ALLIANCE RESOURCE PARTNERS, L.P. (NASDAQ:ARLP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On July28, 2017, Alliance Resource Partners, L.P. (the “Partnership”) entered into a Contribution Agreement (the “Contribution Agreement”) by and among the Partnership, Alliance Resource Management GP, LLC, a Delaware limited liability company and the managing general partner of the Partnership (“ARLP Managing GP”), Alliance Resource GP, LLC, a Delaware limited liability company (“ARLP Special GP”), 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”), whereby (i)ARLP Managing GP contributed to the Partnership all of its incentive distribution rights representing non-voting limited partner interests in the Partnership (the “IDRs”) together with its 0.99% general partner interest in the Partnership in exchange for a non-economic general partner interest in the Partnership and 56,100,000 common units representing limited partner interests in the Partnership (the “ARLP Managing GP Common Units”) and (ii)ARLP Special GP contributed to the Partnership its 0.01% general partner interest in the Partnership and its 0.01% general partner interest in Alliance Resource Operating Partners, L.P. (“AROP”) in exchange for 7,181 common units representing limited partner interests in the Partnership (the “ARLP Special GP Common Units” and, together with the ARLP Managing GP Common Units, the “Exchange Units,” and, the transactions described in (i)and (ii), the “Exchange Transactions”). The general partner interests in the Partnership that were contributed to the Partnership were cancelled by the Partnership, and the only remaining general partner interest in the Partnership is the non-economic general partner interest issued to ARLP Managing GP as described above. In addition, the Partnership cancelled the IDRs following their contribution by ARLP Managing GP. Following the transaction, the Partnership will maintain the 0.01% special general partner interest in AROP contributed to it by ARLP Special GP as noted above.
As a result of the transactions contemplated by the Contribution Agreement, the ARLP Managing GP Units will be held by MGP II, a subsidiary of AHGP that will own ARLP Managing GP as a result of the transactions. ARLP Managing GP will continue to serve as the general partner of the Partnership following the transactions, and no control, management or governance changes will otherwise occur, including with respect to the Partnership’s subsidiaries. MGP II adopted the Second Amended and Restated Limited Liability Company Agreement of ARLP Managing GP, dated as of July28, 2017, a copy of which is filed as Exhibit3.3 to this Current Report and is incorporated herein by reference to reflect its ownership of ARLP Managing GP. In addition, AHGP and ARMH,Inc. adopted the Amended and Restated Limited Liability Company Agreement of MGP II, dated as of July28, 2017, a copy of which is filed as Exhibit3.4 to this Current Report and is incorporated herein by reference to reflect their ownership of MGP II.
The board of directors of ARLP Managing GP (the “Board”) delegated to its conflicts committee (the “Conflicts Committee”) comprised of independent directors, the authority of ARLP Managing GP to negotiate the terms and conditions of the Exchange Transactions on behalf of the Partnership. Robert W. Baird& Co. Incorporated acted as financial advisor to the Conflicts Committee in connection with the evaluation and negotiation of the Exchange Transactions. On July28, 2017, Robert W. Baird& Co. Incorporated delivered a fairness opinion to the Conflicts Committee with respect to the transaction. The terms of the Contribution Agreement were unanimously approved by the Conflicts Committee.
The foregoing description of the Contribution Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement, a copy of which is filed as Exhibit10.1 to this Current Report and is incorporated by reference herein.
Item 1.01 UNREGISTERED SALE OF EQUITY SECURITIES.
As discussed in Item 1.01 of this Current Report, the Partnership entered into the Contribution Agreement on July28, 2017. to the terms of the Contribution Agreement, the Partnership issued the Exchange Units to ARLP Managing GP and ARLP Special GP. The Exchange Units were offered and issued in reliance upon the exemption from registration provided by Section4(a)(2)of the Securities Act of 1933, as amended.
