1
EXHIBIT 10.17
AMENDED AND RESTATED PUT AND CALL OPTION AGREEMENT
AMENDED AND RESTATED PUT AND CALL OPTION AGREEMENT, dated as of
February 12, 2001 (the "Agreement"), between ARH WARRIOR HOLDINGS, INC., a
Delaware corporation ("AWH"), and ALLIANCE RESOURCE PARTNERS, L.P., a Delaware
limited partnership (the "MLP"), amending and restating that certain Put and
Call Option Agreement, dated as of January 26, 2001 (the "Original Put and Call
Agreement"), between AWH and the MLP.
WITNESSETH:
WHEREAS, AWH has formed Warrior Coal, LLC, a Delaware limited liability
company ("Warrior Coal"), and owns all of the limited liability company member
interests in and to Warrior Coal; and
WHEREAS, contemporaneously with the execution and delivery of the
Original Put and Call Agreement, Warrior Coal entered into (i) a Stock Purchase
and Sale Agreement, dated as of the date hereof (the "Stock Purchase
Agreement"), among Warrior Coal, as purchaser, and Xxxxx Xxxxxxx, Xxxx Xxxxxxx
and Xxxxx Xxxxx, as sellers, pursuant to which Warrior Coal purchased all of the
issued and outstanding shares of capital stock of Warrior Coal Corporation
("WCC"), Warrior Coal Mining Company ("WCMC") and Xxxxxxx Bros. Coal Co., Inc.
("RBCC"), and (ii) an Asset Purchase and Sale Agreement, dated as of the date
hereof (the "Asset Purchase Agreement"), among Warrior Coal, as purchaser, and
Christian Coal Corp. and Richland Mining Co., Inc., as sellers, pursuant to
which Warrior Coal purchased certain assets, and assumed certain liabilities, of
Christian Coal Corp. and Richland Mining Co., Inc.;
WHEREAS, contemporaneously with the execution and delivery of the
Original Put and Call Agreement, SGP Land, LLC ("SGP Land") entered into an
Asset Purchase and Sale Agreement, dated as of the date hereof (as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof, the "Cardinal Asset Purchase Agreement"), between SGP Land, as
purchaser, and Cardinal Trust, LLC ("Cardinal Trust"), as seller, pursuant to
which SGP Land purchased certain assets and assumed certain liabilities of
Cardinal Trust;
WHEREAS, AWH has contributed capital to Warrior Coal for the purpose of
financing the acquisitions contemplated by the Stock Purchase Agreement and the
Asset Purchase Agreement;
WHEREAS, contemporaneously with the execution and delivery of the Stock
Purchase Agreement and the Asset Purchase Agreement, AWH and the MLP entered
into the Original Put and Call Agreement, pursuant to which (i) AWH acquired the
right to put to the MLP during a specified period, and the MLP became obligated
to purchase from AWH, all of AWH's limited liability company interests in and to
Warrior Coal, upon the terms and conditions set forth therein, and (ii) the MLP
acquired the right to call from AWH during a specified period, and
2
AWH became obligated to sell to the MLP, all of AWH's limited liability company
interests in and to Warrior Coal, upon the terms and conditions set forth
therein; and
WHEREAS, AWH and the MLP desire to amend and restate the Original Put
and Call Agreement in its entirety upon the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, AWH and the MLP hereby agree as follows:
Section 1. Definitions. Where used in this Agreement, the following
terms shall have the meanings set forth in this Section 1 (such meanings to be,
when appropriate, equally applicable to both the singular and plural forms of
the terms defined):
"Asset Purchase Agreement" shall have the meaning specified in
the second Whereas clause hereof.
"AWH" shall have the meaning specified in the preamble hereof.
"Call Option" means the right of the MLP to purchase from AWH
and to cause AWH to sell to the MLP (or its designee) Warrior Coal, as
contemplated by Section 3 hereof.
"Call Option Period" shall mean the period from and including
April 12, 2003 to and including December 31, 2006.
"Call Option Price" means the sum of (i) $10,000,000.00, (ii)
an amount of interest equal to the product of (x) the amount set forth
in clause (i) hereof multiplied by (y) twelve percent (12%) per annum,
compounded annually (determined based on a 360-day year, actual days
elapsed from January 26, 2001 up to (but not including) the date on
which the purchase and sale of Warrior Coal shall be consummated in
connection with the exercise of the Call Option), and (iii) an amount
equal to the product of (x) the amount determined pursuant to clause
(ii) hereof and (y) twenty-five percent (25%).
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the acquisition
of an asset and the incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to Warrior Coal
or any Subsidiary thereof and a Capital Lease, the amount of the
obligation of Warrior Coal or such Subsidiary as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a
liability on a balance sheet of Warrior Coal or such Subsidiary.
"Cardinal Asset Purchase Agreement" shall have the meaning
specified in the third Whereas clause hereof.
2
3
"Cardinal Trust" shall have the meaning specified in the third
Whereas clause hereof.
"Consolidated Subsidiary" means, with respect to any Person at
any time, any Subsidiary the accounts of which would be consolidated
with those of such first Person in its consolidated financial
statements in accordance with GAAP.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price
of property acquired by it (excluding accounts payable arising
in the ordinary course of business but including, without
limitation, all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities secured by any Lien with respect
to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks or other financial
institutions (whether or not representing obligations for
borrowed money), other than any thereof incurred in the
ordinary course of business of such Person and which are
issued (i) to support such Person's obligations in respect of
workmen's compensation or unemployment insurance laws, the
payment or retirement benefits or performance guarantees
relating to coal deliveries or insurance deductibles and
aggregating, in the case of Warrior Coal and its Subsidiaries,
no more than $2,000,000 at any time outstanding for all of the
foregoing or (ii) in respect of current trade payables of such
Person; and
(f) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through
(e) hereof.
Debt of such Person shall include all obligations of such
Person of the character described in clauses (a) through (f) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished
under GAAP.
"GAAP" means generally accepted accounting principles
consistently applied in the United States.
3
4
"Guaranty" and, with correlative meaning, "Guaranteed" means,
with respect to any Person, any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit
or collection) of such Person guaranteeing or in effect guaranteeing
any Debt of any other Person in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through
an agreement, contingent or otherwise, by such person:
(a) to purchase such Debt or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase
or payment of such Debt, or (ii) to maintain any working
capital or other balance sheet condition or any income
statement condition of any other person or otherwise to
advance or make available funds of the purchase or payment of
such Debt;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such Debt of the ability of any other person to make payment
of the Debt; or
(d) otherwise to assure the owner of such Debt
against loss in respect thereof.
In any computation of the Debt of the obligor under any
Guaranty, the Debt that is the subject of such Guaranty shall be
assumed to be a direct obligation of such obligor. The amount of any
Guaranty shall be equal to the outstanding amount of the Debt
guaranteed, or such lesser amount to which the maximum exposure of such
person shall have been specifically limited.
"Inventory" means inventory held for sale or lease in the
ordinary course of business.
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest, production payment or other
encumbrance, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with respect
to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements); provided, however, "Lien" shall not include any of the
following: (i) any negative pledge, or (ii) any royalty interest or
overriding royalty interest under any lease, sublease or other similar
agreement entered into in the ordinary course of business.
"Material Adverse Effect" means a material adverse effect on
the business, operations, affairs, financial condition, assets or
properties of Warrior Coal and its Subsidiaries, taken as a whole
(unless the context shall expressly require otherwise).
4
5
"Original Put and Call Agreement" shall have the meaning
specified in the preamble hereof.
"Permitted Liens" means each of the following:
(a) Liens for property taxes, assessments or other
governmental charges which are not yet due and payable and
delinquent or the validity of which is being contested in good
faith;
(b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other
similar Liens, in each case, incurred in the ordinary course
of business for sums not yet due and payable or the amount,
applicability or validity thereof is being contested by
Warrior Coal or any Subsidiary thereof on a timely basis in
good faith and in appropriate proceedings, and Warrior Coal or
such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of Warrior Coal or such
Subsidiary.
(c) Liens incurred or deposits made in the ordinary
course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure (or to
obtain letters of credit that secure) the performance of
tenders, statutory obligations, surety bonds, appeal bonds,
bids, leases, performance bonds, purchase, construction or
sales contracts and other similar obligations, in each case
not incurred or made in connection with the borrowing of
money, the obtaining of advances or credit or the payment of
the deferred purchase price of property;
(d) any attachment or judgment Lien for the payment
of money in an aggregate amount not to exceed $1,000,000,
provided that the execution or other enforcement of such Liens
is effectively stayed and the claims secured thereby are
contested by Warrior Coal or any Subsidiary thereof on a
timely basis in good faith and in appropriate proceedings, and
Warrior Coal or such Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of
Warrior Coal or such Subsidiary; and
(e) leases or subleases granted to others, zoning
restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, restrictions on the use of
property or irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist
and arising by, through or under a landlord or owner of the
leased property, with or without consent of the lessee), and
not interfering with, the ordinary conduct of the business of
Warrior Coal or any Subsidiary thereof, provided that such
Liens do not, in the aggregate, materially detract from the
value of such property or impair the use of such property.
5
6
"Person" shall mean an individual, partnership, limited
liability company, corporation (including a business trust), joint
stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency
thereof.
"Put Option" means the right of AWH to sell Warrior Coal to
the MLP (or its designee) and to cause the MLP (or its designee) to
purchase Warrior Coal from AWH, as contemplated by Section 2 hereof.
"Put Option Period" shall mean the ten day period from and
including January 2, 2003 to and including January 11, 2003.
"Put Option Price" means the sum of (i) $10,000,000.00 and
(ii) an amount of interest equal to the product of (x) the amount set
forth in clause (i) hereof multiplied by (y) twelve percent (12%) per
annum, compounded annually (determined based on a 360-day year, actual
days elapsed from January 26, 2001 up to (but not including) the date
on which the purchase and sale of Warrior Coal shall be consummated in
connection with the Put Option).
"RBCC" shall have the meaning specified in the second Whereas
clause hereof.
"SGP Land" shall have the meaning specified in the third
Whereas clause hereof.
"SGP Revolving Credit Agreement" shall mean the Revolving
Credit Agreement, dated as of January 26, 2001, between Alliance
Resource GP, LLC, a Delaware limited liability company, as lender, and
Warrior Coal, as borrower, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Stock Purchase Agreement" shall have the meaning specified in
the second Whereas clause hereof.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, joint venture,
association, trust or other entity of which (or in which) more than 50%
of (a) the issued and outstanding shares of capital stock or
partnership interests (or their equivalent) having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interests in the capital or
profits of such partnership, limited liability company, joint venture
or association with ordinary voting power to elect a majority of the
board of directors (or Persons performing similar functions) of such
partnership, limited liability company, joint venture or association,
or (c) the beneficial interests in such trust or other entity with
ordinary voting power to elect a majority of the board of trustees (or
Persons performing similar functions) of such trust or other entity, is
at the time, directly or indirectly, owned or controlled by such
Person,
6
7
by such Person and one or more of its Subsidiaries, or by one or more
of such Person's other Subsidiaries.
"Third Party Consents" shall have the meaning specified in
Section 8 hereof.
"Warrior Coal" shall have the meaning set forth in the first
Whereas clause hereof.
"WCC" shall have the meaning specified in the second Whereas
clause hereof.
"WCMC" shall have the meaning specified in the second Whereas
clause hereof.
Section 2. Put Option. During the Put Option Period, AWH shall have the
right to put and sell to the MLP (or to any Subsidiary of the MLP designated by
the MLP), and the MLP (or such designee) shall have the obligation to purchase
from AWH, all of the limited liability company interests in and to Warrior Coal
held by AWH provided (i) AWH shall have given not less than ninety (90) days or
more than one hundred fifty (150) days written notice to the MLP prior to the
commencement of the Put Option Period of its desire to put Warrior Coal to MLP,
(ii) after giving effect to such put, the MLP (or such designee) shall own not
less than 100% of the limited liability company interests in and to Warrior
Coal, (iii) the MLP shall pay or cause to be paid to AWH the Put Option Price,
(iv) all Third Party Consents shall have been obtained or waived in writing and
(v) since January 26, 2001, there shall not have occurred a material adverse
change in the business, operations, affairs, financial condition, assets or
properties of Warrior Coal and its Subsidiaries, taken as a whole. Promptly
following the exercise by AWH of the Put Option, the parties hereto shall
cooperate with one another and shall negotiate in good faith a purchase and sale
agreement containing terms and conditions reasonable and customary for a
transaction of the type so contemplated, including representations and
warranties regarding AWH's title in and to the limited liability company
interests of Warrior Coal and Warrior Coal's title in and to the limited
liability company interests or capital stock (or their equivalent) of each
Subsidiary, if any, of Warrior Coal, for the purpose of consummating the sale of
Warrior Coal by AWH to the MLP (or such designee); provided, however, that in no
event shall the consideration payable by the MLP (or such designee) to AWH upon
consummation of such transaction be greater or less than the Put Option Price.
If the Put Option shall have been exercised, AWH and the MLP (or its designee)
shall consummate the purchase and sale of Warrior Coal during the Put Option
Period; provided, however, that if the purchase and sale of Warrior Coal in
connection with the exercise of such Put Option shall not have been consummated
during the Put Option Period and the parties hereto shall be diligently
proceeding in good faith and using their best efforts to consummate such
purchase and sale, then the right of AWH to put and sell Warrior Coal to the MLP
during the Put Option Period shall continue thereafter for not more than fifteen
(15) days to the extent necessary to consummate such transaction.
Section 3. Call Option. During the Call Option Period, the MLP (or any
subsidiary of the MLP designated by the MLP) shall have the right to call and
purchase from AWH, and AWH shall have the obligation to sell to the MLP (or such
designee), all of the limited liability company interests in and to Warrior Coal
held by AWH provided (i) the MLP shall have given written notice to AWH, which
notice may not be given prior to the commencement of the Call
7
8
Option Period, (ii) after giving effect to such call, the MLP (or such designee)
shall own not less than 100% of the limited liability company interests in and
to Warrior Coal, (iii) the MLP shall pay or caused to be paid to AWH the Call
Option Price and (iv) all Third Party Consents shall have been obtained or
waived in writing. Promptly following the exercise by the MLP of the Call
Option, the parties hereto shall cooperate with one another and shall negotiate
in good faith a purchase and sale agreement, containing terms and conditions
reasonable and customary for a transaction of the type so contemplated,
including representations and warranties regarding AWH's title in and to the
limited liability company interests of Warrior Coal and Warrior Coal's title in
and to the limited liability company interests or capital stock (or their
equivalent) of each Subsidiary, if any, of Warrior Coal, for the purpose of
consummating the purchase of Warrior Coal by the MLP (or its designee) from AWH;
provided, however, that in no event shall the consideration payable by the MLP
(or such designee) to AWH upon consummation of such transaction be greater or
less than the Call Option Price. If the Call Option shall have been exercised,
AWH and the MLP (or its designee) shall enter into such purchase and sale
agreement as soon as reasonably practicable following (but not more than 90 days
after) receipt by AWH of such written notice; provided, however, that if the
purchase and sale of Warrior Coal in connection with the exercise of such Call
Option shall not have been consummated within such 90 days' period and the
parties hereto shall be diligently proceeding in good faith to consummate such
purchase and sale, then the right of the MLP to call and purchase Warrior Coal
from AWH during such 90 days' period shall continue thereafter for such period
of time as shall be reasonably necessary to consummate such transaction.
Section 4. Representations and Warranties of the MLP.
In order to induce AWH to enter into this Agreement, the MLP represents
and warrants as of the date hereof as follows:
(a) Existence, Power and Authority. The MLP is a limited
partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full partnership power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby.
(b) Authorization; Enforceable Obligations. This Agreement has
been duly authorized, executed and delivered by the MLP and constitutes
the legal, valid and binding obligation of the MLP, enforceable against
it in accordance with its terms, except as such enforceability may be
limited by general principles of the law of equity or by any applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws and
laws affecting creditors' rights generally.
(c) No Legal Bar. The execution, delivery and performance by
the MLP of this Agreement (i) do not or will not violate the
certificate of limited partnership, or other formation document of the
MLP, and (ii) do not or will not violate or conflict with any law,
governmental rule or regulation or any judgment, writ, order,
injunction, award or decree of any court, arbitrator, administrative
agency or other governmental authority applicable to the MLP.
8
9
Section 5. Representations and Warranties of AWH.
In order to induce the MLP to enter into this Agreement, AWH represents
and warrants as of the date hereof as follows:
(a) Existence, Power and Authority. AWH is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with full corporate power and authority to carry on
its business as currently conducted and has full corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby.
(b) Authorization; Enforceable Obligations. This Agreement has
been duly authorized, executed and delivered by AWH and constitutes the
legal, valid and binding obligation of AWH, enforceable against it in
accordance with its terms. except as such enforceability may be limited
by general principles of the law of equity or by any applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws and
laws affecting creditors' rights generally.
(c) No Legal Bar. The execution, delivery and performance by
AWH of this Agreement (i) do not or will not violate the certificate of
incorporation, or by-laws or other formation document of AWH, and (ii)
do not or will not violate or conflict with any law, governmental rule
or regulation or any judgment, writ, order, injunction, award or decree
of any court, arbitrator, administrative agency or other governmental
authority applicable to AWH.
Section 6. Affirmative and Negative Covenants. AWH covenants and agrees
that, until the earlier of (x) the expiration of the Call Option Period (or, in
the event the MLP shall have exercised its Call Option and, pursuant to the
proviso contained in the last sentence of Section 3 hereof, the parties hereto
shall be negotiating the sale of Warrior Coal beyond the Call Option Period,
then the expiration of such additional period of time as contemplated by such
proviso), (y) the sale of Warrior Coal by AWH to the MLP in connection with the
exercise of the Put Option or the Call Option, as the case may be, and (y) the
termination of this Agreement pursuant to Section 8 hereof:
(a) Compliance with Laws, Etc. AWH shall cause Warrior Coal
and its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, except to the extent
failure so to comply, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(b) Preservation of Limited Liability Company Existence, Etc.
AWH shall cause Warrior Coal and each Subsidiary thereof to preserve
and maintain its existence, legal structure, rights (charter and
statutory), permits, licenses, approvals, privileges, franchises and
intellectual property; provided however, that AWH shall not be required
to cause Warrior Coal or any Subsidiary thereof to preserve any right,
permit, license, approval, privilege, franchise or intellectual
property if the Board of Directors (or persons performing similar
functions) of or on behalf of Warrior Coal or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the
9
10
business of Warrior Coal or such Subsidiary and that the loss thereof,
individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
(c) Maintenance of Properties, Etc. AWH shall cause Warrior
Coal and each Subsidiary thereof to maintain and preserve all of its
properties that are used or useful in the conduct of Warrior Coal's or
such Subsidiary's business in good working order and condition,
ordinary wear and tear expected, except to the extent the failure to so
maintain or preserve such properties, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
(d) Disposition of Limited Liability Company Interests. AWH
shall not sell, transfer, convey, pledge or otherwise dispose of any
limited liability company interest in or to Warrior Coal, except as
otherwise contemplated by Section 2 or 3 of this Agreement, and AWH
shall not permit Warrior Coal to sell, transfer, convey, pledge or
otherwise dispose of any of the limited liability company interests or
capital stock (or their equivalent) of any Subsidiary of Warrior Coal.
(e) Liens, Etc. AWH shall not permit Warrior Coal or any
Subsidiary thereof to create, incur, assume or suffer to exist any Lien
on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names Warrior Coal or any Subsidiary thereof as Debtor, or sign or
suffer to exist any security agreement authorizing any secured party
thereunder to file such financing statement, or assign any accounts or
other right to receive income, except:
(i) Liens, if any, granted or created under or
pursuant to the Stock Purchase Agreement or the Asset Purchase
Agreement or any other agreement entered into in connection
therewith;
(ii) Permitted Liens;
(iii) with respect to Warrior Coal and its
Subsidiaries, taken as a whole, other Liens incurred in the
ordinary course of business securing obligations in an amount
not to exceed $1,000,000;
(iv) Liens existing on the date hereof;
(v) non-recourse Liens upon or in real property or
equipment acquired or held by Warrior Coal or any Subsidiary
thereof in the ordinary course of business to secure the
purchase price of such property or equipment or to secure
non-recourse, tax-exempt Debt incurred solely for the purpose
of financing the acquisition, construction or improvement of
any such property or equipment to be subject to such Liens, or
Liens exiting on any such property or equipment at the time of
acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or
10
11
replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to
or cover any property other than the property or equipment
being acquired, constructed or improved, and no such
extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended,
renewed or replaced;
(vi) the replacement, extension or renewal of any
Lien permitted by clauses (iii) through (v) above upon or in
the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the
amount or change in any direct or contingent obligor) of the
Debt secured thereby;
(vii) Liens on personal property leased under leases
(including synthetic leases) entered into by Warrior Coal or
any Subsidiary thereof which are accounted for as operating
leases in accordance with GAAP to the extent not prohibited
under Section 6(i) hereof;
(viii) easements, exceptions or reservations in any
property of Warrior Coal or any Subsidiary thereof granted or
reserved for the purpose of pipelines, roads, the removal of
oil, gas, coal or other minerals, and other like purposes, for
the joint or common use of real property, facilities and
equipment, which are incidental to, and do not materially
interfere with, the ordinary conduct of the business of
Warrior Coal or such Subsidiary; and
(ix) Liens on documents of title and the property
covered thereby securing obligations in respect of letters of
credit that are commercial letters of credit (i.e., obtained
for the purpose of paying all or a portion of the purchase
price of such property) to the extent not prohibited under
Section 6(f) hereof.
(f) Debt. AWH shall not permit Warrior Coal or any of its
Subsidiaries to create, incur, assume or suffer to exist any Debt,
except:
(i) Debt owed to the MLP or any Subsidiary thereof;
(ii) Debt created under the SGP Revolving Credit
Agreement;
(iii) Debt assumed under or pursuant to the Stock
Purchase Agreement or the Asset Purchase Agreement; and
(iv) non-recourse Debt secured by Liens permitted by
Section 6(e)(v) hereof.
(g) Mergers, Etc. AWH shall not permit Warrior Coal or any
Subsidiary thereof to merge into or consolidate with any Person or
permit any Person to merge into it or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person, except that:
11
12
(i) any of WCC, WCMC and RBCC (or all of them) may
merge into Warrior Coal, provided that, in the case of any
such merger, Warrior Coal shall be the surviving entity and
shall have succeeded to all of the assets and properties of
WCC, WCMC or RBCC (or all of them), as the case may be;
(ii) any Subsidiary of Warrior Coal may merge into or
consolidate with any wholly owned Subsidiary of Warrior Coal,
provided that, in the case of any such merger or
consolidation, the Person formed by such merger or
consolidation shall be a wholly owned subsidiary of Warrior
Coal and such Person shall have succeeded to all of the assets
and properties of such Subsidiary; and
(iii) any Subsidiary of Warrior Coal may merge into
or consolidate with Warrior Coal, provided that Warrior Coal
is the surviving entity and shall have succeeded to all of the
assets and properties of such Subsidiary.
(h) Sales, Etc., of Assets. AWH shall not permit Warrior Coal
or any Subsidiary thereof to sell, lease, transfer or otherwise dispose
of any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets, except;
(i) sales of Inventory in the ordinary course of
Warrior Coal's or its Subsidiaries' business;
(ii) with respect to Warrior Coal and its
Subsidiaries, taken as a whole, sale of assets that are
obsolete or no longer used or useful for fair value in an
aggregate amount not to exceed $500,000.00 over the term of
this Agreement;
(iii) sales of assets by Warrior Coal or any
Subsidiary thereof to the MLP or any Subsidiary thereof;
(iv) in a transaction authorized by Section 6(g)
hereof; and
(v) with respect to Warrior Coal and its
Subsidiaries, taken as a whole, sales of other assets with a
fair value in an amount not to exceed $500,000.00 individually
or $1,000,000.00 in the aggregate over the term of this
Agreement; provided however, that the purchase price paid to
Warrior Coal or any such Subsidiary for such asset shall be no
less than the fair market value of such asset at the time of
such sale and such sale shall be in the best interest of
Warrior Coal or such Subsidiary, as determined in good faith
by the Board of Directors (or other person performing such
functions) of Warrior Coal or such Subsidiary.
(i) Restricted Payments. AWH shall not permit Warrior Coal or
any such Subsidiary thereof to declare or pay any dividends, repurchase
or redeem any capital stock or other equity interest, return any
capital to its members or shareholders as such, make any distribution
of assets to its members or shareholders as such (each of the foregoing
being a "Restricted Payment"), except that any wholly-owned Subsidiary
of
12
13
Warrior Coal shall be permitted to declare, make or incur a liability
to make any such Restricted Payment to Warrior Coal or any wholly-owned
Subsidiary of Warrior Coal.
(j) Lease Obligations. AWH shall not permit Warrior Coal or
any Subsidiary thereof to create, incur, assume or suffer to exist any
obligations as lessee (excluding for this purpose obligations as lessee
under Capital Leases) (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, (ii)
for the rental or hire of other personal property of any kind under
operating leases or agreements to lease having an original term of one
year or more that would cause the direct and contingent liabilities of
Warrior Coal and its Subsidiaries, taken as a whole, in respect of all
such obligations to exceed $1,000,000.00 payable in any period of 12
consecutive months, or (iii) for the rental or hire of other real
property under leases or agreements to lease other than in the ordinary
course of business.
(k) Amendments of Constitutive Documents. AWH shall not permit
Warrior Coal or any Subsidiary thereof to amend its Certificate of
Formation, limited liability company operating agreement, charter,
by-laws, partnership agreement or other constituent document in any
manner that has a Material Adverse Effect.
(l) Generally. Except for any transaction permitted under this
Section 6, AWH shall not permit Warrior Coal or any Subsidiary thereof
to enter into any transaction that is reasonably expected to have a
Material Adverse Effect.
(m) No Amendments To Credit Agreement. AWH shall not permit
Warrior Coal to amend or modify any term or condition of the SGP
Revolving Credit Agreement (or any credit agreement refinancing such
indebtedness) except for such amendments or modifications thereof that
do not increase or alter in any material respect the obligations of
Warrior Coal thereunder or have a Material Adverse Effect.
Section 7. Default; Termination. In the event that a party hereto shall
have failed to perform or comply with in any material respect any agreement or
covenant binding upon such party (such defaulting party, the "Defaulting Party",
and the non-defaulting party, the "Non-Defaulting Party") and such default shall
have continued unremedied for more than 45 days after receipt of notice in
writing of such default from the Non-Defaulting Party (or such longer period as
shall be reasonably necessary to cure such default provided the Defaulting Party
is diligently proceeding in good faith to cure such default), then the
Non-Defaulting Party may, by the giving of not less than 15 days' written notice
to the Defaulting Party, terminate this Agreement. In the event of such
termination, the non-defaulting party shall be entitled to such remedies as are
available to it under applicable law.
Section 8. Further Assurances. In the event that the Put Option is
exercised by AWH or the Call Option is exercised by the MLP, each party hereto
shall, at their own expense, cooperate with one another in good faith and
execute and deliver such additional documents and take such further actions as
such other party hereto may reasonably request in order to more fully give
effect to the purposes and intent of this Agreement, to carry out the terms
hereof and to fully and completely convey Warrior Coal to the MLP (or its
designee) as contemplated hereby.
13
14
Without limiting the foregoing, the parties hereto agree to use their
commercially reasonable efforts to obtain the consent of such third parties,
including the consents of all lenders to the MLP or any of its Subsidiaries, if
required (collectively, the "Third Party Consents"), as shall be necessary or
appropriate for the purpose of consummating the sale of Warrior Coal by AWH to
the MLP as contemplated by this Agreement.
Section 9. Amendment and Restatement. The parties hereto agree that the
Original Put and Call Agreement is amended and restated in its entirety upon the
terms and conditions contained herein.
Section 10. Miscellaneous.
(a) Notices. Any notice required or permitted hereunder is to
be in writing and may be given by telecopy, telex, cable or other
customary means of electronic communication or by registered or
certified mail (return receipt requested) or express courier, postage
prepaid. All notices, statements, requests and demands given to or made
upon any party hereto in accordance with the provisions of this
Agreement shall be deemed to have been given or made (i) in the case of
notice delivered by overnight express courier, one business day after
the business day such notice was delivered to such courier, (ii) in the
case of notice delivered by first class mail, three business days after
being deposited in the mail, postage prepaid, return receipt requested,
(iii) in the case of notice by hand, when delivered, or (iv) in the
case of notice by any customary means of telecommunication, when sent
provided confirmation of receipt or answer back has been received, in
each case if addressed:
to AWH, to it at:
ARH Warrior Holdings, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
to the MLP, to it at:
Alliance Resource Partners, L.P.
c/o Alliance Resource Management, L.P.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
14
15
or such other address for notice as any party hereto may designate for
itself in a notice to the other party, except in cases where it is
expressly provided herein that such notice, statement, request or
demand shall not be effective until received by the party to whom it is
addressed.
(b) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.
(c) Assignment. Except as otherwise permitted hereunder, no
party to this Agreement shall assign its rights or delegate its
obligations hereunder to any other Person without the prior written
consent of the other party hereto.
(d) Integration. This Agreement constitutes the entire
agreement between AWH and the MLP with respect to the subject matter
hereof and there are no promises, undertakings, representations or
warranties by AWH or the MLP relative to the subject matter hereof not
expressly set forth or referred to herein.
(e) Severability. The provisions of this Agreement are
severable, and if any clause or provision of this Agreement shall be
held invalid or unenforceable in whole or in part in any jurisdiction,
then such clause or provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without in any manner affecting the validity or enforceability of such
clause or provision in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by each party hereto on separate counterparts, each
complete set of which, when so executed and delivered by all parties,
shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
(g) Headings, Bold Type and Table of Contents. The section
headings, subsection headings, and bold type used herein have been
inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
15
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
ARH WARRIOR HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President - Law and
Administration, General Counsel and
Secretary
ALLIANCE RESOURCE PARTNERS, L.P.
By: Alliance Resource Management
GP, LLC, its Managing General
Partner
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President, Chief
Financial Officer and Treasurer
16