
(d) deliver to the Lender, as soon as available but within 60
days following the end of each of the initial three quarters of the
Guarantor's fiscal year and within 120 days following the end of the
Guarantor's fiscal year, a statement demonstrating and computing
compliance by the Guarantor with the covenants required to be
maintained by the Guarantor pursuant to Section 6.8 (Liquidity) of the
Credit Agreement for the period then ended.
The financial statements and compliance certificate required to be
delivered pursuant to clauses (b), (c) and (d) of this Section 6 shall be
accompanied by a certificate of the Chief Financial Officer or Treasurer of the
Guarantor to the effect that the information contained therein is true and
accurate as of the date of such certificate.
Section 7. Amendments, Guaranty Supplements, Etc. (a) No amendment or
waiver of any provision of this Guaranty and no consent to any departure by
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 8. Notices, Etc. All notices, consents, waivers, and other
communications required or permitted to be given under this Guaranty 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 Guarantor:
Alliance Resource GP, LLC
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
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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
To Lender:
Fifth Third Bank
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxx
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.
Section 9. No Waiver; Remedies. No failure on the part of Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
Section 10. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Default and (b) the delivery of the notice and expiration of
the Cure Period provided by Section 6 of the Credit Agreement, the Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by Lender, to or for the credit or the account of Guarantor
against any and all of the Guaranteed Obligations of
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Guarantor now or hereafter existing under the Credit Agreement, irrespective of
whether Lender shall have made any demand under this Guaranty or the Credit
Agreement and although such Guaranteed Obligations may be unmatured. Lender
agrees promptly to notify Guarantor after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that Lender may have.
Section 11. Survival. Without prejudice to the survival of any of the
other agreements of Guarantor under this Guaranty, the agreements and
obligations of Guarantor contained in Section 1(a) (with respect to enforcement
expenses) and the last sentence of Section 2 shall survive the payment in full
of the Guaranteed Obligations and all of the other amounts payable under this
Guaranty.
Section 12. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty and
(ii) the Termination Date, (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Lender and its
successors, permitted transferees and permitted assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, the Lender may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement (including, without limitation, all or any portion of
its Letter of Credit Commitment and the Advances owing to it) to any other
Person to the extent permitted by and in accordance with Section 8.5 of the
Credit Agreement, and such other permitted transferee shall thereupon become
vested with all the benefits in respect thereof granted to Lender herein or
otherwise. Guarantor shall not have the right to assign its rights hereunder or
any interest herein without the prior written consent of the Lender.
Section 13. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by difference parties thereto 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 an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 14. Governing Law. This Guaranty shall be deemed to be a
contract made under the laws of the State of Ohio, and shall be construed by and
governed in accordance with the laws of the State of Ohio, without giving effect
to principles of conflicts of laws.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by or on its behalf as of the date first above written.
ALLIANCE RESOURCE GP, LLC
By /s/ Xxxxxxx X. Xxxxxxxxx
_________________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President - Chief
Financial Officer and Treasurer
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