Exhibit 10.1

 

Execution Version

 

 

 

CONTRIBUTION AGREEMENT

 

by and among

 

Alliance Resource Partners, L.P.,

 

Alliance Resource Management GP, LLC,

 

Alliance Resource GP, LLC,

 

ARM GP Holdings, Inc.,

 

MGP II, LLC

 

and

 

Alliance Holdings GP, L.P.

 

Dated as of July 28, 2017

 

 

 

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CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT (this “Agreement”) dated as of July 28, 2017 (the
“Closing Date”), is entered into by and among Alliance Resource Partners, L.P.,
a Delaware limited partnership (the “Partnership”), Alliance Resource Management
GP, LLC, a Delaware limited liability company (“ARLP Managing GP”), Alliance
Resource GP, LLC, a Delaware limited liability company (“ARLP Special GP” and
together with ARLP Managing GP, the “General Partners”), ARM GP Holdings, Inc.,
a Delaware corporation (“ARMH, Inc.”), MGP II, LLC, a Delaware limited liability
company (“MGP II”), and Alliance Holdings GP, L.P., a Delaware limited
partnership (“AHGP”). Unless otherwise defined herein, defined terms shall have
the meaning ascribed to such terms in Article I of this Agreement.

 

RECITALS

 

A.                                    ARLP Managing GP is the managing general
partner of the Partnership and holds a 0.99% General Partner Interest and all of
the IDRs in the Partnership.

 

B.                                    ARLP Special GP is the Special General
Partner of the Partnership and holds a 0.01% General Partner Interest in the
Partnership.

 

C.                                    AHGP wholly owns ARLP Managing GP,
directly and indirectly, through ARMH, Inc., wholly owns MGP II and ARMH, Inc.,
and directly owns a 41.89% limited partner interest in the Partnership.

 

D.                                    Following approval by the AHGP Board (as
defined herein), ARLP Managing GP has agreed to contribute to the Partnership
(i) all of its IDRs in exchange for the issuance by the Partnership of
55,544,539 Exchange Units (as defined below) and (ii) its 0.99% General Partner
Interest in exchange for a non-economic General Partner Interest and the
issuance by the Partnership of 555,461 Exchange Units. Upon the contribution of
the IDRs to the Partnership, such IDRs will be cancelled and cease to exist.

 

E.                                     ARLP Special GP has agreed to contribute
to the Partnership (i) its 0.01% General Partner Interest in exchange for the
issuance by the Partnership of 3,591 Exchange Units and (ii) its 0.01% AROP
General Partner Interest in exchange for the issuance by the Partnership of
3,590 Exchange Units.

 

F.                                      Concurrently with the execution of this
Agreement, ARLP Managing GP will amend the Current Partnership Agreement to make
certain adjustments to the unrealized gain and loss allocation provisions and
the definitions related thereto, which adjustments shall be effective in
accordance with Section 761(c) of the Code as of January 1, 2017 through the
Closing Date in the form attached hereto as Exhibit A (the “First Amendment”),
and ARLP Managing GP will amend and restate the Current Partnership Agreement in
the form attached hereto as Exhibit B to reflect (i) the cancellation of the
IDRs, (ii) the conversion of the General Partner Interest to a non-economic
General Partner Interest and (iii) certain other changes Approved by ARLP
Managing GP, in each case that do not adversely affect the Limited Partners in
any material respect (such amended and restated agreement, the “Revised
Partnership Agreement”).

 

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G.                                    The execution and adoption of the First
Amendment, the Revised Partnership Agreement, which shall be effective on the
Closing Date, the contributions by the General Partners to the Partnership of
the IDRs and the Contributed General Partner Interests, and the issuance by the
Partnership of the Exchange Units to the General Partners (collectively, the
“Transactions”) are conditioned on each other and shall occur on the date hereof
simultaneously with the execution and delivery of this Agreement.

 

NOW, THEREFORE, in consideration of their mutual undertakings and agreements
hereunder, the parties undertake and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning given such term in the Preamble.

 

“AHGP” has the meaning given such term in the Recitals.

 

“AHGP Board” has the meaning given such term in Section 3.2(b).

 

“AHGP Common Units” has the meaning given to the term “Common Unit” in the AHGP
Partnership Agreement.

 

“AHGP GP” has the meaning set forth in Section 3.2(b).

 

“AHGP Parties” means, collectively, AHGP and the General Partners.

 

“AHGP Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of AHGP, dated as of May 15, 2006.

 

“ARLP Managing GP” has the meaning given such term in the Preamble.

 

“ARLP Special GP” has the meaning given such term in the Preamble.

 

“ARMH, Inc.” has the meaning given such term in the Preamble.

 

“AROP” means Alliance Resource Operating Partners, L.P.

 

“AROP General Partner Interest” has the meaning given to the term “General
Partner Interest” in the AROP Partnership Agreement.

 

“AROP Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of AROP, dated as of August 20, 1999.

 

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“Closing Date” has the meaning given such term in the Preamble.

 

“Common Units” has the meaning given such term in the Revised Partnership
Agreement.

 

“Contributed General Partner Interests” means the General Partner Interests
contributed to the Partnership pursuant to Section 2.3 and Section 2.4 and the
AROP General Partner Interest contributed to the Partnership pursuant to
Section 2.5.

 

“Current Partnership Agreement” means the Third Amended and Restated Agreement
of Limited Partnership of the Partnership, dated as of June 16, 2014.

 

“Exchange Units” means the Common Units issued by the Partnership to each of
ARLP Managing GP and ARLP Special GP pursuant to the terms of this Agreement.

 

“First Amendment” has the meaning given such term in the Recitals.

 

“General Partner Interest” has the meaning given such term in the Current
Partnership Agreement.

 

“General Partners” has the meaning given such term in the Preamble.

 

“IDRs” has the meaning given the term “Incentive Distribution Rights” in the
Current Partnership Agreement.

 

“Limited Partners” has the meaning given such term in the Current Partnership
Agreement.

 

“MGP II” has the meaning given such term in the Preamble.

 

“Partnership” has the meaning given such term in the Preamble.

 

“Partnership Common Units” has the meaning given to the term “Common Units” in
the Current Partnership Agreement and Revised Partnership Agreement, as
applicable.

 

“Partnership Conflicts Committee” has the meaning given such term in
Section 3.1(f).

 

“Partnership GP Board” has the meaning given such term in Section 3.1(f).

 

“Permitted Liens” means liens that do not have a material adverse effect on the
ability of the parties to consummate the transactions contemplated by this
Agreement.

 

“Person” has the meaning given such term in the Current Partnership Agreement.

 

“Revised Partnership Agreement” has the meaning given such term in the Recitals.

 

“Securities Act” has the meaning given such term in Section 3.3(e).

 

“Transactions” has the meaning given such term in the Recitals.

 

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“Unaffiliated Common Unitholders” has the meaning given such term in
Section 3.1(f).

 

“Units” has the meaning given such term in the Current Partnership Agreement.

 

ARTICLE II

 

THE TRANSACTIONS

 

Section 2.1                                    Contribution of ARLP Managing GP
Interests. ARMH, Inc. and AHGP hereby grant, contribute, transfer, assign and
convey to MGP II all right, title and interest in and to their membership
interests in ARLP Managing GP as a contribution by ARMH, Inc. and AHGP to the
capital of MGP II and in exchange for such contribution, MGP II shall issue
(a) to AHGP a 99.999% membership interest in MGP II and (b) to ARMH, Inc. a
0.001% membership interest in MGP II, with such issuance being deemed to have
occurred immediately prior to the Revised Partnership Agreement.

 

Section 2.2                                    Contribution of IDRs.

 

(a)                                 ARLP Managing GP hereby grants, contributes,
transfers, assigns and conveys to the Partnership all right, title and interest
in the IDRs held by ARLP Managing GP and the Partnership hereby accepts such
IDRs from ARLP Managing GP as a contribution by ARLP Managing GP to the capital
of the Partnership, and in exchange and as consideration for such contribution,
the Partnership shall issue to ARLP Managing GP 55,544,539 Exchange Units, with
such issuance being deemed to have occurred immediately upon execution of the
Revised Partnership Agreement. Immediately upon execution of the Revised
Partnership Agreement, the IDRs shall be cancelled and shall cease to exist.

 

(b)                                 The Parties acknowledge and agree that the
Exchange Units to be issued to ARLP Managing GP pursuant to this Section 2.2
shall instead be issued by the Transfer Agent directly to MGP II in recognition
of ARLP Managing GP’s obligation to distribute such Exchange Units to MGP II
pursuant to Section 2.8.

 

Section 2.3                                    ARLP Managing GP Contribution of
General Partner Interest.

 

(a)                                 ARLP Managing GP hereby grants, contributes,
transfers, assigns and conveys to the Partnership all right, title and interest
in and to its 0.99% General Partner Interest in the Partnership and the
Partnership hereby accepts such General Partner Interest from ARLP Managing GP
as a contribution by ARLP Managing GP to the capital of the Partnership, and in
exchange and as consideration for such contribution, the Partnership shall issue
to ARLP Managing GP 555,461 Exchange Units and a non-economic General Partner
Interest (as defined in the Revised Partnership Agreement) in the Partnership,
with such issuance being deemed to have occurred immediately upon execution of
the Revised Partnership Agreement. Effective immediately upon execution of the
Revised Partnership Agreement, the 0.99% General Partner Interest contributed to
the Partnership pursuant to this Section 2.3 shall be cancelled and shall cease
to exist.

 

(b)                                 The Parties acknowledge and agree that the
Exchange Units to be issued to ARLP Managing GP pursuant to this Section 2.3
shall instead be issued by the Transfer Agent directly

 

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to MGP II in recognition of ARLP Managing GP’s obligation to distribute such
Exchange Units to MGP II pursuant to Section 2.8.

 

Section 2.4                                    ARLP Special GP Contribution of
General Partner Interest. ARLP Special GP hereby grants, contributes, transfers,
assigns and conveys to the Partnership all right, title and interest in and to
its 0.01% General Partner Interest in the Partnership and the Partnership hereby
accepts such General Partner Interest from ARLP Special GP as a contribution by
ARLP Special GP to the capital of the Partnership, and in exchange and as
consideration for such contribution, the Partnership shall issue to ARLP Special
GP 3,591 Exchange Units, with such issuance being deemed to have occurred
immediately upon execution of the Revised Partnership Agreement. Effective
immediately upon execution of the Revised Partnership Agreement, the 0.01%
General Partner Interest contributed to the Partnership pursuant to this
Section 2.4 shall be cancelled and shall cease to exist.

 

Section 2.5                                    ARLP Special GP Contribution of
AROP General Partner Interest. ARLP Special GP hereby grants, contributes,
transfers, assigns and conveys to the Partnership all right, title and interest
in and to its 0.01% AROP General Partner Interest and the Partnership hereby
accepts such AROP General Partner Interest from ARLP Special GP as a
contribution by ARLP Special GP to the capital of the Partnership and in
exchange and as consideration for such contribution, ARLP shall issue to ARLP
Special GP 3,590 Exchange Units, with such issuance being deemed to have
occurred immediately upon execution of the Revised Partnership Agreement.

 

Section 2.6                                    Partnership Agreement.
Concurrently with the execution of this Agreement, ARLP Managing GP shall
execute, deliver and adopt, on behalf of the Partnership and in its capacity as
the Managing General Partner thereof, (a) for the period commencing January 1,
2017 through the Closing Date, the First Amendment and (b) for the period
following the consummation of the Transactions, the Revised Partnership
Agreement.

 

Section 2.7                                    Certificates for Exchange Units.
On the Closing Date, the Partnership shall issue to each of ARLP Special GP and
MGP II a certificate representing the number of Exchange Units to be issued to
such party pursuant to pursuant to Section 2.2, Section 2.3, Section 2.4 or
Section 2.5, as applicable. Each of the certificates evidencing the Exchange
Units shall bear a legend substantially in the form set forth below and
containing such other information as the Partnership may deem necessary or
appropriate:

 

THE UNITS (THE “UNITS”) EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES THAT IT WILL NOT DISTRIBUTE, OFFER,
RESELL, PLEDGE OR OTHERWISE TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A
“TRANSFER”) THE UNITS EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN
RULE 144

 

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UNDER THE SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE
OTHER THAN PURSUANT TO CLAUSE A ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE ISSUER AND THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR
FOREIGN SECURITIES LAW.

 

No fractional Units or scrip shall be issued as a result of the transactions
contemplated by this Agreement.

 

Section 2.8                                    ARLP Managing GP Distribution of
Exchange Units to AHGP. Immediately after the contributions pursuant to
Section 2.2 and Section 2.3, ARLP Managing GP shall, in a manner contemplated by
Section 2.2(b) and Section 2.3(b), distribute all of the Exchange Units received
by ARLP Managing GP pursuant to Section 2.2 and Section 2.3 above to MGP II. MGP
II hereby accepts, and agrees to be bound by, the terms of the Revised
Partnership Agreement, including the power of attorney in Section 2.6 thereof,
and ARLP Managing GP hereby consents to, and admits, MGP II as an Additional
Limited Partner (as defined in the Revised Partnership Agreement).

 

Section 2.9                                    Further Assurances. The
Partnership and the General Partners agree to execute and deliver, or cause to
be executed and delivered, such further instruments or documents or take such
other action as may be reasonably necessary or convenient to carry out the
transactions contemplated hereby.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Section 3.1                                    Partnership. The Partnership
represents and warrants to the AHGP Parties as follows:

 

(a)                                 the Partnership is a limited partnership
duly formed and is validly existing and in good standing under the laws of the
State of Delaware and has the partnership power and authority to execute and
deliver this Agreement and, subject to the terms and conditions hereof, to carry
out its terms;

 

(b)                                 the Partnership has taken all action as may
be necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement and the
performance of its obligations hereunder. This Agreement constitutes a legal,
valid and binding obligation of the Partnership, enforceable against the
Partnership in accordance with its terms, subject to bankruptcy, receivership,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors’ or secured parties’ rights generally from time to time in effect and
to general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law;

 

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(c)                                  none of the execution and delivery hereof,
the performance of the Partnership’s obligations hereunder nor the consummation
of the Transactions will violate or contravene any applicable law or the Current
Partnership Agreement;

 

(d)                                 on the Closing Date, the Exchange Units and
the limited partner interests represented thereby will have been duly and
validly authorized and, when issued and delivered in accordance with the terms
and provisions of this Agreement, will be duly and validly issued and fully paid
(to the extent required under the Revised Partnership Agreement) and
non-assessable (except as such nonassessability may be affected by matters
described in the Partnership’s filings with the Securities and Exchange
Commission);

 

(e)                                  on the Closing Date and prior to the
issuance of the Exchange Units, the issued and outstanding limited partner
interests of the Partnership consist of the IDRs and 74,597,036 Common Units;

 

(f)                                   at a meeting duly called and held, the
conflicts committee (the “Partnership Conflicts Committee”) of the Board of
Directors of ARLP Managing GP (the “Partnership GP Board”) consisting of John P.
Neafsey, Nick Carter, and John H. Robinson (i) determined that the Revised
Partnership Agreement and the matters contemplated thereby and this Agreement
and the matters contemplated hereby, are fair and reasonable to the Partnership
and the holders of the Partnership Common Units other than AHGP and its
Affiliates (the “Unaffiliated Common Unitholders”), and (iii) approved and
declared the advisability of this Agreement and the matters contemplated hereby,
including the Revised Partnership Agreement; and

 

(g)                                  Robert W. Baird & Co. Incorporated has
delivered a fairness opinion to the Partnership Conflicts Committee with respect
to the Exchange Units to be issued to the General Partners pursuant to this
Agreement.

 

Section 3.2                                    AHGP and ARLP Managing GP. Each
of AHGP and ARLP Managing GP, severally and not jointly, hereby represents and
warrants to the Partnership as follows:

 

(a)                                 ARLP Managing GP is the record holder of the
IDRs and ARLP Managing GP has good and valid title to such IDRs, free and clear
of all liens, encumbrances or other claims other than Permitted Liens; there is
no subscription, option, warrant, call, right, agreement or commitment relating
to the issuance, sale, delivery, repurchase or transfer by ARLP Managing GP of
such IDRs, except as set forth in the Current Partnership Agreement;

 

(b)                                 at a meeting duly called and held, the Board
of Directors (the “AHGP Board”) of Alliance GP, LLC, a Delaware limited
liability company and general partner of AHGP (“AHGP GP”), (i) determined that
the matters contemplated by this Agreement are fair and reasonable to AHGP,
including the limited partners of AHGP other than Affiliates of AHGP GP, and
(ii) approved and declared the advisability of this Agreement; and

 

(c)                                  Wells Fargo Securities, LLC has delivered a
fairness opinion to the AHGP Board with respect to the Exchange Units to be
received by ARLP Managing GP in the Transactions.

 

Section 3.3                                    AHGP Parties.             Each
AHGP Party, severally and not jointly, represents and warrants to the
Partnership as follows:

 

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(a)                                 such AHGP Party is a limited liability
company or limited partnership, as the case may be, duly formed and is validly
existing and in good standing under the laws of the State of Delaware and has
the limited liability company or limited partnership power and authority, as the
case may be, to execute and deliver this Agreement and, subject to the terms and
conditions hereof, to carry out its terms;

 

(b)                                 such AHGP Party has taken all action as may
be necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement and the
performance of its obligations hereunder. This Agreement constitutes a legal,
valid and binding obligation of such AHGP Party, enforceable against such AHGP
Party in accordance with its terms, subject to bankruptcy, receivership,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors’ or secured parties’ rights generally from time to time in effect and
to general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether considered
in a proceeding in equity or at law;

 

(c)                                  none of the execution and delivery hereof,
the performance of such AHGP Party’s obligations hereunder nor the consummation
of the Transactions will violate or contravene any applicable law, the
organizational documents of such AHGP Party or any of its material agreements;

 

(d)                                 (i) in the case of ARLP Managing GP, ARLP
Managing GP and AHGP each represent and warrant that ARLP Managing GP is the
record holder of a 0.99% General Partner Interest and has good and valid title
to such 0.99% General Partner Interest, free and clear of all liens,
encumbrances or other claims other than Permitted Liens; there is no
subscription, option, warrant, call, right, agreement or commitment relating to
the issuance, sale, delivery, repurchase or transfer by ARLP Managing GP of such
0.99% General Partner Interest, except as set forth in the Current Partnership
Agreement; (ii) in the case of ARLP Special GP, ARLP Special GP represents and
warrants that (A) it is the record holder of a 0.01% General Partner Interest
and has good and valid title to such 0.01% General Partner Interest, free and
clear of all liens, encumbrances or other claims other than Permitted Liens;
there is no subscription, option, warrant, call, right, agreement or commitment
relating to the issuance, sale, delivery, repurchase or transfer by ARLP Special
GP of such 0.01% General Partner Interest, except as set forth in the Current
Partnership Agreement and (B) it is the record holder of a 0.01% AROP General
Partner Interest and has good and valid title to such 0.01% AROP General Partner
Interest, free and clear of all liens, encumbrances or other claims other than
Permitted Liens; there is no subscription, option, warrant, call, right,
agreement or commitment relating to the issuance, sale, delivery, repurchase or
transfer by ARLP Special GP of such 0.01% AROP General Partner Interest, except
as set forth in the AROP Partnership Agreement;

 

(e)                                  each AHGP Party is an “Accredited Investor”
as defined in Rule 501(a) promulgated under the United States Securities Act of
1933, as amended (the “Securities Act”), and, to the extent applicable, is
acquiring the Exchange Units for its own account, and not with a view to any
distribution, resale, subdivision, or fractionalization thereof in violation of
the Securities Act or any other applicable domestic or foreign securities law,
and such AHGP Party has no present plans to enter into any contract,
undertaking, agreement or arrangement for any

 

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distribution, resale, subdivision, or fractionalization of the Exchange Units in
violation of the Securities Act or any other applicable domestic or foreign
securities law; and

 

(f)                                   such AHGP Party understands that the
Exchange Units are characterized as “restricted securities” under the federal
securities law inasmuch as they are being acquired from the Partnership in a
transaction not involving a public offering and that under such law and
applicable regulations such securities may be resold under the Securities Act
only in certain limited circumstances.

 

Section 3.4                                    MGP II. MGP II represents and
warrants to AHGP, ARMH, Inc. and the Partnership as follows:

 

(a)                                 MGP II is a limited liability company duly
formed and is validly existing and in good standing under the laws of the State
of Delaware and has the limited liability company power and authority to execute
and deliver this Agreement and, subject to the terms and conditions hereof, to
carry out its terms;

 

(b)                                 MGP II has taken all action as may be
necessary to authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement and the
performance of its obligations hereunder. This Agreement constitutes a legal,
valid and binding obligation of MGP II, enforceable against MGP II in accordance
with its terms, subject to bankruptcy, receivership, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors’ or secured
parties’ rights generally from time to time in effect and to general principles
of equity (including concepts of materiality, reasonableness, good faith and
fair dealing), regardless of whether considered in a proceeding in equity or at
law;

 

(c)                                  none of the execution and delivery hereof,
the performance of MGP II’s obligations hereunder nor the consummation of the
Transactions will violate or contravene any applicable law or the organizational
documents or any material agreement of MGP II; and

 

(d)                                 on the Closing Date, the membership
interests in MGP II issued to AHGP and ARMH, Inc. will have been duly and
validly authorized and, when issued and delivered in accordance with the terms
and provisions of this Agreement, will be duly and validly issued and fully paid
and non-assessable.

 

Section 3.5                                    AHGP and ARMH, Inc.            
Each of AHGP and ARMH, Inc., severally and not jointly, represents and warrants
to MGP II and the Partnership as follows:

 

(a)                                 it is a corporation or limited partnership,
as the case may be, duly formed and in good standing under the laws of the State
of Delaware and has the corporate or limited partnership power and authority, as
the case may be, to execute and deliver this Agreement and, subject to the terms
and conditions hereof, to carry out its terms;

 

(b)                                 it has taken all action as may be necessary
to authorize the execution and delivery of this Agreement and the consummation
of the transactions contemplated by this Agreement and the performance of its
obligations hereunder. This Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, subject to bankruptcy, receivership, insolvency, reorganization,
moratorium and other laws

 

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relating to or affecting creditors’ or secured parties’ rights generally from
time to time in effect and to general principles of equity (including concepts
of materiality, reasonableness, good faith and fair dealing), regardless of
whether considered in a proceeding in equity or at law;

 

(c)                                  none of the execution and delivery hereof,
the performance of such party’s obligations hereunder nor the consummation of
the Transactions will violate or contravene any applicable law, the
organizational documents of such party or any of its material agreements; and

 

(d)                                 (i) in the case of AHGP, AHGP represents and
warrants that it is the record holder of a 99.999% membership interest in ARLP
Managing GP and has good and valid title to such membership interest, free and
clear of all liens, encumbrances or other claims other than Permitted Liens;
there is no subscription, option, warrant, call, right, agreement or commitment
relating to the issuance, sale, delivery, repurchase or transfer by AHGP of such
membership interest; (ii) in the case of ARMH, Inc., ARMH, Inc. represents and
warrants that it is the record holder of a 0.001% membership interest in ARLP
Managing GP and has good and valid title to such membership interest, free and
clear of all liens, encumbrances or other claims other than Permitted Liens;
there is no subscription, option, warrant, call, right, agreement or commitment
relating to the issuance, sale, delivery, repurchase or transfer by ARMH, Inc.
of such membership interest.

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.1                                    Governing Law. The laws of the
State of Delaware shall govern the construction, interpretation and effect of
this Agreement without giving effect to any conflicts of law principles.

 

Section 4.2                                    Counterparts. This Agreement may
be executed in one or more counterparts, each of which shall constitute an
original, and all of which when taken together shall constitute one and the same
original document.

 

Section 4.3                                    Amendments. All waivers,
modifications, amendments or alterations of this Agreement shall require the
written approval of each of the parties to this Agreement.

 

Section 4.4                                    Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties and the respective
successors and assigns. This Agreement shall not be assignable by any party
hereto, except with the prior written consent of the other parties hereto.

 

Section 4.5                                    Benefits of Agreement Restricted
to Parties. This Agreement is made solely for the benefit of the parties to this
Agreement, and no other person (including employees) shall have any right, claim
or cause of action under or by virtue of this Agreement.

 

Section 4.6                                    Severability. In the event that
any provision of this Agreement shall finally be determined to be unlawful, such
provision shall, so long as the economic and legal substance of the transactions
contemplated hereby is not affected in any materially adverse manner as to any
of the parties to this Agreement, be deemed severed from this Agreement and
every other provision of this Agreement shall remain in full force and effect.

 

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Section 4.7                                    Titles. The article, section and
paragraph titles in this Agreement are only for purposes of convenience and do
not form a part of this Agreement and will not be taken to qualify, explain, or
affect any provision thereof.

 

Section 4.8                                    Notices. All notices, requests,
claims, demands and other communications hereunder shall be in writing and shall
be deemed to have been duly given when delivered if delivered in person, by
cable, telegram, telex, or telecopy and shall be deemed to have been duly given
three business days after deposit with a United States post office if delivered
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:

 

if to the Partnership, at

 

Alliance Resource Partners, L.P.

1717 South Boulder Avenue, Suite 400

Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

if to ARLP Managing GP, at

 

Alliance Resource Management GP, LLC

1717 South Boulder Avenue, Suite 400

Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

if to ARLP Special GP, at

 

Alliance Resource GP, LLC

1717 South Boulder Avenue, Suite 400

Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

if to AHGP, at

 

Alliance Holdings GP, L.P.

1717 South Boulder Avenue, Suite 400

Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

if to ARMH, Inc., at

 

ARM GP Holdings, Inc.

1717 South Boulder Avenue, Suite 400

 

11

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Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

if to MGP II, at

 

MGP II, LLC

1717 South Boulder Avenue, Suite 400

Tulsa OK 74119
Attn: R. Eberley Davis
Facsimile: (918) 295-7358

 

[SIGNATURE PAGE FOLLOWS]

 

12

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IN WITNESS WHEREOF, this Agreement has been executed on behalf of each of the
parties hereto effective as of the day and year first above written.

 

 

ALLIANCE RESOURCE PARTNERS, L.P.

 

 

 

 

 

By:

Alliance Resource Management GP, LLC, its general partner

 

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

 

 

 

 

 

 

ALLIANCE RESOURCE MANAGEMENT GP, LLC

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

 

 

 

 

 

 

 

 

ALLIANCE RESOURCE GP, LLC

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

 

 

 

 

 

 

 

 

ARM GP HOLDINGS, INC.

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

 

 

 

 

 

 

 

 

MGP II, LLC

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

Signature Page to Contribution Agreement

 

--------------------------------------------------------------------------------

 

 

ALLIANCE HOLDINGS GP, L.P.

 

 

 

 

 

By:

Alliance GP, LLC,

 

 

its general partner

 

 

 

 

 

 

 

 

By:

/s/ R. Eberley Davis

 

 

 

Name: R. Eberley Davis

 

 

 

Title: Senior Vice President, General Counsel and Secretary

 

Signature Page to Contribution Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FIRST AMENDMENT

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

REVISED PARTNERSHIP AGREEMENT

 

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