Exhibit 1.1
12,500,000 Common
Units
ALLIANCE HOLDINGS GP,
L.P.
Representing Limited Partner
Interests
UNDERWRITING
AGREEMENT
April __, 2006
LEHMAN BROTHERS INC.
As Representative of the several
Underwriters
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Ladies and Gentlemen:
Alliance Holdings GP, L.P., a
Delaware limited partnership (the “ Partnership
”), proposes to sell 12,500,000 common units (the “
Firm Units ”), representing limited partner interests
in the Partnership (the “ Common Units ”). In
addition, the Partnership proposes to grant to the underwriters
named in Schedule I hereto (the “ Underwriters
”) an option to purchase up to 1,875,000 additional Common
Units on the terms and for the purposes set forth in Section 2 (the
“ Option Units ”). The Firm Units and the Option
Units, if purchased, are hereinafter collectively called the
“ Units .”
This is to confirm the agreement
among the Partnership and Alliance GP, LLC, a Delaware limited
liability company and the general partner of the Partnership (the
“ General Partner ,” and together with the
Partnership, the “ Alliance Parties ”), and the
Underwriters concerning the purchase of the Units from the
Partnership by the Underwriters.
A. It is understood and agreed to by
all parties hereto that the Partnership was initially formed to
acquire and own, as of each Delivery Date (as defined in Section 4
hereof):
(i) a 0.99% general partner interest
in Alliance Resource Partners, L.P., a publicly traded Delaware
limited partnership (“ ARLP ”), a 1.0001%
general partner interest in Alliance Resource Operating Partners,
L.P., a Delaware limited partnership (the “ Intermediate
Partnership ”), and a 0.001% managing interest in
Alliance Coal, LLC, a Delaware limited liability company (the
“ Operating Company ”), all of the foregoing
indirectly held through a 100% ownership interest in Alliance
Resource Management GP, LLC, a Delaware limited liability company
and the managing general partner of ARLP (“ MGP
”);
(ii) 15,550,628 common units of
ARLP; and
(iii) the incentive distribution
rights in ARLP, held indirectly through a 100% ownership interest
in MGP;
each as more particularly described in the
Preliminary Prospectus and the Prospectus and as acquired pursuant
to the Contribution Agreement (as such terms are hereinafter
defined).
B. It is further understood and
agreed to by all parties hereto that as of the date
hereof:
(i) Alliance Management Holdings,
LLC, a Delaware limited liability company (“ AMH
”), owns (a) a 25.9% interest in MGP and (b) 19,522
common units of ARLP;
(ii) AMH II, LLC, a Delaware limited
liability company (“ AMH II ”), owns (a) a
74.1% interest in MGP and (b) 220,484 common units of
ARLP;
(iii) MGP owns (a) a 0.99%
general partner interest in ARLP and serves as its managing general
partner, (b) all of the incentive distribution rights in ARLP,
(c) a 1.0001% general partner interest in the Intermediate
Partnership, and serves as its managing general partner, and
(d) a 0.001% managing interest in the Operating Company and
serves as its managing member;
(iv) Alliance Resource GP, LLC, a
Delaware limited liability company (“ SGP ”),
owns 15,310,622 common units of ARLP, and serves as the special
general partner of each of ARLP and the Intermediate Partnership;
and
(v) The Operating Company is the
sole member of or stockholder in each subsidiary listed on Schedule
II hereto (each such entity listed on Schedule II, an “
Alliance Subsidiary ,” and collectively, the “
Alliance Subsidiaries ”).
ARLP, MGP, SGP, the Intermediate
Partnership, the Operating Company and the Alliance Subsidiaries
are collectively referred to herein as the “ Alliance MLP
Parties .”
C. Prior to the execution
hereof:
(i) Joseph W. Craft III (“
Craft ”) formed a Delaware limited liability company
named C-Holdings, LLC (“ C-Holdings ”) to which
he contributed $1,000 in exchange for all of the interest in
C-Holdings;
(ii) C-Holdings formed the General
Partner to which it contributed $1,000 in exchange for all of the
interest in the General Partner; and
(iii) C-Holdings and the General
Partner formed the Partnership and the General Partner contributed
$0.05 thereto in exchange for a 0.005% general partner interest
therein and Craft contributed $999.95 thereto in exchange for a
99.995% limited partner interest therein.
D. On April 14, 2006, the
Partnership, the General Partner, AMH, AMH II, SGP, MGP and ARM GP
Holdings, Inc. entered into a Contribution Agreement (the “
Contribution Agreement ”) pursuant to which the
following transactions will occur prior to the Initial Delivery
Date (as hereinafter defined):
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(i) AMH II will convey a 0.001%
limited liability company interest in MGP to ARM GP Holdings, Inc.
as a capital contribution;
(ii) AMH will contribute its 25.9%
interest in MGP and 19,522 ARLP common units to the Partnership in
exchange for [7,256,904] common units in the Partnership and cash
equal to the AMH IPO Proceeds (as defined in the Contribution
Agreement);
(iii) AMH II will contribute its
remaining interest in MGP, its interest in ARM GP Holdings, Inc.
and 220,484 ARLP common units to the Partnership in exchange for
[20,967,818] common units in the Partnership and cash equal to the
AMH II IPO Proceeds (as defined in the Contribution
Agreement);
(iv) SGP will contribute 15,310,622
ARLP common units to the Partnership in exchange for [19,138,278]
common units in the Partnership;
(v) MGP will distribute its 0.001%
limited liability company managing member interest in Alliance Coal
to the Partnership and ARM GP Holdings, Inc. in proportion to their
respective ownership interest in MGP; and
(vi) ARM GP Holdings, Inc. will
distribute all of its limited liability company managing member
interest in Alliance Coal to the Partnership.
The transactions contemplated by the
Contribution Agreement are referred to herein as the “
Transactions .”
E. It is further understood and
agreed to by the parties hereto that the following additional
transactions will occur substantially contemporaneously with the
Initial Delivery Date:
(i) The Partnership shall have
amended and restated its agreement of limited partnership (as so
amended and restated, the “ Partnership Agreement
”) to conform to the description thereof set forth in the
Prospectus under the caption “ Description of Our
Partnership Agreement ”;
(ii) The General Partner shall have
amended and restated its limited liability company agreement (as so
amended and restated, the “ GP LLC Agreement
”);
(iii) The Partnership, the General
Partner, ARLP, MGP and the Operating Company shall have entered
into an Administrative Services Agreement (the “
Administrative Services Agreement ”) consistent with
the description thereof set forth in the Prospectus under the
caption “Certain Relationships and Related Party
Transactions—Administrative Services
Agreement”;
(iv) The Partnership and the General
Partner shall have become party to the existing Omnibus Agreement
(the “ Omnibus Agreement ”) currently
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among ARLP, MGP and their respective
affiliates, consistent with the description thereof set forth in
the Prospectus under the caption “Certain Relationships and
Related Party Transactions—Omnibus Agreement;”
and
(v) The Partnership shall enter into
a $5 million credit facility (the “ Credit Facility
”) with C-Holdings that provides for [Insert description of
Credit Facility].
The “ Transaction
Documents ” shall mean the Contribution Agreement, the
Administrative Agreement, the Omnibus Agreement and the Credit
Facility. The “ Organizational Documents ” shall
mean the Partnership Agreement, the GP LLC Agreement, the MGP LLC
Agreement, the SGP LLC Agreement and the ARLP Partnership
Agreement. The “ Operative Agreements ” shall
mean the Transaction Documents and the Organizational Documents
collectively.
F. Within 30 days after the Initial
Delivery Date:
(i) AMH and AMH II will dissolve and
distribute the interests in the Partnership and the cash they have
to their owners (the “ Management Investors ”)
in proportion to their respective ownership interests;
and
(ii) Pursuant to a certain Purchase
and Exchange Agreement (the “ Purchase and Exchange
Agreement ”) to be entered into by the parties thereto,
the owners of all the stock of Alliance Resource Holdings II, Inc.
(“ ARH II ”), other than Craft, will have a
portion of their shares redeemed by ARH II in exchange for $[
] million in cash and such owners will sell the balance of their
shares to Craft in exchange for [
] Common Units of the Partnership.
The Alliance Parties wish to confirm
as follows their agreement with you in connection with the purchase
of the Units from the Partnership by the Underwriters.
1. Representations, Warranties
and Agreements of the Alliance Parties . The Alliance Parties
jointly and severally represent, warrant and agree that:
(a) Registration; Definitions; No
Stop Order . A registration statement (Registration
No. 333-129883) on Form S-1 relating to the Units has
(i) been prepared by the Partnership in conformity with the
requirements of the Securities Act of 1933, as amended (the “
Securities Act ”), and the rules and regulations (the
“ Rules and Regulations ”) of the Securities and
Exchange Commission (the “ Commission ”)
thereunder; (ii) been filed with the Commission under the
Securities Act; and (iii) become effective under the
Securities Act. Copies of such registration statement and any
amendment thereto have been delivered by the Partnership to you as
the representative of the Underwriters (the “
Representative ”). As used in this
Agreement:
(i) “ Applicable Time
” means [
:
[a][p].m.]
(New York City time) on the date of this Agreement;
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(ii) “ Effective Date
” means each date and time as of which such registration
statement, any post-effective amendment or amendments thereto and
any registration statement or amendments thereto filed pursuant to
Rule 462(b) relating to the offering of the Units was or is
declared effective by the Commission;
(iii) “ Issuer Free Writing
Prospectus ” means each “free writing
prospectus” (as defined in Rule 405 of the Rules and
Regulations) prepared by or on behalf of the Partnership or used or
referred to by the Partnership in connection with the offering of
the Units;
(iv) “ Preliminary
Prospectus ” means any preliminary prospectus relating to
the Units included in such registration statement or filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations;
(v) “ Pricing Disclosure
Package ” means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with each Issuer Free
Writing Prospectus filed with the Commission by the Partnership on
or before the Applicable Time;
(vi) “ Prospectus
” means the final prospectus relating to the Units, as filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations; and
(vii) “ Registration
Statement ” means such registration statement, as amended
as of the Effective Date, including any Preliminary Prospectus or
the Prospectus and all exhibits to such registration
statement.
Any reference to the “ most
recent Preliminary Prospectus ” shall be deemed to refer
to the latest Preliminary Prospectus included in the Registration
Statement or filed pursuant to Rule 424(b) on or prior to the date
hereof. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
or suspending the effectiveness of the Registration Statement, and
no proceeding or examination for such purpose has been instituted
or, to the knowledge of the Alliance Parties, threatened by the
Commission.
(b) Partnership Not an
“Ineligible Issuer .” The Partnership was not at
the time of initial filing of the Registration Statement and at the
earliest time thereafter that the Partnership or another offering
participant made a bona fide offer (within the meaning of Rule
164(h)(2) of the Rules and Regulations) of the Units, is not on the
date hereof and will not be on the applicable Delivery Date, an
“ineligible issuer” (as defined in Rule
405).
(c) R egistration Statement and
Prospectus Conform to the Requirements of the Securities Act .
The Registration Statement conformed when filed and will conform in
all material respects on the Effective Date and on the applicable
Delivery Date, and any
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amendment to the Registration
Statement filed after the date hereof will conform in all material
respects when filed, to the requirements of the Securities Act and
the Rules and Regulations. The Preliminary Prospectus conformed
when filed, and the Prospectus will conform, in all material
respects when filed with the Commission pursuant to Rule 424(b) and
on the applicable Delivery Date, to the requirements of the
Securities Act and the Rules and Regulations.
(d) No Material Misstatements or
Omissions in Registration Statement . The Registration
Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement in reliance upon and in conformity with
written information furnished to the Partnership through the
Representative by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in
Section 7(e).
(e) No Material Misstatements or
Omissions in Prospectus . The Prospectus will not, as of its
date and on the applicable Delivery Date, contain an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to
information contained in or omitted from the Prospectus in reliance
upon and in conformity with written information furnished to the
Partnership through the Representative by or on behalf of any
Underwriter specifically for inclusion therein, which information
is specified in Section 7(e).
(f) No Material Misstatements or
Omissions in Pricing Disclosure Package . The Pricing
Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to
information contained in or omitted from the Pricing Disclosure
Package in reliance upon and in conformity with written information
furnished to the Partnership through the Representative by or on
behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 7(e).
(g) No Material Misstatements or
Omissions in Issuer Free Writing Prospectuses . Each Issuer
Free Writing Prospectus (including, without limitation, any road
show that is a free writing prospectus under Rule 433), when
considered together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(h) Issuer Free Writing
Prospectuses Conform to the Requirements of the Securities Act
. Each Issuer Free Writing Prospectus, if any, conformed or will
conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations on the date of first
use, and the Partnership has complied with all
prospectus
6
delivery requirements, any filing
requirements and any record keeping requirements applicable to such
Issuer Free Writing Prospectus pursuant to the Rules and
Regulations. The Partnership has not made any offer relating to the
Units that would constitute an Issuer Free Writing Prospectus
without the prior written consent of the Representative. The
Partnership has retained in accordance with the Rules and
Regulations all Issuer Free Writing Prospectuses that were not
required to be filed pursuant to the Rules and Regulations. The
Partnership has taken all actions necessary so that any “road
show” (as defined in Rule 433 of the Rules and Regulations)
in connection with the offering of the Units will not be required
to be filed pursuant to the Rules and Regulations.
(i) Formation and
Qualification . Each of the Alliance Parties and the Alliance
MLP Parties has been duly formed and is validly existing and is in
good standing as a limited partnership, limited liability company
or corporation, as applicable, under the laws of the state of
Delaware and is duly qualified to do business and in good standing
as a foreign limited partnership, foreign limited liability company
or corporation, as applicable, in each jurisdiction in which its
ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified or in good standing would not (i) in the aggregate,
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), results of operations,
properties, business or prospects of the Partnership and its
subsidiaries (as herein after defined) taken as a whole (a “
Material Adverse Effect ”), or (ii) subject the
limited partners of the applicable limited partnership to any
material liability or disability; each of the Alliance Parties and
the Alliance MLP Parties has all power and authority necessary to
own or hold its properties and to conduct the businesses in which
it is engaged.
(j) Power and Authority to Act as
a General Partner . The General Partner has, and as of each
Delivery Date will have, full limited liability company power and
authority to act as general partner of the Partnership in all
material respects as described in the Registration Statement and
Prospectus.
(k) Ownership of the General
Partner . C-Holdings, LLC, a Delaware limited liability company
(“ C-Holdings ”), owns 100% of the issued and
outstanding membership interests in and is the sole member of the
General Partner; such membership interests have been duly
authorized and validly issued in accordance with the GP LLC
Agreement and are fully paid (to the extent required by the GP LLC
Agreement) and nonassessable (except as such nonassessability may
be affected by matters described in Section 18-607 of the
Delaware Limited Liability Company Act (the “ Delaware LLC
Act ”)); and C-Holdings owns such membership interests
free and clear of all liens, encumbrances, security interests,
charges or claims.
(l) Ownership of the General
Partner Interest in the Partnership . At each Delivery Date,
the General Partner will be the sole general partner of the
Partnership and will have a non-economic interest in the
Partnership; such general partner interest will be duly authorized
and validly issued in accordance with the Partnership Agreement,
and the General Partner will own such general partner interest free
and clear of all liens, encumbrances, security interests, charges
or claims.
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(m) Ownership of the Management
Units . At the Initial Delivery Date, after giving effect to
the Transactions and this offering of Units, AMH will own
[7,256,904] Common Units (the “ AMH Units ”);
AMH II will own [20,967,818] Common Units (the “ AMH II
Units ”); and SGP will own [19,138,278] Common Units (the
“ SGP Units ,” and, collectively with the AMH
Units and the AMH II Units, the “ Management Units
”) of the Partnership. Such limited partner interests will be
duly authorized and validly issued in accordance with the
Partnership Agreement, and AMH, AMH II and SGP will own their
respective limited partner interests free and clear of all liens,
encumbrances, security interests, charges or claims.
(n) Ownership of MGP by the
Partnership . At each Delivery Date, the Partnership will be
the sole member of MGP and will own 100% of the issued and
outstanding membership interests in MGP; such membership interests
have been duly authorized and validly issued in accordance with the
limited liability company agreement of MGP (the “ MGP LLC
Agreement ”), and are fully paid (to the extent required
under the MGP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in
Section 18-607 of the Delaware LLC Act); and the Partnership
owns such membership interests free and clear of all liens,
encumbrances, security interests, charges or claims.
(o) Ownership of the General
Partner Interests in ARLP . MGP and SGP are the only general
partners of ARLP with 0.99% and 0.01% general partner interests,
respectively, in ARLP; such general partner interests have been
duly authorized and validly issued in accordance with the
Partnership Agreement; and MGP and SGP own such general partner
interests free and clear of all liens, encumbrances, security
interests, charges or claims.
(p) Ownership of ARLP Common
Units by the Partnership . At each Delivery Date, the
Partnership will own 15,550,628 ARLP common units representing
limited partner interests in ARLP; such limited partner interests
have been duly authorized and validly issued in accordance with the
Limited Partnership Agreement of ARLP, as amended to date (the
“ ARLP Partnership Agreement ”) and are fully
paid (to the extent required under the ARLP 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 will own such limited partner interests
free and clear of all liens, encumbrances, security interests,
charges or claims.
(q) Ownership of the General
Partner Interests in the Intermediate Partnership . MGP and SGP
are the only general partners of the Intermediate Partnership with
1.0001% and 0.01% 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 the Intermediate Partnership, as amended
to date (the “ Intermediate Partnership Agreement
”); and MGP and SGP own such general partner interests free
and clear of all liens, encumbrances, security interests, charges
or claims.
8
(r) Ownership of the Limited
Partner Interests in the Intermediate Partnership . ARLP is the
sole limited partner of the Intermediate Partnership with a
98.9899% limited partner interest; 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 ARLP owns such limited partner interest free and clear of all
liens, encumbrances, security interests, charges or
claims.
(s) Ownership of the Managing
Interest in the Operating Company . MGP is the sole manager of
the Operating Company with a 0.001% 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 is fully paid
(to the extent required under the Operating Company LLC Agreement)
and nonassessable (except as such nonassessability may be affected
by matters described in Section 18-607 of the Delaware LLC
Act); and MGP owns such managing interest free and clear of all
liens, encumbrances, security interests, charges or
claims.
(t) Ownership of the Non-Managing
Interest in the Operating Company . 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.
(u) Ownership of the Alliance
Subsidiaries . The Operating Company owns 100% of the
outstanding capital stock or membership interests, as the case may
be, in each of the Alliance Subsidiaries; such stock or membership
interests have been duly authorized and validly issued in
accordance with the applicable certificate of incorporation and
bylaws or certificate of formation and limited liability company
agreement of each of the Alliance Subsidiaries (collectively, the
“ Subsidiary Organizational Agreements ”), and
are fully paid (to the extent required under the applicable
Subsidiary Organizational Agreement) and nonassessable (except as
such nonassessability may be affected by Section 18-607 of the
Delaware LLC Act); and the Operating Company owns such stock or
membership interests free and clear of all liens, encumbrances,
security interests, charges or claims.
(v) No Other Subsidiaries .
The General Partner does not have any subsidiaries (other than the
Partnership) 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 Securities Act). The
Partnership does not have any subsidiaries (other than MGP, ARLP
and the Operating Company) 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
Securities Act).
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(w) Capitalization . At the
Initial Delivery Date, after giving effect to the Offering, the
issued and outstanding Common Units of the Partnership will consist
of [59,863,000] Common Units (including [47,363,000] Management
Units). Other than the Management Units, the Units will be the only
limited partner interests of the Partnership issued or outstanding
at each Delivery Date.
(x) Valid Issuance of the
Units . At the Initial Delivery Date, there will be issued and
sold to the Underwriters the Firm Units (assuming no purchase by
the Underwriters of Option Units on the Initial Delivery Date); at
the Initial Delivery Date or the Option Unit Delivery Date (as
defined in Section 4 hereof), as the case may be, the Firm Units or
the Option Units, as the case may be, and the limited partners
interests represented thereby, will be duly and validly authorized
in accordance with the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefor in
accordance with this Agreement, will be duly and validly issued,
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 Revised
Uniform Limited Partnership Act (the “ Delaware LP Act
”)).
(y) No Preemptive Rights,
Registration Rights or Options . Except as identified in the
most recent Preliminary Prospectus, there are no
(i) preemptive rights or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of any
equity securities of, either of the Alliance Parties or MGP or
(ii) outstanding options or warrants to purchase any
securities of either of the Alliance Parties or MGP. Except for
such rights that have been waived or as described in the most
recent Preliminary Prospectus, 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 Alliance Parties or MGP.
(z) Authority and
Authorization . The Partnership has all requisite partnership
power and authority to issue, sell and deliver (i) the Units,
in accordance with and upon the terms and conditions set forth in
this Agreement and the Partnership Agreement and (ii) the
Management Units, in accordance with an upon the terms and
conditions set forth in the Partnership Agreement and the
Contribution Agreement. At each Delivery Date, all corporate,
partnership and limited liability company action, as the case may
be, required to be taken by any of the Alliance Parties or the
Alliance MLP Parties or any of their respective unitholders,
stockholders, members or partners for the authorization, issuance,
sale and delivery of the Units and the Management Units, the
execution and delivery of the Operative Agreements and the
consummation of the transactions (including the Transactions)
contemplated by this Agreement and the Operative Agreements, shall
have been validly taken.
(aa) Authorization, Execution and
Delivery of this Agreement . This Agreement has been duly
authorized and validly executed and delivered by each of the
Alliance Parties.
(bb) Authorization, Execution,
Delivery and Enforceability of Certain Agreements . At or
before the Initial Delivery Date:
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(i) The Transaction Documents will
have been duly authorized, executed and delivered by the parties
thereto and each will be a valid and legally binding agreement of
the parties thereto, enforceable against such parties in accordance
with its terms;
(ii) the Partnership Agreement will
have been duly authorized, executed and delivered by the General
Partner and will be a valid and legally binding agreement of the
General Partner, enforceable against the General Partner in
accordance with its terms; and
(iii) the GP LLC Agreement will have
been duly authorized, executed and delivered by C-Holdings and will
be a valid and legally binding agreement of C-Holdings, enforceable
against C-Holdings in accordance with its terms;
provided that , with respect to each agreement described in
this Section 1(bb), 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); provided further ; that
the indemnity, contribution and exoneration provisions contained in
any of such agreements may be limited by applicable laws and public
policy.
(cc) Authorization, Execution and
Enforceability of Certain ARLP Agreements . As of each Delivery
Date:
(i) The MGP LLC Agreement has been
duly authorized, executed and delivered by the Partnership as the
sole member of MGP, and is a valid and legally binding agreement of
the Partnership, enforceable against the Partnership in accordance
with its terms;
(ii) the ARLP Partnership Agreement
has been duly authorized, executed and delivered by MGP and SGP and
is a valid and legally binding agreement of MGP and SGP,
enforceable against MGP and SGP in accordance with its
terms;
(iii) the Intermediate Partnership
Agreement has been duly authorized, executed and delivered by ARLP
as the limited partner and by SGP and MGP as the general partners,
and is a valid and legally binding agreement of each of them,
enforceable against them in accordance with its terms;
(iv) the Operating Company LLC
Agreement has been duly authorized, executed and delivered by each
of the Intermediate Partnership and the MGP and is a valid and
legally binding agreement of each of them, enforceable against each
of them in accordance with its terms;
provided that , with respect to each agreement described in
this Section 1(cc), 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
11
equity or at law); provided further ;
that the indemnity, contribution and exoneration provisions
contained in any of such agreements may be limited by applicable
laws and public policy.
(dd) Sufficiency of the
Contribution Agreement . The Contribution Agreement will be
legally sufficient to transfer or convey to the Partnership all
equity interests in ARLP as contemplated by the most recent
Preliminary Prospectus and the Prospectus, subject to the
conditions, reservations and limitations contained in the
Contribution Agreement and those set forth in the most recent
Preliminary Prospectus and the Prospectus.
(ee) No Conflicts . None of
the (i) offering, issuance or sale by the Partnership of the
Units, (ii) the execution, delivery and performance of this
Agreement by the Alliance Parties and the Operative Agreements by
the Alliance Parties and Alliance MLP Parties that are parties
thereto or (iii) the consummation of any other transactions
contemplated by this Agreement or the Operative Agreements
(including the Transactions) or the fulfillment of the terms hereof
or thereof, conflict with or will conflict with, result in a breach
or violation of, or a default (or an event that, with notice or
lapse of time or both, would constitute such a default) under, or
imposition of any lien, charge or encumbrance upon any property or
assets of any of the Alliance Parties or the Alliance MLP Parties
pursuant to (i) the certificate of limited partnership or
agreement of limited partnership, certificate of formation or
limited liability company agreement, the charter or bylaws, or any
other organizational documents of any of the Alliance Parties or
Alliance MLP Parties, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which any of the Alliance Parties or Alliance MLP
Parties is a party or by which any of them are bound or to which
any of their respective properties is subject or (iii) any
statute, law, rule or regulation, or any judgment, order or decrees
of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over any of
the Alliance Parties or Alliance MLP Parties or any of their
properties or assets, except, in the case of clauses (ii) and
(iii), for such conflicts, breaches, violations, defaults, liens,
charges or encumbrances as would not, individually or in the
aggregate, have a Material Adverse Effect.
(ff) No Defaults . None of
the Alliance Parties or the Alliance MLP Parties is in
(i) violation of its agreement of limited partnership, limited
liability company agreement, certificate 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 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.
12
(gg) No Consents . 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 Parties of the Transactions
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 Delivery Date will be, obtained,
(iii) such consents that, if not obtained, would not have a
Material Adverse Effect and (iv) as disclosed in the most
recent Preliminary Prospectus.
(hh) Conformity of Units to
Description in the most recent Preliminary Prospectus and
Prospectus . The Units, when issued and delivered in accordance
with the terms of the Partnership Agreement and this Agreement
against payment therefor as provided therein and herein, will
conform in all material respects to the description thereof
contained in the most recent Preliminary Prospectus and
Prospectus.
(ii) No Integration . The
Partnership has not sold or issued any securities that would be
integrated with the offering of the Units contemplated by this
Agreement pursuant to the Securities Act, the Rules and Regulations
or the interpretations thereof by the Commission.
(jj) No Material Adverse
Change . None of the Alliance Parties or the Alliance MLP
Parties has sustained, since the date of the latest audited
financial statements included in the most recent Preliminary
Prospectus, any 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, order or decree, and since such date, there has not been
any change in the capitalization or long-term debt of any of the
Alliance Parties or the Alliance MLP Parties or any material
adverse change, or any development involving a prospective adverse
change, in or affecting the condition (financial or otherwise),
results of operations, unitholders’ equity, properties,
management, business or prospects of any of the Alliance Parties or
the Alliance MLP Parties taken as a whole, in each case except as
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Since the date of the latest audited
financial statements included in the Prospectus, none of the
Alliance Parties or the Alliance MLP Parties has incurred any
liability or obligation, direct, indirect or contingent, or entered
into any transactions, not in the ordinary course of business,
that, individually or in the aggregate, is material to the Alliance
Parties or the Alliance MLP Parties, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(kk) Conduct of Business .
Since the date as of which information is given in the most recent
Preliminary Prospectus, none of the Alliance Parties or the
Alliance MLP Parties have (i) incurred any liability or
obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business,
(ii) entered into any material transaction not in the ordinary
course of business or (iii) declared, paid or made any
dividend or distribution on any class of security.
13
(ll) Financial Statements .
The historical financial statements (including the related notes
and supporting schedules) included in the most recent Preliminary
Prospectus (or any amendment or supplement thereto) comply as to
form in all material respects with the requirements of Regulation
S-X under the Securities Act and present fairly in all material
respects the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates
and for the periods indicated and have been prepared in conformity
with accounting principles generally accepted in the United States
applied on a consistent basis throughout the periods involved. The
summary historical and pro forma financial and operating data
included in the most recent Preliminary Prospectus (and any
amendment or supplement thereto) under the caption
“Summary—Summary Historical and Pro Forma Financial and
Operating Data” and the selected historical and pro forma
financial and operating data set forth under the caption
“Selected Historical and Pro Forma Financial and Operating
Data” is accurately presented in all material respects and
prepared on a basis consistent with the audited and unaudited
historical financial statements and pro forma financial statements,
as applicable, from which it has been derived.
(mm) Pro Forma Financial
Statements . The pro forma financial statements included in the
most recent Preliminary Prospectus (and any amendment or supplement
thereto) comply as to form in all material respects with the
applicable requirements of Regulation S-X and have been prepared in
accordance with the Commission’s rules and guidelines with
respect to pro forma financial statements and have been properly
computed on the bases described therein. The assumptions used in
the preparation of such pro forma financial statements are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
The other historical financial and statistical information and data
included in the most recent Preliminary Prospectus are, in all
material respects, fairly presented.
(nn) Statistical and
Market-Related Data . The statistical and market-related data
included under the captions “Alliance Resource Partners,
L.P.,” “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and
“Business of Alliance Resource Partners, L.P.” in the
most recent Preliminary Prospectus and the consolidated financial
statements of the Partnership, the General Partner and MGP and
their respective subsidiaries included in the most recent
Preliminary Prospectus are based on or derived from sources that
the Alliance Parties believe to be reliable and accurate in all
material respects.
(oo) Independent Public
Accountants . Deloitte & Touche LLP, who have
certified certain financial statements of the Partnership, the
General Partner and MGP, and their respective consolidated
subsidiaries, whose report appears in the most recent Preliminary
Prospectus and the Prospectus and who have delivered the initial
letter referred to in Section (g)) hereof, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(pp) Title to Properties . At
each Delivery Date, each of the Alliance Parties and the Alliance
MLP Parties will have good and indefeasible title to all real
property and good title to all personal property described in the
most recent Preliminary Prospectus as
14
being owned by them, except
(i) as described in the most recent Preliminary 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 most
recent Preliminary Prospectus; and all real property and buildings
held under lease or license by the Alliance Parties and the
Alliance MLP Parties are held by them 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 most recent Preliminary
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 Alliance MLP Parties 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, such
title defects, and imperfections, limitations, correlative rights,
or appurtenant rights or obligations contained in, arising from or
created by the instrument under which any of the Alliance Parties
or the Alliance MLP Parties hold title to such real property
interest or contained in its chain of title thereto and those that
arise under the Amended and Restated Credit Agreement, dated as of
April 13, 2006, among Alliance Resource Operating Partners,
L.P. as Borrower and the Initial Lenders, Initial Issuing Banks and
Swing Line Bank and JP Morgan Chase Bank N.A. (as paying agent) and
Citicorp USA, Inc. and JP Morgan Chase Bank, N.A. (as
co-administrative agents) and Citigroup Global Markets Inc. and
J.P. Morgan Securities Inc. (as joint lead arrangers and joint
bookrunners), 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 Alliance Parties and the Alliance MLP Parties.
(qq) Rights-of Way . At each
Delivery Date, each of the Alliance Parties and Alliance MLP
Parties will have such consents, easements, rights-of-way or
licenses from any person (“rights-of-way”) as are
necessary to conduct their business in the manner described in the
most recent Preliminary Prospectus, subject to such qualifications
as may be set forth in the most recent Preliminary 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 Parties and the Alliance MLP Parties 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 most
recent Preliminary Prospectus, none of such rights-of-way contains
any restriction that is materially burdensome to the Alliance
Parties or the Alliance MLP Parties considered as a
whole.
15
(rr) Insurance . The Alliance
Parties and the Alliance MLP Parties 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 Parties or the Alliance
MLP Parties 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
each Delivery Date.
(ss) Investment Company .
None of the Alliance Parties or the Alliance MLP Parties is, and as
of the applicable Delivery Date and, after giving effect to the
offer and sale of the Units and the application of the proceeds
therefrom as described under “Use of Proceeds” in the
most recent Preliminary Prospectus and the Prospectus, none of them
will be, an “investment company” or a company
“controlled by” an “investment company”
within the meaning of such term under the Investment Company Act of
1940, as amended (the “Investment Company Act”), and
the rules and regulations of the Commission thereunder.
(tt) Litigation . Except as
described in the most recent Preliminary 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 Parties or the Alliance
MLP Parties is or may be a party or to which the business or
property of any of the Alliance Parties or the Alliance MLP Parties
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 Parties or the
Alliance MLP Parties 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.
(uu) Legal Proceedings or
Contracts to be Described or Filed . There are no legal or
governmental proceedings or contracts or other documents of a
character required to be described in the Registration Statement or
the most recent Preliminary Prospectus or, in the case of
documents, to be filed as exhibits to the Registration Statement,
that are not described and filed as required. Statements made in
the most recent Preliminary Prospectus under the captions
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Business of
Alliance Resource Partners, L.P.” insofar as they purport to
constitute summaries of the terms of statutes, rules or
regulations, legal or governmental proceedings or contracts and
other documents, constitute accurate summaries of the terms of such
statutes, rules and regulations, legal and governmental proceedings
and contracts and other documents in all material
respects.
(vv) Certain Relationships and
Related Transactions . Except as described in the most recent
Preliminary Prospectus, no relationship, direct or indirect, exists
between
16
or among any of the Alliance Parties
or the Alliance MLP Parties, on the one hand, and the directors,
officers, unitholders, customers or suppliers of any of the
Alliance Parties or the Alliance MLP Parties, on the other hand,
that is required to be described in the most recent Preliminary
Prospectus or the Prospectus which is not so described.
(ww) No Labor Dispute . No
labor disturbance by the employees of any of the Alliance Parties
or the Alliance MLP Parties exists or, to the knowledge of the
Alliance Parties, is imminent that could reasonably be expected to
have a Material Adverse Effect.
(xx) ERISA . (i) Each
“employee benefit plan” (within the meaning of
Section 3(3) of the Employee Retirement Security Act of 1974,
as amended (“ ERISA ”)) for which any of the
Alliance Parties or the Alliance MLP Parties or any member of the
“Controlled Group” (defined as any organization which
is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986,
as amended (the “ Code ”)) of any of the
Alliance Parties or the Alliance MLP Parties would have any
liability (each a “ Plan ”) has been maintained
in material compliance with its terms and with the material
requirements of all applicable statutes, rules and regulations
including ERISA and the Code; (ii) with respect to each Plan
subject to Title IV of ERISA (a) no “reportable
event” (within the meaning of Section 4043(c) of ERISA)
has occurred or is reasonably expected to occur, (b) no
“accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether
or not waived, has occurred or is reasonably expected to occur, and
(c) none of the Alliance Parties or the Alliance MLP Parties
or any member of the Controlled Group of any of the Alliance
Parties or the Alliance MLP Parties has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary
course and without default) in respect of a Plan (including a
“multiemployer plan,” within the meaning of
Section 4001(a)(3) of ERISA); and (iii) each Plan that is
intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue
Service that it is so qualified in form and nothing has occurred,
whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
(yy) Tax Returns . Each of
the Alliance Parties and Alliance MLP Parties has filed all
material federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof, subject to
permitted extensions, and have paid all taxes due thereon, and no
tax deficiency has been determined adversely to any of the Alliance
Parties or the Alliance MLP Parties, nor do any of the Alliance
Parties have any knowledge of any tax deficiencies that could, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(zz) Books and Records;
Accounting Controls . Each of the Alliance Parties and Alliance
MLP Parties (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
17
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.
(aaa) Disclosure Controls and
Procedures . (i) The Partnership has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the Exchange Act), (ii) such
disclosure controls and procedures are designed to ensure that the
information required to be disclosed by the Partnership in the
reports they file or will file or submit under the Securities
Exchange Act of 1934, as amended, as applicable, is accumulated and
communicated to management of the Partnership, including their
respective principal executive officers and principal financial
officers, as appropriate, to allow timely decisions regarding
required disclosure to be made and (iii) such disclosure
controls and procedures are effective in all material respects to
perform the functions for which they were established.
(bbb) No Changes in Internal
Controls . Since the date of the most recent balance sheet of
MGP and its consolidated subsidiaries reviewed or audited by
Deloitte & Touche LLP and the audit committee of the board
of directors of MGP, (i) none of the Alliance Parties or the
Alliance MLP Parties has been advised of (A) any significant
deficiencies in the design or operation of internal controls that
could adversely affect the ability of any such entities to record,
process, summarize and report financial data, or any material
weaknesses in internal controls or (B) any fraud, whether or
not material, that involves management or other employees who have
a significant role in the internal controls of any such entity, and
(ii) since that date, there have been no significant changes
in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material
weaknesses.
(ccc) Sarbanes-Oxley Act of
2002 . Except as described in the most recent Preliminary
Prospectus, there is and has been no failure on the part of any of
the Alliance Parties or the Alliance MLP Parties or any of their
respective directors or officers, in their capacities as such, to
comply with the provisions of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection
therewith.
(ddd) Permits . Each of the
Alliance Parties and Alliance MLP Parties 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 most recent Preliminary
Prospectus, subject to such qualifications as may be set forth in
the most recent Preliminary 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 Parties
and the Alliance MLP Parties 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
18
permit, except for such revocations,
terminations and impairments that would not have a Material Adverse
Effect; and, except as described in the most recent Preliminary
Prospectus, none of such permits contains any restriction that is
materially burdensome to the Alliance Parties and the Alliance MLP
Parties considered as a whole.
(eee) Environmental
Compliance . Each of the Alliance Parties and the Alliance MLP
Parties (i) is 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) has received all permits required of them under
applicable Environmental Laws to conduct their respective
businesses, (iii) is in compliance with all terms and
conditions of any such permits and (iv) does 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 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.
(fff) Directed Units Sales .
None of the Directed Units distributed in connection with the
Directed Unit Program (each as defined in Section 3) will be
offered or sold outside of the United States. The Partnership has
not offered, or caused Lehman Brothers Inc. to offer, Units to any
person pursuant to the Directed Unit Program with the specific
intent to unlawfully influence (i) a customer or supplier of
any of the Alliance Parties or the Alliance MLP Parties to alter
the customer’s or supplier’s level or type of business
with any such entity or (ii) a trade journalist or publication
to write or publish favorable information about any of the Alliance
Parties or the Alliance MLP Parties, or their respective businesses
or products.
(ggg) No Distribution of Other
Offering Materials . None of the Alliance Parties or the
Alliance MLP Parties has distributed and, prior to the later to
occur of any Delivery Date and completion of the distribution of
the Units, will distribute any offering material in connection with
the offering and sale of the Units other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to
which the Representative has consented in accordance with Section
1(h) or 5(a)(v) or as set forth on Schedule [
] hereto and, in connection with
the Directed Unit Program described in Section 3, the enrollment
materials prepared by Lehman Brothers Inc.
(hhh) Market Stabilization .
The Partnership has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that
could reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the
Partnership or ARLP to facilitate the sale or resale of the
Units.
19
(iii) Inclusion in the NASDAQ
National Market . The Units have been approved for quotation on
The NASDAQ National Market, subject to official notice of
issuance.
Any certificate signed by any
officer of the Alliance Parties and delivered to the Representative
or counsel for the Underwriters in connection with the offering of
the Units shall be deemed a representation and warranty by such
entity, as to matters covered thereby, to each
Underwriter.
2. Purchase of the Units by the
Underwriters . On the basis of the representations and
warranties contained in, and subject to the terms and conditions
of, this Agreement, the Partnership agrees to sell the Firm Units
to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm
Units set forth opposite that Underwriter’s name in Schedule
I hereto. The respective purchase obligations of the Underwriters
with respect to the Firm Units shall be rounded among the
Underwriters to avoid fractional units, as the Representative may
determine.
In addition, the Partnership grants
to the Underwriters an option to purchase up to 1,875,000 Option
Units. Such option is exercisable in the event that the
Underwriters sell more Common Units than the number of Firm Units
in the offering and as set forth in Section 4 hereof. Each
Underwriter agrees, severally and not jointly, to purchase the
number of Option Units (subject to such adjustments to eliminate
fractional Units as the Representative may determine) that bears
the same proportion to the total number of Option Units to be sold
on such Delivery Date as the number of Firm Units set forth in
Schedule I hereto opposite the name of such Underwriter bears to
the total number of Firm Units.
The price of both the Firm Units and
any Option Units purchased by the Underwriters shall be $[_._] per
unit.
The Partnership shall not be
obligated to deliver any of the Firm Units or Option Units to be
delivered on the applicable Delivery Date, except upon payment for
all such Units to be purchased on such Delivery Date as provided
herein.
3. Offering of Units by the
Underwriters . Upon authorization by the Representative of the
release of the Firm Units, the several Underwriters propose to
offer the Firm Units for sale upon the terms and conditions to be
set forth in the Prospectus.
It is understood that 550,000 Firm
Units (the “ Directed Units ”) will initially be
reserved by the several Underwriters for offer and sale upon the
terms and conditions to be set forth in the most recent Preliminary
Prospectus and in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. (the “
NASD ”) to employees of the General Partner and its
affiliates who have heretofore delivered to Lehman Brothers Inc.
offers to purchase Firm Units in form satisfactory to Lehman
Brothers Inc. (such program, the “ Directed Unit
Program ”) and that any allocation of such Firm Units
among such persons will be made in accordance with timely
directions received by Lehman Brothers Inc. from the Partnership;
provided that under no circumstances will Lehman Brothers
Inc. or any Underwriter be liable to the Partnership or to any such
person for any action taken or omitted in good faith in
20
connection with such Directed Unit Program. It
is further understood that any Directed Units not affirmatively
reconfirmed for purchase by any participant in the Directed Unit
Program by [ ]:00 A.M., New York City time,
on the [date hereof / first business day following the date hereof]
or otherwise are not purchased by such persons will be offered by
the Underwriters to the public upon the terms and conditions set
forth in the most recent Preliminary Prospectus.
The Partnership agrees to pay all
fees and disbursements incurred by the Underwriters in connection
with the Directed Unit Program and any stamp duties or other taxes
incurred by the Underwriters in connection with the Directed Unit
Program.
4. Delivery of and Payment for
the Units . Delivery of and payment for the Firm Units shall be
made at 10:00 A.M., New York City time, on the [third] full
business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the
Representative and the Partnership. This date and time are
sometimes referred to as the “ Initial Delivery Date
.” Delivery of the Firm Units shall be made to the
Representative for the account of each Underwriter against payment
by the several Underwriters through the Representative and of the
respective aggregate purchase prices of the Firm Units being sold
by the Partnership to or upon the order of the Partnership of the
purchase price by wire transfer in immediately available funds to
the accounts specified by the Partnership. Time shall be of the
essence, and delivery at the time and place specified pursuant to
this Agreement is a further condition of the obligation of each
Underwriter hereunder. The Partnership shall deliver the Firm Units
through the facilities of the Depository Trust Company unless the
Representative shall otherwise instruct.
The option granted in Section 2 will
expire 30 days after the date of this Agreement and may be
exercised in whole or from time to time in part by written notice
being given to the Partnership by the Representative; provided
that if such date falls on a day that is not a business day,
the option granted in Section 2 will expire on the next succeeding
business day. Such notice shall set forth the aggregate number of
Option Units as to which the option is being exercised, the names
in which the Option Units are to be registered, the denominations
in which the Option Units are to be issued and the date and time,
as determined by the Representative, when the Option Units are to
be delivered; provided, however , that this date and time
shall not be earlier than the Initial Delivery Date nor earlier
than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day
after the date on which the option shall have been exercised. Each
date and time the Option Units are delivered is sometimes referred
to as an “ Option Unit Delivery Date ,” and the
Initial Delivery Date and any Option Unit Delivery Date are
sometimes each referred to as a “ Delivery
Date
