EXHIBIT 1.1
ALLIANCE RESOURCE PARTNERS, L.P.
2,250,000 Common Units
Representing Limited Partner Interests
UNDERWRITING AGREEMENT
February 10, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ BROTHERS INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Alliance Resource Partners, L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell (the "Offering") an aggregate of
2,250,000 common units (the "Firm Units") representing limited partner interests
in the Partnership (the "Common Units") to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇▇▇▇▇▇
Brothers Inc. and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. (the "Underwriters"), upon the terms
and conditions set forth in Section 2 hereof. The Partnership also proposes to
sell to the Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 337,500 Common Units (the "Additional Units"). The
Firm Units and the Additional Units are hereinafter collectively referred to as
the "Units."
Alliance Resource Management GP, LLC, a Delaware limited liability
company, serves as the managing general partner (the "Managing General Partner")
of each of the Partnership and Alliance Resource Operating Partners, L.P., a
Delaware limited partnership (the "Intermediate Partnership"), and as managing
member of Alliance Coal, LLC, a Delaware limited liability company (the
"Operating Company"). Alliance Resource GP, LLC, a Delaware limited liability
company, serves as the special general partner (the "Special General Partner")
of each of the Partnership and the Intermediate Partnership. The Operating
Company is the sole member or stockholder in each of Alliance Land, LLC,
Alliance Properties, LLC, Alliance Service, Inc., Backbone Mountain, LLC, Excel
Mining, LLC, ▇▇▇▇▇▇ County Coal, LLC, ▇▇▇▇▇▇▇ County Coal, LLC, MC Mining, LLC,
Mettiki Coal, LLC, Mettiki Coal (WV), LLC, Mt. ▇▇▇▇▇▇ Transfer Terminal, LLC,
Pontiki Coal, LLC, ▇▇▇▇▇▇▇ County Coal, LLC and White County Coal, LLC (each
referred to herein individually as a "Subsidiary" and collectively as the
"Subsidiaries"). The Managing General Partner and the Special General Partner
are collectively referred to herein as the "General Partners." The Partnership,
the General Partners, the Intermediate Partnership, the Operating Company and
the Subsidiaries are collectively referred to herein as the "Alliance Entities."
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The Partnership, the General Partners, the Intermediate Partnership and
the Operating Company (the "Alliance Parties") wish to confirm as follows their
agreement with you in connection with the several purchases of the Units by the
Underwriters. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties of the Alliance Parties. The Alliance
Parties, jointly and severally, represent and warrant to each Underwriter that:
(a) The Partnership meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a registration
statement (the file number of which is set forth in Schedule II hereto) on Form
S-3, including a related Basic Prospectus, for registration under the Act of the
offering and sale of the Units. The Partnership may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of which has
previously been furnished to you. The Partnership will next file with the
Commission one of the following: (1) after the Effective Date of such
registration statement, a final prospectus supplement relating to the Units in
accordance with Rules 430A and 424(b), (2) prior to the Effective Date of such
registration statement, an amendment to such registration statement (including
the form of final prospectus supplement) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (1), the Partnership has
included in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Final
Prospectus. As filed, such final prospectus supplement or such amendment and
form of final prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except to the extent the
Underwriters shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Partnership has
advised you, prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the requirements set forth
in Rule 415(a)(1)(x) under the Act.
(b) On the Effective Date, the Registration Statement did, and
when the Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein) and on any date that
Additional Units are purchased, if such date is not the Closing Date (a
"settlement date"), the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the Act and
the Exchange Act and the respective rules thereunder; on the Effective Date and
at the Execution Time, the
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Registration Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to Rule 424(b), will
not, and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date and any settlement date, the Final Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the Partnership makes no representations or warranties as to the
information contained in or omitted from the Registration Statement or the Final
Prospectus (or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Partnership by or on behalf of any
Underwriter specifically for inclusion in the Registration Statement or the
Final Prospectus (or any supplement thereto). Each of the statements made by the
Partnership in such documents within the coverage of Rule 175(b) of the rules
and regulations under the Act, including (but not limited to) any statements
with respect to future available cash or future cash distributions of the
Partnership or the anticipated ratio of taxable income to distributions was made
or will be made with a reasonable basis and in good faith.
(c) Each of the Partnership and the Intermediate Partnership has
been duly formed and is validly existing and in good standing as a limited
partnership under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware LP Act") with full partnership power and authority to own or lease its
properties and to conduct its business, in each case in all material respects as
described in the Final Prospectus. Each of the Partnership and the Intermediate
Partnership is duly registered or qualified as a foreign limited partnership for
the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a material adverse effect on the condition (financial or otherwise), business,
prospects, properties or results of operations of the Alliance Entities, taken
as a whole (a "Material Adverse Effect"), or (ii) subject the limited partners
of the Partnership to any material liability or disability.
(d) The Operating Company and each Subsidiary that is a limited
liability company has been duly formed and is validly existing and in good
standing as a limited liability company under the Delaware Limited Liability
Company Act (the "Delaware LLC Act") with full limited liability company power
and authority to own or lease its properties and to conduct its business, in
each case in all material respects as described in the Final Prospectus.
Alliance Service, Inc. has been duly organized and is validly existing and in
good standing as a corporation under the Delaware General Corporation Law
("DGCL") with full corporate power and authority to own or lease its properties
and to conduct its business, in each case in all material respects as described
in the Final Prospectus. The Operating Company and each Subsidiary is duly
registered or qualified as a foreign limited liability company or corporation
for the transaction of business under the laws of each jurisdiction in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership to any material liability or disability.
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(e) Each of the General Partners has been duly formed and is
validly existing and in good standing as a limited liability company under the
Delaware LLC Act with full limited liability company power and authority to own
or lease its properties, to conduct its business and to act as general partner
of the Partnership and the Intermediate Partnership and, as to the Managing
General Partner, to act as the managing member of the Operating Company, in each
case in all material respects as described in the Final Prospectus. Each of the
General Partners is duly registered or qualified as a foreign limited liability
company for the transaction of business under the laws of each jurisdiction in
which the character of the business conducted by it or the nature or location of
the properties owned or leased by it makes such registration or qualification
necessary, except where the failure so to register or qualify would not (i) have
a Material Adverse Effect or (ii) subject the limited partners of the
Partnership to any material liability or disability.
(f) The Managing General Partner and the Special General Partner
are the sole general partners of the Partnership with .99% and .01% general
partner interests, respectively, in the Partnership; such general partner
interests have been duly authorized and validly issued in accordance with the
Amended and Restated Agreement of Limited Partnership of the Partnership, as
amended to date (the "Partnership Agreement"); and the Managing General Partner
and the Special General Partner own such general partner interests free and
clear of all liens, encumbrances, security interests, equities, charges or
claims.
(g) As of the date hereof, the issued and outstanding limited
partner interests of the Partnership consist of 8,982,780 Common Units,
6,422,531 Subordinated Units (as defined in the Partnership Agreement) and the
Incentive Distribution Rights (as defined in the Partnership Agreement). All
outstanding Common Units, Subordinated Units and Incentive Distribution Rights
and the limited partner interests represented thereby have been duly authorized
and validly issued in accordance with the Partnership Agreement and are fully
paid (to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in Section
17-607 of the Delaware LP Act).
(h) The Special General Partner owns 1,232,780 Common Units and
6,422,531 Subordinated Units and the Managing General Partner owns all of the
Incentive Distribution Rights.
(i) The Units issued to the Underwriters at the Closing Date or
the Option Closing Date, as the case may be, and the limited partner interests
represented thereby will be duly authorized by the Partnership Agreement and,
when issued and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued in accordance with the
Partnership Agreement, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Section 17-607 of the Delaware LP Act).
(j) The Managing General Partner and the Special General Partner
are the sole general partners of the Intermediate Partnership with 1.0001% and
..01% general partner interests, respectively, in the Intermediate Partnership;
such general partner interests have been duly authorized and validly issued in
accordance with the Agreement of Limited Partnership of
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the Intermediate Partnership, as amended to date (the "Intermediate Partnership
Agreement"); and the Managing General Partner and the Special General Partner
own such general partner interests free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(k) The Partnership is the sole limited partner of the
Intermediate Partnership with a 98.9899% limited partner interest in the
Intermediate Partnership; such limited partner interest has been duly authorized
and validly issued in accordance with the Intermediate Partnership Agreement and
is fully paid (to the extent required under the Intermediate Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by
matters described in Section 17-607 of the Delaware LP Act); and the Partnership
owns such limited partner interest free and clear of all liens, encumbrances,
security interests, equities, charges or claims.
(l) The Managing General Partner is the sole manager of the
Operating Company with a .001% managing interest in the Operating Company; such
managing interest has been duly authorized and validly issued in accordance with
the Limited Liability Company Agreement of the Operating Company, as amended to
date (the "Operating Company LLC Agreement"); and the Managing General Partner
owns such managing interest free and clear of all liens, encumbrances, security
interests, equities, charges or claims.
(m) The Intermediate Partnership owns a 99.999% non-managing
interest in the Operating Company; such non-managing interest has been duly
authorized and validly issued in accordance with the Operating Company LLC
Agreement and is fully paid (to the extent required under the Operating Company
LLC Agreement) and nonassessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware LLC Act); and the Intermediate
Partnership owns such non-managing interest free and clear of all liens,
encumbrances, security interests, equities, charges or claims.
(n) The Operating Company owns a 100% membership interest in each
of the Subsidiaries that are limited liability companies; such membership
interests have been duly authorized and validly issued in accordance with the
limited liability company agreements of the Subsidiaries that are limited
liability companies, as amended to date (the "Subsidiary LLC Agreements"), and
are fully paid (to the extent required under the Subsidiary LLC Agreements) and
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act); and the Operating Company owns such membership
interests free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(o) The Operating Company owns all of the outstanding capital
stock of Alliance Service, Inc.; such shares of capital stock have been duly
authorized and validly issued in accordance with the certificate of
incorporation and bylaws of the Alliance Service, Inc., as amended to date, and
are fully paid and nonassessable; and the Operating Company owns such shares of
capital stock, free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
(p) None of the General Partners, the Partnership, the
Intermediate Partnership, the Operating Company or the Subsidiaries has any
subsidiaries (other than the Partnership, the Intermediate Partnership, the
Operating Company or the Subsidiaries
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themselves) which, individually or considered as a whole, would be deemed to be
a significant subsidiary (as such term is defined in Section 1-02(w) of
Regulation S-X of the Act).
(q) Except as described in the Final Prospectus or for rights that
have been waived, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of, any
limited partner interests in the Partnership or the Intermediate Partnership or
any interest in the General Partners or the Operating Company pursuant to the
Partnership Agreement, the Intermediate Partnership Agreement, the Limited
Liability Company Agreement of the Managing General Partner, as amended to date
(the "Managing General Partner LLC Agreement"), the Special General Partner LLC
Agreement and the Operating Company LLC Agreement, or any agreement or other
instrument to which any of the Partnership, the Intermediate Partnership, the
General Partners or the Operating Company is a party or by which any one of them
may be bound. Except for such rights that have been waived, neither the filing
of the Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Units or other securities of the Partnership, the
Intermediate Partnership, the General Partners or the Operating Company. Except
as described in the Final Prospectus, there are no outstanding options or
warrants to purchase (i) any Common Units or Subordinated Units or other
partnership interests in the Partnership or the Intermediate Partnership or (ii)
any interests in the General Partners or the Operating Company. The Units, when
issued and delivered against payment therefor as provided herein, will conform
in all material respects to the description thereof contained in the Final
Prospectus. The Partnership has all requisite power and authority to issue, sell
and deliver the Units, in accordance with and upon the terms and conditions set
forth in this Agreement, the Partnership Agreement and the Final Prospectus. At
the Closing Date and the Option Closing Date, all corporate, partnership and
limited liability company action, as the case may be, required to be taken by
the Partnership for the authorization, issuance, sale and delivery of the Units
contemplated by this Agreement shall have been validly taken.
(r) The execution and delivery of, and the performance by each of
the Alliance Parties of their respective obligations under, this Agreement have
been duly and validly authorized by each of the Alliance Parties, and this
Agreement has been duly executed and delivered by each of the Alliance Parties.
(s) The Partnership Agreement has been duly authorized, executed
and delivered by the General Partners and is a valid and legally binding
agreement of the General Partners, enforceable against the General Partners in
accordance with its terms; the Managing General Partner LLC Agreement has been
duly authorized, executed and delivered by Alliance Management Holdings, LLC and
ARH II, LLC and is a valid and legally binding agreement of Alliance Management
Holdings, LLC and ARH II, LLC, enforceable against such parties in accordance
with its terms; the Special General Partner LLC Agreement has been duly
authorized, executed and delivered by Alliance Resource Holdings, Inc. and is a
valid and legally binding agreement of Alliance Resource Holdings, Inc.,
enforceable against such party in accordance with its terms; the Intermediate
Partnership Agreement has been duly authorized, executed and delivered by the
General Partners and the Partnership and is a valid and legally binding
agreement of the General Partners and the Partnership, enforceable against the
General Partners and the Partnership in accordance with its terms; the Operating
Company LLC Agreement has been duly authorized, executed and delivered by each
of the Managing General Partner and the
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Intermediate Partnership and is a valid and legally binding agreement of the
Managing General Partner and the Intermediate Partnership, enforceable against
each of them in accordance with its terms; and the Subsidiary LLC Agreements
have been duly authorized, executed and delivered by the Operating Company, and
are valid and legally binding agreements of the Operating Company enforceable
against it in accordance with their respective terms; provided that, with
respect to each agreement described in this Section 6(s), the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting creditors'
rights generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and provided,
further, that the indemnity, contribution and exoneration provisions contained
in any of such agreements may be limited by public policy.
(t) None of the offering, issuance and sale by the Partnership of
the Units, the execution, delivery and performance of this Agreement by the
Alliance Parties, or the consummation of the transactions contemplated hereby
(including the acquisition of Warrior Coal, LLC on the terms described in the
Final Prospectus) (i) conflicts or will conflict with or constitutes or will
constitute a violation of the agreement of limited partnership, limited
liability company agreement, certificate or articles of incorporation or bylaws
or other organizational documents of any of the Alliance Entities, (ii)
conflicts or will conflict with or constitutes or will constitute a breach or
violation of, or a default under (or an event which, with notice or lapse of
time or both, would constitute such an event), any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Alliance Entities is a party or by which any of them or any of their
respective properties may be bound, (iii) violates or will violate any statute,
law or regulation or any order, judgment, decree or injunction of any court or
governmental agency or body directed to any of the Alliance Entities or any of
their properties in a proceeding to which any of them or their property is a
party or (iv) will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Alliance Entities, in the
case of clauses (ii), (iii) or (iv), which conflicts, breaches, violations or
defaults would have a Material Adverse Effect.
(u) No permit, consent, approval, authorization, order,
registration, filing or qualification of or with any court, governmental agency
or body is required in connection with the execution and delivery of, or the
consummation by the Alliance Entities of the transactions (including the pending
Warrior Coal transaction, on the terms described in the Final Prospectus)
contemplated by, this Agreement except for (i) such permits, consents, approvals
and similar authorizations required under the Securities Act, the Exchange Act
and state securities or "Blue Sky" laws, (ii) such consents that have been, or
prior to the Closing Date will be, obtained, (iii) such consents that, if not
obtained, would not have a Material Adverse Effect and (iv) as disclosed in the
Final Prospectus.
(v) None of the Alliance Entities is in (i) violation of its
agreement of limited partnership, limited liability company agreement,
certificate or articles of incorporation or bylaws or other organizational
documents, or of any law, statute, ordinance, administrative or governmental
rule or regulation applicable to it or of any decree of any court or
governmental agency or body having jurisdiction over it or (ii) breach, default
(or an event which, with notice or lapse of time or both, would constitute such
an event) or violation in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence
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of indebtedness or in any agreement, indenture, lease or other instrument to
which it is a party or by which it or any of its properties may be bound, which
breach, default or violation would, if continued, have a Material Adverse Effect
or could materially impair the ability of any of the Alliance Parties to perform
their obligations under this Agreement.
(w) The accountants, Deloitte & Touche LLP, who have certified or
shall certify the audited financial statements included in the Registration
Statement and the Final Prospectus (or any supplement thereto), are independent
public accountants with respect to the Alliance Entities as required by the Act
and the applicable published rules and regulations thereunder.
(x) The financial statements (including the related notes and
supporting schedules) included in the Registration Statement and the Final
Prospectus (and any supplement thereto) present fairly in all material respects
the financial position, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein at the respective
dates or for the respective periods and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except to the extent disclosed therein. The selected
historical information set forth in the Final Prospectus (and any supplement
thereto) under the caption "Selected Historical Financial and Operating Data" is
accurately presented in all material respects and prepared on a basis consistent
with the audited and unaudited historical consolidated financial statements from
which it has been derived. The pro forma financial statements of the Partnership
included in the Registration Statement and the Final Prospectus (and any
supplement thereto) have been prepared in all material respects in accordance
with the applicable requirements of Article II of Regulation S-X of the
Commission; the assumptions used in the preparation of such pro forma financial
statements are, in the opinion of the management of the Alliance Entities,
reasonable; and the pro forma adjustments reflected in such pro forma financial
statements have been properly applied to the historical amounts in compilation
of such pro forma financial statements.
(y) Except as disclosed in the Registration Statement and the
Final Prospectus (or any supplement thereto), subsequent to the respective dates
as of which such information is given in the Registration Statement and the
Final Prospectus (or any supplement thereto), (i) none of the Alliance Entities
has incurred any liability or obligation, indirect, direct or contingent, or
entered into any transactions, not in the ordinary course of business, that,
singly or in the aggregate, is material to the Alliance Entities, taken as a
whole, and (ii) there has not been any material change in the capitalization or
material increase in the short-term debt or long-term debt, of the Alliance
Entities.
(z) There are no legal or governmental proceedings pending or, to
the knowledge of the Alliance Parties, threatened, against any of the Alliance
Entities, or to which any of the Alliance Entities is a party, or to which any
of them or their respective properties is subject, that are required to be
described in the Registration Statement or the Final Prospectus but are not
described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Final Prospectus or to be filed as an exhibit to
the Registration Statement that are not described or filed as required by the
Act.
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(aa) The Operating Company and the Subsidiaries have good and
indefeasible title to all real property and good title to all personal property
described in the Final Prospectus as being owned by the Operating Company and
the Subsidiaries, except (i) as described in the Final Prospectus and (ii) such
as do not materially interfere with the use of such properties taken as a whole
as they have been used in the past and are proposed to be used in the future as
described in the Final Prospectus; and all real property and buildings held
under lease or license by the Operating Company and the Subsidiaries are held by
the Operating Company and the Subsidiaries under valid and subsisting and
enforceable leases or licenses with such exceptions as do not materially
interfere with the use of such properties taken as a whole as they have been
used in the past and are proposed to be used in the future as described in the
Final Prospectus. For purposes of this Underwriting Agreement, the phrase "good
and indefeasible title" to all real property shall mean, with respect to any
real property interest, and subject to the terms, conditions, and provisions
contained in the realty deeds and leases creating such real property interest,
that the ownership, rights, possession and title in the jurisdiction and locale
where the real property interest is located, is in each case legally sufficient
in all material respects to mine, remove, process and transport coal by the
mining methods currently utilized or contemplated by the Operating Company and
the Subsidiaries applicable to the mining complex where the real property
interest is located, and is free and clear of all liens, claims, security
interests or other encumbrances excepting (in each case) permitted encumbrances
and such title defects, and imperfections, limitations, correlative rights, or
appurtenant rights or obligations contained in, arising from or created by the
instrument under which the Operating Company and the Subsidiaries hold title to
such real property interest, or contained in its chain of title thereto, which
do not materially and adversely effect current or intended use or operation of
the subject real property interest or which are capable of being routinely
addressed, cured, avoided or assumed in the ordinary course of business and land
management of the Operating Company and the Subsidiaries.
(bb) Each of the Alliance Entities has such consents, easements,
rights-of-way or licenses from any person ("rights-of-way") as are necessary to
conduct its business in the manner described in the Final Prospectus, subject to
such qualifications as may be set forth in the Final Prospectus and except for
such rights-of-way which, if not obtained, would not have, individually or in
the aggregate, a Material Adverse Effect; each of the Alliance Entities has
fulfilled and performed all its material obligations with respect to such
rights-of-way and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or would result in any
impairment of the rights of the holder of any such rights-of-way, except for
such revocations, terminations and impairments that would not have a Material
Adverse Effect; and, except as described in the Final Prospectus, none of such
rights-of-way contains any restriction that is materially burdensome to the
Alliance Entities considered as a whole.
(cc) The Partnership has not distributed and, prior to the later
to occur of (i) the Closing Date and (ii) completion of the distribution of the
Units, will not distribute, any prospectus (as defined under the Act) in
connection with the offering and sale of the Units other than the Registration
Statement, the Final Prospectus or other materials, if any, permitted by the
Act, including Rule 134 of the general rules and regulations thereunder.
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(dd) Each of the Alliance Entities has such permits, consents,
licenses, franchises, certificates and authorizations of governmental or
regulatory authorities ("permits") as are necessary to own its properties and to
conduct its business in the manner described in the Final Prospectus, subject to
such qualifications as may be set forth in the Final Prospectus and except for
such permits which, if not obtained, would not have, individually or in the
aggregate, a Material Adverse Effect; each of the Alliance Entities has
fulfilled and performed all its material obligations with respect to such
permits which are due to have been fulfilled and performed by such date and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any impairment of the rights of
the holder of any such permit, except for such revocations, terminations and
impairments that would not have a Material Adverse Effect; and, except as
described in the Final Prospectus, none of such permits contains any restriction
that is materially burdensome to the Alliance Entities considered as a whole.
(ee) The Partnership (i) makes and keeps books, records and
accounts, which, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets and (ii) maintains systems of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) None of the Alliance Entities is now, and after sale of the
Units to be sold by the Partnership hereunder and application of the net
proceeds from such sale as described in the Final Prospectus under the caption
"Use of Proceeds," none of the Alliance Entities will be, (i) an "investment
company" or a company "controlled by" an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) a "public utility
company," "holding company" or a "subsidiary company" of a "holding company" or
an "affiliate" thereof, under the Public Utility Holding Company Act of 1935, as
amended.
(gg) None of the Alliance Entities has sustained since the date of
the latest audited financial statements included in the Final Prospectus any
material loss or interference with its business from fire, explosion, flood or
other calamity whether or not covered by insurance, or from any labor dispute or
court or governmental action, investigation, order or decree, otherwise than as
set forth or contemplated in the Final Prospectus.
(hh) Except as described in the Final Prospectus, the Alliance
Entities (i) are in compliance with any and all applicable federal, state and
local laws and regulations relating to the protection of human health and safety
and the environment or imposing liability or standards of conduct concerning any
Hazardous Materials (as defined below) ("Environmental Laws"), (ii) have
received all permits required of them under applicable Environmental Laws to
conduct their respective businesses, (iii) are in compliance with all terms and
conditions of any such permits and (iv) do not have any liability in connection
with the release into the environment of any Hazardous Material, except where
such noncompliance with Environmental Laws, failure to
10
receive required permits, failure to comply with the terms and conditions of
such permits or liability in connection with such releases would not,
individually or in the aggregate, have a Material Adverse Effect. The term
"Hazardous Material" means (A) any "hazardous substance" as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (B) any "hazardous waste" as defined in the Resource Conservation and
Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
(ii) Except as described in or contemplated by the Final
Prospectus, no material labor dispute with the employees of any of the Alliance
Entities exists or, to the knowledge of any of the Alliance Parties, is
imminent.
(jj) The Alliance Entities maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Alliance
Entities has received notice from any insurer or agent of such insurer that
material capital improvements or other material expenditures will have to be
made in order to continue such insurance, and all such insurance is outstanding
and duly in force on the date hereof and will be outstanding and duly in force
on the Closing Date.
(kk) Except as described in the Final Prospectus, there is (i) no
action, suit or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or, to the knowledge
of the Alliance Parties, threatened, to which any of the Alliance Entities, or
any of their respective subsidiaries, is or may be a party or to which the
business or property of any of the Alliance Entities, or any of their respective
subsidiaries, is or may be subject, (ii) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency and (iii) no
injunction, restraining order or order of any nature issued by a federal or
state court or foreign court of competent jurisdiction to which any of the
Alliance Entities, or any of their respective subsidiaries, is or may be
subject, that, in the case of clauses (i), (ii) and (iii) above, is reasonably
expected to (A) singly or in the aggregate have a Material Adverse Effect, (B)
prevent or result in the suspension of the offering and issuance of the Units,
or (C) in any manner draw into question the validity of this Agreement.
(ll) The Common Units are quoted on the Nasdaq National Market and
the Units have been approved for quotation on the Nasdaq National Market,
subject only to official notice of issuance.
(mm) Since January 26, 2001, there has not occurred a material
adverse change in the business, operations, affairs, financial condition, assets
or properties of Warrior Coal, LLC and its subsidiaries, taken as a whole.
Any certificate signed by any officer of any of the Alliance Parties
and delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Units shall be deemed a representation and warranty by
the Partnership, as to matters covered thereby, to each Underwriter.
11
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Partnership agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Partnership, at a purchase price
of $21.553325 per Unit (the "purchase price per Unit"), the amount of Firm Units
set forth opposite such Underwriter's name in Schedule I hereto (or such number
of Firm Units increased as set forth in Section 9 hereof).
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to 337,500 Additional Units at the same purchase price per Unit as the
Underwriters shall pay for the Firm Units. Said option may be exercised only to
cover over-allotments in the sale of the Units by the Underwriters. Said option
may be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of the Final Prospectus upon written or
telegraphic notice by the Underwriters to the Partnership setting forth the
number of Additional Units as to which the several Underwriters are exercising
the option and the settlement date. The number of Additional Units to be
purchased by each Underwriter shall be the same percentage of the total number
of Firm Units to be purchased by the several Underwriters as such Underwriter is
purchasing of the Firm Units, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional units.
3. Delivery and Payment. (a) Delivery of and payment for the Firm Units
and the Additional Units (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third Business Day prior to the
Closing Date) shall be made on the date and at the time specified in Schedule II
hereto or at such time on such later date not more than three Business Days
after the foregoing date as the Underwriters shall designate, which date and
time may be postponed by agreement between the Underwriters and the Partnership
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Units being herein called the "Closing Date"). Delivery of the Units
shall be made to the Underwriters against payment by the Underwriters of the
purchase price thereof to or upon the order of the Partnership by wire transfer
payable in same-day funds to an account specified by the Partnership. Delivery
of the Firm Units and the Additional Units shall be made through the facilities
of The Depository Trust Company unless the Underwriters shall otherwise
instruct.
(b) If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Partnership will
deliver the Additional Units (at the expense of the Partnership) to the
Underwriters through the facilities of the Depository Trust Company on the date
specified by the Underwriters (which shall be within three Business Days after
exercise of said option) against payment by the Underwriters of the purchase
price thereof to or upon the order of the Partnership by wire transfer payable
in same-day funds to an account specified by the Partnership. If settlement for
the Additional Units occurs after the Closing Date, the Partnership will deliver
to the Underwriters on the settlement date for the Additional Units, and the
obligation of the Underwriters to purchase the Additional Units shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
12
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Units for sale to the public as set forth in
the Final Prospectus.
5. Agreements. Each of the Alliance Parties, jointly and severally,
agrees with the Underwriters that:
(a) The Partnership will use its reasonable commercial efforts to
cause the Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination of the
offering of the Units, the Partnership will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus or any Rule 462(b)
Registration Statement unless the Partnership has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing sentence, if
the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Final Prospectus is otherwise required under Rule 424(b),
the Partnership will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Underwriters of such timely filing. The Partnership
will promptly advise the Underwriters (1) when the Registration Statement, if
not effective at the Execution Time, shall have become effective, (2) when the
Final Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Units, any amendment to the
Registration Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Final Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (6) of the receipt by the Partnership of any notification with
respect to the suspension of the qualification of the Units for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Partnership will use its reasonable commercial efforts to prevent
the issuance of any such stop order or the suspension of any such qualification
and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Units is
required to be delivered under the Act, any event occurs as a result of which
the Final Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Partnership promptly will (1) notify the
Underwriters of such event, (2) prepare and file with the Commission, subject to
the second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
13
(c) As soon as practicable, the Partnership will make generally
available to its security holders and to the Underwriters an earnings statement
or statements of the Partnership and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Partnership will furnish to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
counsel for the Underwriters, without charge, a signed copy of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy of
the Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Final Prospectus and the Final Prospectus and any
supplement thereto as the Underwriters may reasonably request. The Partnership
will pay the expenses of printing or other production of all documents relating
to the offering.
(e) The Partnership will arrange, if necessary, for the
qualification of the Units for sale under the laws of such jurisdictions as the
Underwriters may reasonably designate, will maintain such qualifications in
effect so long as required for the distribution of the Units and will pay any
fee of the National Association of Securities Dealers, Inc., in connection with
its review of the offering; provided that in no event shall the Partnership be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Units, in any
jurisdiction where it is not now so subject.
(f) The Partnership will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge, or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Partnership or any affiliate of the Partnership or any person
in privity with the Partnership or any affiliate of the Partnership) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, any other Common
Units or any securities convertible into, or exercisable, or exchangeable for,
Common Units; or publicly announce an intention to effect any such transaction,
until the Business Day set forth on Schedule II hereto, provided, however, that
the Partnership may issue and sell Common Units pursuant to (i) the Alliance
Resource Management GP, LLC 1999 Long-Term Incentive Plan, (ii) the Alliance
Resource Management GP, LLC Supplemental Executive Retirement Plan and (iii) the
Director's Deferred Compensation Program, each in effect at the Execution Time,
and pursuant to (x) the Managing General Partner's capital contribution in
connection with this Offering and (y) the conversion of securities or the
exercise of warrants outstanding at the Execution Time.
(g) The Partnership will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Partnership to facilitate the
sale or resale of the Units.
14
(h) The Partnership will apply the net proceeds from the sale of
the Units at the Closing in accordance with the description set forth under the
caption "Use of Proceeds" in the Final Prospectus.
(i) Each of the Alliance Entities will take such steps as shall be
necessary to ensure that none of them shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Units and the Additional Units, as the case
may be, shall be subject to (i) the accuracy of the representations and
warranties on the part of the Alliance Parties contained herein as of the
Execution Time, the Closing Date and any settlement date pursuant to Section 3
hereof, (ii) the accuracy of the statements of the Alliance Parties made in any
certificates pursuant to the provisions hereof, (iii) the performance by the
Alliance Entities of their obligations hereunder and (iv) the following
additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Underwriters agree in writing to a later time,
the Registration Statement will become effective not later than (i) 6:00 P.M.
New York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 P.M. New York City time on such
date or (ii) 9:30 A.M. on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00 P.M.
New York City time on such date; if filing of the Final Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Final Prospectus,
and any such supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Partnership shall have requested and caused ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., counsel for the Partnership, to have furnished to the
Underwriters their opinion, dated the Closing Date and addressed to the
Underwriters, to the effect that:
(i) Each of the Partnership and the Intermediate Partnership
has been duly formed and is validly existing and in good standing as a
limited partnership under the Delaware LP Act with all necessary
partnership power and authority to own or lease its properties and
conduct its business, in each case in all material respects as
described in the Final Prospectus. Each of the Partnership and the
Intermediate Partnership is duly registered or qualified as a foreign
limited partnership for the transaction of business under the laws of
the states set forth on Exhibit A to such counsel's opinion.
(ii) The Operating Company has been duly formed and is validly
existing and in good standing as a limited liability company under the
Delaware LLC Act with all necessary limited liability company power and
authority to own or lease its properties and conduct its business, in
each case in all material respects as described in the Final
Prospectus. The Operating Company is duly registered or qualified as a
foreign
15
limited liability company for the transaction of business under the
laws of the states set forth on Exhibit A to such counsel's opinion.
(iii) Each of ▇▇▇▇▇▇ County Coal, LLC, ▇▇▇▇▇▇▇ County Coal,
LLC, MC Mining, LLC, Mettiki Coal, LLC, Pontiki Coal, LLC, ▇▇▇▇▇▇▇
County Coal, LLC and White County Coal, LLC (collectively, the
"Material Subsidiaries") has been formed in accordance with Section
18-201 of the Delaware Limited Liability Company Act and is validly
existing and in good standing under the Delaware LLC Act, with all
necessary limited liability company power and authority to own or lease
its properties and conduct its business, in each case in all material
respects as described in the Final Prospectus. Each Material Subsidiary
is duly registered or qualified as a foreign limited liability company
for the transaction of business under the laws of the states set forth
on Exhibit A to such counsel's opinion.
(iv) Alliance Service, Inc. has been duly incorporated and is
validly existing and in good standing under the DGCL, with all
necessary corporate power and authority to own or lease its properties
and conduct its business, in each case in all material respects as
described in the Final Prospectus. Alliance Service, Inc. is duly
registered or qualified as a foreign corporation for the transaction of
business under the laws of the states set forth on Exhibit A to such
counsel's opinion.
(v) Each General Partner has been duly formed and is validly
existing and in good standing as a limited liability company under the
Delaware LLC Act, with all necessary limited liability company power
and authority to own or lease its properties, conduct its business and
act as general partner of the Partnership and the Intermediate
Partnership and, as to the Managing General Partner, to act as the
managing member of the Operating Company, in each case in all material
respects as described in the Final Prospectus. Each General Partner is
duly registered or qualified as a foreign limited liability company for
the transaction of business under the laws of the states set forth on
Exhibit A to such counsel's opinion.
(vi) The Managing General Partner and the Special General
Partner are the sole general partners of the Partnership, with .99% and
.01% general partner interests, respectively, in the Partnership; such
general partner interests have been duly authorized and validly issued
in accordance with the Partnership Agreement; and each General Partner
owns its general partner interests free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware naming such General Partner as debtor is on file in
the office of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel, without independent investigation,
other than those created by or arising under the Delaware LP Act.
(vii) The Operating Company owns a 100% membership interest in
each of the Material Subsidiaries and the Operating Company owns such
membership interests free and clear of all liens, encumbrances,
security interests, charges or claims (A) in respect of which a
financing statement under the Uniform Commercial Code of the State of
Delaware naming the Operating Company as debtor is on file in the
office of the
16
Secretary of State of the State of Delaware, or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LLC Act.
(viii) The Operating Company owns all of the outstanding
capital stock of Alliance Service, Inc.; such shares of capital stock
have been duly authorized and validly issued in accordance with the
certificate of incorporation and bylaws of the Alliance Service, Inc.,
as amended to date, and are fully paid and nonassessable; and the
Operating Company owns such shares of capital stock, free and clear of
all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Operating Company as debtor is
on file in the office of the Secretary of State of the State of
Delaware, or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the DGCL.
(ix) All of the outstanding Common Units issued to the
underwriters in the Partnership's initial public offering, the
Subordinated Units and the Incentive Distribution Rights and the
limited partner interests represented thereby have been duly authorized
and validly issued in accordance with the Partnership Agreement, and
are fully paid (to the extent required under the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by
matters described in Section 17-607 of the Delaware LP Act).
(x) The Units to be issued and sold to the Underwriters by the
Partnership pursuant to this Agreement and the limited partner
interests represented thereby have been duly authorized by the
Partnership Agreement and, when issued and delivered against payment
therefor as provided in this Agreement, will be validly issued in
accordance with the Partnership Agreement and fully paid (to the extent
required under the Partnership Agreement) and nonassessable (except as
such nonassessability may be affected by matters described in Section
17-607 of the Delaware LP Act).
(xi) The Managing General Partner and the Special General
Partner are the sole general partners of the Intermediate Partnership,
with 1.0001% and .01% general partner interests, respectively, in the
Intermediate Partnership; such general partner interests have been duly
authorized and validly issued in accordance with the Intermediate
Partnership Agreement; and each General Partner owns its general
partner interest free and clear of all liens, encumbrances, security
interests, charges or claims (A) in respect of which a financing
statement under the Uniform Commercial Code of the State of Delaware
naming such General Partner as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LP Act.
(xii) The Partnership owns a 98.9899% limited partner interest
in the Intermediate Partnership; such limited partner interest has been
duly authorized and validly issued in accordance with the Intermediate
Partnership Agreement and is fully paid (to the extent required under
the Intermediate Partnership Agreement) and
17
nonassessable (except as such nonassessability may be affected by
matters described in Section 17-607 of the Delaware LP Act); and the
Partnership owns such limited partner interest free and clear of all
liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Partnership as debtor is on
file in the office of the Secretary of State of the State of Delaware
or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Delaware LP Act.
(xiii) The Managing General Partner is the sole manager of the
Operating Company with a .001% managing interest in the Operating
Company; such managing interest has been duly authorized and validly
issued in accordance with the Operating Company LLC Agreement; and the
Managing General Partner owns such managing interest free and clear of
all liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Managing General Partner as
debtor is on file in the office of the Secretary of State of the State
of Delaware or (B) otherwise known to such counsel, without independent
investigation, other than those created by or arising under the
Delaware LLC Act.
(xiv) The Intermediate Partnership owns a 99.999% non-managing
interest in the Operating Company; such non-managing interest has been
duly authorized and validly issued in accordance with the Operating
Company LLC Agreement and is fully paid (to the extent required under
the Operating Company LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC
Act); and the Intermediate Partnership owns such non-managing interest
free and clear of all liens, encumbrances, security interests, charges
or claims (A) in respect of which a financing statement under the
Uniform Commercial Code of the State of Delaware naming the
Intermediate Partnership as debtor is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to
such counsel, without independent investigation, other than those
created by or arising under the Delaware LLC Act.
(xv) The Partnership Agreement has been duly authorized,
executed and delivered by the General Partners and is a valid and
legally binding agreement of the General Partners, enforceable against
the General Partners in accordance with its terms; the Managing General
Partner LLC Agreement has been duly authorized, executed and delivered
by Alliance Management Holdings, LLC and AMH II, LLC and is a valid and
legally binding agreement of Alliance Management Holdings, LLC and AMH
II, LLC, enforceable against such parties in accordance with its terms;
the Special General Partner LLC Agreement has been duly authorized,
executed and delivered by Alliance Resource Holdings, Inc. and is a
valid and legally binding agreement of Alliance Resource Holdings,
Inc., enforceable against such party in accordance with its terms; the
Intermediate Partnership Agreement has been duly authorized, executed
and delivered by the General Partners and the Partnership and is a
valid and legally binding agreement of the General Partners and the
Partnership, enforceable against the General Partners and the
Partnership in accordance with its terms; and the Operating Company LLC
Agreement
18
has been duly authorized, executed and delivered by each of the
Managing General Partner and the Intermediate Partnership and is a
valid and legally binding agreement of the Managing General Partner and
the Intermediate Partnership, enforceable against each of them in
accordance with its terms; provided that, with respect to each
agreement described in this paragraph, the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and provided, further, that the
indemnity, contribution and exoneration provisions contained in any of
such agreements may be limited by public policy and applicable law
relating to fiduciary duties, indemnification and contribution.
(xvi) Except as described in the Final Prospectus and for
rights that have been waived, there are no preemptive rights or other
rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any limited partner interests in the Partnership
or the Intermediate Partnership or any interest in the Operating
Company pursuant to the Partnership Agreement, the Intermediate
Partnership Agreement and the Operating Company LLC Agreement. To such
counsel's knowledge, neither the filing of the Registration Statement
nor the offering or sale of the Units as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any
Units or other securities of the Partnership or the Intermediate
Partnership or any interest in the Operating Company other than as
provided in the Final Prospectus or as have been waived. The
Partnership has all requisite power and authority to issue, sell and
deliver the Units, in accordance with and upon the terms and conditions
set forth in this Agreement, the Partnership Agreement and the
Registration Statement and Final Prospectus.
(xvii) This Agreement has been duly authorized and validly
executed and delivered by each of the Alliance Parties.
(xviii) None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of
this Agreement by the Alliance Parties, or the consummation of the
transactions contemplated hereby (including the acquisition of Warrior
Coal, LLC, on the terms described in the Final Prospectus) (A)
conflicts or will conflict with or constitutes or will constitute a
violation of the agreement of limited partnership, limited liability
company agreement, the certificate or articles of incorporation or
bylaws or other organizational documents of any of the Alliance
Parties, (B) conflicts or will conflict with or constitutes or will
constitute a breach or violation of, or a default under (or an event
which, with notice or lapse of time or both, would constitute such an
event), any agreement filed as an exhibit to the Registration
Statement, (C) results or will result in any violation of the Delaware
LP Act, the Delaware LLC Act, the DGCL, or federal law, or (D) results
or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Alliance
Entities, which in the case of clauses (B), (C) or (D) would reasonably
be expected to have a material adverse effect on the financial
condition, business or results of operations of the Alliance Entities,
taken as a whole; provided, however, that for purposes of this
19
paragraph (xviii), such counsel may disclaim an opinion with respect to
Federal or state securities laws or other antifraud laws.
(xix) No permit, consent, approval, authorization, order,
registration, filing or qualification ("consent") of or with any
federal or Delaware court, governmental agency or body having
jurisdiction over the Alliance Entities or any of their respective
properties is required for the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of
this Agreement by the Alliance Parties or the consummation by the
Alliance Entities of the transactions contemplated by this Agreement
(including the acquisition of Warrior Coal, LLC, on the terms described
in the Final Prospectus), except for such consents as may be required
under the Act, the Exchange Act and state securities or "Blue Sky"
laws, as to which such counsel need not express any opinion.
(xx) The statements in the Registration Statement and Final
Prospectus under the captions "Description of the Common Units," "Cash
Distribution Policy" and "Description of Our Partnership Agreement,"
insofar as they constitute descriptions of agreements or refer to
statements of law or legal conclusions, are accurate and complete in
all material respects, and the Units conform in all material respects
to the descriptions thereof contained in the Registration Statement and
Final Prospectus.
(xxi) The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. that is filed as
Exhibit 8.1 to the current report on Form 8-K filed with the Commission
on February [___], 2003 is confirmed and the Underwriters may rely upon
such opinion as if it were addressed to them.
(xxii) The Registration Statement was declared effective under
the Act on April 12, 2002; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
threatened by the Commission; and any required filing of the Basic
Prospectus, any Preliminary Final Prospectus and the Final Prospectus,
and any supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by such Rule.
(xxiii) The Registration Statement and the Final Prospectus
(except for the financial statements and the notes and the schedules
thereto and the other financial, statistical and reserve data included
therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act
and the rules and regulations promulgated thereunder.
(xxiv) To the knowledge of such counsel, (A) there is no legal
or governmental proceeding pending or threatened to which any of the
Alliance Entities is a party or to which any of their respective
properties is subject that is required to be disclosed in the Final
Prospectus and is not so disclosed and (B) there are no agreements,
contracts or other documents to which any of the Alliance Entities is a
party that are required to be described in the Registration Statement
or the Final Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
20
(xxv) None of the Alliance Parties is (i) an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended, or (ii) a "public utility company" or "holding company"
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
In addition, such counsel shall state that they have participated
in conferences with officers and other representatives of the Alliance Entities
and the independent public accountants of the Partnership and your
representatives, at which the contents of the Registration Statement and the
Final Prospectus and related matters were discussed, and although such counsel
has not independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Final Prospectus (except to the
extent specified in paragraph (xx), (xxi), (xxiii) and (xxiv)), no facts have
come to such counsel's attention that lead such counsel to believe that the
Registration Statement (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' report
thereon, and (ii) the other financial, statistical and reserve information
included therein, as to which such counsel need not comment), as of its
effective date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Final Prospectus (other than (i)
the financial statements included therein, including the notes and schedules
thereto and the auditors' report thereon, and (ii) the other financial,
statistical and reserve information included therein, as to which such counsel
need not comment), as of its issue date and the Closing Date contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon representations of the Alliance Parties set forth in this
Agreement and upon certificates of officers and employees of the Alliance
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that their opinion is
limited to federal laws, the Delaware LP Act, the Delaware LLC Act, and the
DGCL, (D) with respect to the opinions expressed in paragraphs (i), (ii), (iii)
and (iv) above as to the due qualification or registration as a foreign limited
partnership, corporation or limited liability company, as the case may be, of
the Alliance Entities, state that such opinions are based upon certificates of
foreign qualification or registration provided by the Secretary of State of the
States of Indiana, Illinois, Kentucky, Maryland, Oklahoma and West Virginia
(each of which shall be dated as of a date not more than fourteen days prior to
the Closing Date and shall be provided to you), and (E) state that they express
no opinion with respect to state or local taxes or tax statutes to which any of
the limited partners of the Partnership or any of the Alliance Entities may be
subject.
(c) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President - Law and Administration and General
Counsel of the Managing General Partner, dated the Closing Date and addressed to
you, to the effect that:
(i) To the knowledge of such counsel, none of the Alliance
Entities is in (A) breach or violation of the provisions of its
agreement of limited partnership,
21
limited liability company operating agreement, certificate or articles
of incorporation or bylaws or other organizational documents or (B)
default (and no event has occurred which, with notice or lapse of time
or both, would constitute such a default) or violation in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which it is a party
or by which it or any of its properties may be bound, which breach,
default or violation would, if continued, have a material adverse
effect on the financial condition, business or results of operations of
the Alliance Entities, taken as a whole, or could materially impair the
ability of any of the Alliance Entities to perform their obligations
under this Agreement, except in respect of which waivers have been
obtained.
(ii) Except as described in the Final Prospectus and for
rights that have been waived, there are no preemptive rights or other
rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any limited partner interests in the Partnership
or the Intermediate Partnership or any interest in the Operating
Company pursuant any agreement or instrument known to such counsel to
which an Alliance Entity is a party or by which any of them may be
bound, other than the Partnership Agreement, the Intermediate
Partnership Agreement and the Operating Company LLC Agreement. To such
counsel's knowledge, except as described in the Final Prospectus, there
are no outstanding options or warrants to purchase (A) any Common Units
or Subordinated Units or other partnership interests in the Partnership
or the Intermediate Partnership or (B) any interests in the Operating
Company.
(iii) None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of
this Agreement by the Alliance Parties or the consummation by the
Alliance Entities of the transactions contemplated hereby (including
the acquisition of Warrior Coal, LLC, on the terms described in the
Final Prospectus) (i) constitutes or will constitute a breach or
violation of, or a default under (or an event which, with notice or
lapse of time or both, would constitute such a default), any agreement,
lease or other instrument known to such counsel to which any of the
Alliance Entities is a party or by which any of them or any of their
respective properties may be bound, other than those filed as an
exhibit to the Registration Statement, or (ii) violates or will violate
any order, judgment, decree or injunction of any court or government
agency or body known to such counsel directed to any of the Alliance
Entities or any of their properties in a proceeding to which any of
them or their property is or was a party.
(iv) To the knowledge of such counsel, each of the Alliance
Entities has such permits, consents, licenses, franchises and
authorizations ("permits") issued by the appropriate federal, state or
local governmental or regulatory authorities as are necessary to own or
lease its properties and to conduct its business in the manner
described in the Final Prospectus, subject to such qualifications as
may be set forth in the Final Prospectus, and except for such permits
which,if not obtained would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect upon the
operations conducted by the Alliance Entities, taken as a whole; and,
to the knowledge of such counsel, none of the Alliance Entities has
received any notice of proceedings relating to the revocation or
modification of any such permits which,
22
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to have a
material adverse effect on the financial condition, business or results
of operations of the Alliance Entities, taken as a whole.
(v) Except as described in the Final Prospectus, to the
knowledge of such counsel, there is no litigation, proceeding or
governmental investigation pending or threatened against any of the
Alliance Entities which, if adversely determined to such Alliance
Entities, is reasonably likely to have a material adverse effect on the
financial condition, business, properties, or results of operations of
the Alliance Entities, taken as a whole.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Alliance Parties and
the independent public accountants of the Partnership and your representatives,
at which the contents of the Registration Statement and the Final Prospectus and
related matters were discussed, and although such counsel has not independently
verified, is not passing on, and is not assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in, the
Registration Statement and the Final Prospectus, no facts have come to such
counsel's attention that lead such counsel to believe that the Registration
Statement (other than (i) the financial statements included therein, including
the notes and schedules thereto and the auditors' report thereon, and (ii) the
other financial, statistical and reserve information included therein, as to
which such counsel need not comment), as of its effective date contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Final Prospectus (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' report
thereon and (ii) the other financial, statistical and reserve information
included therein, as to which such counsel need not comment), as of its issue
date and the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon representations of the Alliance Parties set forth in this
Agreement and upon certificates of officers and employees of the Alliance
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to him as originals are authentic, that all copies submitted
to him conform to the originals thereof, and that the signatures on all
documents examined by him are genuine, (C) state that such opinions are limited
to federal laws and the laws of the State of Oklahoma.
(d) The Underwriters shall have received from ▇▇▇▇▇ ▇▇▇▇▇ L.L.P.,
counsel for the Underwriters, such opinion or opinions dated the Closing Date
and addressed to the Underwriters, with respect to the issuance and sale of the
Units, the Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Underwriters may reasonably
require, and the Partnership shall have furnished to such counsel documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Partnership shall have furnished to the Underwriters a
certificate signed by the President and Chief Executive Officer and the
principal financial or accounting
23
officer of the Managing General Partner, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Alliance Parties
in this Agreement are true and correct on and as of the Closing Date
with the same effect as if made on the Closing Date and the Alliance
Parties have complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Managing General Partner's
knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Alliance Entities, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(f) The Partnership shall have requested and caused Deloitte &
Touche LLP to have furnished to the Underwriters, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance reasonably satisfactory to the
Underwriters, confirming that they are independent auditors within the meaning
of the Act and the Exchange Act and the respective applicable rules and
regulations adopted by the Commission thereunder and that they have performed a
review of the unaudited interim financial information of the Partnership for the
three-month periods ended March 31, 2002 and 2001, the three-month and six-month
period ended June 30, 2002 and 2001, the three-month and nine-month periods
ended September 30, 2002 and 2001, and the three-month periods ended December
31, 2002 and 2001 and the year ended December 31, 2002, in accordance with
Statement on Auditing Standards No. 71, and stating in effect, that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Final Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related rules and regulations
adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Alliance Entities; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited consolidated
interim financial information for the three-month periods ended March
31, 2002 and 2001, the three-month and six-month period ended June 30,
2002 and 2001, the three-month and nine-month periods ended September
30, 2002 and 2001 in the Registration Statement and Final Prospectus
and the three-month periods ended December 31, 2002 and 2001 and the
year ended December 31, 2002 in the 8-K filed by
24
the Partnership January 29, 2003; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such letter;
a reading of the 2002 minutes of the meetings of the General Partners;
and inquiries of certain officials of the Alliance Entities who have
responsibility for financial and accounting matters of the Alliance
Entities as to transactions and events subsequent to December 31, 2001,
nothing came to their attention which caused them to believe that:
(A) the unaudited interim financial statements included in the
Registration Statement and the Final Prospectus do not comply as
to form in all material respects with applicable accounting
requirements of the Act and with the related rules and regulations
adopted by the Commission with respect to financial statements
included or incorporated by reference in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements included in the
Registration Statement and the Final Prospectus;
(B) with respect to the period subsequent to December 31,
2002, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the capital stock,
increase in long-term debt of the Partnership, or decreases in the
consolidated net current assets or the owners' equity/partners'
capital of the Partnership as compared with the amounts shown on
the December 31, 2002, unaudited consolidated balance sheet filed
by the Partnership on Form 8-K on January 29, 2003, or for the
period from January 1, 2003 to such specified date there were any
decreases, as compared with the comparable period from January 1,
2003, in revenues or income of the Partnership, except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by
the Partnership as to the significance thereof unless said
explanation is not deemed necessary by the Underwriters;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Partnership) set forth in the
Registration Statement and the Final Prospectus agrees with the
analyses prepared by management from the accounting records of the
Alliance Entities, excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Final Prospectus (the "pro forma
financial statements"), carrying out certain specified procedures,
inquiries of certain officials of the Partnership who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the unaudited pro forma financial statements,
nothing came to their attention which caused them to believe that the
unaudited pro forma financial statements do not comply as to form in
all material
25
respects with the applicable requirements of Rule 11-02 of Regulation
S-X and that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such statements.
References to the Final Prospectus in this section (f) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (f) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the
Alliance Entities, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto) the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the sole judgment of
the Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Units as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement thereto).
(h) Prior to the Closing Date, the Partnership shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
(i) The Units shall have been listed and admitted and authorized
for quotation on the Nasdaq National Market System, and satisfactory evidence of
such actions shall have been provided to the Underwriters.
(j) At the Execution Time, the Partnership shall have furnished to
the Underwriters a letter substantially in the form of Exhibit B hereto from
each executive officer and director of the Managing General Partner addressed to
the Underwriters.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Underwriters. Notice of such cancellation shall be given to the Partnership in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Units
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied or because of
any refusal, inability or failure on the part of the Partnership to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Partnership will reimburse the
Underwriters
26
severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Units.
8. Indemnification and Contribution.
(a) Each of the Alliance Parties, jointly and severally, agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Units as originally filed or in any amendment thereof, or in the Basic
Prospectus, or the Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Alliance Parties
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of any Underwriter specifically for inclusion
therein; provided further, that with respect to any untrue statement or omission
or alleged untrue statement or omission in or from any Final Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter (or director, officer, employee, agent or controlling
person thereof) from whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter (or director, officer, employee,
agent or controlling person thereof) occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Alliance Parties have previously furnished
copies of the Final Prospectus to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., (x) delivery of the
Final Prospectus was required by the Act to be made to such person, (y) the
untrue statement or omission or alleged untrue statement or omission in or from
the Basic Prospectus was corrected in the Final Prospectus and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of such securities to such person, a copy of the Final Prospectus. This
indemnity agreement will be in addition to any liability which any Alliance
Party may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Alliance Parties, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Partnership within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from Alliance Parties to each
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Partnership by or on behalf of such Underwriter-
specifically for inclusion in the
27
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. The
Alliance Parties acknowledge that the statements set forth in the last paragraph
of the cover page regarding delivery of the Units and, under the heading
"Underwriting" or "Plan of Distribution," (i) the list of Underwriters and their
respective participation in the sale of the Units, (ii) the sentences related to
concessions and reallowances, (iii) the paragraph related to release of the
lockup agreements and (iv) the paragraphs related to stabilization, syndicate
covering transactions, penalty bids, passive market making transactions and
compliance with Rule 2810 of the NASD's Conduct Rules in the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason,
28
the Alliance Parties and the Underwriters severally agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Alliance Parties and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Partnership on the one hand and by the
Underwriters on the other from the offering of the Units; provided, however,
that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Units) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Units purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Alliance Parties and the Underwriters severally shall contribute in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Alliance Parties on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Alliance Parties shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses) received by it,
and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Alliance Parties on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Alliance Parties and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Alliance Parties within the meaning of either the Act or the Exchange Act, any
of the directors or officers of the Alliance Parties who shall have signed the
Registration Statement shall have the same rights to contribution as the
Alliance Parties, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Units agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Units set forth
opposite their names in Schedule I hereto bears to the aggregate amount of Units
set forth opposite the names of all the remaining Underwriters) the Units which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of Units which
the defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Units set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation
29
to purchase any, of the Units, and if such nondefaulting Underwriters do not
purchase all the Units, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Partnership. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Underwriters shall
determine in order that the required changes in the Registration Statement and
the Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Partnership and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Underwriters, by notice given to the Partnership
prior to delivery of and payment for the Units, if at any time prior to such
time (i) trading in the Partnership's Common Units shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on either of
such Exchanges or the Nasdaq National Market, (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Underwriters, impractical or inadvisable to proceed with the
offering or delivery of the Units as contemplated by the Final Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Alliance Parties or any of their respective officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Alliance Entities or any of their respective officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Units. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc., at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Partnership, will be mailed, delivered or telefaxed
to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President, Law and Administration, (fax: (918)
▇▇▇-▇▇▇▇) Alliance Resource Partners, L.P., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
30
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
the introductory paragraph above contained in the Registration
Statement at the Effective Date including any Preliminary Final
Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Houston, Texas.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Units that was first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the Units
and the offering thereof and is used prior to filing of the Final
Prospectus, together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in the introductory paragraph above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it
31
shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement
as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
"Rule 415," "Rule 424," "Rule 430A" and "Rule 462" refer to
such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Units and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
32
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Alliance Parties and the Underwriters.
Very truly yours,
Alliance Resource Partners, L.P.
By: Alliance Resource Management GP, LLC
its Managing General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President-
Law and Administration
Alliance Resource Operating Partners, L.P.
By: Alliance Resource Management GP, LLC
its Managing General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President-
Law and Administration
Alliance Coal, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President-
Law and Administration
Alliance Resource GP, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President-
Law and Administration
33
Alliance Resource Management GP, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President-
Law and Administration
Confirmed as of the date first
above mentioned on behalf of
the Underwriters named in Schedule I
hereto.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
▇▇▇▇▇▇ BROTHERS INC.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Managing Director
34
SCHEDULE I
Alliance Resource Partners, L.P.
Number of Firm Units
Underwriter to be Purchased
----------- --------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ..................................................... 1,125,000
▇▇▇▇▇▇ Brothers Inc............................................................. 675,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc........................................................ 450,000
=========
Total 2,250,000
SCHEDULE II
Underwriting Agreement dated February 10, 2003
Registration Statement No. 333-85282
Title, Purchase Price and Description of Units:
Title: Common Units
Number of Units to be sold by the Company: 2,250,000
Price to Public per Unit (include accrued dividends, if any): $22.51
Price to Public -- total: $50,647,500
Underwriting Discount per Unit: .956675
Underwriting Discount -- total: $2,152,519
Proceeds to Company per Unit: $21.553325
Proceeds to Company -- total: $48,494,981
Other provisions:
Closing Date, Time and Location: February 14, 2003 at 9:00 a.m. Houston time at
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Type of Offering: Non-Delayed
Date referred to in Section 5(f) after which the Company may offer or sell
securities issued or guaranteed by the Company without the consent of the
Underwriters: May 12, 2003
Modification of items to be covered by the letter from Deloitte & Touche
delivered pursuant to Section 6(e) at the Execution Time: None.
EXHIBIT A
Entity Jurisdiction in which registered or qualified
------ ---------------------------------------------
Alliance Resource Partners, L.P. Kentucky, Oklahoma
Alliance Coal, LLC Kentucky, Oklahoma
Alliance Resource GP, LLC Indiana, Illinois, Kentucky, Maryland, Oklahoma, West Virginia
Alliance Resource Management GP, LLC Indiana, Illinois, Kentucky, Maryland, Oklahoma, West Virginia
Alliance Resource Operating Partners, LP Oklahoma
▇▇▇▇▇▇▇ County Coal, LLC Kentucky
MC Mining, LLC Kentucky
▇▇▇▇▇▇ County Coal, LLC Indiana
Pontiki Coal, LLC Kentucky
White County Coal, LLC Illinois
▇▇▇▇▇▇▇ County Coal, LLC Kentucky
Mettiki Coal, LLC Maryland, West Virginia
Alliance Service, Inc. Kentucky
EXHIBIT B
Letterhead of officer, director or holder of Common Units
Alliance Resource Partners, L.P.
Public Offering of Common Units
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ Brothers Inc.
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed
Underwriting Agreement (the "
Underwriting Agreement") among Alliance
Resource Partners, L.P., a Delaware limited partnership (the "Partnership"),
Alliance Resource Operating Partners, L.P., Alliance Coal, LLC, Alliance
Resource Management GP, LLC, Alliance Resource GP, LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc., ▇▇▇▇▇▇ Brothers Inc. and ▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc., relating to an
underwritten public offering of common units representing limited partner
interests (the "Common Units") of the Partnership.
In order to induce you and the other Underwriters to enter
into the
Underwriting Agreement, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell,
pledge or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
Common Units (as defined in the
Underwriting Agreement) of the Partnership or
any securities convertible into or exercisable or exchangeable for such Common
Units, or publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of the
Underwriting Agreement, other than
Common Units disposed of as bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc.
If for any reason the
Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the
Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
Signature of officer, director or common Unitholder
Name and address of officer, director or common
Unitholder
