# Alliance Resource Partners (ARLP) 10-Q SEC filing - Q2 FY2026
- Filed: Aug 6, 2026, 4:11 PM EDT
- Fiscal quarter: Q2 FY2026
- Calendar quarter: Q2 2026
- Accession: 0001104659-26-092001
- OpenCapital page: https://www.opencapital.sh/filings/0001104659-26-092001
- Markdown URL: https://www.opencapital.sh/filings/0001104659-26-092001.md
- Official SEC filing index: https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/0001104659-26-092001-index.htm
## Filing documents
- [10-Q (arlp-20260630x10q.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630x10q.htm)
- [EX-10.1 (arlp-20260630xex10d1.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d1.htm)
- [EX-10.2 (arlp-20260630xex10d2.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d2.htm)
- [EX-10.3 (arlp-20260630xex10d3.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d3.htm)
- [EX-10.4 (arlp-20260630xex10d4.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d4.htm)
- [EX-10.5 (arlp-20260630xex10d5.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d5.htm)
- [EX-10.6 (arlp-20260630xex10d6.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d6.htm)
- [EX-31.1 (arlp-20260630xex31d1.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex31d1.htm)
- [EX-31.2 (arlp-20260630xex31d2.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex31d2.htm)
- [EX-32.1 (arlp-20260630xex32d1.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex32d1.htm)
- [EX-32.2 (arlp-20260630xex32d2.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex32d2.htm)
- [EX-95.1 (arlp-20260630xex95d1.htm)](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex95d1.htm)
---
## 10-Q
SEC source: [arlp-20260630x10q.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630x10q.htm)
**UNITED STATES**
**SECURITIES AND EXCHANGE COMMISSION**
Washington, D.C. 20549
FORM 10-Q
**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the quarterly period ended** **June 30,** **2026**
**OR**
**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the transition period from ________________to________________**
**Commission File No.:** **0-26823**
**ALLIANCE RESOURCE PARTNERS, L.P**.
**(Exact name of registrant as specified in its charter)**
**Delaware** ** ** **73-1564280**
**(State or other jurisdiction of**
**incorporation or organization)** **(IRS Employer Identification No.)**
**1717 South Boulder Avenue****,** **Suite 400****,** **Tulsa****,** **Oklahoma** **74119**
**(Address of principal executive offices and zip code)**
**(****918****)** **295-7600**
**(Registrant’s telephone number, including area code)**
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☒ Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller Reporting Company ☐
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common units representing limited partner interests ARLP NASDAQ Global Select Market
As of August 6, 2026, 128,658,801 common units are outstanding.
**TABLE OF CONTENTS**
[**PART I**](#PARTI_764400)
[**FINANCIAL INFORMATION**](#FINANCIALINFORMATION_857642)
| ITEM 1. | Financial Statements (Unaudited) |
| --- | --- |
| | ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES |
| | Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 |
| | Condensed Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025 |
| | Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 |
| | Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 |
| | Notes to Condensed Consolidated Financial Statements |
| | 1. Organization and Presentation |
| | 2. New Accounting Standards |
| | 3. Variable Interest Entities |
| | 4. Acquisitions |
| | 5. Fair Value Measurements |
| | 6. Inventories |
| | 7. Digital Assets |
| | 8. Long-Lived Asset Impairment |
| | 9. Investments |
| | 10. Long-Term Debt |
| | 11. Workers’ Compensation and Pneumoconiosis |
| | 12. Components of Pension Plan Net Periodic Benefit Cost |
| | 13. Contingencies |
| | 14. Partners’ Capital |
| | 15. Common Unit-Based Compensation Plan |
| | 16. Revenue from Contracts with Customers |
| | 17. Related-Party Transactions |
| | 18. Income Taxes |
| | 19. Earnings per Limited Partner Unit |
| | 20. Segment Information |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk |
| ITEM 4. | Controls and Procedures |
| | Forward-Looking Statements |
| PART II | |
| OTHER INFORMATION | |
| ITEM 1. | Legal Proceedings |
| ITEM 1A. | Risk Factors |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
| ITEM 3. | Defaults Upon Senior Securities |
| ITEM 4. | Mine Safety Disclosures |
| ITEM 5. | Other Information |
| ITEM 6. | Exhibits |
**PART I**
**FINANCIAL INFORMATION**
## Item 1. Financial Statements (Unaudited)
**ITEM 1. FINANCIAL STATEMENTS**
**ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES**
### CONDENSED CONSOLIDATED BALANCE SHEETS
_(In thousands, except unit data) · (Unaudited)_
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| ASSETS | | |
| CURRENT ASSETS: | | |
| Cash and cash equivalents | $111,194 | $71,212 |
| Trade receivables (net of allowance of $5,659 and $5,360, respectively) | 200,779 | 129,686 |
| Other receivables | 4,449 | 1,992 |
| Inventories, net | 125,131 | 142,619 |
| Advance royalties | 10,410 | 10,496 |
| Digital assets | 37,858 | 51,834 |
| Prepaid expenses and other assets | 18,752 | 22,215 |
| Total current assets | 508,573 | 430,054 |
| PROPERTY, PLANT AND EQUIPMENT: | | |
| Property, plant and equipment | 4,372,062 | 4,502,648 |
| Less accumulated depreciation, depletion and amortization | (2,234,362) | (2,364,206) |
| Total property, plant and equipment, net | 2,137,700 | 2,138,442 |
| OTHER ASSETS: | | |
| Advance royalties | 75,080 | 72,412 |
| Equity method investments | 71,276 | 69,638 |
| Equity securities | 86,353 | 82,466 |
| Operating lease right-of-use assets | 13,786 | 17,065 |
| Other long-term assets | 49,024 | 43,711 |
| Total other assets | 295,519 | 285,292 |
| TOTAL ASSETS | $2,941,792 | $2,853,788 |
| LIABILITIES AND PARTNERS' CAPITAL | | |
| CURRENT LIABILITIES: | | |
| Accounts payable | $90,507 | $81,809 |
| Accrued taxes other than income taxes | 27,570 | 20,319 |
| Accrued payroll and related expenses | 37,438 | 31,244 |
| Accrued interest | 2,412 | 2,012 |
| Workers' compensation and pneumoconiosis benefits | 15,847 | 15,901 |
| Other current liabilities | 35,367 | 29,495 |
| Current maturities, long-term debt, net | 81,104 | 23,646 |
| Total current liabilities | 290,245 | 204,426 |
| LONG-TERM LIABILITIES: | | |
| Long-term debt, excluding current maturities, net | 498,484 | 427,137 |
| Pneumoconiosis benefits | 102,865 | 100,740 |
| Workers' compensation | 36,995 | 37,742 |
| Asset retirement obligations | 163,104 | 153,247 |
| Long-term operating lease obligations | 11,280 | 14,591 |
| Deferred income tax liabilities | 26,957 | 27,732 |
| Other liabilities | 25,466 | 27,951 |
| Total long-term liabilities | 865,151 | 789,140 |
| Total liabilities | 1,155,396 | 993,566 |
| COMMITMENTS AND CONTINGENCIES - (NOTE 13) | | |
| PARTNERS' CAPITAL: | | |
| ARLP Partners' Capital: | | |
| Limited Partners - Common Unitholders 128,658,801 and 128,428,024 units outstanding, respectively | 1,776,227 | 1,843,627 |
| Accumulated other comprehensive loss | (7,217) | (1,026) |
| Total ARLP Partners' Capital | 1,769,010 | 1,842,601 |
| Noncontrolling interest | 17,386 | 17,621 |
| Total Partners' Capital | 1,786,396 | 1,860,222 |
| TOTAL LIABILITIES AND PARTNERS' CAPITAL | $2,941,792 | $2,853,788 |
See notes to condensed consolidated financial statements.
**ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF** **INCOME**
**(In thousands, except unit and per unit data)**
**(Unaudited)**
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| SALES AND OPERATING REVENUES: | | | | |
| Coal sales | $469,544 | $485,469 | $912,826 | $953,980 |
| Oil & gas royalties | 46,293 | 35,473 | 87,634 | 71,557 |
| Transportation revenues | 7,510 | 8,558 | 16,153 | 18,758 |
| Other revenues | 28,213 | 17,963 | 50,964 | 43,636 |
| Total revenues | 551,560 | 547,463 | 1,067,577 | 1,087,931 |
| EXPENSES: | | | | |
| Operating expenses (excluding depreciation, depletion and amortization) | 341,352 | 346,288 | 682,650 | 685,724 |
| Transportation expenses | 7,510 | 8,558 | 16,153 | 18,758 |
| Outside coal purchases | — | 7,179 | — | 14,524 |
| General and administrative | 25,836 | 20,380 | 49,877 | 40,960 |
| Depreciation, depletion and amortization | 81,277 | 76,340 | 163,631 | 144,969 |
| Asset impairments | — | — | 37,820 | — |
| Total operating expenses | 455,975 | 458,745 | 950,131 | 904,935 |
| INCOME FROM OPERATIONS | 95,585 | 88,718 | 117,446 | 182,996 |
| Interest expense (net of interest capitalized for the three and six months ended June 30, 2026 and 2025 of $443, $3,360, $1,356 and $7,848, respectively) | (12,553) | (9,252) | (24,297) | (17,686) |
| Interest income | 306 | 570 | 624 | 1,437 |
| Net income (loss) on equity method investments | 9,489 | (1,536) | 13,775 | (3,542) |
| Change in fair value of digital assets | (6,345) | 12,856 | (17,974) | 7,282 |
| Impairment loss on investments - (Note 9) | — | (25,000) | — | (25,000) |
| Other income | 1,307 | 17 | 11,647 | 628 |
| INCOME BEFORE INCOME TAXES | 87,789 | 66,373 | 101,221 | 146,115 |
| INCOME TAX EXPENSE | 6,241 | 5,348 | 8,926 | 9,530 |
| NET INCOME | 81,548 | 61,025 | 92,295 | 136,585 |
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | (1,986) | (1,615) | (3,639) | (3,192) |
| NET INCOME ATTRIBUTABLE TO ARLP | $79,562 | $59,410 | $88,656 | $133,393 |
| EARNINGS PER LIMITED PARTNER UNIT - BASIC AND DILUTED | $0.61 | $0.46 | $0.68 | $1.03 |
| WEIGHTED-AVERAGE NUMBER OF UNITS OUTSTANDING – BASIC AND DILUTED | 128,658,801 | 128,428,024 | 128,598,875 | 128,347,131 |
See notes to condensed consolidated financial statements.
**ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME**
**(In thousands)**
**(Unaudited)**
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| NET INCOME | $81,548 | $61,025 | $92,295 | $136,585 |
| OTHER COMPREHENSIVE INCOME (LOSS): | | | | |
| Defined benefit pension plan | | | | |
| Amortization of prior service cost (1) | — | 2 | — | 5 |
| Total defined benefit pension plan adjustments | — | 2 | — | 5 |
| Pneumoconiosis benefits | | | | |
| Amortization of net actuarial loss (1) | 116 | 232 | 232 | 464 |
| Other adjustments (2) | — | — | (6,450) | — |
| Total pneumoconiosis benefits adjustments | 116 | 232 | (6,218) | 464 |
| Foreign currency translation adjustment | 53 | 41 | 27 | 76 |
| Change in unrealized gains on debt securities (3) | — | 10,919 | — | 10,919 |
| OTHER COMPREHENSIVE INCOME (LOSS) | 169 | 11,194 | (6,191) | 11,464 |
| COMPREHENSIVE INCOME | 81,717 | 72,219 | 86,104 | 148,049 |
| Less: Comprehensive income attributable to noncontrolling interest | (1,986) | (1,615) | (3,639) | (3,192) |
| COMPREHENSIVE INCOME ATTRIBUTABLE TO ARLP | $79,731 | $70,604 | $82,465 | $144,857 |
(1) Amortization of prior service cost and net actuarial loss is included in the computation of net periodic benefit cost (credit) (see Notes 11 and 12 for additional details).
(2) For more information on other adjustments please see Note 11.
(3) For more information on the change in unrealized gains please see Note 9.
See notes to condensed consolidated financial statements.
**ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES**
**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**
**(In thousands)**
**(Unaudited)**
| Line item | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- |
| CASH FLOWS FROM OPERATING ACTIVITIES | $258,520 | $297,379 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | |
| Property, plant and equipment: | | |
| Capital expenditures | (145,704) | (153,793) |
| Change in accounts payable and accrued liabilities | (3,282) | (11,840) |
| Proceeds from sale of property, plant and equipment | 411 | 709 |
| Contributions to equity method investments | (2,178) | (1,391) |
| Purchase of debt securities | — | (2,127) |
| Oil & gas reserve business combinations | (21,965) | — |
| Oil & gas reserve asset acquisitions | (9,370) | (2,740) |
| Other | 938 | 2,929 |
| Net cash used in investing activities | (181,150) | (168,253) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | |
| Borrowings under securitization facility | 151,000 | 39,000 |
| Payments under securitization facility | (95,000) | (39,000) |
| Payments on equipment financings | (6,845) | (6,303) |
| Borrowings under revolving credit facilities | 181,000 | — |
| Payments under revolving credit facilities | (102,500) | — |
| Borrowing under long-term debt | 5,903 | — |
| Payments on long-term debt | (7,031) | (7,031) |
| Payments for tax withholdings related to settlements under deferred compensation plan | (4,142) | (7,082) |
| Distributions paid to Partners | (155,856) | (181,630) |
| Other | (3,938) | (9,114) |
| Net cash used in financing activities | (37,409) | (211,160) |
| Effect of exchange rate changes on cash and cash equivalents | 21 | 76 |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 39,982 | (81,958) |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 71,212 | 136,962 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $111,194 | $55,004 |
| SUPPLEMENTAL NON-CASH ACTIVITY: | | |
| Accounts payable for purchase of property, plant and equipment | $9,620 | $11,888 |
| Change in property, plant and equipment for reclamation assets | 13,002 | — |
| Right-of-use assets acquired by operating lease | — | $1,571 |
| Market value of common units issued under deferred compensation plan before tax withholding requirements | $9,766 | $17,068 |
See notes to condensed consolidated financial statements.
**ALLIANCE RESOURCE PARTNERS, L.P. AND SUBSIDIARIES**
### **NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**1.****ORGANIZATION AND PRESENTATION**
Significant Relationships Referenced in Notes to Condensed Consolidated Financial Statements
- References to “we,” “us,” “our” or “ARLP Partnership” mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries.
- References to “ARLP” mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis.
- References to “MGP” mean Alliance Resource Management GP, LLC, ARLP’s general partner.
- References to “Mr. Craft” mean Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP.
- References to “Intermediate Partnership” mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P.
- References to “Alliance Coal” mean Alliance Coal, LLC, an indirect wholly owned subsidiary of ARLP.
- References to “Alliance Minerals” mean Alliance Minerals, LLC, an indirect wholly owned subsidiary of ARLP.
- References to “Alliance Resource Properties” mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP.
Organization
ARLP is a Delaware limited partnership listed on the NASDAQ Global Select Market under the ticker symbol “ARLP.” ARLP was formed in May 1999 and completed its initial public offering on August 19, 1999 when it acquired substantially all of the coal production and marketing assets of Alliance Resource Holdings, Inc., a Delaware corporation, and its subsidiaries. We are managed by our general partner, MGP, a Delaware limited liability company which holds a non-economic general partner interest in ARLP.
AllDale III & IV Acquisition
On July 1, 2026, Alliance Minerals acquired certain general partner and limited partner interests in AllDale Minerals III, LP (“AllDale III”) & AllDale Minerals IV, LP ("AllDale IV", and collectively with AllDale III, "AllDale III & IV") for $206.2 million, subject to customary post-closing adjustments (the “AllDale III & IV Acquisition”). The AllDale III & IV Acquisition expands and diversifies the ARLP Partnership's portfolio of mineral and royalty interests through the acquisition of approximately 48,500 net royalty acres across premier basins and resource plays including the Permian, Anadarko, Bakken and Haynesville. See Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 17 – Related Party Transactions for more information.
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts and operations of the ARLP Partnership and present our financial position as of June 30, 2026 and December 31, 2025, the results of our operations and comprehensive income for the three and six months ended June 30, 2026 and 2025 and cash flows for the six months ended June 30, 2026 and 2025. All intercompany transactions and accounts have been eliminated.
These condensed consolidated financial statements and notes are prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting and do not include all the information normally included with financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) of the United States. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.
These condensed consolidated financial statements and notes are unaudited. However, in the opinion of management, these condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair presentation of the results for the periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year ending December 31, 2026.
Use of Estimates
The preparation of the ARLP Partnership’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in our condensed consolidated financial statements. Actual results could differ from those estimates.
**2.****NEW ACCOUNTING STANDARDS**
New Accounting Standards Issued and Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40*) (“ASU 2024-03”). ASU 2024-03 requires the disclosure of additional information about specific expense categories in the notes to the financial statements to provide enhanced transparency into the nature and function of expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis, with early adoption permitted. We continue evaluation of the impact of ASU 2024-03 on our results of operations, cash flows, financial condition and related disclosures including ongoing research as well as assessing our ability to accurately generate the information required for disclosure.
In September 2025, the FASB issued ASU 2025-06, *Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software* (“ASU 2025-06”). ASU 2025-06 improves the accounting for software development costs by removing references to software development stages so that the accounting is neutral to different software development methods. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, with early adoption permitted. ASU 2025-06 can be applied on a prospective basis, a modified basis for in-process projects or a retrospective basis. We are evaluating the impact of ASU 2025-06 on our results of operations, cash flows, financial condition and related disclosures.
**3.****VARIABLE INTEREST ENTITIES**
AllDale I & II and Cavalier Minerals
We own the general partner interests and, including the limited partner interests we hold through our ownership in Cavalier Minerals JV, LLC (“Cavalier Minerals”), approximately 97% of the limited partner interests in AllDale Minerals LP (“AllDale I”) and AllDale Minerals II, LP (“AllDale II”, and collectively with AllDale I, “AllDale I & II”). As the general partner of AllDale I & II, we are entitled to receive 20.0% of all distributions from AllDale I & II with the remaining 80.0% allocated to limited partners based upon ownership percentages.
Cavalier Minerals owns approximately 72% of the limited partner interests in AllDale I & II. We own the managing member interest and a 96% member interest in Cavalier Minerals. Bluegrass Minerals Management, LLC (“Bluegrass Minerals”) owns a 4% member interest in Cavalier Minerals and a profits interest which entitles it to receive distributions equal to 25% of all distributions (including in liquidation).
We have concluded that AllDale I, AllDale II and Cavalier Minerals are variable interest entities (“VIEs”) which we consolidate as the primary beneficiary because we have the power to direct the activities that most significantly impact the economic performance of AllDale I, AllDale II and Cavalier Minerals in addition to having substantial equity ownership.
Our share of Cavalier Minerals’ investment in AllDale I & II is eliminated in consolidation and Bluegrass Minerals’ investment in Cavalier Minerals is accounted for as noncontrolling ownership interest on our condensed consolidated balance sheets. Additionally, earnings attributable to Bluegrass Minerals are recognized as noncontrolling interest in our condensed consolidated statements of income.
The following table presents the carrying amounts and classification of AllDale I & II’s assets and liabilities included in our condensed consolidated balance sheets:
| Assets (liabilities): | June 30, 2026 / (in thousands) | December 31, 2025 / (in thousands) |
| --- | --- | --- |
| Cash and cash equivalents | $5,518 | $4,137 |
| Trade receivables | 16,013 | 11,194 |
| Total property, plant and equipment, net | 348,933 | 356,751 |
| Accounts payable | (195) | (236) |
| Due to affiliates | (67) | — |
| Accrued taxes other than income taxes | (807) | (970) |
AllDale III
AllDale III owns oil & gas mineral interests in areas around the oil & gas mineral interests we own. As of June 30, 2026, Alliance Minerals owned a 13.9% limited partner interest in AllDale III. Alliance Minerals’ investment in AllDale III was subject to a 25% profits interest for the general partner that was subject to a return hurdle equal to the greater of 125% of cumulative capital contributions and a 10% internal rate of return, and following an 80/20 “catch-up” provision for the general partner.
We concluded that AllDale III was a VIE that we did not consolidate. AllDale III is structured as a limited partnership with the limited partners (1) not having the ability to remove the general partner and (2) not participating significantly in operational decisions. We were not the primary beneficiary of AllDale III because we did not have the power to direct the activities that most significantly impact AllDale III’s economic performance. At June 30, 2026 and December 31, 2025, the carrying value of our investment in AllDale III was $20.1 million and $21.0 million, respectively.
As discussed in Note 1 – Organization and Presentation, on July 1, 2026, Alliance Minerals acquired certain general partner and limited partner interests in AllDale III & IV. At the same time, related parties of Mr. Craft also acquired limited partner interests in AllDale III. As the result of these acquisitions and the pre-existing ownership of interests in AllDale III by Alliance Minerals and related parties of Mr. Craft, all of the general partner and limited partner interests in AllDale III were owned by either Alliance Minerals or related parties of Mr. Craft. Following the acquisitions, the parties entered into Contribution and Exchange Agreements by which they exchanged those interests for limited partner interests in AllDale III, eliminated the pre-existing profits interest attributable to the general partner interests, and assigned a non-economic general partner interest to a subsidiary of ARLP. As a result, we hold 100% of the non-economic general partner interest and 46.92% of the limited partner interests in AllDale III. Beginning in the third quarter of 2026 we expect these transactions to lead us to start consolidating AllDale III as the primary beneficiary because we will have the power to direct the activities that most significantly impact the economic performance of AllDale III. See Note 17 – Related-Party Transactions for more information about the Contribution and Exchange Agreements.
NGP ET IV
We have committed to purchase $25.0 million of limited partner interests in NGP Energy Transition, L.P. (“NGP ET IV”), a private equity fund focused on investments that are part of the energy transition. This commitment represents a 3.6% interest in NGP ET IV. As of June 30, 2026, our commitment was $12.4 million, which include distributions we have received that may be recalled.
We have concluded that NGP ET IV is a VIE that we do not consolidate. NGP ET IV is structured as a limited partnership with limited partners (i) not having the ability to remove the general partner and (ii) not participating significantly in operational decisions. We are not the primary beneficiary of NGP ET IV because we do not have the power to direct the activities that most significantly impact NGP ET IV’s economic performance. At June 30, 2026 and December 31, 2025, the carrying value of our investment in NGP ET IV was $18.0 million and $13.4 million, respectively.
Gavin Generation
We have committed to invest up to $25.0 million of limited partner interests in Gavin Generation Holdings A, LP (“Gavin Generation”). Gavin Generation owns, indirectly, an interest in a joint venture holding company formed with a third-party that indirectly owns and operates a coal-fired power plant. This commitment represents an interest of 5.4% in Gavin Generation (based on total commitments). As of June 30, 2026, our commitment was $17.4 million, which include distributions we have received that may be recalled. Our investment in Gavin Generation is subject to a customary profit interest in favor of the general partner after the return of capital to the limited partners and the investment generating a specified internal rate of return in favor of the limited partners.
We have concluded that Gavin Generation is a VIE that we do not consolidate. Gavin Generation is structured as a limited partnership with the limited partners (1) not having the ability to remove the general partner and (2) not participating significantly in operational decisions. We are not the primary beneficiary of Gavin Generation because we do not have the power to direct the activities that most significantly impact Gavin Generation’s economic performance. At June 30, 2026 and December 31, 2025, the carrying value of our investment in Gavin Generation was $33.2 million and $35.2 million, respectively.
**4.****ACQUISITIONS**
During the six months ended June 30, 2026, we acquired 881 oil & gas net royalty acres in the Permian Basin through a series of transactions for an aggregate cash purchase price of $22.0 million which was funded with cash on hand. These acquisitions further enhance our ownership position in the Permian Basin. Because the mineral interests acquired in these acquisitions include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that these acquisitions should be accounted for as business combinations and the underlying assets should be recorded at fair value on their respective acquisition dates on our condensed consolidated balance sheet.
The following table summarizes the fair value allocation of assets acquired:
_(in thousands)_
| | |
| --- | --- |
| Mineral interests in proved properties | $13,004 |
| Mineral interests in unproved properties | 8,961 |
| | $21,965 |
The fair value of the mineral interests was determined using an income approach consisting of discounted cash flow models. The assumptions used in the discounted cash flow models include estimated production, projected cash flows, forward oil & gas prices and risk adjusted discount rates. Certain assumptions used were not observable in active markets; therefore, the fair value measurements represent Level 3 fair value measurements.
The amounts of revenues and earnings from the mineral interests acquired included in our condensed consolidated statements of income from their respective acquisition dates through June 30, 2026 are immaterial.
The following table represents our supplemental pro forma revenues and net income for the three and six months ended June 30, 2026 and 2025 as if the mineral interests acquired had been included in our consolidated results since January 1, 2025. These amounts have been calculated after applying our accounting policies.
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Revenue | $551,776 | $548,305 | $1,068,229 | $1,089,457 |
| Net Income | 81,748 | 61,784 | 92,884 | 137,959 |
AllDale III &IV Acquisition
On July 1, 2026, we acquired certain general partner and limited partner interests in AllDale III & IV for $206.2 million, subject to customary post-closing adjustments. We funded the AllDale III & IV Acquisition using a combination of cash on hand, and borrowings under both our revolving credit facility and the Minerals Term Loan. See Note 10 – Long-Term Debt for more information on the terms of the Credit Agreement and Minerals Term Loan. In connection with the AllDale III & IV Acquisition, certain entities related to Mr. Craft acquired, pursuant to separate definitive agreements, an aggregate of $100.0 million of limited partner interests in AllDale III.
Because the underlying mineral interests held by AllDale III & IV include royalty interests in both developed properties and undeveloped properties with different risk profiles, we have determined that the AllDale III & IV Acquisition should be accounted for as a business combination and the underlying assets and liabilities of AllDale III & IV will be recorded at their July 1, 2026 acquisition date fair values on our condensed consolidated balance sheet.
We are in the process of performing our valuation of our previously held equity method investment in AllDale III, the acquired assets and liabilities and the noncontrolling interest. Given the recent date of the acquisition, we have not finalized our determination of the fair value of the various measurements as we continue to gather information to determine the assumptions we intend to use in our valuation.
Prior to the AllDale III & IV Acquisition, we accounted for our investment in AllDale III as an equity method investment. We anticipate re-measuring our equity method investment immediately prior to the AllDale III & IV Acquisition using a discounted cash flow model. The assumptions to be used in the determination of the fair value measurement include estimated production, projected cash flows, forward oil & gas prices and a risk adjusted discount rate, among others.
We anticipate determining the fair value of the mineral interests by determining an entity-wide value using discounted expected cash flows based on estimated production, projected cash flows, forward oil & gas prices and risk adjusted discount rates. AllDale III & IV also hold certain commodity derivative instruments, and we anticipate determining the fair value of these instruments by observing similar transactions and developing a value that is then adjusted for counterparty risk. We anticipate using the carrying values for any acquired receivables, payables and cash, as this represents their fair value given their short-term nature.
We anticipate determining the fair value of the noncontrolling interests using a discounted cash flow model. The assumptions to be used in the determination of the fair value measurements include estimated production, projected cash flows, forward oil & gas prices and a risk adjusted discount rate, among others.
**5.****FAIR VALUE MEASUREMENTS**
The following table summarizes certain fair value measurements within the hierarchy:
_(in thousands)_
| June 30, 2026 | Carrying Value | Fair Value / Level 1 | Fair Value / Level 2 | Fair Value / Level 3 |
| --- | --- | --- | --- | --- |
| Recorded on a recurring basis: | | | | |
| Digital assets | $37,858 | $37,858 | — | — |
| Contingent consideration | $16,749 | — | — | $16,749 |
| Additional disclosures: | | | | |
| Long-term debt | $589,982 | — | $615,228 | — |
| December 31, 2025 | | | | |
| Recorded on a recurring basis: | | | | |
| Digital assets | $51,834 | $51,834 | — | — |
| Contingent consideration | $18,000 | — | — | $18,000 |
| Additional disclosures: | | | | |
| Long-term debt | $463,456 | — | $508,844 | — |
The carrying amounts for cash equivalents, accounts receivable, accounts payable, accrued and other liabilities approximate fair value due to the short maturity of those instruments.
The fair value of our digital assets is based on an exchange quoted price. See Note 7 – Digital Assets for more information on our digital assets.
The fair value measurement of our contingent consideration liability is determined using an option approach methodology simulation based on significant inputs not observable in active markets representing a Level 3 fair value measurement under the fair value hierarchy. Our contingent consideration liability is associated with our acquisition of our Hamilton County Coal, LLC (“Hamilton”) mine in 2015 wherein we agreed to pay the seller additional consideration for the acquisition if the average quarterly sales price exceeds a defined threshold price in any future quarters subject to a maximum of $110.0 million reduced for any payments made under an overriding royalty agreement with the sellers relating to mineral interests controlled by our Hamilton mine. We have paid $17.1 million under this contingent consideration agreement and $2.2 million under the overriding royalty agreement as of June 30, 2026.
The estimated fair value of our long-term debt, including current maturities, is based on interest rates that we believe are currently available to us in active markets for issuance of debt with similar terms and remaining maturities. See Note 10 – Long-Term Debt for additional information on our long-term debt.
**Quantitative Information about Level 3 Fair Value Measurements**
Contingent Consideration
Our option approach methodology simulation for contingent consideration generates an expected payment for each quarter in Hamilton’s expected mine life by using proprietary internal estimates of our uncommitted coal sales prices and generating a simulated uncommitted coal sales price by applying unobservable inputs through a million simulations. This simulated coal sales price is then used in a calculation of the expected future payments using our proprietary committed coal sales prices and production for each quarter. We then calculate the present value of the estimated future payments. The following table presents quantitative information about certain significant unobservable inputs used in the fair value measurement for our contingent consideration liability. The use of significant unobservable inputs results in uncertainty as of the reporting date, as changes in these unobservable inputs could significantly raise or lower the estimated fair value.
| June 30, 2026 | Valuation Technique(s) | Unobservable Input | Range/Amount (Average) (a) |
| --- | --- | --- | --- |
| Contingent Consideration | Option approach methodology simulation | Cost of Debt | 5.46% - 8.35% |
| | | Coal price volatility | 9.2% |
| | | Market price of risk adjustment (annual) | 6.7% |
| December 31, 2025 | | | |
| Contingent Consideration | Option approach methodology simulation | Cost of Debt | 5.46% - 8.35% |
| | | Coal price volatility | 9.2% |
| | | Market price of risk adjustment (annual) | 6.7% |
(a) Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount.
The following table represents changes in our contingent consideration liability:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Beginning balance | $16,995 | $11,324 | $18,000 | $13,100 |
| Noncash changes in fair value (1) | 302 | 2,005 | (189) | 2,005 |
| Payments | (548) | (2,652) | (1,062) | (4,428) |
| Ending balance | $16,749 | $10,677 | $16,749 | $10,677 |
(1) Noncash changes in the fair value of our contingent consideration liability are included in the *Operating expenses (excluding depreciation, depletion and amortization)* line item within our condensed consolidated statements of income.
**6.****INVENTORIES**
Inventories consist of the following:
_(in thousands)_
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Coal | $37,271 | $61,528 |
| Finished goods (net of reserve for obsolescence of $1,733 and $1,133, respectively) | 7,952 | 9,732 |
| Work in process | 169 | 2,660 |
| Raw materials | 8,716 | 6,106 |
| | 54,108 | 80,026 |
| Supplies (net of reserve for obsolescence of $9,998 and $6,901, respectively) | 71,023 | 62,593 |
| Total inventories, net | $125,131 | $142,619 |
The above coal inventory balances reflect lower of cost or net realizable value adjustments of $9.7 million and $8.3 million as of June 30, 2026 and December 31, 2025, respectively. The adjustment as of June 30, 2026 is primarily a result of higher cost per ton at the Mettiki Coal, LLC and Mettiki Coal (WV), LLC (collectively “Mettiki”) mining complex due to reduced production following the decision to cease longwall production. The adjustment as of December 31, 2025 is the result of higher cost per ton at the Mettiki mining complex due to lower production and challenging geological conditions in the longwall panel that reduced coal recovery.
**7.****DIGITAL ASSETS**
The following table sets forth our digital assets cost basis and fair value as shown on the condensed consolidated balance sheet:
| Digital assets: | June 30, 2026 / Units / (in thousands, except unit data) | June 30, 2026 / Cost Basis / (in thousands, except unit data) | June 30, 2026 / Fair Value / (in thousands, except unit data) | December 31, 2025 / Units / (in thousands, except unit data) | December 31, 2025 / Cost Basis / (in thousands, except unit data) | December 31, 2025 / Fair Value / (in thousands, except unit data) |
| --- | --- | --- | --- | --- | --- | --- |
| Bitcoin | 645.96 | $33,955 | $37,858 | 592.01 | $29,937 | $51,834 |
| Total | | $33,955 | $37,858 | | $29,937 | $51,834 |
**8.****LONG-LIVED ASSET IMPAIRMENT**
On January 29, 2026, we announced our decision to cease longwall production at our Mettiki mining complex, which is primarily included in our Appalachia Coal Operations reportable segment. We concluded that as a result of this decision, along with uncertainty regarding future longwall production resumption and our evaluation of potential operation scenarios, we would not recover the carrying value of Mettiki’s assets. Accordingly, we adjusted the carrying value of Mettiki’s assets from $95.3 million to its fair value of $57.5 million resulting in an impairment charge of $37.8 million. While limited coal production is ongoing with continuous mining units, we continue to evaluate options concerning the mine’s future.
The fair value of the impaired assets was determined using an income approach, which represents a Level 3 fair value measurement under the fair value hierarchy. Our analysis considered two operating scenarios for Mettiki and reflected a probability-weighted discounted cash flow model based on these scenarios. Significant assumptions in the model included proprietary internal estimates of expected future sales volumes, realized coal sales prices, operating costs, capital requirements, the timing of cessation of operations, and a risk-adjusted discount rate. The following table presents quantitative information about certain significant unobservable inputs used in our nonrecurring fair value measurement. The use of significant unobservable inputs results in uncertainty as changes in these unobservable inputs could significantly impact the estimated fair value.
| Line item | Valuation Technique(s) | Unobservable Input | Range/Amount (Average) (a) |
| --- | --- | --- | --- |
| Mettiki asset group | Income approach methodology | Discount rate | 5.98% - 6.93% (6.46%) |
| | | Low case scenario probability | 70.0% - 95.0% (82.5%) |
| | | High case scenario probability | 5.0% - 30.0% (17.5%) |
(a) Averages represent the arithmetic average of the inputs and is not weighted by a relative fair value or notional amount.
**9.****INVESTMENT****S**
Equity Method Investments
The changes in our equity method investments were as follows:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Beginning balance | $70,986 | $33,555 | $69,638 | $35,532 |
| Contributions | 1,592 | 513 | 2,178 | 1,391 |
| Net income (loss) on equity method investments | 9,489 | (1,536) | 13,775 | (3,542) |
| Distributions received | (10,791) | (2,904) | (14,315) | (3,753) |
| Ending balance | $71,276 | $29,628 | $71,276 | $29,628 |
Net income (loss) on equity method investments represents our share of the income or loss of the equity method investments.
Infinitum
As of June 30, 2026 we have an $86.4 million investment in Infinitum Electric, Inc. (“Infinitum”). Infinitum is a Texas-based startup developer and manufacturer of electric motors featuring printed circuit board stators. During 2022, we purchased shares of Series D Preferred Stock in Infinitum for $42.0 million. During 2023, we purchased shares of Series E Preferred Stock in Infinitum for $24.6 million at a slightly higher price per share than our Series D Preferred Stock, resulting in an increase of $1.0 million in the carrying value of our investment. On December 31, 2025, we purchased shares of Series F Preferred Stock (together with the Series D and Series E Preferred Stock, the “Infinitum Preferred Stock”) in Infinitum for $14.9 million.
The Infinitum Preferred Stock provides for non-cumulative dividends when and if declared by Infinitum’s board of directors and is convertible, at any time, at our option, into shares of common stock of Infinitum. We account for our investment in Infinitum as an equity investment without a readily determinable fair value. Absent an observable price change, it is not practicable to estimate the fair value of our investment in Infinitum because of the lack of a quoted market price for our ownership interests. Therefore, we use a measurement alternative other than fair value to account for our investment.
Infinitum completed its Series F Preferred Stock funding round in the first quarter of 2026 and finalized the value per share of this issuance. In addition to the shares of Series F Preferred Stock we purchased, we also received additional Series D and Series E Preferred Stock in accordance with anti-dilution provisions designed to maintain our initial investment value in those issuances. Some of the additional shares we received under the anti-dilution provisions had a share price that was lower than the Series F Preferred Stock. Infinitum's Series F Preferred Stock issuance represents an observable price change in an orderly transaction for an investment that is similar to our Series D and Series E Preferred Stock investments. We therefore remeasured our shares to reflect the Series F Preferred Stock share price increasing the carrying value of our investments by $3.8 million. We used the Series F Preferred Stock issuance price per share without adjustment to remeasure investments since the rights and obligations of the securities are substantially the same. This remeasurement represents a Level 2 fair value measurement as it is based on a quoted price for a similar security in a market that is not active.
We have made $4.8 million cumulative upward fair value adjustments to the carrying amount of our investments in Infinitum since our initial investment in 2022.
Ascend
On August 22, 2023, we purchased shares of Series D Preferred Stock (the “Ascend Series D Preferred Stock”) in Ascend Elements, Inc. (“Ascend”) for $25.0 million which was accounted for as an equity investment without a readily determinable fair value because of the lack of quoted market prices. Ascend is a U.S.-based manufacturer and recycler of sustainable, engineered battery materials. In June 2025, Ascend raised new capital through a recapitalization utilizing the issuance of convertible notes. Under the terms of the convertible notes and the resulting recapitalization, all shares of each outstanding series of preferred stock were converted into common stock on a 1:1 basis for stockholders that participated in the convertible notes or on a 3:1 basis if they did not participate.
We elected to participate in the recapitalization of Ascend with a $3.0 million commitment to purchase convertible notes. As of June 30, 2025, we had funded $2.1 million of this commitment. The convertible notes provided for a redemption in two years for an amount equal to the greater of (a) a multiple of each stockholder’s investment in the convertible notes as determined by their level of participation or (b) the principal amount of each stockholder’s investment in the convertible notes plus an annual interest rate of 15%. Based on our level of participation, our convertible notes provided for a multiple of 12 times our funded commitment at redemption. We concluded that these convertible notes represented available-for-sale debt securities as we did not intend to sell the notes and believed that it was likely we would not be required to sell them before redemption. As a result of our participation in the recapitalization, our shares of Ascend Series D Preferred Stock converted into common stock on a 1:1 basis.
The following table presents our debt securities holdings:
_June 30, 2025 · (in thousands)_
| Line item | Cost Basis | Unrealized Gains (1) | Fair Value |
| --- | --- | --- | --- |
| Debt Securities | $2,127 | $10,919 | $13,046 |
(1) Unrealized gains in our debt securities are included in the *Change in unrealized gains on debt securities* line item within our condensed consolidated statements of comprehensive income.
We determined the fair value of the debt securities by using a combination of market approaches and option-pricing models which utilized significant inputs not observable in active markets representing a Level 3 fair value measurement under the fair value hierarchy. The underlying enterprise value was estimated using income and market approaches which utilized discounted cash flows and market participant values for assets in hypothetical sales scenarios. The enterprise value was then utilized in market approach models and option-pricing models taking into account the rights and preferences of the convertible notes, expected exit scenarios as of June 30, 2025, and the volatility associated with those outcomes to arrive at a fair value.
Using the same models we used to value the debt securities on June 30, 2025, we determined that the common stock we received in the recapitalization had no value, resulting in a $25.0 million impairment charge included in our condensed consolidated statements of income. The impairment represented a Level 3 fair value measurement and is included within our Other, Corporate and Elimination category.
In December 2025, Ascend issued additional convertible notes senior to our convertible notes with similar multiples which significantly lowered the likelihood of recovery of a multiple of our principal investment. This lower likelihood of recovery of the multiple of our principal investment at redemption in addition to our lack of visibility into Ascend's financial condition and performance as of December 31, 2025, led us to conclude it was likely we would also not recover our principal investment of $3.0 million and fully impaired our debt securities as of December 31, 2025.
**10.****LONG-TERM DEBT**
Long-term debt consists of the following:
_(in thousands)_
| Line item | Principal / June 30, 2026 | Principal / December 31, 2025 | Unamortized Discount and / Debt Issuance Costs / June 30, 2026 | Unamortized Discount and / Debt Issuance Costs / December 31, 2025 |
| --- | --- | --- | --- | --- |
| Revolving credit facility | $78,500 | — | $(3,894) | $(5,007) |
| Alliance Coal term loan | 24,610 | 31,640 | (687) | (884) |
| 8.625% Senior notes due 2029 | 400,000 | 400,000 | (5,813) | (6,782) |
| Securitization facility | 56,000 | — | — | — |
| February 2024 equipment financing | 24,970 | 31,816 | — | — |
| Installment purchase arrangement | 5,902 | — | — | — |
| | 589,982 | 463,456 | (10,394) | (12,673) |
| Less current maturities | (85,498) | (28,041) | 4,394 | 4,395 |
| Total long-term debt | $504,484 | $435,415 | $(6,000) | $(8,278) |
Credit Facility
On January 13, 2023, Alliance Coal, as borrower, entered into a credit agreement with various financial institutions which was amended on June 12, 2024 (the “Credit Agreement”). The Credit Agreement provides for a $425.0 million revolving credit facility which includes a sublimit of $15.0 million for swingline borrowings and permits the issuance of letters of credit up to the full amount of the Credit Facility (the “Revolving Credit Facility”), and for a term loan in an aggregate principal amount of $75.0 million (the “Alliance Coal Term Loan”). The Revolving Credit Facility also includes an incremental facility providing for an increase of $100.0 million at our option subject to lenders agreeing to participate in such incremental facility. The Credit Agreement matures on March 9, 2028, at which time the aggregate outstanding principal amount of all Revolving Credit Facility advances and all Alliance Coal Term Loan advances are required to be repaid in full. Interest is payable quarterly, with principal on the Alliance Coal Term Loan due in quarterly installments equal to 6.25% of the outstanding balance of the Alliance Coal Term Loan on the Credit Agreement amendment date beginning with the quarter ended June 30, 2024.
The Credit Agreement is guaranteed by ARLP and certain of its subsidiaries, including the Intermediate Partnership and most of the direct and indirect subsidiaries of Alliance Coal (the “Coal Subsidiary Guarantors”). The Credit Agreement also is secured by substantially all of the assets of the Coal Subsidiary Guarantors and Alliance Coal. Borrowings under the Credit Agreement bear interest, at our option, at either (i) an adjusted one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York, plus the applicable margin or (ii) the base rate plus the applicable margin. The base rate is the highest of (i) the Overnight Bank Funding Rate plus 0.50%, (ii) the Administrative Agent’s prime rate, and (iii) the Daily Simple Secured Overnight Financing Rate plus 100 basis points. The applicable margin for borrowings under the Credit Agreement are determined by reference to the Consolidated Debt to Consolidated Cash Flow Ratio. For borrowings under the Alliance Coal Term Loan, we elected the one-month term rate, with applicable margin, which was 7.23% as of June 30, 2026. At June 30, 2026, we had $41.0 million of letters of credit outstanding with $305.5 million available for borrowing under the Revolving Credit Facility. We incur an annual commitment fee of 0.50% on the undrawn portion of the Revolving Credit Facility. We utilize the Credit Agreement, as appropriate, for working capital requirements, capital expenditures and investments, scheduled debt payments and distribution payments.
The Credit Agreement contains various restrictions affecting Alliance Coal and its subsidiaries, including, among other things, restrictions on incurrence of additional indebtedness and liens, sale of assets, investments, mergers and consolidations and transactions with affiliates. In each case, these restrictions are subject to various exceptions. In addition, restrictions apply to cash distributions by Alliance Coal to the Intermediate Partnership if such distribution would result in the debt of Alliance Coal to cash flow ratio (as determined in the Credit Agreement) being more than 1.0 to 1.0 or in Alliance Coal having liquidity of less than $200 million. The Credit Agreement requires us to maintain (a) a debt of Alliance Coal to cash flow ratio of not more than 1.5 to 1.0, (b) a consolidated debt of Alliance Coal and the Intermediate Partnership to cash flow ratio of not more than 2.5 to 1.0 and (c) an interest coverage ratio of not less than 3.0 to 1.0, in each case, during the four most recently ended fiscal quarters. The debt of Alliance Coal to cash flow ratio, consolidated debt of Alliance Coal and the Intermediate Partnership to cash flow ratio, and interest coverage ratio were 0.37 to 1.0, 1.16 to 1.0 and 41.98 to 1.0, respectively, for the trailing twelve months ended June 30, 2026. We were in compliance with the covenants of the Credit Agreement as of June 30, 2026 and anticipate remaining in compliance with the covenants.
8.625% Senior Notes due 2029
On June 12, 2024, the Intermediate Partnership and Alliance Resource Finance Corporation (as co-issuer), a wholly owned subsidiary of the Intermediate Partnership (“Alliance Finance”), issued an aggregate principal amount of $400.0 million of senior unsecured notes due 2029 (the “2029 Senior Notes”) in a private placement to qualified institutional buyers. The 2029 Senior Notes have a term of five years, maturing on June 15, 2029 and accrue interest at an annual rate of 8.625%. Interest is payable semi-annually in arrears on each June 15 and December 15. The 2029 Senior Notes are guaranteed, jointly and severally, on a senior unsecured basis by ARLP, certain of ARLP’s wholly owned oil and gas and coal royalties subsidiaries and each of ARLP’s subsidiaries that guarantee obligations under the Credit Agreement. The indenture governing the 2029 Senior Notes contains customary terms, events of default and covenants relating to, among other things, the incurrence of debt, the payment of distributions or similar restricted payments, undertaking transactions with affiliates and limitations on asset sales. The issuers may redeem all or a part of the 2029 Senior Notes at any time at the redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Accounts Receivable Securitization
Certain direct and indirect wholly owned subsidiaries of our Intermediate Partnership are party to a $75.0 million accounts receivable securitization facility (“Securitization Facility”). Under the Securitization Facility, certain subsidiaries sell certain trade receivables on an ongoing basis to our Intermediate Partnership, which then sells the trade receivables to AROP Funding, LLC (“AROP Funding”), a wholly owned bankruptcy-remote special purpose subsidiary of our Intermediate Partnership, which in turn borrows on a revolving basis up to $75.0 million secured by the trade receivables. After the sale, Alliance Coal, as servicer of the assets, collects the receivables on behalf of AROP Funding. The Securitization Facility bears interest based on a short-term bank yield index. On June 30, 2026, we had $11.7 million of letters of credit outstanding with $7.3 million available for borrowing under the Securitization Facility. The agreement governing the Securitization Facility contains customary terms and conditions, including limitations with regards to certain customer credit ratings. In January 2026, we extended the term of the Securitization Facility to January 2027. At June 30, 2026, we had a $56.0 million outstanding balance under the Securitization Facility.
February 2024 Equipment Financing
On February 28, 2024, Alliance Coal entered into an equipment financing arrangement accounted for as debt, wherein Alliance Coal received $54.6 million in exchange for conveying its interest in certain equipment owned indirectly by Alliance Coal and entering into a master lease agreement for that equipment (the “February 2024 Equipment Financing”). The February 2024 Equipment Financing contains customary terms and events of default and provides for forty-eight monthly payments with an implicit interest rate of 8.29%, maturing on February 28, 2028. Upon maturity, the equipment will revert to Alliance Coal.
Craft Foundation Installment Purchase Arrangement
On January 29, 2026, Alliance Resource Properties, as borrower, entered into an installment purchase arrangement with the Joseph W. Craft III Foundation, an entity controlled by Mr. Craft, for $5.9 million pursuant to the purchase of certain coal reserves. The installment purchase arrangement contains customary terms and events of default and provides for six annual payments of $1.2 million each, with an interest rate of 5.0%, beginning on January 1, 2027 and maturing on January 1, 2032. Alliance Resource Properties has the right at its option, as well as the obligation if demanded by the Joseph W. Craft III Foundation, to prepay all unpaid purchase price installments (together with accrued and unpaid interest thereon) at any time without penalty or premium. As of June 30, 2026, we had a $5.9 million outstanding balance under this arrangement.
Alliance Minerals Term Loan
On July 1, 2026, Alliance Minerals, as borrower, entered into a term loan for an aggregate principal amount of $150.0 million (the "Alliance Minerals Term Loan") with Truist Bank, who is acting as administrative agent. The Alliance Minerals Term Loan matures on January 1, 2028, at which time the aggregate outstanding principal amount of the Alliance Minerals Term Loan is required to be repaid in full. Interest is payable no less frequently than quarterly, with principal payments of $18.75 million due quarterly beginning with the quarter ending September 30, 2026.
The Alliance Minerals Term Loan is guaranteed by ARLP, our Intermediate Partnership, certain of Alliance Minerals’ direct and indirect subsidiaries, and AllRoy GP, LLC and its subsidiaries (the "Minerals Subsidiary Guarantors"). The Alliance Minerals Term Loan also is secured by the equity interests in and personal property of Alliance Minerals and the Minerals Subsidiary Guarantors, and by the equity interests of Alliance Minerals and the Minerals Subsidiary Guarantors in the ARLP Partnership’s other oil & gas mineral entities. Borrowings under the Alliance Minerals Term Loan bear interest, at our option, at either (i) an adjusted one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York plus the applicable margin or (ii) the base rate plus the applicable margin. The base rate is the highest of (i) the Administrative Agent’s prime rate, (ii) the Federal Funds Rate plus 0.50%, (iii) term secured overnight financing rate for an interest period of one month, plus 1.0% and (iv) zero percent. The applicable margin for borrowings under the Alliance Minerals Term Loan is determined by reference to the principal amount outstanding.
The Alliance Minerals Term Loan contains various restrictive covenants applicable to Alliance Minerals and its subsidiaries, including limitations on indebtedness, liens, asset sales, investments, mergers and consolidations, and affiliate transactions, in each case subject to customary exceptions. In addition, the restrictions provide an aggregate limit of $575.0 million Notes Indebtedness as such term is defined in the Alliance Minerals Term Loan at our Intermediate Partnership. The Alliance Minerals Term Loan requires us to maintain (a) total consolidated secured debt of Alliance Minerals to consolidated EBITDA of Alliance Minerals ratio of not more than 2.0 to 1.0, and (b) a total consolidated debt of Alliance Minerals to consolidated Alliance Minerals cash flow ratio of not more than 2.5 to 1.0, during the four most recently ended fiscal quarters.
**11.****WORKERS’ COMPENSATION AND PNEUMOCONIOSIS**
The changes in the workers’ compensation liability, including current and long-term liability balances, for each of the periods presented were as follows:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Beginning balance | $49,320 | $48,511 | $49,378 | $47,870 |
| Changes in accruals | 3,258 | 3,419 | 6,602 | 6,795 |
| Payments | (3,926) | (3,762) | (7,866) | (7,064) |
| Interest accretion | 539 | 570 | 1,077 | 1,137 |
| Valuation loss (gain) (1) | (614) | 496 | (614) | 496 |
| Ending balance | $48,577 | $49,234 | $48,577 | $49,234 |
(1) Our estimate of the liability for the present value of current workers′ compensation benefits is based on our actuarial calculations. Our actuarial calculations are based on a blend of actuarial projection methods and numerous assumptions including claims development patterns, mortality, medical costs and interest rates. The valuation gain in 2026 is due to an increase in the discount rate from 4.78% on December 31, 2025 to 5.10% on June 30, 2026. The valuation loss in 2025 is due to a decrease in the discount rate from 5.17% on December 31, 2024 to 4.92% on June 30, 2025.
We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for a claim have been met. The deductible level may vary by claim year. Our workers’ compensation liability above is presented on a gross basis and does not include our expected receivables from our insurance policy. Our receivables for traumatic injury claims under this policy as of June 30, 2026 are $4.1 million and are included in *Other long-term assets* on our condensed consolidated balance sheet.
Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay pneumoconiosis, or black lung, benefits to eligible employees and former employees and their dependents. Components of the net periodic benefit cost for each of the periods presented are as follows:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Service cost | $723 | $889 | $1,443 | $1,748 |
| Interest cost (1) | 1,399 | 1,686 | 2,797 | 3,352 |
| Amortization of net actuarial loss (1) | 116 | 232 | 232 | 464 |
| Other adjustments (1) (2) | — | — | (6,450) | — |
| Net periodic benefit cost | $2,238 | $2,807 | $(1,978) | $5,564 |
(1) Interest cost, amortization of net actuarial loss and other adjustments are included in the *Other income* line item within our condensed consolidated statements of income.
(2) This line item includes an immaterial adjustment related to the correction of actuarial assumptions for terminated employees in the prior period.
**12.****COMPONENTS OF PENSION PLAN NET PERIODIC BENEFIT COSTS**
Eligible employees at certain of our mining operations participate in a defined benefit plan (the “Pension Plan”) that we sponsor. The Pension Plan is closed to new applicants and participants in the Pension Plan are no longer receiving benefit accruals for service. The benefit formula for the Pension Plan is a fixed dollar unit based on years of service. Components of the net periodic benefit credit for each of the periods presented are as follows:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Interest cost | $1,268 | $1,310 | $2,537 | $2,620 |
| Expected return on plan assets | (1,486) | (1,709) | (2,972) | (3,418) |
| Amortization of prior service cost | — | 2 | — | 5 |
| Net periodic benefit credit (1) | $(218) | $(397) | $(435) | $(793) |
(1) Net periodic benefit credit for the Pension Plan is included in the *Other income* line item within our condensed consolidated statements of income.
We do not expect to make material contributions to the Pension Plan during 2026.
**13.****CONTINGENCIES**
We have various lawsuits, claims and regulatory proceedings incidental to our business that are pending against us. We record an accrual for a potential loss related to these matters when, in management’s opinion, such loss is probable and reasonably estimable. Based on known facts and circumstances, we believe the ultimate outcome of these outstanding lawsuits, claims and regulatory proceedings will not have a material adverse effect on our financial condition, results of operations or liquidity. However, if the results of these matters are different from management’s current expectations and in amounts greater than our accruals, such matters could have a material adverse effect on our business and operations.
**14.****PARTNERS’ CAPITAL**
Distributions
Distributions paid or declared during 2025 and 2026 were as follows:
| Payment Date | Per Unit Cash Distribution | Total Cash Distribution |
| --- | --- | --- |
| | | (in thousands) |
| February 14, 2025 | $0.70 | $90,891 |
| May 15, 2025 | 0.70 | 90,739 |
| August 14, 2025 | 0.60 | 77,776 |
| November 14, 2025 | 0.60 | 77,772 |
| Total | $2.60 | $337,178 |
| February 13, 2026 | $0.60 | $78,009 |
| May 15, 2026 | 0.60 | 77,847 |
| August 14, 2026 (1) | 0.60 | |
| Total | $1.80 | $155,856 |
(1) On July 27, 2026, we declared this quarterly distribution payable on August 14, 2026 to all unitholders of record as of August 7, 2026.
Change in Partners’ Capital
The following tables present the quarterly change in Partners' Capital for the three and six months ended June 30, 2026 and 2025:
_(in thousands, except unit data)_
| Line item | Number of / Limited Partner / Units | Limited / Partners' / Capital | Accumulated / Other / Comprehensive / Income (Loss) | Noncontrolling / Interest | Total Partners' / Capital |
| --- | --- | --- | --- | --- | --- |
| Balance at January 1, 2026 | 128,428,024 | $1,843,627 | $(1,026) | $17,621 | $1,860,222 |
| Comprehensive income: | | | | | |
| Net income | — | 9,094 | — | 1,653 | 10,747 |
| Other comprehensive loss | — | — | (6,360) | — | (6,360) |
| Total comprehensive income | | | | | 4,387 |
| Settlement of deferred compensation plans | 230,777 | (4,142) | — | — | (4,142) |
| Common unit-based compensation | — | 1,667 | — | — | 1,667 |
| Distributions on deferred common unit-based compensation | — | (953) | — | — | (953) |
| Distributions from consolidated company to noncontrolling interest | — | — | — | (1,830) | (1,830) |
| Distributions to Partners | — | (77,056) | — | — | (77,056) |
| Balance at March 31, 2026 | 128,658,801 | 1,772,237 | (7,386) | 17,444 | 1,782,295 |
| Comprehensive income: | | | | | |
| Net income | — | 79,562 | — | 1,986 | 81,548 |
| Other comprehensive income | — | — | 169 | — | 169 |
| Total comprehensive income | | | | | 81,717 |
| Common unit-based compensation | — | 2,275 | — | — | 2,275 |
| Distributions on deferred common unit-based compensation | — | (652) | — | — | (652) |
| Distributions from consolidated company to noncontrolling interest | — | — | — | (2,044) | (2,044) |
| Distributions to Partners | — | (77,195) | — | — | (77,195) |
| Balance at June 30, 2026 | 128,658,801 | $1,776,227 | $(7,217) | $17,386 | $1,786,396 |
_(in thousands, except unit data)_
| Line item | Number of / Limited Partner / Units | Limited / Partners' / Capital | Accumulated / Other / Comprehensive / Income (Loss) | Noncontrolling / Interest | Total Partners' / Capital |
| --- | --- | --- | --- | --- | --- |
| Balance at January 1, 2025 | 128,061,981 | $1,867,850 | $(35,103) | $20,786 | $1,853,533 |
| Comprehensive income: | | | | | |
| Net income | — | 73,983 | — | 1,577 | 75,560 |
| Other comprehensive income | — | — | 270 | — | 270 |
| Total comprehensive income | | | | | 75,830 |
| Settlement of deferred compensation plans | 366,043 | (7,082) | — | — | (7,082) |
| Common unit-based compensation | — | 1,964 | — | — | 1,964 |
| Distributions on deferred common unit-based compensation | — | (1,247) | — | — | (1,247) |
| Distributions from consolidated company to noncontrolling interest | — | — | — | (1,894) | (1,894) |
| Distributions to Partners | — | (89,644) | — | — | (89,644) |
| Balance at March 31, 2025 | 128,428,024 | 1,845,824 | (34,833) | 20,469 | 1,831,460 |
| Comprehensive income: | | | | | |
| Net income | — | 59,410 | — | 1,615 | 61,025 |
| Other comprehensive income | — | — | 11,194 | — | 11,194 |
| Total comprehensive income | | | | | 72,219 |
| Common unit-based compensation | — | 2,281 | — | — | 2,281 |
| Distributions on deferred common unit-based compensation | — | (841) | — | — | (841) |
| Distributions from consolidated company to noncontrolling interest | — | — | — | (2,731) | (2,731) |
| Distributions to Partners | — | (89,898) | — | — | (89,898) |
| Balance at June 30, 2025 | 128,428,024 | $1,816,776 | $(23,639) | $19,353 | $1,812,490 |
**15.****COMMON UNIT-BASED COMPENSATION PLAN**
Long-Term Incentive Plan
A summary of non-vested Long-Term Incentive Plan (“LTIP”) grants of restricted units is as follows:
| Line item | Number of units | Weighted average grant date fair value per unit | Intrinsic value |
| --- | --- | --- | --- |
| | | | (in thousands) |
| Non-vested grants at January 1, 2026 | 1,192,243 | $22.58 | $27,696 |
| Granted (1) | 431,501 | 25.80 | |
| Vested (2) | (400,722) | 21.54 | |
| Forfeited | (91,086) | 23.34 | |
| Non-vested grants at June 30, 2026 | 1,131,936 | 24.12 | 27,144 |
(1) The restricted units granted during 2026 have certain minimum-value guarantees per unit, regardless of whether the awards vest.
(2) During the six months ended June 30, 2026, we issued 230,777 unrestricted common units to the LTIP participants. The remaining vested units were withheld to satisfy tax withholdings.
LTIP expense for grants of restricted units was $2.3 million for each of the three months ended June 30, 2026 and 2025 and $4.0 million and $4.2 million for the six months ended June 30, 2026 and 2025, respectively. The total obligation associated with LTIP grants of restricted units as of June 30, 2026 was $12.2 million and is included in the partners’ capital *Limited partners-common unitholders* line item on our condensed consolidated balance sheets. As of June 30, 2026, there was $15.1 million in total unrecognized compensation expense related to the non-vested LTIP restricted unit grants that are expected to vest. That expense is expected to be recognized over a weighted-average period of 1.5 years.
**16.****REVENUE FROM CONTRACTS WITH CUSTOMERS**
The following table illustrates the disaggregation of our revenues by type, including a reconciliation to our segment presentation as presented in Note 20 – Segment Information.
_(in thousands)_
| Line item | Coal Operations / Illinois / Basin | Coal Operations / Appalachia | Royalties / Oil & Gas | Royalties / Coal | Other, / Corporate and / Elimination | Consolidated |
| --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended June 30, 2026 | | | | | | |
| Coal sales | $330,272 | $139,272 | — | — | — | $469,544 |
| Oil & gas royalties | — | — | 46,293 | — | — | 46,293 |
| Coal royalties | — | — | — | 22,723 | (22,723) | — |
| Transportation revenues | 6,083 | 1,427 | — | — | — | 7,510 |
| Other revenues | 3,117 | 11,198 | 234 | — | 13,664 | 28,213 |
| Total revenues | $339,472 | $151,897 | $46,527 | $22,723 | $(9,059) | $551,560 |
| Three Months Ended June 30, 2025 | | | | | | |
| Coal sales | $343,841 | $141,628 | — | — | — | $485,469 |
| Oil & gas royalties | — | — | 35,473 | — | — | 35,473 |
| Coal royalties | — | — | — | 17,612 | (17,612) | — |
| Transportation revenues | 4,829 | 3,729 | — | — | — | 8,558 |
| Other revenues | 1,577 | 626 | 28 | — | 15,732 | 17,963 |
| Total revenues | $350,247 | $145,983 | $35,501 | $17,612 | $(1,880) | $547,463 |
| Six Months Ended June 30, 2026 | | | | | | |
| Coal sales | $640,027 | $272,799 | — | — | — | $912,826 |
| Oil & gas royalties | — | — | 87,634 | — | — | 87,634 |
| Coal royalties | — | — | — | 41,823 | (41,823) | — |
| Transportation revenues | 12,260 | 3,893 | — | — | — | 16,153 |
| Other revenues | 6,147 | 15,308 | 677 | 291 | 28,541 | 50,964 |
| Total revenues | $658,434 | $292,000 | $88,311 | $42,114 | $(13,282) | $1,067,577 |
| Six Months Ended June 30, 2025 | | | | | | |
| Coal sales | $677,075 | $276,905 | — | — | — | $953,980 |
| Oil & gas royalties | — | — | 71,557 | — | — | 71,557 |
| Coal royalties | — | — | — | 33,407 | (33,407) | — |
| Transportation revenues | 11,692 | 7,066 | — | — | — | 18,758 |
| Other revenues | 4,475 | 1,508 | 857 | — | 36,796 | 43,636 |
| Total revenues | $693,242 | $285,479 | $72,414 | $33,407 | $3,389 | $1,087,931 |
The following table illustrates the beginning and ending balances of our trade receivables:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Beginning balance | $166,573 | $177,467 | $129,686 | $166,829 |
| Ending balance | $200,779 | $177,659 | $200,779 | $177,659 |
The following table illustrates the amount of our transaction price for all coal supply contracts allocated to performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2026 and disaggregated by segment and contract duration.
_(in thousands)_
| Line item | 2026 | 2027 | 2028 | 2029 and / Thereafter | Total |
| --- | --- | --- | --- | --- | --- |
| Illinois Basin Coal Operations coal revenues | $713,153 | $1,008,907 | $549,623 | $405,380 | $2,677,063 |
| Appalachia Coal Operations coal revenues | 250,072 | 380,968 | 289,856 | 37,800 | 958,696 |
| Total coal revenues | $963,225 | $1,389,875 | $839,479 | $443,180 | $3,635,759 |
**17****.****RELATED-PARTY TRANSACTIONS**
Craft Foundations
In January 2005, we acquired Tunnel Ridge from Alliance Resource Holdings, Inc., a wholly owned subsidiary of ARLP. In connection with this acquisition, we assumed a coal lease and surface land lease with Alliance Resource GP, LLC, an entity indirectly wholly owned by Mr. Craft and Kathleen S. Craft until it was dissolved in December 2020. In December 2018, the property subject to the leases was transferred to The Joseph W. Craft III Foundation and The Kathleen S. Craft Foundation (the “Craft Foundations”).
On January 29, 2026, Alliance Resource Properties purchased all of the ownership interests in the coal reserves and surface rights located in Ohio County, West Virginia and Washington County, Pennsylvania that were subject to the leases from the Craft Foundations for $15.5 million in the aggregate. The entire purchase price of $7.75 million payable to The Kathleen S. Craft Foundation was paid in full at the closing, while The Joseph W. Craft III Foundation was paid approximately $1.8 million at closing with the balance of the purchase price to be paid over the next six years. See Note 10 – Long-Term Debt for more information on the installment purchase arrangement.
Contribution and Exchange Agreements
In connection with the AllDale III & IV Acquisition on July 1, 2026 as discussed in Note 1 – Organization and Presentation, the ARLP Partnership entered into Contribution and Exchange Agreements with the related parties who held general and limited partner interests in AllDale III & IV prior to the AllDale III & IV Acquisition and the related parties who acquired limited partner interests in AllDale III (collectively the “Craft Related Parties”). Pursuant to the Contribution and Exchange Agreements, the parties effected a series of coordinated transactions to restructure the ownership and governance of AllDale III & IV, including exchanging the existing general partner interests held by Alliance Minerals and certain Craft Related Parties for limited partner interests in AllDale III & IV, eliminating the pre-existing profits interests attributable to those general partner interests and assigning the non-economic general partner interests to AllRoy GP, LLC, a wholly owned subsidiary of the ARLP Partnership.
Following the closing, we hold 100% of the non-economic general partner interests in AllDale III & IV, a 46.92% limited partner interest in AllDale III, and a 78.57% limited partner interest in AllDale IV while the Craft Related Parties hold a 53.08% limited partner interest in AllDale III and a 21.43% limited parter interest in AllDale IV.
**18.****INCOME TAXES**
Components of income tax expense are as follows:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Current: | | | | |
| Federal | $6,289 | $4,340 | $12,293 | $9,063 |
| State | 437 | 285 | 849 | 605 |
| Foreign | (60) | — | (83) | — |
| | 6,666 | 4,625 | 13,059 | 9,668 |
| Deferred: | | | | |
| Federal | (371) | 593 | (3,552) | (184) |
| State | (54) | 130 | (581) | 46 |
| | (425) | 723 | (4,133) | (138) |
| Income tax expense | $6,241 | $5,348 | $8,926 | $9,530 |
The effective income tax rates for our income tax expense for the three and six months ended June 30, 2026 and 2025 are less than the federal statutory rate, primarily due to the portion of income not subject to income taxes.
Our 2020 through 2025 tax years remain open to examination by tax authorities, and lower-tier partnership income tax returns for the tax years ended December 31, 2020 and 2021 are being audited by the Internal Revenue Service.
**19****.****EARNINGS PER LIMITED PARTNER UNIT**
We utilize the two-class method in calculating basic and diluted earnings per limited partner unit (“EPU”). Net income attributable to ARLP is allocated to limited partners and participating securities with nonforfeitable distributions or distribution equivalents, while net losses attributable to ARLP are allocated only to limited partners but not to participating securities. Our participating securities represent outstanding restricted unit awards under our LTIP.
The following is a reconciliation of net income attributable to ARLP used for calculating basic and diluted earnings per unit and the weighted-average units used in computing EPU:
_(in thousands, except per unit data)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Net income attributable to ARLP | $79,562 | $59,410 | $88,656 | $133,393 |
| Less: | | | | |
| Distributions to participating securities | (679) | (719) | (1,339) | (1,545) |
| Undistributed earnings attributable to participating securities | (15) | — | — | — |
| Net income attributable to ARLP available to limited partners | $78,868 | $58,691 | $87,317 | $131,848 |
| Weighted-average limited partner units outstanding – basic and diluted | 128,659 | 128,428 | 128,599 | 128,347 |
| Earnings per limited partner unit - basic and diluted (1) | $0.61 | $0.46 | $0.68 | $1.03 |
(1) Diluted EPU gives effect to all potentially dilutive common units outstanding during the period using the treasury stock method. Diluted EPU excludes all potentially dilutive units calculated under the treasury stock method if their effect is anti-dilutive. For the three and six months ended June 30, 2026, participating securities of 495 and 582, respectively, were considered anti-dilutive under the treasury stock method. For the three and six months ended June
30, 2025, participating securities of 605 and 715, respectively, were considered anti-dilutive under the treasury stock method.
**20.****SEGMENT INFORMATION**
We operate in the United States as a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. We aggregate multiple operating segments into four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an “all other” category referred to as Other, Corporate and Elimination. Our two coal operations reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. The two coal operations reportable segments include seven mining complexes operating in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal loading terminal on the Ohio River in Indiana. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests which are located primarily across premier basins and resource plays including the Permian, Anadarko, Bakken, and after the AllDale III & IV Acquisition on July 1, 2026, Haynesville. The operations within our Oil & Gas Royalties reportable segment primarily include receiving royalties and lease bonuses for our oil & gas mineral interests. Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties, which are either (a) leased to our mining complexes or (b) near our coal mining operations and external mining operations but not yet leased.
The Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC mining complex, which includes the River View and Henderson County mines and (d) the Hamilton mining complex. The segment also includes activity associated with support services and our non-operating mining complexes.
The Appalachia Coal Operations reportable segment includes (a) the Mettiki mining complex, (b) the Tunnel Ridge, LLC mining complex and (c) the MC Mining, LLC mining complex.
The Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries and prior to the AllDale III & IV Acquisition on July 1, 2026, our equity method investment in AllDale III. See Note 3 – Variable Interest Entities and Note 4 – Acquisitions for more information.
The Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties that are (a) leased to certain of our mining complexes in the Illinois Basin and Appalachia Basin or (b) located near our operations and external mining operations.
Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Design Group, LLC, its subsidiaries, and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), Bitiki KY, LLC, which holds our crypto-mining activities (see Note 7 – Digital Assets), our non-oil & gas equity investments (see Note 3 – Variable Interest Entities and Note 9 – Investments), Wildcat Insurance, LLC which assists the ARLP Partnership with its insurance requirements, and AROP Funding and Alliance Finance (both discussed in Note 10 – Long-Term Debt). The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines.
Reportable segment results are presented below.
_(in thousands)_
| Three Months Ended June 30, 2026 | Coal Operations / Illinois / Basin | Coal Operations / Appalachia | Royalties / Oil & Gas | Royalties / Coal | Total |
| --- | --- | --- | --- | --- | --- |
| Revenues - Outside | $337,888 | $151,897 | $46,527 | — | $536,312 |
| Revenues - Intercompany | 1,584 | — | — | 22,723 | 24,307 |
| Total revenues (1) | 339,472 | 151,897 | 46,527 | 22,723 | 560,619 |
| Less: | | | | | |
| Segment Adjusted EBITDA Expense (2) | 229,177 | 101,277 | 7,224 | 9,754 | 347,432 |
| Transportation expenses | 6,083 | 1,427 | — | — | 7,510 |
| Other segment items (3) | — | — | 1,291 | — | 1,291 |
| Segment Adjusted EBITDA (4) | 104,212 | 49,193 | 38,012 | 12,969 | 204,386 |
| Capital expenditures (6) | 37,466 | 9,579 | — | — | 47,045 |
| Three Months Ended June 30, 2025 | | | | | |
| Revenues - Outside | $350,247 | $145,983 | $35,501 | — | $531,731 |
| Revenues - Intercompany | — | — | — | 17,612 | 17,612 |
| Total revenues (1) | 350,247 | 145,983 | 35,501 | 17,612 | 549,343 |
| Less: | | | | | |
| Segment Adjusted EBITDA Expense (2) | 231,189 | 112,829 | 4,558 | 5,795 | 354,371 |
| Transportation expenses | 4,829 | 3,729 | — | — | 8,558 |
| Other segment items (3) | — | — | 1,060 | — | 1,060 |
| Segment Adjusted EBITDA (4) | 114,229 | 29,425 | 29,883 | 11,817 | 185,354 |
| Capital expenditures (6) | 50,072 | 15,226 | — | 102 | 65,400 |
| Six Months Ended June 30, 2026 | | | | | |
| Revenues - Outside | $656,850 | $292,000 | $88,311 | $291 | $1,037,452 |
| Revenues - Intercompany | 1,584 | — | — | 41,823 | 43,407 |
| Total revenues (1) | 658,434 | 292,000 | 88,311 | 42,114 | 1,080,859 |
| Less: | | | | | |
| Segment Adjusted EBITDA Expense (2) | 442,763 | 212,729 | 13,188 | 16,878 | 685,558 |
| Transportation expenses | 12,260 | 3,893 | — | — | 16,153 |
| Other segment items (3) | — | — | 2,504 | — | 2,504 |
| Segment Adjusted EBITDA (4) | 203,411 | 75,378 | 72,619 | 25,236 | 376,644 |
| Total assets (5) | 1,070,838 | 420,593 | 920,383 | 308,896 | 2,720,710 |
| Capital expenditures (6) | 94,360 | 31,127 | — | 15,500 | 140,987 |
| Six Months Ended June 30, 2025 | | | | | |
| Revenues - Outside | $693,242 | $285,479 | $72,414 | — | $1,051,135 |
| Revenues - Intercompany | — | — | — | 33,407 | 33,407 |
| Total revenues (1) | 693,242 | 285,479 | 72,414 | 33,407 | 1,084,542 |
| Less: | | | | | |
| Segment Adjusted EBITDA Expense (2) | 441,148 | 233,397 | 10,279 | 12,195 | 697,019 |
| Transportation expenses | 11,692 | 7,066 | — | — | 18,758 |
| Other segment items (3) | — | — | 2,368 | — | 2,368 |
| Segment Adjusted EBITDA (4) | 240,402 | 45,016 | 59,767 | 21,212 | 366,397 |
| Total assets (5) | 1,076,634 | 472,142 | 847,300 | 308,959 | 2,705,035 |
| Capital expenditures (6) | 102,657 | 46,054 | — | 147 | 148,858 |
(1) The following is a reconciliation of our total segment revenues to total consolidated revenues:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Total segment revenues | $560,619 | $549,343 | $1,080,859 | $1,084,542 |
| Other, Corporate and Elimination revenues - Outside | 15,248 | 15,732 | 30,125 | 36,796 |
| Other, Corporate and Elimination revenues - Intercompany | (24,307) | (17,612) | (43,407) | (33,407) |
| Total consolidated revenues | $551,560 | $547,463 | $1,067,577 | $1,087,931 |
Revenues included in Other, Corporate and Elimination are attributable to intercompany eliminations, which are primarily intercompany coal royalties eliminations, outside revenues at the Matrix Group and other outside miscellaneous sales and revenue activities.
(2) Segment Adjusted EBITDA Expense includes operating expenses, coal purchases, if applicable, and other income or expense as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA Expense is used as a financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses.
(3) Other segment items include:
*Oil & Gas Royalties* – equity method investment income from AllDale III and income allocated to noncontrolling interest
(4) Segment Adjusted EBITDA is defined as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA is used as a financial measure by Mr. Craft, who is also our chief operating decision maker (“CODM”), other management and by external users of our financial statements such as investors, commercial banks, research analysts and others. Our CODM uses Segment Adjusted EBITDA in assessing segment performance and deciding how to allocate resources. Segment Adjusted EBITDA provides useful information to our CODM and investors regarding our performance and results of operations because Segment Adjusted EBITDA (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions, (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations and (iv) allows our CODM and management to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments.
The following is a reconciliation of total Segment Adjusted EBITDA for our segments to consolidated income before income taxes:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Segment Adjusted EBITDA – total segments | $204,386 | $185,354 | $376,644 | $366,397 |
| Other, Corporate and Elimination profit (loss) | 7,122 | (3,050) | 13,913 | (3,578) |
| General and administrative | (25,836) | (20,380) | (49,877) | (40,960) |
| Depreciation, depletion and amortization | (81,277) | (76,340) | (163,631) | (144,969) |
| Asset impairments | — | — | (37,820) | — |
| Interest expense, net | (12,247) | (8,682) | (23,673) | (16,249) |
| Change in fair value of digital assets | (6,345) | 12,856 | (17,974) | 7,282 |
| Impairment loss on investments | — | (25,000) | — | (25,000) |
| Noncontrolling interest | 1,986 | 1,615 | 3,639 | 3,192 |
| Income before income taxes | $87,789 | $66,373 | $101,221 | $146,115 |
Other, Corporate and Elimination profit (loss) represents profit (loss) from operating segments below the quantitative thresholds when determining our reportable segments as well as the elimination of intersegment profit (loss) between our reportable segments. The operating segments included are those described as part of our Other, Corporate and Eliminations category.
(5) The following is a reconciliation of our total segment assets to total consolidated assets:
_(in thousands)_
| Line item | June 30, 2026 | June 30, 2025 |
| --- | --- | --- |
| Total segment assets | $2,720,710 | $2,705,035 |
| Other, Corporate and Elimination total assets | 221,082 | 164,411 |
| Total consolidated assets | $2,941,792 | $2,869,446 |
(6) Capital expenditures excludes $15.1 million and $31.3 million paid towards oil & gas reserve acquisitions for the three and six months ended June 30, 2026, respectively, and $2.7 million paid towards oil & gas reserve acquisitions for the six months ended June 30, 2025.
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Total segment capital expenditures | $47,045 | $65,400 | $140,987 | $148,858 |
| Other, Corporate and Elimination capital expenditures | 2,969 | 1,617 | 4,717 | 4,935 |
| Total consolidated capital expenditures | $50,014 | $67,017 | $145,704 | $153,793 |
## ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Significant relationships referenced in this management’s discussion and analysis of financial condition and results of operations include the following:
- References to “we,” “us,” “our” or “ARLP Partnership” mean the business and operations of Alliance Resource Partners, L.P., the parent company, as well as its consolidated subsidiaries.
- References to “ARLP” mean Alliance Resource Partners, L.P., individually as the parent company, and not on a consolidated basis.
- References to “MGP” mean Alliance Resource Management GP, LLC, ARLP’s general partner.
- References to “Mr. Craft” mean Joseph W. Craft III, the Chairman, President and Chief Executive Officer of MGP.
- References to “Intermediate Partnership” mean Alliance Resource Operating Partners, L.P., the intermediate partnership of Alliance Resource Partners, L.P.
- References to “Alliance Coal” mean Alliance Coal, LLC, an indirect wholly owned subsidiary of ARLP.
- References to “Alliance Minerals” mean Alliance Minerals, LLC, an indirect wholly owned subsidiary of ARLP.
- References to “Alliance Resource Properties” mean Alliance Resource Properties, LLC, an indirect wholly owned subsidiary of ARLP.
**Summary**
We are a diversified natural resource company that generates operating and royalty income from the production and marketing of coal to major domestic utilities, industrial users and international customers, as well as royalty income from oil & gas mineral interests located in key producing regions across the United States. Our core objective is to maximize the value of our mineral asset base—both through coal production from our mining operations and through the leasing and development of our coal and oil & gas mineral interests. Our strategy is to provide reliable, baseload fuel for electricity generating customers while positioning the Partnership for long-term growth through investments in energy related technologies and infrastructure. Leveraging our relationships with electric utilities, industrial customers, and government partners, we intend to pursue strategic opportunities that complement our operational strengths. We believe our diverse resource portfolio and targeted investments will continue to create long-term value for our unitholders.
We are the second largest coal producer in the eastern United States and as of June 30, 2026, we operated seven underground mining complexes across Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia and a coal-loading terminal on the Ohio River in Indiana. We manage and report our coal operations under two regions, Illinois Basin and Appalachia. We market our coal production to major domestic and international utilities and industrial customers.
We also own mineral and royalty interests across premier basins and resource plays in the United States including the Permian, Anadarko, Bakken, and after the AllDale III & IV Acquisition on July 1, 2026, Haynesville. We market our oil & gas mineral interests for lease to operators in those regions and generate royalty income from their development of those mineral interests. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 17. – Related Party Transactions” for more information on the AllDale III & IV Acquisition.
We also hold coal mineral reserves and resources in Illinois, Indiana, Kentucky, Pennsylvania and West Virginia. Substantially all of our coal mineral resources and a majority of our coal mineral reserves are owned or leased by Alliance Resource Properties, which are (a) leased or subleased to our mining complexes or (b) near other internal and external coal mining operations but not yet leased. We generate intercompany royalty income through the leasing and development of our coal mineral reserves and resources.
Beyond our core mineral platform, we have invested in growth-oriented businesses and energy-related technologies. Our subsidiaries, Matrix Design Group, LLC (and its subsidiaries), and Alliance Design Group, LLC (collectively referred to as "Matrix Group"), develop and market industrial, mining and technology products and services worldwide and our subsidiary, Bitiki KY, LLC (“Bitiki”), mines bitcoin. We have also made investments in emerging energy and infrastructure opportunities, including Infinitum Electric, Inc. (“Infinitum”), NGP Energy Transition IV, L.P. (“NGP ET IV”) and Gavin Generation Holdings A, LP (“Gavin Generation”).
We have four reportable segments, Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties and Coal Royalties. We also have an “all other” category referred to as Other, Corporate and Elimination. Our two coal operations reportable segments correspond to major coal producing regions in the eastern United States with similar economic characteristics including coal quality, geology, coal marketing opportunities, mining and transportation methods and regulatory issues. Our Oil & Gas Royalties reportable segment includes our oil & gas mineral interests. Our Coal Royalties reportable segment includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.
- Illinois Basin Coal Operations reportable segment includes (a) the Gibson County Coal, LLC mining complex, (b) the Warrior Coal, LLC mining complex, (c) the River View Coal, LLC (“River View”) mining complex, which includes the River View and Henderson County mines and (d) the Hamilton County Coal, LLC (“Hamilton”) mining complex. The segment also includes activity associated with support services and our non-operating mining complexes.
- Appalachia Coal Operations reportable segment includes (a) the Mettiki Coal, LLC and Mettiki Coal (WV), LLC (collectively, “Mettiki”) mining complex, (b) the Tunnel Ridge, LLC (“Tunnel Ridge”) mining complex and (c) the MC Mining, LLC mining complex.
- Oil & Gas Royalties reportable segment includes oil & gas mineral interests held by Alliance Minerals through its consolidated subsidiaries and prior to the AllDale III & IV Acquisition on July 1, 2026, our equity method investment in AllDale III. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 4 – Acquisitions and Note 17 – Related Party Transactions” for more information on the AllDale III & IV Acquisition.
- Coal Royalties reportable segment includes substantially all of our coal mineral resources and the majority of our coal mineral reserves owned or leased by Alliance Resource Properties.
- Other, Corporate and Elimination includes marketing and administrative activities, certain of our subsidiaries, primarily consisting of Matrix Group, Bitiki, which holds our crypto-mining activities, our non oil & gas equity and debt investments, Wildcat Insurance, LLC, which assists the ARLP Partnership with its insurance requirements, AROP Funding, LLC (“AROP Funding”) and Alliance Resource Finance Corporation (“Alliance Finance”), and other miscellaneous activities. The eliminations included in Other, Corporate and Elimination primarily represent the intercompany coal royalty transactions described above between our Coal Royalties reportable segment and our coal operations’ mines. Please read “Item 1. Financial Statements (Unaudited) – Note 3 – Variable Interest Entities, Note 9 – Investments, and Note 8 – Long-Term Debt” for more information on our investments in Infinitum, Gavin Generation, and NGP ET IV as well as AROP Funding and Alliance Finance.
**Recent Developments**
During the six months ended June 30, 2026, we acquired 881 oil & gas net royalty acres through a series of transactions in the Permian Basin for an aggregate cash purchase price of $22.0 million which was funded with cash on hand. The interests include royalty interests in both developed properties and undeveloped properties. Please see “Item 1. Financial Statements (Unaudited) – Note 4 – Acquisitions” for additional information.
Prior to January 29, 2026, certain of the coal mined and to be mined by Tunnel Ridge had been leased from the Craft Foundations. On January 29, 2026, we purchased all of the ownership interests in these coal reserves together with surface rights from the Craft Foundations for an aggregate $15.5 million. Please see “Item 1. Financial Statements (Unaudited) – Note 17 – Related-Party Transactions” for additional information.
In January 2026, we announced our decision to cease longwall production at our Mettiki mining complex due to a series of planned and unplanned outages at a key customer’s plant. While limited coal production is ongoing with continuous mining units, we continue to evaluate options concerning the mine’s future. Please see “Item 1. Financial Statements (Unaudited) – Note 8 – Long-Lived Asset Impairment” for additional information.
On July 1, 2026, we completed the acquisition of certain general partner and limited partner interests in AllDale III & IV for approximately $206.2 million. The AllDale III & IV Acquisition expands and diversifies our portfolio of mineral and royalty interests through the added control of approximately 48,500 net royalty acres across premier basins
and resource plays including the Permian, Anadarko, Bakken and Haynesville. ARLP funded the acquisition using a combination of cash on hand, borrowings under its revolving credit facility, and a new $150.0 million term loan at Alliance Minerals.
**Risks and Uncertainties**
We face a variety of risks and uncertainties that management considers in the operation and planning of our businesses, which could affect our financial position and results of operations. For additional information regarding our risks and uncertainties that affect our business and the industries in which we operate, see “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.
**How We Evaluate Our Performance**
Our management uses a variety of financial and operational measurements to analyze our performance. Primary measurements include the following: (1) coal volumes; (2) coal sales; (3) oil & gas volumes; (4) oil & gas royalties; (5) intercompany coal royalties; (6) Segment Adjusted EBITDA Expense; and (7) Segment Adjusted EBITDA. Please see below and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information.
**Analysis of Historical Results of Operations**
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Consolidated Information
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Increase (Decrease) |
| --- | --- | --- | --- |
| Consolidated Total | | | |
| Tons sold | 8,558 | 8,382 | 176% |
| Tons produced | 8,225 | 8,105 | 120% |
| Volume - BOE (1) | 936 | 880 | 56% |
| Coal sales | $469,544 | $485,469 | $(15,925)% |
| Oil & gas royalties | $46,293 | $35,473 | $10,820% |
| Total revenues | $551,560 | $547,463 | $4,097% |
| Segment Adjusted EBITDA Expense (2) | $340,045 | $353,450 | $(13,405)% |
| Net income of ARLP | $79,562 | $59,410 | $20,152% |
| Segment Adjusted EBITDA (2) | $211,508 | $182,304 | $29,204% |
(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).
(2) For definitions of Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see below under “— Reconciliation of Non-GAAP Financial Measures.”
*Total Revenues*
Total revenues for the three months ended June 30, 2026 (“2026 Quarter”) increased 0.7% to $551.6 million compared to $547.5 million for the three months ended June 30, 2025 (“2025 Quarter”) as a result of record oil & gas royalty revenues, increased coal sales volumes and higher other revenues, partially offset by lower coal sales prices per ton.
- Coal sales decreased to $469.5 million for the 2026 Quarter compared to $485.5 million for the 2025 Quarter. The decrease was attributable to lower average coal sales prices, which reduced coal sales by $26.1 million, partially offset by higher tons sold, which increased coal sales by $10.2 million. Coal sales price per ton decreased by 5.3% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of
higher-priced legacy contracts. Higher coal sales volumes were primarily driven by increased volumes at our River View and Tunnel Ridge operations due to improved recoveries and higher productivity.
- Oil & gas royalties increased 30.5% to a record $46.3 million for the 2026 Quarter compared to $35.5 million for the 2025 Quarter. The increase was due to higher average sales prices, which increased 22.7%, and improved oil & gas royalty volumes, partially offset by higher expenses. Oil & gas royalty volumes increased 6.4% compared to the 2025 Quarter as a result of increased drilling and completion activities on our acreage combined with additional volumes from oil & gas mineral interests acquired.
- Other revenues increased to $28.2 million for the 2026 Quarter compared to $18.0 million for the 2025 Quarter. The increase was due to higher miscellaneous sales and revenue activities in our Appalachian segment.
*Segment Adjusted EBITDA Expense*
Segment Adjusted EBITDA Expense decreased 3.8% to $340.0 million for the 2026 Quarter compared to $353.5 million for the 2025 Quarter primarily due to decreased expenses at our coal operations. Segment Adjusted EBITDA Expense for our coal operations decreased 4.3% to $331.0 million due to lower per ton costs, partially offset by higher coal sales volumes. Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 6.3% to $38.68 per ton sold in the 2026 Quarter compared to $41.27 per ton in the 2025 Quarter, primarily due to increased production at several mines as well as the following per ton cost decreases:
- Labor and benefit expenses per ton produced decreased 5.1% to $14.47 per ton in the 2026 Quarter from $15.24 per ton in the 2025 Quarter. The decrease of $0.77 per ton was primarily due to lower labor costs at several mines and decreased workers’ compensation accruals.
- Material and supplies expenses per ton produced decreased 10.0% to $12.16 per ton in the 2026 Quarter from $13.51 per ton in the 2025 Quarter. The decrease of $1.35 per ton produced primarily reflects decreases of $0.63 per ton for miscellaneous materials and supplies, $0.26 per ton for ventilation related expenses, $0.24 per ton for electrical expenses, and $0.21 per ton for various preparation plant expenses, partially offset by an increase of $0.36 per ton for roof support.
- Maintenance expenses per ton produced decreased 5.2% to $4.40 per ton in the 2026 Quarter from $4.64 per ton in the 2025 Quarter. The decrease of $0.24 per ton produced was primarily a result of lower maintenance costs at several mines.
- Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.40 per produced ton sold in the 2026 Quarter compared to the 2025 Quarter primarily resulting from lower coal sales prices, partially offset by an unfavorable mix of tons sold that were mined in states with severance taxes.
- We had no sales of outside coal purchases in the 2026 Quarter compared to $7.2 million in the 2025 Quarter. Thus, costs per ton in the 2026 Quarter decreased as the cost of our produced coal is generally lower on a per ton basis than outside coal purchases.
*General and administrative*
General and administrative expenses for the 2026 Quarter increased to $25.8 million compared to $20.4 million in the 2025 Quarter. The increase of $5.4 million was primarily due to higher incentive compensation expenses and increased outside services.
*Equity method investment income (loss)*
Equity method investment income was $9.5 million in the 2026 Quarter compared to a loss of $1.5 million in the 2025 Quarter. The change was primarily due to an increase in the value of our share of the net assets of Gavin Generation and NGP ET IV.
*Change in fair value of digital assets*
The fair value adjustment on our digital assets decreased by $19.2 million for the 2026 Quarter compared to the 2025 Quarter reflecting movement in the price of bitcoin.
*Impairment loss on investments*
During the 2025 Quarter, we recorded a $25.0 million impairment on our equity investment in Ascend. Please read “Item 1. Financial Statements (Unaudited) – Note 9 – Investments” for more information.
*Net income attributable to ARLP*
Net income attributable to ARLP for the 2026 Quarter increased 33.9% to $79.6 million, or $0.61 per basic and diluted limited partner unit, compared to $59.4 million, or $0.46 per basic and diluted limited partner unit for the 2025 Quarter, primarily as a result of higher total revenues and equity method investment income as well as the impact of the impairment loss on investments in the 2025 Quarter.
*Segment Adjusted EBITDA*
Our 2026 Quarter Segment Adjusted EBITDA increased 16.0% to $211.5 million from the 2025 Quarter Segment Adjusted EBITDA of $182.3 million.
Segment Information
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Increase (Decrease) |
| --- | --- | --- | --- |
| Illinois Basin Coal Operations | | | |
| Tons sold | 6,367 | 6,665 | (298)% |
| Coal sales | $330,272 | $343,841 | $(13,569)% |
| Other revenues | $3,117 | $1,577 | $1,540% |
| Segment Adjusted EBITDA Expense | $229,177 | $231,189 | $(2,012)% |
| Segment Adjusted EBITDA | $104,212 | $114,229 | $(10,017)% |
| Appalachia Coal Operations | | | |
| Tons sold | 2,191 | 1,717 | 474% |
| Coal sales | $139,272 | $141,628 | $(2,356)% |
| Other revenues | $11,198 | $626 | $10,572% |
| Segment Adjusted EBITDA Expense | $101,277 | $112,829 | $(11,552)% |
| Segment Adjusted EBITDA | $49,193 | $29,425 | $19,768% |
| Oil & Gas Royalties | | | |
| Volume - BOE (1) | 936 | 880 | 56% |
| Oil & gas royalties | $46,293 | $35,473 | $10,820% |
| Other revenues | $234 | $28 | $206% |
| Segment Adjusted EBITDA Expense | $7,224 | $4,558 | $2,666% |
| Segment Adjusted EBITDA | $38,012 | $29,883 | $8,129% |
| Coal Royalties | | | |
| Volume - Tons sold (2) | 7,537 | 5,492 | 2,045% |
| Intercompany coal royalties | $22,723 | $17,612 | $5,111% |
| Segment Adjusted EBITDA Expense | $9,754 | $5,795 | $3,959% |
| Segment Adjusted EBITDA | $12,969 | $11,817 | $1,152% |
n/m - Percentage change not meaningful.
(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).
(2) Represents tons sold by our Coal Operations segments associated with coal reserves leased from our Coal Royalties segment.
Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 8.8% to $104.2 million in the 2026 Quarter from $114.2 million in the 2025 Quarter. The decrease of $10.0 million was primarily attributable to lower average coal sales volumes. Tons sold decreased by 4.5% compared to the 2025 Quarter due primarily to decreased sales volumes from our Hamilton mine as a result of a planned extended longwall move during the 2026 Quarter, partially offset by a strong sales performance and productivity at our River View complex. Segment Adjusted EBITDA Expense decreased to $229.2 million in the 2026 Quarter from $231.2 million in the 2025 Quarter, primarily as a result of reduced volumes, partially offset by increased operating expenses per ton. Segment Adjusted EBITDA Expense per ton increased by 3.7% compared to the 2025 Quarter due primarily to the planned extended longwall move at our Hamilton mine during the 2026 Quarter.
Appalachia Coal Operations – Segment Adjusted EBITDA increased 67.2% to $49.2 million for the 2026 Quarter from $29.4 million in the 2025 Quarter. The increase of $19.8 million was primarily attributable to reduced operating expenses and higher other revenues, partially offset by lower coal sales. The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 22.9% compared to the 2025 Quarter primarily due to an increased sales mix of lower priced Tunnel Ridge sales volumes in the 2026 Quarter and reduced sales price per ton at Mettiki. Partially offsetting lower coal sales prices, coal sales volumes increased 27.6% compared to the 2025 Quarter primarily as a result of increased production at Tunnel Ridge due to improved recoveries and higher productivity. Other revenues increased by $10.6 million in the 2026 Quarter reflecting higher miscellaneous revenue activities. Segment Adjusted EBITDA Expense decreased 10.2% to $101.3 million in the 2026 Quarter from $112.8 million in the 2025 Quarter due primarily to lower per ton expenses, partially offset by increased sales volumes. Segment Adjusted EBITDA Expense per ton for the 2026 Quarter decreased by 29.7% compared to the 2025 Quarter as a result of increased production at our Tunnel Ridge operation.
Oil & Gas Royalties – Segment Adjusted EBITDA increased to a record $38.0 million in the 2026 Quarter compared to $29.9 million in the 2025 Quarter primarily due to higher average sales prices, which increased 22.7%, partially offset by higher expenses. Oil & gas royalty volumes increased 6.4% compared to the 2025 Quarter as a result of increased drilling and completion activities on our acreage combined with additional volumes from oil & gas mineral interests acquired.
Coal Royalties – Segment Adjusted EBITDA increased to $13.0 million in the 2026 Quarter compared to $11.8 million in the 2025 Quarter due to higher royalty tons sold, primarily from Tunnel Ridge and River View, partially offset by higher expenses.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Consolidated Information
_(in thousands)_
| Line item | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 | Increase (Decrease) |
| --- | --- | --- | --- |
| Consolidated Total | | | |
| Tons sold | 16,418 | 16,153 | 265% |
| Tons produced | 16,209 | 16,562 | (353)% |
| Volume - BOE (1) | 1,958 | 1,760 | 198% |
| Coal sales | $912,826 | $953,980 | $(41,154)% |
| Oil & gas royalties | $87,634 | $71,557 | $16,077% |
| Total revenues | $1,067,577 | $1,087,931 | $(20,354)% |
| Segment Adjusted EBITDA Expense (2) | $671,003 | $699,620 | $(28,617)% |
| Net income of ARLP | $88,656 | $133,393 | $(44,737)% |
| Segment Adjusted EBITDA (2) | $390,557 | $362,819 | $27,738% |
(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).
(2) For definitions of Segment Adjusted EBITDA and Segment Adjusted EBITDA Expense and related reconciliations to their respective comparable GAAP financial measures, please see below under “— Reconciliation of Non-GAAP Financial Measures.”
*Total Revenues*
Total revenues for the six months ended June 30, 2026 (“2026 Period”) decreased 1.9% to $1.07 billion compared to $1.09 billion for the six months ended June 30, 2025 (“2025 Period”) primarily due to lower coal sales, partially offset by record oil & gas royalty revenues.
- Coal sales decreased to $912.8 million for the 2026 Period compared to $954.0 million for the 2025 Period. The decrease was attributable to lower average coal sales prices, which reduced coal sales by $56.8 million, partially offset by higher tons sold, which increased coal sales by $15.7 million. Coal sales price per ton decreased by 5.9% as a result of lower domestic price realizations at several mines resulting from the continued roll-off of higher-priced legacy contracts. Higher coal sales volumes were primarily driven by increased volumes at our River View and Tunnel Ridge operations due to improved recoveries and higher productivity, partially offset by decreased sales volumes from our Hamilton mine as a result of a planned extended longwall move during the 2026 Period.
- Oil & gas royalties increased 22.5% to $87.6 million for the 2026 Period compared to $71.6 million for the 2025 Period. The increase was due to record oil & gas royalty volumes, which increased 11.3%, as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests, and higher average sales prices, which increased 10.1%.
*Segment Adjusted EBITDA Expense*
Segment Adjusted EBITDA Expense decreased 4.1% to $671.0 million for the 2026 Period compared to $699.6 million for the 2025 Period primarily due to decreased expenses at our coal operations and a $6.5 million benefit from the correction of black lung actuarial assumptions during the 2026 Period.
Segment Adjusted EBITDA Expense for our coal operations decreased 3.2% to $656.6 million due to lower per ton costs, partially offset by higher coal sales volumes. Segment Adjusted EBITDA Expense per ton sold for our coal operations decreased 4.7% to $39.99 per ton sold in the 2026 Period compared to $41.98 per ton in the 2025 Period, primarily due to increased production at several mines as well as the following per ton cost decreases:
- Labor and benefit expenses per ton produced decreased 2.3% to $14.84 per ton in the 2026 Period from $15.19 per ton in the 2025 Quarter. The decrease of $0.35 per ton was primarily due to lower labor costs at several mines and decreased workers’ compensation accruals.
- Maintenance expenses per ton produced decreased 5.1% to $4.51 per ton in the 2026 Period from $4.75 per ton in the 2025 Period. The decrease of $0.24 per ton produced was primarily a result of lower maintenance costs at several mines.
- Production taxes and royalty expenses per ton incurred as a percentage of coal sales prices and volumes decreased $0.26 per produced ton sold in the 2026 Period compared to the 2025 Period primarily resulting from lower coal sales prices, partially offset by an unfavorable mix of tons sold that were mined in states with severance taxes.
- We had no sales of outside coal purchases in the 2026 Period compared to $14.5 million in the 2025 Period. Thus, costs per ton in the 2026 Period decreased as the cost of our produced coal is generally lower on a per ton basis than outside coal purchases.
*Depreciation, depletion and amortization*
Depreciation, depletion and amortization expense increased to $163.6 million for the 2026 Period compared to $145.0 million for the 2025 Period primarily as a result of new mine infrastructure and equipment placed in service during the second half of 2025 at our Hamilton and River View operations as well as increased sales volumes in the 2026 Period.
*Asset impairments*
During the 2026 Period, we recorded $37.8 million of non-cash asset impairment charges due to our decision to cease longwall production at our Mettiki mining complex, along with uncertainty regarding future longwall production resumption and our evaluation of potential operation scenarios. Please read "Item 1. Financial Statements (Unaudited) – Note 8 – Long-Lived Asset Impairments."
*Equity method investment income (loss)*
Equity method investment income was $13.8 million in the 2026 Period compared to a loss of $3.5 million in the 2025 Period. The change was primarily due to an increase in the value of our share of the net assets of Gavin Generation and NGP ET IV.
*Change in fair value of digital assets*
The fair value adjustment on our digital assets decreased by $25.3 million for the 2026 Period compared to the 2025 Period reflecting movement in the price of bitcoin.
*Impairment loss on investments*
During the 2025 Period, we recorded a $25.0 million impairment on our equity investment in Ascend. Please read “Item 1. Financial Statements (Unaudited) – Note 9 – Investments” for more information.
*Net income attributable to ARLP*
Net income attributable to ARLP for the 2026 Period decreased 33.5% to $88.7 million, or $0.68 per basic and diluted limited partner unit, compared to $133.4 million, or $1.03 per basic and diluted limited partner unit for the 2025 Period, primarily as a result of lower revenues, higher depreciation, a decrease in the fair value of our digital assets, and the non-cash asset impairment charges at Mettiki, partially offset by the $25.0 million impairment loss on investments in the 2025 Period, higher equity method investment income and lower outside coal purchases.
*Segment Adjusted EBITDA*
Our 2026 Period Segment Adjusted EBITDA increased 7.6% to $390.6 million from the 2025 Period Segment Adjusted EBITDA of $362.8 million.
Segment Information
_(in thousands)_
| Line item | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 | Increase (Decrease) |
| --- | --- | --- | --- |
| Illinois Basin Coal Operations | | | |
| Tons sold | 12,435 | 12,707 | (272)% |
| Coal sales | $640,027 | $677,075 | $(37,048)% |
| Other revenues | $6,147 | $4,475 | $1,672% |
| Segment Adjusted EBITDA Expense | $442,763 | $441,148 | $1,615% |
| Segment Adjusted EBITDA | $203,411 | $240,402 | $(36,991)% |
| Appalachia Coal Operations | | | |
| Tons sold | 3,983 | 3,446 | 537% |
| Coal sales | $272,799 | $276,905 | $(4,106)% |
| Other revenues | $15,308 | $1,508 | $13,800 |
| Segment Adjusted EBITDA Expense | $212,729 | $233,397 | $(20,668)% |
| Segment Adjusted EBITDA | $75,378 | $45,016 | $30,362% |
| Oil & Gas Royalties | | | |
| Volume - BOE (1) | 1,958 | 1,760 | 198% |
| Oil & gas royalties | $87,634 | $71,557 | $16,077% |
| Other revenues | $677 | $857 | $(180)% |
| Segment Adjusted EBITDA Expense | $13,188 | $10,279 | $2,909% |
| Segment Adjusted EBITDA | $72,619 | $59,767 | $12,852% |
| Coal Royalties | | | |
| Volume - Tons sold (2) | 14,149 | 10,564 | 3,585% |
| Intercompany coal royalties | $41,823 | $33,407 | $8,416% |
| Other revenues | $291 | — | $291 |
| Segment Adjusted EBITDA Expense | $16,878 | $12,195 | $4,683% |
| Segment Adjusted EBITDA | $25,236 | $21,212 | $4,024% |
n/m - Percentage change not meaningful.
(1) BOE for natural gas is calculated on a 6:1 basis (6,000 cubic feet of natural gas to one barrel).
(2) Represents tons sold by our Coal Operations segments associated with coal reserves leased from our Coal Royalties segment.
Illinois Basin Coal Operations – Segment Adjusted EBITDA decreased 15.4% to $203.4 million in the 2026 Period from $240.4 million in the 2025 Period. The decrease of $37.0 million was primarily attributable to lower coal sales. The decrease in coal sales reflects lower coal sales prices, which decreased by 3.4% compared to the 2025 Period as a result of the expiration of higher priced legacy contracts, and decreased coal sales volumes. Tons sold decreased by 2.1% compared to the 2025 Period due primarily to decreased sales volumes from our Hamilton mine as a result of the planned extended longwall move during the 2026 Period, partially offset by a strong sales performance and productivity at our River View complex. Segment Adjusted EBITDA Expense remained comparable to the 2025 Period as reduced sales volumes substantially offset higher per ton costs. Segment Adjusted EBITDA Expense per ton increased by 2.6% compared to the 2025 Period due primarily to the planned extended longwall move at our Hamilton mine during the 2026 Period.
Appalachia Coal Operations – Segment Adjusted EBITDA increased 67.4% to $75.4 million for the 2026 Period from $45.0 million in the 2025 Period. The increase of $30.4 million was primarily attributable to reduced operating expenses and higher other revenues, partially offset by lower coal sales. The decrease in coal sales primarily reflects lower coal sales prices, which decreased by 14.8% compared to the 2025 Period primarily due to an increased sales mix of lower priced Tunnel Ridge sales volumes in the 2026 Period and reduced sales price per ton at Mettiki. Partially offsetting lower coal sales prices, coal sales volumes increased 15.6% compared to the 2025 Period primarily as a result of increased production at Tunnel Ridge due to improved recoveries, higher productivity, and fewer longwall move days during the
2026 Period. Other revenues increased by $13.8 million in the 2026 Period reflecting higher miscellaneous revenue activities. Segment Adjusted EBITDA Expense decreased 8.9% to $212.7 million in the 2026 Period from $233.4 million in the 2025 Period due primarily to lower per ton expenses, partially offset by increased sales volumes. Segment Adjusted EBITDA Expense per ton for the 2026 Period decreased by 21.1% compared to the 2025 Period as a result of increased production at our Tunnel Ridge operation.
Oil & Gas Royalties – Segment Adjusted EBITDA increased to a record $72.6 million in the 2026 Period compared to $59.8 million in the 2025 Period due to record oil & gas royalty volumes, which increased 11.3% as a result of increased drilling and completion activities on our interests and acquisitions of additional oil & gas mineral interests, and higher average sales prices, which increased 10.1% compared to the 2025 Period.
Coal Royalties – Segment Adjusted EBITDA increased to $25.2 million in the 2026 Period compared to $21.2 million in the 2025 Period due to higher royalty tons sold, primarily from Tunnel Ridge and River View, partially offset by lower average royalty rates per ton received from the Partnership’s mining subsidiaries.
Reconciliation of Non-GAAP Financial Measures
*Segment Adjusted EBITDA*
We define Segment Adjusted EBITDA (a non-GAAP financial measure) as net income attributable to ARLP before net interest expense, income taxes, depreciation, depletion and amortization and general and administrative expenses adjusted for certain items that we characterize as unrepresentative of our ongoing operations. Segment Adjusted EBITDA is a key component of consolidated Adjusted EBITDA, which is used as a supplemental financial measure by management and by external users of our financial statements such as investors, commercial banks, research analysts and others. We believe that the presentation of consolidated Adjusted EBITDA provides useful information to investors regarding our performance and results of operations because Adjusted EBITDA, when used in conjunction with related GAAP financial measures, (i) provides additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provides investors with the financial analytical framework upon which we base financial, operational, compensation and planning decisions and (iii) presents a measurement that investors, rating agencies and debt holders have indicated is useful in assessing us and our results of operations.
Segment Adjusted EBITDA is also used as a supplemental measure by our management for reasons similar to those stated in the previous explanation of Adjusted EBITDA. In addition, the exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA allows management to focus solely on the evaluation of segment operating profitability as it relates to our revenues and operating expenses, which are primarily controlled by our segments.
The following is a reconciliation of net income, the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Net income | $81,548 | $61,025 | $92,295 | $136,585 |
| Noncontrolling interest | (1,986) | (1,615) | (3,639) | (3,192) |
| Net income attributable to ARLP | $79,562 | $59,410 | $88,656 | $133,393 |
| General and administrative | 25,836 | 20,380 | 49,877 | 40,960 |
| Depreciation, depletion and amortization | 81,277 | 76,340 | 163,631 | 144,969 |
| Asset impairments | — | — | 37,820 | — |
| Interest expense, net | 12,247 | 8,682 | 23,673 | 16,249 |
| Change in fair value of digital assets | 6,345 | (12,856) | 17,974 | (7,282) |
| Impairment loss on investments | — | 25,000 | — | 25,000 |
| Income tax expense | 6,241 | 5,348 | 8,926 | 9,530 |
| Consolidated Segment Adjusted EBITDA | $211,508 | $182,304 | $390,557 | $362,819 |
*Segment Adjusted EBITDA Expense*
We define Segment Adjusted EBITDA Expense (a non-GAAP financial measure) as the sum of operating expenses, coal purchases and other income or expenses as adjusted to remove certain items from operating expenses that we characterize as unrepresentative of our ongoing operations. Transportation expenses are excluded as these expenses are passed through to our customers and, consequently, we do not realize any gain or loss on transportation revenues. Segment Adjusted EBITDA Expense is used as a supplemental financial measure by our management to assess the operating performance of our segments. Segment Adjusted EBITDA Expense is a key component of Segment Adjusted EBITDA in addition to coal sales, royalty revenues and other revenues. The exclusion of corporate general and administrative expenses from Segment Adjusted EBITDA Expense allows management to focus solely on the evaluation of segment operating performance as it primarily relates to our operating expenses. We also review Segment Adjusted EBITDA Expense on a per ton basis for cost trends at our coal operations by dividing Segment Adjusted EBITDA expense by coal sales volumes.
The following is a reconciliation of operating expenses, the most comparable GAAP financial measure, to consolidated Segment Adjusted EBITDA Expense:
_(in thousands)_
| Line item | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 |
| --- | --- | --- | --- | --- |
| Operating expenses (excluding depreciation, depletion and amortization) | $341,352 | $346,288 | $682,650 | $685,724 |
| Outside coal purchases | — | 7,179 | — | 14,524 |
| Other income | (1,307) | (17) | (11,647) | (628) |
| Consolidated Segment Adjusted EBITDA Expense | $340,045 | $353,450 | $671,003 | $699,620 |
**Liquidity and Capital Resources**
Liquidity
We have historically satisfied our working capital requirements and funded our capital expenditures, investments, contractual obligations and debt service obligations with cash generated from operations, cash provided by the issuance of debt or equity, borrowings under credit and securitization facilities and other financing transactions. We believe that existing cash balances, future cash flows from operations and investments, borrowings under credit facilities and cash provided from the issuance of debt or equity will be sufficient to meet our working capital requirements, capital expenditures and additional investments, debt payments, contractual obligations, commitments and distribution payments. Nevertheless, our ability to satisfy our working capital requirements and additional investments, to satisfy our contractual obligations, to fund planned capital expenditures, to service our debt obligations or to pay distributions will depend upon our future operating performance and access to and cost of financing sources, which will be affected by prevailing economic conditions generally, and in both the coal and oil & gas industries specifically, as well as other financial and business factors, some of which are beyond our control. Based on our recent operating cash flow results, current cash position, anticipated future cash flows and sources of financing that we expect to have available, we anticipate being in compliance with the covenants of our credit agreements and expect to have sufficient liquidity to fund our operations and growth strategies. However, to the extent operating cash flow or access to and cost of financing sources are materially different than expected, future covenant compliance or liquidity may be adversely affected. Please read “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025.
Unit Repurchase Program
We have $80.6 million remaining authorized under our unit repurchase program as of June 30, 2026. No units were repurchased during the six months ended June 30, 2026. The program has no time limit and we may repurchase units from time to time in the open market or in other privately negotiated transactions. The unit repurchase program authorization does not obligate us to repurchase any dollar amount or number of units. The timing of any future unit repurchases and the ultimate number of units to be purchased will depend on several factors, including business and market conditions, our future financial performance, and other capital priorities. Please read “Part II - Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q for more information on the unit repurchase program.
Accounts Receivable Securitization
In January 2026, we extended the term of the accounts receivable securitization facility (the “Securitization Facility”) to January 2027. The borrowing availability under the facility is a maximum of $75.0 million. For additional information on the Securitization Facility, please see “Item 1. Financial Statements (Unaudited) – Note 10 – Long-Term Debt.”
Alliance Minerals Term Loan
On July 1, 2026, Alliance Minerals, as borrower, entered into a term loan for an aggregate principal amount of $150.0 million (the “Alliance Minerals Term Loan”). The Alliance Minerals Term Loan matures on January 1, 2028. For additional information on the Alliance Minerals Term Loan, please see “Item 1. Financial Statements (Unaudited) – Note 10 – Long-Term Debt.”
AllDale III & IV Acquisition
On July 1, 2026, we completed the AllDale III & IV Acquisition for approximately $206.2 million, which was funded using a combination of cash on hand, borrowings under our revolving credit facility and proceeds from the Alliance Minerals Term Loan.
Cash Flows
Cash provided by operating activities was $258.5 million for the 2026 Period compared to $297.4 million for the 2025 Period. The decrease in cash provided by operating activities was primarily due to the decrease in net income adjusted for non-cash items and unfavorable working capital changes primarily related to trade and other receivables. These
decreases were partially offset by favorable working capital changes primarily related to inventories and other miscellaneous changes compared to the 2025 Period.
Net cash used in investing activities was $181.2 million for the 2026 Period compared to $168.3 million for the 2025 Period. The increase in cash used in investing activities was primarily due to increased oil & gas reserve acquisitions in the 2026 Period as compared to the 2025 Period. This increase was partially offset by decrease in accounts payable and accrued liabilities and reduced capital expenditure during the 2026 Period.
Net cash used in financing activities was $37.4 million for the 2026 Period compared to $211.2 million for the 2025 Period. The decrease in cash used in financing activities was primarily attributable to increased borrowings under both the revolving credit facility and Securitization Facility and reduced distributions paid to partners in the 2026 Period as compared to the 2025 Period. These decreases were partially offset by increased payments on the revolving credit facility and Securitization Facility in the 2026 Period compared to the 2025 Period.
Cash Requirements
Management anticipates having sufficient cash flow to meet 2026 cash requirements, including capital expenditures, acquisitions of oil & gas mineral interests, scheduled payments on long-term debt, lease obligations, asset retirement obligation costs and workers’ compensation and pneumoconiosis costs, with our June 30, 2026 cash and cash equivalents of $111.2 million, cash flows from operations, or borrowings under our revolving credit facility and Securitization Facility, if necessary. We project average estimated annual maintenance capital expenditures over the next five years of approximately $7.23 per ton produced. Our anticipated total capital expenditures, including maintenance capital expenditures, for 2026 are estimated in the range of $280.0 million to $300.0 million. We will continue to have significant cash requirements over the long term, which may require us to incur debt or seek additional equity capital. The availability and cost of additional capital will depend upon prevailing market conditions, the market price of our common units and several other factors over which we have limited control, as well as our financial condition and results of operations.
**Debt Obligations**
See “Item 1. Financial Statements (Unaudited) – Note 10 – Long-Term Debt” of this Quarterly Report on Form 10-Q for a discussion of our long-term debt obligations.
We also have an agreement with a bank to provide additional letters of credit in the amount of $5.0 million to maintain surety bonds to secure certain asset retirement obligations and our obligations for workers’ compensation benefits. On June 30, 2026, we had $5.0 million in letters of credit outstanding under this agreement.
**Related-Party Transactions**
We have related-party transactions and activities with Mr. Craft, MGP and their respective affiliates as well as other related parties. These related-party transactions and activities relate principally to (1) an installment purchase obligation with The Joseph W. Craft III Foundation resulting from our January 2026 acquisition of ownership interests in certain coal reserves and associated surface rights that we had previously been leasing from The Joseph W. Craft III Foundation and The Kathleen S. Craft Foundation, (2) the use of aircraft, (3) master supply and services agreements for the purchase and servicing of electronic components and other parts used in mining equipment, and (4) contribution and exchange agreements entered with related parties of Mr. Craft in connection with the AllDale III & IV Acquisition on July 1, 2026. We also have related-party transactions with (a) WKY CoalPlay LLC, a company owned by entities related to Mr. Craft, regarding three mineral leases, and (b) entities in which we hold equity investments. For more information, please read “Item 1. Financial Statements (Unaudited) – Note 9 – Investments, Note 10 – Long-Term Debt and Note 17 – Related-Party Transactions” of this Quarterly Report on Form 10-Q. Please read our Annual Report on Form 10-K for the year ended December 31, 2025, “Item 8. Financial Statements and Supplementary Data—Note 21 – Related-Party Transactions” for additional information concerning related-party transactions.
**New Accounting Standards**
See “Item 1. Financial Statements (Unaudited) – Note 2. New Accounting Standards” of this Quarterly Report on Form 10-Q for a discussion of new accounting standards.
## Item 3. Quantitative and Qualitative Disclosures about Market Risk
**ITEM 3.** **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
**Commodity Price Risk**
We have significant long-term sales contracts. Many of the long-term sales contracts are subject to price adjustment provisions, which periodically permit an increase or decrease in the contract price, typically to reflect changes in specified indices or changes in production costs resulting from regulatory changes, or both.
Our results of operations are highly dependent upon the prices we receive for our coal, oil and natural gas. Regarding coal, the short-term sales contracts favored by some of our coal customers leave us more exposed to risks of declining coal price periods. Also, a significant change in oil & gas prices would have a significant impact on our oil & gas royalty revenues.
We have exposure to coal and oil & gas sales prices and price risk for supplies that are used directly or indirectly in the normal course of coal and oil & gas production such as electricity, steel and other supplies. We manage our risk for these items through strategic sourcing contracts for normal quantities required by our operations. Historically, we have not utilized any commodity price-hedges or other derivatives related to either our sales price or supply cost risks but may do so in the future.
**Credit Risk**
Most of our coal is sold to U.S. electric utilities or into the international markets through brokered transactions. Therefore, our credit risk is primarily with domestic electric power generators and reputable global brokerage firms. Our policy is to independently evaluate each customer’s creditworthiness prior to entering into transactions and to constantly monitor outstanding accounts receivable. When deemed appropriate by our credit management department, we will take steps to reduce our credit exposure to customers that do not meet our credit standards or whose credit has deteriorated. These steps may include obtaining letters of credit or cash collateral, requiring prepayments for shipments or establishing customer trust accounts held for our benefit in the event of a failure to pay. Such credit risks from customers may impact the borrowing capacity of our Securitization Facility. See “Item 1. Financial Statements (Unaudited) – Note 10 – Long-Term Debt” of this Quarterly Report on Form 10-Q for more information on our Securitization Facility.
**Exchange Rate Risk**
The majority of our transactions are denominated in United States dollars, and as a result, we do not have material exposure to currency exchange-rate risks. However, because we periodically sell our coal internationally in United States dollars, general economic conditions in foreign markets and changes in foreign currency exchange rates may provide our foreign competitors with a competitive advantage. If our competitors’ currencies decline against the United States dollar or against foreign purchasers’ local currencies, those competitors may be able to offer lower prices for coal to these purchasers. Furthermore, if the currencies of overseas purchasers were to significantly decline in value in comparison to the United States dollar, those purchasers may seek decreased prices for the coal we sell to them. Consequently, currency fluctuations could adversely affect the competitiveness of our coal in international markets.
**Interest Rate Risk**
Borrowings under our revolving credit facility and related term loan, Securitization Facility and Alliance Minerals Term Loan are at variable rates and, as a result, we have interest rate exposure on any amounts drawn under these facilities. Historically, our earnings have not been materially affected by changes in interest rates and we have not utilized interest rate derivative instruments related to our outstanding debt. We had $24.6 million in borrowings under Alliance Coal Term Loan at June 30, 2026. We had $78.5 million outstanding under the revolving credit facility and $56.0 million outstanding under the Securitization Facility at June 30, 2026.
There were no other changes in our quantitative and qualitative disclosures about market risk as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
## ITEM 4.CONTROLS AND PROCEDURES
We maintain controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file with the Securities and Exchange Commission (“SEC”) is recorded, processed, summarized
and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act) as of June 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these controls and procedures are effective as of June 30, 2026.
On April 1, 2026, we implemented a new enterprise resource planning system on a partnership-wide basis. We will continue to evaluate and test control changes in order to provide certification on the effectiveness, in all material respects, of our internal control over financial reporting for the year ending December 31, 2026.
Other than as set forth above, there have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with our evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarterly period ended June 30, 2026.
**FORWARD-LOOKING STATEMENTS**
Certain statements and information in this Quarterly Report on Form 10-Q, and certain oral statements made from time to time by our representatives, constitute “forward-looking statements.” These statements are based on our beliefs as well as assumptions made by, and information currently available to, us. When used in this document, the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “may,” “outlook,” “plan,” “project,” “potential,” “should,” “will,” “would,” and similar expressions identify forward-looking statements. Without limiting the foregoing, all statements relating to our future outlook, anticipated capital expenditures, future cash flows and borrowings, and sources of funding are forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and reflect our current views with respect to future events and are subject to numerous assumptions that we believe are reasonable, but are open to a wide range of uncertainties and business risks, and actual results could differ materially from those discussed in these statements. Among the factors that could cause actual results to differ from those in the forward-looking statements are:
- decline in the coal industry’s share of electricity generation, including as a result of environmental concerns related to coal mining and combustion, the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels and the retirement of coal-fired power plants in the U.S.;
- our ability to provide fuel for growth in domestic energy demand, should it materialize;
- changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position;
- changes in global economic and geo-political conditions or changes in industries in which our customers operate;
- changes in commodity prices, demand and availability which could affect our operating results and cash flows;
- impacts of geopolitical events, including the conflicts in Ukraine and in the Middle East, including Iran and disruption of maritime traffic through the Strait of Hormuz;
- actions of the major oil-producing countries with respect to oil production volumes and prices and the direct and indirect impacts over the near and long term on oil & gas exploration and production operations at the properties in which we hold mineral interests;
- changes in competition in domestic and international coal markets and our ability to respond to such changes;
- potential shut-ins of production by the operators of the properties in which we hold oil & gas mineral interests due to low commodity prices or the lack of downstream demand or storage capacity;
- risks associated with the expansion of and investments into the infrastructure of our operations and properties, including the timing of such investments coming online;
- our ability to identify and complete acquisitions and to successfully integrate such acquisitions into our business and achieve the anticipated benefits therefrom;
- our ability to identify and invest in new energy and infrastructure ventures;
- the success of our development and growth plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging and other infrastructure and technology companies;
- dependence on significant customer contracts, and failure of customers to renew existing contracts upon expiration;
- adjustments made in price, volume, or terms to existing coal supply agreements;
- the effects of and changes in trade, monetary and fiscal policies and laws, and the results of central bank policy actions, including interest rates, bank failures, and associated liquidity risks;
- the effects of and changes in taxes or tariffs and other trade measures adopted or threatened by the United States and foreign governments, including the imposition of or increase in tariffs on steel and/or other raw materials;
- legislation, regulations, and court decisions and interpretations thereof, both domestic and foreign, including those relating to the environment and the release of greenhouse gases, such as state legislation seeking to impose liability on a wide range of energy companies under greenhouse gas “superfund” laws, mining, miner health and safety, hydraulic fracturing, and health care;
- deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions;
- investors’ and other stakeholders’ attention to sustainability matters;
- liquidity constraints, including those resulting from any future unavailability of financing;
- customer bankruptcies, cancellations or breaches to existing contracts, or other failures to perform;
- customer delays, failure to take coal under contracts or defaults in making payments;
- our productivity levels and margins earned on our coal sales;
- disruptions to oil & gas exploration and production operations at the properties in which we hold mineral interests;
- changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures or tariffs;
- changes in our ability to recruit, hire and maintain labor;
- our ability to maintain satisfactory relations with our employees;
- increases in labor costs, including increases in the costs of health insurance, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims;
- increases in transportation costs and risk of transportation delays or interruptions;
- operational interruptions due to geologic, permitting, labor, weather, supply chain shortage of equipment or mine supplies, or other factors;
- risks associated with major mine-related accidents, mine fires, mine floods or other interruptions;
- results of litigation, including claims not yet asserted;
- foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad;
- difficulty maintaining our surety bonds for mine reclamation as well as workers’ compensation and black lung benefits;
- difficulty in making accurate assumptions and projections regarding post-mine reclamation as well as pension, black lung benefits, and other post-retirement benefit liabilities;
- uncertainties in estimating and replacing our coal mineral reserves and resources;
- uncertainties in estimating and replacing our oil & gas reserves;
- uncertainties in the amount of oil & gas production due to the level of drilling and completion activity by the operators of our oil & gas properties;
- the impact of current and potential changes to federal or state tax rules and regulations, including a loss or reduction of benefits from certain tax deductions and credits;
- difficulty obtaining commercial property insurance, and risks associated with our participation in the commercial insurance property program;
- evolving cybersecurity risks, such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, malware, social engineering, physical breaches, or other actions;
- difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control; and
- other factors, including those discussed in “Item 1A. Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2025, and “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2025.
If one or more of these or other risks or uncertainties materialize, or should our underlying assumptions prove incorrect, our actual results could differ materially from those described in any forward-looking statement. When considering forward-looking statements, you should also keep in mind our risk factors and legal proceedings. Known material factors that could cause our actual results to differ from those in the forward-looking statements are described in “Item 1. Legal Proceedings” and “Item 1A. Risk Factors” below. We disclaim any obligation to update or revise any forward-looking statements or to announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments unless required by law.
You should consider the information above when reading or considering any forward-looking statements contained in:
- this Quarterly Report on Form 10-Q;
- other reports filed by us with the SEC;
- our press releases;
- our website *www.arlp.com*; and
- written or oral statements made by us or any of our officers or other authorized persons acting on our behalf.
**PART II**
**OTHER INFORMATION**
## ITEM 1.LEGAL PROCEEDINGS
The information in Note 13. Contingencies to the Unaudited Condensed Consolidated Financial Statements included in "Part I. Item 1. Financial Statements (Unaudited)" of this Quarterly Report on Form 10-Q herein is hereby incorporated by reference. See also "Item 3. Legal Proceedings" of our Annual Report on Form 10-K for the year ended December 31, 2025.
## ITEM 1A.RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I - Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. The risks described in these reports are not our only risks. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial based on current knowledge and factual circumstances, if such knowledge or facts change, also may materially adversely affect our business, financial condition and/or operating results in the future.
## ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In January 2023, the board of directors authorized us to repurchase up to a total of $100.0 million of ARLP common units from that date. We have $80.6 million remaining authorized under our unit repurchase program as of June 30, 2026. The unit repurchase program is intended to enhance ARLP’s ability to achieve its goal of creating long-term value for its unitholders and provides another means, along with quarterly cash distributions, of returning cash to unitholders. The program has no time limit and ARLP may repurchase units from time to time in the open market or in other privately negotiated transactions. The unit repurchase program authorization does not obligate ARLP to repurchase any dollar amount or number of units and repurchases may be commenced or suspended from time to time without prior notice.
During the three months ended June 30, 2026, we did not repurchase and retire any units pursuant to the unit repurchase program. ARLP has had a unit repurchase program in place since May 31, 2018 and since its inception, we have repurchased and retired 6,390,446 units at an average unit price of $17.67 for an aggregate purchase price of $112.9 million.
## ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
## ITEM 4.MINE SAFETY DISCLOSURES
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.
## ITEM 5.OTHER INFORMATION
During the three months ended June 30, 2026, no director or officer adopted or terminated (i) any contract, instructions or written plan for the purchase or sale of securities of the Partnership intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or (ii) any written arrangement for the purchase or sale of securities of the Partnership that meets the definition of a non-Rule 10b5-1 trading arrangement as defined in Item 408(c).
## ITEM 6.EXHIBITS
| Exhibit Number | Exhibit Description | Incorporated by Reference / Form | Incorporated by Reference / SECFile No. and Film No. | Incorporated by Reference / Exhibit | Incorporated by Reference / Filing Date |
| --- | --- | --- | --- | --- | --- |
| 3.1 | Amended and Restated Certificate of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-2682317990766 | 3.6 | 07/28/2017 |
| 3.2 | Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-2682317990766 | 3.2 | 07/28/2017 |
| 3.3 | Amendment No. 1 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 10-K | 000-2682318634634 | 3.9 | 02/23/2018 |
| 3.4 | Amendment No. 2 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-2682318883834 | 3.3 | 06/06/2018 |
| 3.5 | Amendment No. 3 to Fourth Amended and Restated Agreement of Limited Partnership of Alliance Resource Partners, L.P. | 8-K | 000-2682318883834 | 3.4 | 06/06/2018 |
| 3.6 | Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | S-1/A | 333-7884599669102 | 3.8 | 07/23/1999 |
| 3.7 | First Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823241184062 | 3.7 | 08/07/2024 |
| 3.8 | Second Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823241184062 | 3.8 | 08/07/2024 |
| 3.9 | Third Amendment to Certificate of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-Q | 000-26823241184062 | 3.9 | 08/07/2024 |
| 3.10 | Amended and Restated Agreement of Limited Partnership of Alliance Resource Operating Partners, L.P. | 10-K | 000-26823583595 | 3.2 | 03/29/2000 |
| 3.11 | Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of Alliance Resource Operating Partners, L.P. | 8-K | 000-2682318883834 | 3.5 | 06/06/2018 |
| 3.12 | Certificate of Formation of Alliance Resource Management GP, LLC | S-1/A | 333-7884599669102 | 3.7 | 07/23/1999 |
| 3.13 | Third Amended and Restated Operating Agreement of Alliance Resource Management GP, LLC | 8-K | 000-2682318883834 | 3.7 | 06/06/2018 |
| Exhibit Number | Exhibit Description | Incorporated by Reference / Form | Incorporated by Reference / SECFile No. and Film No. | Incorporated by Reference / Exhibit | Incorporated by Reference / Filing Date |
| --- | --- | --- | --- | --- | --- |
| 3.14 | Certificate of Formation of MGP II, LLC | 8-K | 000-2682317990766 | 3.5 | 07/28/2017 |
| 3.15 | Amended and Restated Operating Agreement of MGP II, LLC | 8-K | 000-2682317990766 | 3.4 | 07/28/2017 |
| 10.1 | Subscription Agreement for Partnership Interest in AllDale Minerals III, LP and Membership Interest in AllDale Minerals Management III, LLC, dated July 1, 2026, by and among Alliance Minerals, LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company. | | | | |
| 10.2 | Subscription Agreement for Partnership Interest in AllDale Minerals IV, LP and Membership Interest in AllDale Minerals Management IV, LLC, dated July 1, 2026, by and among Alliance Minerals, LLC, AllDale Minerals IV, LP, AllDale Minerals Management IV, LLC and Dale Operating Company. | | | | |
| 10.3 | Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management III, LLC, AllDale Minerals III, LP, Alliance Minerals, LLC, KC-AllDale, LLC, The Joseph W. Craft III Foundation, CC OilPlay LLC and AllRoy GP, LLC. | | | | |
| 10.4 | Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management IV, LLC, AllDale Minerals IV, LP, Alliance Minerals, LLC, KC-AllDale IV, LLC and AllRoy GP, LLC. | | | | |
| 10.5 | Master Supply, Distribution, and Services Agreement, dated July 1, 2026, by and between Saminco Solutions LLC and Matrix Design Africa (PTY) LTD. | | | | |
| 10.6 | Credit Agreement, dated July 1, 2026, among Alliance Resource Partners, L.P., Alliance Resource Operating Partners, L.P., Alliance Minerals, LLC, the lenders party thereto from time to time, and Truist Bank, as Administrative Agent. | | | | |
| Exhibit Number | Exhibit Description |
| --- | --- |
| 31.1 | Certification of Joseph W. Craft III, President and Chief Executive Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated August 6, 2026, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Certification of Cary P. Marshall, Senior Vice President and Chief Financial Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated August 6, 2026, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certification of Joseph W. Craft III, President and Chief Executive Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated, August 6, 2026, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 32.2 | Certification of Cary P. Marshall, Senior Vice President and Chief Financial Officer of Alliance Resource Management GP, LLC, the general partner of Alliance Resource Partners, L.P., dated August 6, 2026, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 95.1 | Federal Mine Safety and Health Act Information |
| 101 | Interactive Data File (Form 10-Q for the quarter ended June 30, 2026 filed in Inline XBRL). |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Or furnished, in the case of Exhibits 32.1 and 32.2.
**SIGNATURES**
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, in Tulsa, Oklahoma, on August 6, 2026.
ALLIANCE RESOURCE PARTNERS, L.P.
By: Alliance Resource Management GP, LLC
its general partner
/s/ Joseph W. Craft, III
Joseph W. Craft, III
*Chairman, President and Chief Executive*
*Officer, duly authorized to sign on behalf**of the registrant.*
/s/ Megan J. Cordle
Megan J. Cordle
*Vice President, Controller and*
*Chief Accounting Officer*
49
---
## EX-10.1
SEC source: [arlp-20260630xex10d1.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d1.htm)
**Exhibit 10.1**
Execution Version
**SUBSCRIPTION AGREEMENT FOR**
**PARTNERSHIP INTEREST IN**
**ALLDALE MINERALS III, LP**
**AND**
**MEMBERSHIP INTEREST IN**
**ALLDALE MINERALS MANAGEMENT III, LLC**
**OFFERS AND SALES OF LIMITED PARTNER INTERESTS IN ALLDALE MINERALS III, LP AND MEMBERSHIP INTERESTS IN ALLDALE MINERALS MANAGEMENT III, LLC HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR FOREIGN SECURITIES LAWS, OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY FEDERAL, STATE OR FOREIGN AUTHORITY. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS SUCH INTERESTS ARE FIRST REGISTERED PURSUANT TO ALL SUCH APPLICABLE LAWS OR UNLESS COUNSEL SATISFACTORY TO THE GENERAL PARTNER SHALL HAVE RENDERED AN OPINION SATISFACTORY TO THE GENERAL PARTNER THAT SUCH REGISTRATION IS NOT REQUIRED. THE SALE, ASSIGNMENT OR OTHER TRANSFER OF SUCH INTERESTS IS ALSO RESTRICTED BY** **ARTICLE IX** **OF THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ALLDALE MINERALS III, LP AND** **ARTICLE 9** **OF THE SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ALLDALE MINERALS MANAGEMENT III, LLC.**
Effective as of June 4, 2026, the undersigned, Alliance Minerals, LLC, a Delaware limited liability company (“**Subscriber**”), and ALLDALE MINERALS III, LP, a Texas limited partnership (the “**Partnership**”), and AllDale Minerals Management III, LLC, a Texas limited liability company (the “**General Partner**”), and solely for purposes of Section Thirteenth, paragraph (e), and Section Fourteenth, paragraph (d), Dale Operating Company, a Texas corporation (“**DOC**”), hereby agree as follows:
**First** **- SUBSCRIPTION:** In accordance with the terms of the Third Amended and Restated Limited Partnership Agreement of the Partnership, as to be amended by the First Amendment (the “**First Amendment**”) to the Third Amended and Restated Limited Partnership Agreement of the Partnership (as amended by the First Amendment, the “**Limited Partnership Agreement**”), attached as Exhibit “A-1” to the Disclosure Letter and the Second Amended and Restated Limited Liability Company Agreement of the General Partner, as to be amended by the First Amendment (the “**GP Agreement Amendment**”) to the Second Amended and Restated Limited Liability Company Agreement of the General Partner (as amended by the GP Agreement Amendment, the “**GP Company Agreement**”), attached as Exhibit “A-2” to the Disclosure Letter, copies of which have been provided to the Subscriber, and subject to the terms and conditions of this Agreement, the Subscriber hereby subscribes for a Partnership Interest as a limited partner interest in the Partnership in the aggregate amount (the “**Commitment**”) set forth on the signature page of this subscription agreement (this “**Subscription Agreement**” or this “**Agreement**”), which Commitment represents the Subscriber’s portion of the Original LP Purchase Price. The Subscriber, at Closing (as defined below), will make a Capital Contribution to the Partnership in the full amount of the Commitment. The Subscriber further subscribes for a Membership Interest
1
in the aggregate amount (the “**GP Commitment**”) set forth on the signature page of this Agreement (if such GP Commitment is not $0) of the Classes of Interest in the General Partner set forth below, which GP Commitment represents Subscriber’s portion of the Original GP Purchase Price. The Subscriber, at Closing, will make a Capital Contribution to the General Partner in the full amount of the GP Commitment.
Subscriber is subscribing for (A) a Partnership Interest in the Partnership, consisting of a limited partner interest with a Sharing Ratio, after giving effect to the Redemption, of 15.7306% and (B) if the GP Commitment is not $0, a Membership Interest in the General Partner, after giving effect to the GP Redemption, consisting of a 80.0440% interest in the General Partner (which, for the avoidance of doubt, includes (1) a Sharing Percentage in the General Partner of 80.0440% and (2) a Sharing Ratio in the Partnership of 1.6064%). The Membership Interest in the General Partner subscribed for by Subscriber (if any) shall be composed of both Class A Interests and Class B Interests as Subscriber shall determine.
**Second** **- ACCREDITED INVESTOR:** The Subscriber represents that it is an “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended (“**Securities Act**”).
**Third** **- SUBSCRIBER REPRESENTATIONS AND WARRANTIES:** The Subscriber further represents, warrants, acknowledges and agrees with the Partnership and the General Partner as follows:
(a)Subscriber is entering into this Agreement relying solely on the facts and terms set forth in this Agreement, the Limited Partnership Agreement and the GP Company Agreement (collectively, the “**Offering Documents**”) and Subscriber has received, read and understood each of the Offering Documents, including but not limited to those sections dealing with conflicts of interest, fees and Tax consequences of an investment in the Partnership and an interest in the General Partner. Subscriber has been given the opportunity to ask questions of, and receive answers from the General Partner, the Partnership, or one of their Affiliates, concerning the terms and conditions of the offering and other matters pertaining to an investment in the Partnership and the General Partner, as applicable. Neither the General Partner nor the Partnership has made any representations of any kind or nature to induce the Subscriber to enter into this Agreement except as specifically set forth in the Offering Documents and the other Related Transaction Documents;
(b)Subscriber has made an investigation of the pertinent facts relating to the operation of the Partnership and the General Partner and has reviewed the terms of the Limited Partnership Agreement and the GP Company Agreement to the extent that Subscriber deems necessary in order to be fully informed with respect thereto;
(c)Subscriber has such knowledge and experience in financial and business matters that Subscriber is capable of evaluating the merits and risks of an investment in the Partnership and the General Partner; and the Subscriber is able to bear the economic risk of a complete loss of its investment in the Partnership and the General Partner;
(d)(i)The Subscriber will be acquiring, as applicable, the limited partner interest in the Partnership and the Membership Interest in the General Partner, for investment, for its own
2
account and not for the interest of any other person and not for distribution or resale to others, and Subscriber will not, prior to Closing, permit any other person to acquire a beneficial interest in such limited partner interest in the Partnership or such Membership Interest in the General Partner without the consent of the General Partner (including, prior to Closing, the Withdrawing GP Members). Subscriber understands that the limited partner interests in the Partnership and the Membership Interests of the General Partner have not been registered under the Securities Act, and Subscriber agrees that its limited partner interest in the Partnership and Membership Interests in the General Partner may not be sold, transferred, or otherwise disposed of except pursuant to an exemption from registration under the Securities Act. Subscriber will not assign its limited partner interest in the Partnership or Membership Interests in the General Partner or any beneficial interests therein, in whole or in part, to any other person, nor will Subscriber be entitled to substitute for itself as a limited partner in the Partnership or member of the General Partner, any other person, except in compliance with the Limited Partnership Agreement, the GP Company Agreement or this Agreement;
(ii)Subscriber understands the effect of the limitations on disposition and of its representation that its limited partner interest in the Partnership and Membership Interests in the General Partner (if applicable) will not be sold, transferred or otherwise disposed of except pursuant to an exemption from registration under the Securities Act. Subscriber understands that transfers can be made only in compliance with the Limited Partnership Agreement or the GP Company Agreement, as applicable; and
(iii)The execution, delivery and performance of this Agreement and each other agreement, instrument or document to be executed by the Subscriber in connection with the transactions contemplated hereby, and the performance of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by all necessary action on the part of the Subscriber and (b) will not violate any Laws applicable to the Subscriber.
**Fourth** **- AUTHORITY:** If the Subscriber is a corporation, partnership, trust or other entity, the person executing this Agreement for the Subscriber has the full power and authority under the Subscriber’s governing instruments to do so and the Subscriber has the full power and authority under its governing instruments to become a limited partner of the Partnership and a member of the General Partner, as applicable.
**Fifth** **- ADMISSION**: The Subscriber understands that the date of the Subscriber’s admission as a Limited Partner and a Member, as applicable, subject to the terms and conditions of this Agreement, will be on the Closing Date (as defined below), and on the Closing Date the Subscriber will join in and agree to be bound by the Limited Partnership Agreement as a limited partner of the Partnership and, if applicable, by the GP Company Agreement as a member of the General Partner.
**Sixth** **- REAFFIRMATION OF SUBSCRIBER’S REPRESENTATIONS AND WARRANTIES:** The Subscriber hereby agrees that any representation made hereunder will be deemed to be reaffirmed by it on the Closing Date.
**Seventh** **- NOTICE REQUIREMENT:** The Subscriber hereby agrees that if any of the statements, representations, warranties or covenants made by Subscriber herein become untrue
3
or inaccurate, the undersigned shall immediately at such time notify the Partnership and the General Partner.
**Eighth** **- REPRESENTATIONS AND WARRANTIES OF GENERAL PARTNER AND PARTNERSHIP:** Any representation “to the knowledge of the General Partner” or words of similar import means matters within the actual knowledge, without inquiry, of Lawrence B. Dale, Cody Miller, Stephen Abney or Jack Newman. Simultaneously herewith, the General Partner is delivering to Subscriber the Disclosure Letter. Matters disclosed in any particular paragraph of the Disclosure Letter shall qualify the representation and warranty in the matching paragraph of this Section Eighth and any other representation and warranty to which the matters disclosed reasonably relate. The fact that any item of information is disclosed in the Disclosure Letter shall not constitute an admission by the General Partner or Partnership that such item is material, that such item has had or would have a Material Adverse Effect, or that the disclosure of such item be construed to mean that such information is required to be disclosed by this Agreement.
Subject to the foregoing provisions of this Section Eighth, and the other terms and conditions of this Agreement, the General Partner and the Partnership, hereby represent and warrant to Subscriber, as of the date hereof and as of the Closing, and subject to the approval of the First Amendment and the GP Agreement Amendment, the following:
(a)**Existence and Qualification**. The General Partner is a limited liability company organized, validly existing and with the right to transact business in the state of Texas under the Laws of the state of Texas and is duly qualified to do business as a foreign limited liability company in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. The Partnership is a limited partnership organized, validly existing and with the right to transact business in the state of Texas under the Laws of the state of Texas and is duly qualified to do business as a foreign limited partnership in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. Each Subsidiary is a limited liability company or limited partnership organized, validly existing in the jurisdiction of its formation and is duly qualified to do business as a foreign limited liability company or limited partnership in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. Complete and correct copies of the Charter Documents of the General Partner, the Partnership, and each Subsidiary (including all amendments, waivers, and modifications thereto), in each case as in effect as of the date of this Agreement, have been made available to the Subscriber.
(b)**Power**. Each of the General Partner and Partnership has the requisite power to enter into and perform this Agreement and each other agreement, instrument or document to be executed by the General Partner or Partnership, as applicable, in connection with the transactions contemplated hereby and to consummate the transactions contemplated hereby and thereby.
(c)**Authorization and Enforceability**. The execution, delivery and performance of this Agreement and each other agreement, instrument or document to be executed by the General Partner or Partnership in connection with the transactions contemplated hereby, and the performance of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary action on the part of the General Partner (including the Withdrawing
4
GP Members) and the Partnership. This Agreement has been duly executed and delivered by each of the General Partner (including the Withdrawing GP Members) and the Partnership (and all documents required hereunder to be executed and delivered by the General Partner or the Partnership at Closing will be duly executed and delivered by the General Partner and Partnership, as applicable) and this Agreement constitutes, and at the Closing such other documents will constitute, the valid and binding obligations of each of the General Partner and Partnership, as applicable, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law).
(d)**No Conflicts**. The execution, delivery and performance of this Agreement by each of the General Partner and the Partnership, and the transactions contemplated by this Agreement by them, will not (i) violate any provision of the Charter Documents of any of the General Partner, the Partnership, or any Subsidiary, (ii) result in a default (with due notice or lapse of time or both) or the creation of any Lien, or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any Contract, promissory note, bond, mortgage, indenture, loan or similar financing instrument to which the General Partner, the Partnership, or any Subsidiary is a party or which affects the Assets, (iii) violate any judgment, order, ruling, or decree applicable to the General Partner, the Partnership, or any Subsidiary or (iv) violate any Laws applicable to the General Partner, the Partnership, or any Subsidiary. Other than as set forth in Section Eighth, paragraph (d) of the Disclosure Letter, there is no consent, approval, waiver or authorization of any Person required (or notice required to be given) under Law or by the terms of any Governmental Authorization or Contract to which the General Partner, the Partnership, or any Subsidiary is a party or the Assets are bound, for the execution and delivery by the General Partner or Partnership of this Agreement and the consummation of the transactions contemplated hereby.
(e)**Subsidiaries**.
(i)Except as disclosed in Section Eighth, paragraph (e) of the Disclosure Letter, the Partnership does not own or hold any stock or any membership, limited liability company, partnership or other equity interest in any Person, and other than a general partner interest in the Partnership, the General Partner does not own or hold any stock or membership, limited liability company, partnership or other equity interest in any Person.
(ii)To the extent the Partnership has one or more Subsidiaries, each such Subsidiary is, directly or indirectly, wholly owned by the Partnership. No Person holds any option, warrant, right of first refusal, or other right to acquire any equity interests or other interests in any Subsidiary, and no such Subsidiary is party to or bound by any agreement to issue such option, warrant, right of first refusal or other right to acquire any equity or other interest in any such Subsidiary.
(iii)All equity interests in each Subsidiary (A) are duly authorized and validly issued, (B) are non-assessable except as provided in the Charter Documents of such Subsidiary, (C) were not issued in violation of any pre-emptive rights, right of first refusal or other rights of any Person, and (D) were offered and sold by such Subsidiary in compliance with all applicable securities Laws.
5
(f)**Ownership**. Each Partner in the Partnership and each Member in the General Partner is identified in Section Eighth, paragraph (f) of the Disclosure Letter and set opposite each such Partner or Member’s name therein are the Partnership Interests held by each Partner in the Partnership or the Membership Interests held by each Member in the General Partner, as the case may be, including each Partner and Member’s Capital Commitments, Capital Contributions, Remaining Commitments, Sharing Ratios and Sharing Percentages as of immediately prior to the Closing Date. Except for this Agreement, the Limited Partnership Agreement, the GP Company Agreement and the other Related Transaction Documents, there is not outstanding any option, warrant, right of first refusal, or other right to acquire any partnership interests or other interests in the Partnership or any Membership Interests or other interests in the General Partner and neither the General Partner nor the Partnership is party to or bound by any agreement to issue such option, warrant, right of first refusal or other right to acquire a partnership or other interest in the Partnership. Neither the Partnership Interests nor the Membership Interests are certificated. To the General Partner’s knowledge, each of the Partnership Interests and Membership Interests are held by the Partner or Member, as the case may be, to whom attributed in Section Eighth, paragraph (f) of the Disclosure Letter free and clear of all Liens. All of the Partnership Interests and Membership Interests identified in Section Eighth, paragraph (f) of the Disclosure Letter (i) are duly authorized and validly issued, (ii) are non-assessable (except for, in the case of the Partnership Interests, the obligation to make Capital Contributions equal to the Remaining Commitments under the Limited Partnership Agreement), (iii) were not issued in violation of any pre-emptive rights, right of first refusal or other rights of any Person, and (iv) were offered and sold by the Partnership and/or the General Partner in compliance with all applicable securities Laws. Upon effectiveness of the Redemption and GP Redemption, the Subscriber, each of the other Alliance Parties, Alliance Minerals, LLC, a Delaware limited liability company, and KC-AllDale, LLC, a Delaware limited liability company, shall be the only limited partners in the Partnership and the only members in the General Partner. The partnership interests and Membership Interests issued to Subscriber hereunder will (i) be duly authorized and validly issued, (ii) be non-assessable, except for the Subscriber’s Commitment and GP Commitment, as applicable, and (iii) not be issued in violation of any preemptive rights, right of first refusal or other rights of any Person (except for rights set forth in the Limited Partnership Agreement or the GP Company Agreement, which will be waived upon effectiveness of the First Amendment and the GP Agreement Amendment). Except as disclosed in Section Eighth, paragraph (f) of the Disclosure Letter, the General Partner is the only general partner of the Partnership and has not, assigned, granted a Lien (except for transfer restrictions on the General Partner’s Partnership Interests imposed by the Partnership Agreement) in or otherwise transferred to any Person, or agreed to assign, grant a Lien (except for transfer restrictions on the General Partner’s Partnership Interests imposed by the Partnership Agreement) in or otherwise transfer to any Person, any of the General Partner’s right, title and interest in, to and under the Partnership or the Limited Partnership Agreement.
(g)**Liability for Partnership Transaction Expenses**. Except as provided in Section Eleventh, paragraph (h), neither Subscriber nor any of its Affiliates (including, after Closing, the Partnership or the General Partner) will, directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of the General Partner, Partnership, the Existing Management Company or any of their Affiliates, for any Partnership Transaction Expenses. For the avoidance of doubt, Subscriber shall pay its own expenses in accordance with Section Fourteenth, paragraph (j).
6
(h)**Litigation**. Except as disclosed in Section Eighth, paragraph (h) of the Disclosure Letter, there are no pending Proceedings against the General Partner, the Partnership, or any Subsidiary (or the Existing Management Company with respect to the Partnership or any Subsidiary) before any Governmental Body or arbitrator to which the General Partner, Partnership, any Subsidiary or any Assets are subject, and to the General Partner’s knowledge, no such Proceeding is threatened.
(i)**Taxes and Assessments**.
(i)The General Partner, the Partnership, and all Subsidiaries have timely filed all federal and state income Tax Returns and all other material Tax Returns that are required to be filed by each (taking into account applicable extensions to file), and such Tax Returns are complete and accurate in all material respects and have not subsequently been amended. The General Partner, the Partnership, and all Subsidiaries have paid all Taxes shown thereon as due and owing by each. All material Taxes which the General Partner, the Partnership, or any Subsidiary, as applicable, are obligated to withhold by Law, including from amounts owing to or allocable to any owner (including the Partners and the Members), employee, creditor or third party, have been duly withheld or collected and, to the extent required have been paid over to the proper Governmental Body.
(ii)There is no material dispute or claim concerning any Tax Liability of the General Partner, the Partnership, or any Subsidiary claimed or raised by any Governmental Body of which the General Partner, the Partnership, any Subsidiary, or the Existing Management Company has received written notice or the General Partner has knowledge. None of the General Partner, the Partnership, or any Subsidiary has waived any statute of limitations in respect of Taxes beyond the date hereof or agreed to any extension of time beyond the date hereof with respect to a material Tax assessment or deficiency.
(iii)To the General Partner’s knowledge, none of the Partners or Members is a foreign person within the meaning of Treasury Regulations Section 1.1445-2(b)(2) and Section 1445(f)(3) of the Code.
(iv)None of the General Partner, the Partnership, or any Subsidiary is a party to, bound by or obligated under, any Tax allocation, indemnity, sharing or similar Contract or arrangement (other than the Limited Partnership Agreement, the GP Company Agreement and any agreement entered into in the ordinary course of business the primary purpose of which is not Taxes, including any agreement with respect to property Taxes payable with respect to properties leased from third parties). Each Subsidiary is a disregarded entity for U.S. federal income Tax purposes.
(v)Except as set forth in Section Eighth, paragraph (i)(v) of the Disclosure Letter, there are no Tax Liens upon any Assets (other than Liens for Taxes not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings by the General Partner, the Partnership, or the applicable Subsidiary and for which appropriate reserves have been reflected in the Financial Statements (as defined below)).
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(vi)None of the General Partner, the Partnership, or any Subsidiary has participated in a “listed transaction” or “reportable transaction” as defined in Section 6707A of the Code or Treasury Regulations Section 1.6011-4 (or any predecessor provision thereto) or any corresponding or similar provision of state or local Laws.
(vii)True and complete copies of the Tax Returns of the General Partner, the Partnership, and all Subsidiaries have been provided to Subscriber.
(viii)Except as set forth in Section Eighth, paragraph (i)(viii) of the Disclosure Letter, there are no past due ad valorem Taxes respecting any of the Assets, except those being contested in good faith in the ordinary course of business for which adequate reserves have been established in the Financial Statements (as defined below).
(j)**Compliance with Laws; Governmental Authorizations**. Except as disclosed in Section Eighth, paragraph (j) of the Disclosure Letter, since December 31, 2023, the General Partner, the Partnership, the Subsidiaries and their respective Assets and operations have been, and currently are, in material compliance with the provisions and requirements of all Laws of all Governmental Bodies having jurisdiction with respect to the General Partner, the Partnership, the Subsidiaries, and their respective Assets. The General Partner, the Partnership, and each Subsidiary have obtained and are maintaining all federal, state and local governmental licenses, permits, franchises, orders, exemptions, variances, waivers, authorizations, certificates, consents, rights, privileges and applications therefor (the “**Governmental Authorizations**”) that are presently necessary or required for the ownership and operation of the Assets as currently operated, and no violations exist in respect of any material Governmental Authorizations except where the failure to obtain or maintain or the violation of which would not cause a Material Adverse Effect.
(k)**Contracts**.
(i)Section Eighth, paragraph (k) of the Disclosure Letter sets forth, a true, complete and correct list as of the date of this Agreement (including amendments) of all Contracts to which the General Partner, the Partnership, any Subsidiary, or their respective Assets are bound, or respecting which the General Partner or the Existing Management Company is a party in connection with the Partnership or any Subsidiary, other than (A) leases, easements, rights-of-way and other similar agreements affecting only mineral or other interests in real property, (B) letters of intent relating to transactions that have been fully consummated, and (C) purchase and sale agreements and similar agreements relating to the acquisition or disposition of Assets where (1) such transaction has been fully consummated and all conditions to closing thereunder have been satisfied or waived and (2) such agreement does not contain indemnification or other obligations that remain in effect as of the date hereof. Each Contract required to be listed at Section Eighth, paragraph (k) of the Disclosure Letter is a “Material Contract”.
(ii)Each Material Contract is in full force and effect to the extent provided therein and the General Partner has provided to the Subscriber a true and complete copy of each Material Contract and any and all amendments thereto. The Partnership, General Partner, each Subsidiary and the Existing Management Company are not, and to the General Partner’s knowledge, no other party is, in default in any material respect under any Material Contract.
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(l)**Bankruptcy**. There are no bankruptcy, reorganization or receivership Proceedings pending, being contemplated by or, to the General Partner’s knowledge, threatened against the General Partner, the Partnership or any Subsidiary. The General Partner, the Partnership, and each Subsidiary is solvent.
(m)**Wells and Equipment Status; Working Interests**. Neither the Partnership nor any Subsidiary owns any wells, pipelines or other tangible assets, or any working interests, other than as set forth in Section Eighth, paragraph (m) of the Disclosure Letter.
(n)**Financial Statements**. True, correct and complete copies of the balance sheets, statements of operations, statements of changes in partners’ capital, statements of cash flows and related notes to financial statements of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of and for the fiscal years ended on December 31, 2025, December 31, 2024 and December 31, 2023, as audited by the Company’s accountants (the “**Audited Financial Statements**”), are contained in Section Eighth, paragraph (n) of the Disclosure Letter. True, correct and complete copies of the unaudited balance sheet, statement of operations, statement of changes in partners’ capital and statement of cash flows of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of and for the period ended on March 31, 2026 (such financial statements, the “**Interim Financial Statements**” and such date, the “**Interim Financial Statement Date**”) are also contained in Section Eighth, paragraph (n) of the Disclosure Letter. The Audited Financial Statements and the Interim Financial Statements, present fairly, in all material respects, the consolidated financial position of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of the dates thereof and the consolidated results of operations and cash flows of the Partnership and its Subsidiaries (taken as a whole) and the General Partner for the periods covered by said statements, in accordance with GAAP consistently applied through the periods covered thereby, except for in the case of the Interim Financial Statements (i) year-end adjustments and (ii) the omission of footnote disclosures and other presentation items required by GAAP. The Audited Financial Statements and the Interim Financial Statements are referred to collectively as the “Financial Statements.”
(o)**Indebtedness; Assets; Undisclosed Liabilities**.
(i)None of the General Partner, the Partnership, or any Subsidiary has any Indebtedness. Except as otherwise set forth in Section Eighth, paragraph (o) of the Disclosure Letter, none of the General Partner, the Partnership, or any Subsidiary has granted or suffered to exist any Liens on any of the Assets other than the Permitted Encumbrances. The immediately preceding sentence shall not apply to any Liens on Assets of the Partnership or any Subsidiary that were in existence prior to such Assets being acquired by the Partnership or such Subsidiary where such Liens were not granted by the Partnership or such Subsidiary.
(ii)Except as otherwise set forth in Section Eighth, paragraph (o) of the Disclosure Letter and as reflected on the Interim Financial Statements, neither the Partnership nor the General Partner has any Liabilities required to be reflected on or referenced in financial statements in accordance with GAAP, except (A) Liabilities other than Indebtedness which have arisen after the Interim Financial Statement Date in the ordinary course of business under any Contracts to which the General Partner, the Partnership or any Subsidiary is a party or their respective Assets are bound or (B) trade payables.
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(iii)Except for the Interests, the Partnership owns and has good and valid title to all the Assets reflected as owned in the Interim Financial Statements and all the Assets (other than Interests) acquired by the Partnership since the Interim Financial Statement Date, except for such Assets as have been disposed of in the ordinary course of business.
(iv)With respect to the Interests, the Partnership warrants that the Partnership or a Subsidiary, as applicable, holds title to the Interests, free and clear of any Title Defects created by, through or under the Partnership or any Affiliate of the Partnership (including the Subsidiaries), but not otherwise; provided, however, that in no event shall the Subscriber Indemnitees be entitled to recover any Losses under this Agreement for a breach of this Section Eighth, paragraph (o)(iv) (A) with respect to any Interest in excess of the Allocated Value of such Interest, or (B) to the extent such Losses have already been recovered from the Initial Purchase Price Escrow Amount (as defined in Appendix A to the First Amendment).
(v)The General Partner is a special purpose entity and the only assets of the General Partner are general partnership interests in the Partnership and any rights or privileges incidental thereto. The General Partner has never owned, leased, or otherwise held any other properties or assets.
(p)**Employees**. None of the General Partner, the Partnership, or any Subsidiary has any employees, or has ever had any employees.
(q)**Bank Accounts.** Section Eighth, paragraph (q) of the Disclosure Letter contains a true and complete list of the name and location of each bank, trust company, savings and loan association or other financial institution at which the General Partner, the Partnership, any Subsidiary or the Existing Management Company for the Partnership or any Subsidiary, has an account, safety deposit box or custody agreement, along with the account names and numbers, or other identifying information for safety deposit boxes or custody agreements, and the names of the Persons authorized to draw thereon or to withdraw therefrom.
(r)**Affiliated Transactions**. Except as set forth in Section Eighth, paragraph (r) of the Disclosure Letter, other than as a Partner of the Partnership, none of the General Partner, the Existing Management Company, or any of their Affiliates (or any investment vehicle which they manage) or any of their respective officers, directors, managers, members or controlling or other equity holders (including any of the Partners), or any of the respective Affiliates of any of the foregoing Persons, or, to the General Partner’s knowledge, any of such officer’s, director’s, manager’s, member’s or equity holder’s immediate family members, is a party to, or has any interest in any material asset or property held or used by the Partnership or any Subsidiary.
(s)**No Other Representations or Warranties**. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS AGREEMENT, THE FIRST AMENDMENT AND APPENDIX A THERETO, THE GP AGREEMENT AMENDMENT, AND ANY AND ALL OTHER AGREEMENTS, THE DISCLOSURE LETTER, AND CERTIFICATES, THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER TO THE SUBSCRIBER AND HEREBY DISCLAIM ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT, OR INFORMATION MADE,
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COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO SUBSCRIBER OR ITS REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN (OR MAY BE IN CONNECTION WITH THIS AGREEMENT) PROVIDED TO SUBSCRIBER BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR REPRESENTATIVE OF THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY OR ANY AFFILIATE THEREOF). THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY MAKE NO REPRESENTATIONS OR WARRANTIES TO SUBSCRIBER REGARDING THE PROBABLE SUCCESS OR PROFITABILITY OF THE PARTNERSHIP OR THE GENERAL PARTNER. EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, NO REPRESENTATION OR WARRANTY IS MADE BY THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY TO THE SUBSCRIBER AS TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OF ANY ASSETS OF THE PARTNERSHIP, AND THE PARTNERSHIP AND GENERAL PARTNER ARE NOT MAKING ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO ANY PROJECTIONS OR FORECASTS HERETOFORE DELIVERED OR MADE AVAILABLE TO SUBSCRIBER RELATING TO THE PARTNERSHIP.
**Ninth** **- CONDITIONS OF SUBSCRIBER TO CLOSE:** The obligations of the Subscriber under this Agreement, including the obligation to make any Capital Contribution and join in the Limited Partnership Agreement and (if applicable) the GP Company Agreement, shall be subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which the Subscriber may waive in writing in whole or any part):
(a)**Compliance by the General Partner and the Partnership**. Each of the General Partner and Partnership shall have complied with and performed in all material respects all of their respective agreements and covenants required to be complied with or performed by each of them under this Agreement and the other Related Transaction Documents on or prior to the Closing Date.
(b)**Representations and Warranties**. The representations and warranties of the General Partner and Partnership contained in Section Eighth of this Agreement shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (except for representations and warranties made as of a specified date, which need be so true and correct only as of the specified date).
(c)**Closing Certificate**. The Subscriber shall have received one or more certificates executed by an officer (or person performing a similar function) of the General Partner dated as of the Closing Date, certifying (i) that the conditions specified in paragraphs (a) and (b) above have been fulfilled, (ii) true and complete copies of the Charter Documents of the General Partner and the Partnership, in the form previously provided to the Subscriber as the General Partner’s and Partnership’s Charter Documents (including the Limited Partnership Agreement as amended by the First Amendment and the GP Company Agreement as amended by the GP Agreement Amendment) and (iii) resolutions of the board of the General Partner and other appropriate Persons authorizing the General Partner and the Partnership entering this Agreement, the documents to be delivered in connection herewith and the transactions contemplated hereby.
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(d)**No Prohibition**. No temporary restraining order, preliminary or permanent injunction or other order or decree by any domestic or foreign court of competent jurisdiction or other Governmental Body that prevents the consummation of the transactions contemplated hereby or imposes material conditions with respect thereto shall have been issued and remain in effect and no action shall have been taken, and no statute, rule or regulation shall have been enacted, by any Governmental Body that would prevent the consummation of the transactions contemplated hereby or impose material conditions with respect thereto.
(e)**First Amendment**. The First Amendment shall have been executed and delivered by each of the Partners, to be effective as of the Closing Date, subject to Closing.
(f)**GP Agreement Amendment**. The GP Agreement Amendment shall have been executed and delivered by each of the Members to be effective as of the Closing Date, subject to Closing.
(g)**Termination and Replacement Management Agreement**. (i) Existing Management Company, the Partnership and the other parties thereto shall have terminated in writing the Mineral Interest Acquisition Agreement dated as of January 18, 2017 among Existing Management Company, the Partnership, the General Partner and the other parties thereto, as amended (the “**Existing Management Agreement**”), (ii) Replacement Management Company, the Partnership and the other parties thereto shall have executed the Second Amendment to Mineral Interest Management Agreement, in the form attached as Exhibit “B” to the Disclosure Letter (the “**Management Agreement Amendment**”), which amends the Mineral Interest Management Agreement dated effective April 1, 2020 among Replacement Management Company, certain Affiliates of Subscriber and certain other parties, as amended by the First Amendment to Mineral Interest Management Agreement dated as of March 8, 2022 (as so amended, the “**Replacement Management Agreement**”), such Management Agreement Amendment to be effective as of the Closing Date, subject to Closing.
(h)**Material Consents**. The Partnership, General Partner or Subscriber, as applicable, shall have received a duly executed copy of each consent or approval of any Person required for consummation of the transactions hereunder where the failure to obtain such consent or approval would reasonably be expected to result in a Material Adverse Effect, in each case, in form and substance reasonably satisfactory to the Subscriber, each of which shall be in full force and effect as of the Closing Date.
(i)**Other Closings**. Each Closing under, and as defined in, each Other AllDale III Subscription Agreement and the AllDale IV Subscription Agreement shall simultaneously occur with the Closing hereunder.
**Tenth** **- CONDITIONS OF PARTNERSHIP AND GENERAL PARTNER:** The obligations of the Partnership and the General Partner under this Agreement to accept the Capital Contribution and admit the Subscriber as a Partner or Member, as the case may be, shall be subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which the General Partner (including the Withdrawing GP Members), including on behalf of the Partnership, may waive in writing in whole or any part):
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(a)**Compliance by the Subscriber**. Subscriber shall have complied with and performed in all material respects all of its agreements and covenants required to be complied with or performed by it under this Agreement and the other Related Transaction Documents on or prior to the Closing Date.
(b)**Representations and Warranties**. The representations and warranties of the Subscriber contained in this Agreement shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (except for representations and warranties made as of a specified date, which need be so true and correct only as of the specified date).
(c)**Closing Certificate**. The General Partner shall have received a certificate executed by an officer (or person performing a similar function) of the Subscriber dated as of the Closing Date, certifying that the conditions specified in paragraphs (a) and (b) above have been fulfilled.
(d)**No Prohibition**. No temporary restraining order, preliminary or permanent injunction or other order or decree by any domestic or foreign court of competent jurisdiction or other Governmental Body that prevents the consummation of the transactions contemplated hereby or imposes material conditions with respect thereto shall have been issued and remain in effect and no action shall have been taken, and no statute, rule or regulation shall have been enacted, by any Governmental Body that would prevent the consummation of the transactions contemplated hereby or impose material conditions with respect thereto.
(e)**First Amendment**. The First Amendment shall have been executed and delivered by each of the Partners other than the General Partner and any Partner controlled by the General Partner or any Affiliate of the General Partner to be effective as of the Closing Date, subject to Closing.
(f)**GP Agreement Amendment****.** The GP Agreement Amendment shall have been executed and delivered by each of the Members to be effective as of the Closing Date, subject to Closing.
(g)**Other Closings**. Each Closing under, and as defined in, each Other AllDale III Subscription Agreement and the AllDale IV Subscription Agreement shall simultaneously occur with the Closing hereunder.
**Eleventh** **- ADDITIONAL COVENANTS AND AGREEMENTS:**
(a)**Closing**. Subject to the terms and conditions hereof, the closing of the transactions contemplated by this Agreement (the “**Closing**”) shall take place remotely on July 1, 2026. The date of the Closing is herein referred to as the “**Closing Date**.” At the Closing:
(i)Subscriber shall make the Capital Contributions to each of the Partnership and the General Partner required hereby by wire transfer of immediately available funds to the accounts for each of the Partnership and the General Partner designated by the General Partner in writing;
(ii)The Subscriber shall execute and deliver the joinder agreements to the Partnership Agreement and (if Subscriber has a GP Commitment that is not $0) the GP Company
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Agreement in the forms attached to the Disclosure Letter as Exhibit “C-1” and Exhibit “C-2”, respectively;
(iii)The First Amendment and the GP Agreement Amendment will become effective, and in accordance therewith and as contemplated thereby, (A) the Subscriber, or its successor or assign, shall, immediately prior to the Redemption and the GP Redemption, be admitted as a limited partner to the Partnership and as a Member to the General Partner, (B) the Redemption and the GP Redemption shall occur, (C) the Redeeming Partners shall automatically withdraw from the Partnership and cease to be Partners and (D) the Withdrawing GP Members shall automatically withdraw from the General Partner and cease to be Members;
(iv)The Existing Management Agreement will be terminated, the Management Agreement Amendment will become effective, and the Replacement Management Agreement will become the “Management Agreement” under, and as defined in, the Limited Partnership Agreement; and
(v)The General Partner shall deliver to the Partnership and Subscriber releases in the form attached to the Disclosure Letter as Exhibit “D” from the General Partner, each Withdrawing GP Member, the Dale Entities and the General Partner’s other Affiliates as requested by Subscriber, Lawrence B. Dale, Cody Miller, Stephen Abney and Jack Newman.
The foregoing transactions shall be deemed to occur and given effect as of 12:01 a.m. Central Prevailing Time on the Closing Date.
Notwithstanding anything to the contrary herein, the intended U.S. federal and applicable state and local income Tax treatment of the foregoing transactions is as described in Section 1(c) of the First Amendment and Section 1(c) of the GP Agreement Amendment.
(b)**Conduct of Business**. The General Partner and the Partnership shall, and shall cause the Existing Management Company to, from and after the date hereof and until Closing (i) conduct the Partnership’s and the General Partner’s business and affairs, and cause the business and affairs of each Subsidiary to be conducted, in the ordinary course of business and consistent with past practice and in compliance with the Charter Documents of the General Partner, the Partnership and the Subsidiaries, (ii) use commercially reasonable efforts to preserve intact the current business organization of the Partnership, the Subsidiaries, and General Partner and maintain their respective relations and goodwill with lessors, lessees, suppliers, agents and other Persons having business relationships with the Partnership, the Subsidiaries, or the General Partner, (iii) comply in all material respects with applicable Laws, the Contracts of the Partnership, the Subsidiaries and the General Partner and the Charter Documents of the General Partner, the Partnership and the Subsidiaries, and (iv) keep in full force and effect, without amendment, all material rights relating to the Assets and the business of the Partnership and the General Partner. Except as otherwise expressly permitted by this Agreement, without the prior written consent of the Subscriber, neither the General Partner nor Partnership will (and the General Partner will not permit the Partnership to, and neither will permit any Subsidiary to):
(i)make any distributions to the Partners, other than any distributions expressly permitted under the First Amendment or the GP Agreement Amendment or any pro rata
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distributions of cash in the ordinary course of business pursuant to the Limited Partnership Agreement, or make any discretionary payments to the Existing Management Company or any other Person;
(ii)amend (A) any Charter Documents, other than amendment of the Limited Partnership Agreement pursuant to the First Amendment, amendment of the GP Company Agreement pursuant to the GP Agreement Amendment, or (B) the Existing Management Agreement;
(iii)amend or enter into any Material Contract other than immaterial amendments to Material Contracts in the ordinary course of business;
(iv)make any capital expenditure or investment in excess of $50,000, individually, or $250,000, in the aggregate;
(v)sell, lease or otherwise dispose of any Interests or other Assets, other than leases entered in the ordinary course of business consistent with past practice and on terms customary for the geographic area in which such Interests are located;
(vi)change accounting methods in use by the Partnership, the General Partner, and the Subsidiaries, or make any Tax elections;
(vii)incur any Indebtedness (which excludes trade payables incurred in the ordinary course of business) or grant or suffer to exist a Lien on any of the Assets other than (A) Permitted Encumbrances and (B) Liens on Assets of the Partnership or any Subsidiary which were in existence prior to the subject Assets being acquired by the Partnership or any Subsidiary;
(viii)issue or redeem any Partnership Interests in the Partnership or Membership Interests in the General Partner or any equity interests in any Subsidiary; or
(ix)commit to or enter any Contract to do any of the foregoing.
From the date hereof to the Closing, General Partner and the Partnership will use commercially reasonable efforts (and cause the Subsidiaries to use commercially reasonable efforts) to comply with and fulfill its duties and obligations under all leases and other Contracts to which the Partnership, any Subsidiary or the General Partner is a party or by which any of their respective Assets are bound.
(c)**Future Litigation; Breaches of Representations And Warranties; Notification**. From the date hereof until the Closing Date, the General Partner shall advise the Subscriber in writing promptly upon becoming aware of the commencement or threat against the Partnership, any Subsidiary or General Partner, or the Existing Management Company respecting the Partnership, of any Proceeding or Tax audit unless such disclosure is prohibited by law. Promptly upon becoming aware of any breach of any representation, warranty or covenant of the General Partner or Partnership contained herein, the General Partner shall notify Subscriber in writing of such breach and the circumstances giving rise thereto. Any disclosure of a breach shall not relieve the breaching party of any Liability for such breach.
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(d)**Exclusive Dealing**. During the period from the date of this Agreement through the Closing or the earlier termination of this Agreement pursuant to Section Twelfth, the General Partner shall not, and shall cause the Partnership and the General Partner’s Affiliates (including all Subsidiaries) and representatives not to, directly or indirectly, entertain, solicit, respond to, discuss or enter into negotiations with respect to any other offers from or potential transactions with prospective buyers of all or any portion of the Partnership Interests, Membership Interests in the General Partner, any equity interests in any Subsidiaries, or the Assets (either by merger, consolidation, transfer or otherwise), and shall suspend any discussions with or dissemination of information to any such prospective buyers. If the General Partner, the Partnership or the General Partner’s Affiliates or representatives receive any offers from any new or existing offerees, they will (i) remain silent or advise the offeror that they are not in a position to negotiate or accept any offers at that time and (ii) promptly notify the Subscriber in writing of such offers.
(e)**Diligence****.** Up to the Closing Date and subject to any applicable Law, any applicable privileges (including the attorney-client privilege), trade secrets, and contractual confidentiality obligations, Subscriber shall be entitled, through its employees, advisors, consultants, representatives, contractors, counsel and independent accountants, to make such investigation of the Assets, business and operations of the Partnership, the Subsidiaries, and the General Partner and their business and such examination of the books, records and financial condition of the Partnership, the Subsidiaries, and the General Partner and their business as Subscriber reasonably requests, provided that any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances and in a manner so as not to interfere with the normal business operations of the business; provided, however, such entitlement shall not extend to the physical inspection of the properties underlying the Interests. The General Partner shall direct the management of the Partnership, the Subsidiaries, General Partner and Existing Management Company to make available to such Persons during such period all such information and copies of all such documents concerning the affairs of the Partnership, the Subsidiaries, and the General Partner and business as such Persons may reasonably request, shall permit such Persons access to the properties of the Partnership and the Subsidiaries and all parts thereof, and shall cause the Partnership’s, the Subsidiaries’, General Partner’s and the Existing Management Company’s employees, advisors, consultants, representatives, contractors, counsel and independent accountants to cooperate fully with such Persons in connection with their review and examination.
(f)**Conditions; Disclosure**. Each of the parties shall use commercially reasonable efforts to cause the conditions set forth in Sections Ninth and Tenth to be satisfied, and to consummate the transactions contemplated herein as of the Closing Date. The General Partner will provide to each Limited Partner a written summary, which shall be reasonably satisfactory to the Alliance Parties, of the material terms and conditions of the Related Transaction Documents and the transactions contemplated thereby, and all other material information required by applicable securities Laws in connection with requesting the Limited Partners’ approval of the First Amendment and the transactions contemplated hereby, and recommend, subject to any fiduciary duties, to each Limited Partner such Limited Partner approve, execute and deliver the First Amendment.
(g)**Further Assurances**. The General Partner agrees, and agrees to cause the Existing Management Company and Replacement Management Company to, after Closing, take such
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further actions and to execute, acknowledge and deliver such further documents, as are reasonably requested by the Subscriber for giving effect to the transactions contemplated by this Agreement and the other Related Transaction Documents.
(h)**Partnership Transaction Expenses**. If Closing occurs, the Partnership shall pay and discharge when due all Partnership Transaction Expenses, and the entire amount of the Partnership Transaction Expenses shall reduce the amounts payable to the Redeeming Partners and the Withdrawing GP Members in accordance with the terms of the First Amendment and the GP Agreement Amendment, as applicable. If Closing does not occur, the General Partner shall pay and discharge any amounts that may be due as described under this Section Eleventh, paragraph (h).
(i)**Disclosure**. Except as and to the extent required by Law, without the prior written consent of Subscriber, the General Partner (including the Withdrawing GP Members) shall not, and shall direct the Partnership, the Existing Management Company and their respective representatives not to, directly or indirectly, make any public comment or public statement with respect to, or otherwise disclose or permit the disclosure of the Related Transaction Documents or the transactions contemplated hereby, including any of the terms, conditions or other aspects of the Related Transaction Documents; provided, however, this provision does not prohibit the Existing Management Company from reporting the performance or investment returns of the Partnership or the general nature of the transaction (without naming Subscriber, any Alliance Party, any other Subscribers or any of their respective Affiliates) following Closing. Subscriber will provide any press release or public disclosure to the General Partner for the General Partner’s review in advance of releasing such press release or public disclosure. The General Partner shall request that the Limited Partners and Members (including the Withdrawing GP Members) comply with the foregoing disclosure restrictions, but the General Partner and Partnership shall not have any liability for violations of such disclosure requirements by any Limited Partner or Member not controlled by General Partner or its Affiliates.
(j)**754 Election****.** The General Partner shall make (on behalf of the General Partner), and shall cause the Partnership to make (on behalf of the Partnership), a Section 754 election under the Code for the taxable year in which the Closing Date occurs, if such an election is not already in effect for the General Partner or the Partnership, respectively.
(k)**Review of LP/Member Communications**.
(i)From the date hereof until the Closing Date, the General Partner shall, and shall cause the Partnership to, provide Subscriber with a reasonable opportunity to review and comment on any written materials, notices, solicitations, consent requests, summaries or other disclosures (including any summary of the Related Transaction Documents prepared pursuant to Section Eleventh, paragraph (f)) proposed to be delivered, distributed or otherwise made available by or on behalf of the General Partner, the Partnership or the Existing Management Company to any Limited Partner or Member (including any Withdrawing GP Member) in connection with this Agreement, the other Related Transaction Documents or the transactions contemplated hereby or thereby (collectively, “**LP/Member Communications**”). The General Partner shall deliver each proposed LP/Member Communication to Subscriber reasonably in advance of the proposed delivery, distribution or release thereof, shall consider in good faith any comments timely provided
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by Subscriber, and shall not deliver, distribute or release any LP/Member Communication that is not in form and substance reasonably acceptable to Subscriber.
(ii)The foregoing shall not apply to (A) communications consisting solely of routine administrative or ministerial matters not related to this Agreement, the other Related Transaction Documents or the transactions contemplated hereby or thereby, or (B) responses to unsolicited inquiries from individual Limited Partners or Members, provided that such responses are consistent in all material respects with LP/Member Communications previously reviewed by Subscriber.
**Twelfth** **- TERMINATION:** This Agreement may be terminated at any time prior to the Closing by written notice given prior to or at the Closing:
(a)(i) by Subscriber if there is a material violation or breach by the General Partner or Partnership of any covenant or obligation contained in this Agreement and such violation or breach has not been waived by Subscriber or cured by the General Partner or Partnership within fifteen (15) days following Subscriber’s written notice of same to the General Partner; or (ii) by the General Partner if there is a material violation or breach by Subscriber of any covenant or obligation contained in this Agreement and such violation or breach has not been waived by the General Partner or cured by Subscriber within fifteen (15) days following written notice by the General Partner of the same to Subscriber;
(b)(i) by Subscriber if there is a material violation or breach by the General Partner or Partnership of any of their representations or warranties contained in this Agreement such that the condition set forth in paragraph (b) of Section Ninth would not be satisfied, and such violation or breach has not been waived by Subscriber or cured by the General Partner within fifteen (15) days following Subscriber’s written notice of same to the General Partner; or (ii) by the General Partner if there is a material violation or breach by Subscriber of its representations or warranties contained in this Agreement such that the condition set forth in paragraph (b) of Section Tenth would not be satisfied, and such violation or breach has not been waived by the General Partner or cured by the Subscriber within fifteen (15) days following General Partner’s written notice of same to the Subscriber;
(c)by Subscriber or the General Partner if the transactions contemplated by this Agreement have not been consummated by September 30, 2026 (unless such deadline is extended by mutual written agreement of the Subscriber and the General Partner); **provided** that neither party shall be entitled to terminate this Agreement pursuant to this paragraph (c) if such party’s failure to perform its obligations under this Agreement (and in the case of the General Partner, either the General Partner or the Partnership has failed to perform its obligations) has prevented the consummation of the transactions contemplated by this Agreement;
(d)by mutual written consent of Subscriber and the General Partner; or
(e)by Diligence Representative, on behalf of Subscriber, or by the Existing Management Company, on behalf of the Partnership and the General Partner, as permitted by Appendix A to the First Amendment.
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Each party’s right of termination under this Section Twelfth is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. In the event of termination of this Agreement as provided in Section Twelfth, the provisions of this Agreement shall immediately become of no further force and effect (other than this Section Twelfth and Section Fourteenth, each of which shall survive the termination of this Agreement) without any party being liable to any other party; provided, however, that in the event that this Agreement is terminated pursuant to paragraph (a) or (b) of Section Twelfth, the parties shall be entitled to all damages available at law and in equity for breaches of this Agreement by the other parties.
**Thirteenth** **- INDEMNIFICATION:**
(a)**Survival**. The representations and warranties contained in this Agreement shall survive the Closing and consummation of the transactions contemplated by this Agreement and shall terminate on the Final Redemption Payment Date; provided, that the representations and warranties of the General Partner set forth in Section Eighth, paragraphs (a), (b), (c), (e), (f), (g), (i), and (o) (the “**Fundamental Representations**”), shall survive the Closing and consummation of the transactions contemplated by this Agreement and shall terminate on the first anniversary of the Final Redemption Payment Date, with the exception of Section Eighth, paragraph (o)(iv), which shall terminate on the Final Redemption Payment Date. The covenants and agreements contained in this Agreement shall survive the Closing and consummation of the transactions contemplated hereby and shall terminate on the first anniversary of the Final Redemption Payment Date. For the avoidance of doubt and subject to the below provisos, after Closing neither party shall be entitled to initiate any action, claim or litigation relating to any representation (including Fundamental Representations), warranty, covenant or agreement after its termination in accordance with this paragraph (a) and waives all rights in respect thereof (such actions, claims or litigations forever being barred) it being understood that this limitation constitutes the expression of the parties’ desire to reduce the statute of limitations with respect to any such action, claim or litigation; provided, however, if an Indemnified Party (as defined below) provides written notice to the Indemnifying Party (as defined below) of a claim for indemnification respecting the breach of a representation, warranty, covenant or agreement prior to the termination of such representation, warranty, covenant or agreement, such representation, warranty, covenant or agreement shall survive solely with respect to such claim (and any and all actions and litigation arising out of such claim brought within two years of such notice of such claim), shall not terminate and shall survive until such claim for indemnification (and related actions and litigation brought within two years of such notice of such claim) are finally resolved; provided, further, that such indemnification will continue to be limited as set forth in paragraph (d) of this Section Thirteenth, which also survives. Furthermore, the parties stipulate that they agree that this is an agreement relating to the sale or purchase of a business entity for purposes of Texas Civil Practice & Remedies Code §16.070(b), if, however, it is determined not to be an agreement relating to the sale or purchase of a business entity for purposes of Texas Civil Practice & Remedies Code §16.070(b), then the relevant termination dates will be two years from the Closing Date.
(b)**Indemnity by General Partner****.** Subject to the limitations set forth below, from and after the Closing (but subject to the terms and conditions of this Section Thirteenth), the General Partner shall indemnify and hold harmless the Subscriber and each of its Affiliates (which after the Closing shall be deemed to include the Partnership) and each of their respective officers,
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directors, managers, equity holders, partners, employees, agents and representatives (collectively, the “**Subscriber Indemnitees**”) from, and shall pay to and reimburse the Subscriber Indemnitees for the amount of, any and all Losses that Subscriber Indemnitees or any of them may suffer, sustain, or become subject to, as a result of, in connection with, or relating to:
(i)any breach of or inaccuracy in any representation or warranty of the General Partner or Partnership contained in this Agreement;
(ii)any breach of any covenant or agreement of the General Partner or, at or prior to the Closing, the Partnership contained in this Agreement; or
(iii)any Partnership Transaction Expenses, to the extent not paid at Closing pursuant to Section Eleventh, paragraph (h).
(c)**Indemnity by Subscriber**. Subject to the limitations set forth below, from and after the Closing (but subject to the terms and conditions of this Section Thirteenth), the Subscriber shall indemnify and hold harmless the General Partner (including the Withdrawing GP Members) and each of its Affiliates and each of their respective officers, directors, managers, equity holders, partners, employees, agents and representatives (collectively, the “**General Partner Indemnitees**”) from, and shall pay to and reimburse the General Partner Indemnitees for the amount of, any and all Losses that General Partner Indemnitees or any of them may suffer, sustain, or become subject to, as a result of, in connection with, or relating to:
(i)any breach of or inaccuracy in any representation or warranty of the Subscriber contained in this Agreement; or
(ii)any breach of any covenant or agreement of the Subscriber or, after the Closing, the Partnership contained in this Agreement.
(d)**Limitation****.** A Subscriber Indemnitee shall have the right to set off any claims made under Section Thirteenth, paragraph (b) above against the Adjusted Purchase Price Escrow Amount; provided that any claims under Section Thirteenth, paragraph (b) above first asserted after the Second Redemption Payment Date (as defined in the First Amendment) shall only be set off against the Adjusted Purchase Price Escrow Amount less the amount of any First Release Net Redemption Proceeds (as defined in the First Amendment) released from escrow on the Second Redemption Payment Date (the “**Remaining Adjusted Purchase Price Escrow Amount**”). No further claim may be made under this Section Thirteenth for which an adjustment to the Adjusted Purchase Price Escrow Amount has been made pursuant to Appendix A of the First Amendment such that an Indemnified Party would otherwise receive duplicative payments under this Section Thirteenth. Notwithstanding anything to the contrary set forth in this Agreement, even if a Subscriber Indemnitee would otherwise be entitled to recover a Loss pursuant to Section Thirteenth, paragraph (b), no Subscriber Indemnitee shall be entitled to any indemnification with respect thereto in excess of the Adjusted Purchase Price Escrow Amount or, in the case of any indemnification arising after the Second Redemption Payment Date, in excess of the Remaining Adjusted Purchase Price Escrow Amount, except with respect to a Limitation Exception, in which case no Subscriber Indemnitee shall be entitled to any indemnification with respect thereto in excess of the Net Redemption Proceeds paid to the Withdrawing GP Members. After the Closing,
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set-off against the Adjusted Purchase Price Escrow Amount (or the Remaining Adjusted Purchase Price Escrow Amount, as applicable) held in the escrow account pursuant to this Section Thirteenth shall act as the sole and exclusive remedy for any and all Losses, liabilities, claims, breaches or set-offs arising under, out of, or related to this Agreement or the transactions contemplated hereby, except for Losses arising out of a Limitation Exception (which shall be limited as described in the previous sentence hereof) and for the remedy of specific performance and injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j). The Subscriber, the General Partner (including the Withdrawing GP Members) and the Partnership expressly waive all other remedies available after Closing for breaches of this Agreement other than as provided in this Section Thirteenth and Subscriber’s right to the remedy of specific performance and injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j). Subscriber shall have no obligation to post bond or other security for the remedy of specific performance or injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j), which obligations to post bond or other security are hereby waived.
(e)**Matters Involving Third Parties**.
(i)If any third party shall notify any Person entitled to indemnification hereunder (the “**Indemnified Party**”) with respect to any matter (a “**Third Party Claim**”) that is reasonably expected to give rise to a claim for indemnification against the General Partner or Subscriber, as applicable (the “**Indemnifying Party**”) under this Section Thirteenth, then the Indemnified Party shall promptly (and in any event within ten business days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing. Failure to notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party, except to the extent the defense of such claim is materially prejudiced by the Indemnified Party’s failure to give such notice.
(ii)The Indemnifying Party and, if the Indemnifying Party is the General Partner, DOC, acting on behalf of and as representative of the Redeeming Partners and the Withdrawing GP Members (and not in any individual capacity or in its capacity as Replacement Management Company), shall have the right to assume and thereafter conduct the defense of the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party and the Indemnifying Party (or DOC, as applicable) shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that DOC’s right to assume or control the defense of any Third Party Claim under this Section Thirteenth, paragraph (e)(ii) shall automatically terminate, and control of such defense shall revert to the Indemnified Party, at such time as the Adjusted Purchase Price Escrow Amount (or, following the Second Redemption Payment Date, the Remaining Adjusted Purchase Price Escrow Amount) has been reduced to zero, whether by release, set-off, or otherwise, it being understood that DOC will have no right to control the defense of any Third Party Claim for which no escrow proceeds remain available to satisfy any resulting indemnification obligation; provided, further, that the Indemnifying Party (or DOC, as applicable) shall not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim which provides for or results in any payment by or Liability of the Indemnified Party of or for any damages or other amount, any encumbrance on any property of the Indemnified Party, any finding of responsibility or liability on the part of the Indemnified Party or any sanction or injunction of, restriction upon the conduct of any business by, or other equitable relief upon the Indemnified Party without the prior written
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consent of the Indemnified Party (not to be unreasonably withheld). If the Indemnifying Party (or DOC, as applicable) assumes and thereafter conducts the defense of the Third Party Claim, the Indemnifying Party (or DOC, as applicable) will not have to pay the cost of counsel of the Indemnified Party. Notwithstanding the foregoing, the Indemnifying Party (or DOC, as applicable) shall not be entitled to defend or control the defense of any Third Party Claim if (I) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation, or in the case of any non-criminal Proceeding by a Governmental Body that would reasonably be expected to materially and adversely affect the operations or conduct of the Partnership; (II) the Third Party Claim seeks an injunction or equitable relief against the Indemnified Party; (III) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend such Third Party Claim; (IV) the Indemnified Party reasonably believes that the Losses relating to such Third Party Claim could exceed the maximum amount that such Indemnified Party could then be entitled to recover under the applicable provisions of this Section Thirteenth; or (V) the Indemnifying Party (or DOC, as applicable) does not provide the Indemnified Party with reasonable evidence that the Indemnifying Party (or DOC, as applicable) has the financial resources to defend such Third Party Claim and to fulfill its indemnification obligations under this Section Thirteenth.
(iii)Unless and until the Indemnifying Party (or DOC) assumes the defense of the Third Party Claim as provided in Section Thirteenth, paragraph (e)(ii), the Indemnified Party may defend against the Third Party Claim in any manner it reasonably may deem appropriate. After the Indemnifying Party (or DOC) assumes the defense of a Third Party Claim, the Indemnified Party may participate in such defense with counsel of its choosing at the Indemnified Party’s expense.
(iv)In no event shall the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (or DOC, as applicable), which consent shall not be unreasonably withheld.
(f)**Waiver of Rights and Remedies**.
(i)Notwithstanding anything to the contrary in this Agreement, if Subscriber has knowledge (A) on or prior to the date hereof or (B) after the date hereof (and, in the case of this clause (B), has the right to terminate this Agreement pursuant to Section Twelfth as a result of the breach) of the breach of any representation or warranty of the General Partner or the Partnership under this Agreement and nonetheless proceeds to the Closing, the Subscriber and its Affiliates, shall be deemed to have waived any rights to indemnification under Section Thirteenth with respect to such breach. For purposes of this Agreement, Subscriber’s “knowledge” shall be limited to the actual knowledge, without inquiry, of Joseph W. Craft III, Kirk Tholen, R. Eberley Davis, Tyson Schwerdtfeger, Matt Lewis, and Joey Ross.
(ii)Notwithstanding anything to the contrary in this Agreement, if the General Partner or the Partnership has knowledge (A) on or prior to the date hereof or (B) after the date hereof (and, in the case of this clause (B), has the right to terminate this Agreement pursuant to Section Twelfth as a result of the breach) of the breach of any representation or warranty of the Subscriber under this Agreement and nonetheless proceeds to the Closing, the General Partner
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(including the Withdrawing GP Members), the Partnership and their Affiliates shall be deemed to have waived any rights to indemnification with respect to such breach.
(g)**Determination of Amount of Losses; Duty to Mitigate**.
(i)Any Indemnified Party seeking indemnification hereunder shall give promptly to the party obligated to provide indemnification to such Indemnified Party a written notice (a “**Claim Notice**”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based. The failure of any Indemnified Party to give the Claim Notice promptly as required by this Section Thirteenth shall not affect such Indemnified Party’s rights under this Section Thirteenth except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnifying Party.
(ii)The Losses giving rise to any indemnification obligation hereunder shall be limited to the Losses actually suffered by the Indemnified Party (reduced by (i) any insurance proceeds or other payments or recoupments received, realized or retained by the Indemnified Party as a result of the events giving rise to the claim for indemnification net of any expenses related to the receipt of such proceeds, payment or recoupment and (ii) any Tax Benefit recognized by the Indemnified Party (or the affiliated group of which it is a member) resulting from such Losses). Upon the request of the Indemnifying Party, the Indemnified Party shall provide the Indemnifying Party with information (to the extent in the Indemnified Party’s possession or reasonable control) sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section Thirteenth. Each Indemnified Party shall use its commercially reasonable efforts (without any obligation to bring a Proceeding) to recover under insurance policies or similar agreements for any Losses. If the Indemnified Party receives insurance proceeds for Losses after an indemnification payment for such Losses has been made by the Indemnifying Party to the Indemnified Party, the Indemnified Party will refund the Indemnifying Party the amount of such insurance proceeds received by the Indemnified Party up to the amount of the Indemnification payment. An Indemnified Party shall take all commercially reasonable steps to mitigate damages in respect of any claim for which it is seeking indemnification.
(h)**Tax Treatment of Indemnity Payments**. The parties hereto agree that all indemnification payments made under this Agreement shall be treated as purchase price adjustments for applicable Tax purposes.
(i)**Additional Remedy Matters**. To the extent any claim may be recoverable pursuant to more than one subsection of this Section Thirteenth, the Indemnified Party may make such claim under any such subsection in the alternative; provided, however, that nothing in this Agreement is intended to allow an Indemnified Party to receive duplicative payments and to the extent an Indemnified Party has been paid for any Loss under one Section of this Agreement, such Indemnified Party shall not be permitted to seek payment for that Loss under another Section of this Agreement.
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(j)**Applicability of Indemnities**. All indemnities in this Section Thirteenth shall apply without regard to the negligence of the Indemnified Party, whether such negligence be sole, joint and/or concurrent, active or passive.
**Fourteenth** **- MISCELLANEOUS:**
(a)**Successors and Assigns**. This Agreement shall inure to the benefit of and be binding upon each of the parties hereto and their successors, heirs and assigns.
(b)**Counterparts**. This Agreement may be executed in counterparts, any one of which need not contain the signatures of more than one party, but each of which will be an original and all of which together shall constitute one and the same agreement binding on all the parties hereto.
(c)**Assignment**. This Agreement shall not be assigned without the prior written consent of the parties hereto, except that Subscriber may assign this Agreement (and its right to acquire some or all of the interests in the Partnership or the General Partner contemplated hereby) and its rights and obligations hereunder, in each case, in whole or part, to any one or more Affiliates of Subscriber upon written notice to the General Partner, in which event such Affiliate(s) shall be substituted as and be the “Subscriber” hereunder. Such assignment shall not relieve Subscriber of its liability for the obligations of Subscriber under this Agreement.
(d)**Amendment; Waiver**. No waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided. This Agreement may not be amended except in a writing signed by each of the General Partner, the Partnership, the Subscriber and DOC. Additionally, if any such amendment would amend this Agreement in a manner that would adversely affect (i) the indemnification rights of any Withdrawing GP Member or any Redeeming Partner pursuant to Section 5.4 of the Partnership Agreement (subject to Sections 1(g) and 1(h) of the First Amendment) or Article 12 of the GP Company Agreement (subject to Section 1(g) and 1(h) of the GP Agreement Amendment), or (ii) the amount of, or the payment of, Net Redemption Proceeds to any Withdrawing GP Member or any Redeeming Partner, whether as Partners or creditors of the Partnership or Members or creditors of the General Partner, as the case may be, such amendment will not be effective without the prior written consent of the Redeeming Partners Majority (as defined in the First Amendment) or the Redeeming Members Majority (as defined in the GP Agreement Amendment), as applicable.
(e)**Severability**. If any provision of this Agreement shall be finally determined to be unenforceable, illegal or 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 party, be deemed severed from this Agreement and the remainder of this Agreement shall continue to be effective and enforceable.
(f)**Governing Law**. This Agreement shall be governed by, and construed under, the laws of the State of Texas and all rights and remedies shall be governed by said laws, without
24
regard to conflict of laws principles. In addition, any and all disputes, controversies, causes of action or claims asserted by any party (against the other), whether those claims sound in breach of contract, tort, fraud, or any other statutory or judicially created cause of action and whether or not such claims are asserted in an arbitration, court of law or any other forum, shall be governed by, and construed under, the laws of the State of Texas and all rights and remedies shall be governed by said laws, without regard to conflict of laws principles.
(g)**WAIVER OF JURY TRIAL**. THE PARTIES KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. EACH PARTY AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
(h)**Addresses and Notices**. All notices, requests or other communications to any party hereunder shall be in writing (which may include e-mail transmission) and shall be given,
if to Subscriber, to the following address:
Alliance Minerals, LLC
1717 S. Boulder Avenue, Suite 400
Tulsa, OK 74119
Attention: Kirk Tholen
e-mail: Kirk.Tholen@arlp.com
with a copy (which shall not constitute notice) to:
R. Eberley Davis
Senior Vice President, General Counsel and Secretary
Alliance Resource Partners, L.P.
1146 Monarch Street
Lexington, KY 40513
e-mail: Eb.Davis@arlp.com
And
GableGotwals
Attn: Stephen W. Lake, Tom Hutchison
110 North Elgin Avenue, Suite 200
Tulsa, OK 74120
e-mail: slake@gablelaw.com, thutchison@gablelaw.com
and if to the General Partner or Partnership
Cody Miller
General Counsel, Dale Operating Company
25
110 Manufacturing St.
Dallas, TX 75207
United States of America
e-mail: cody@dale-energy.com
Any such communication will be effective (i) if given by e-mail transmission, when transmitted to the applicable address specified in (or pursuant to) this paragraph (h) (with confirming copy by United States mail), (ii) if given by United States mail (which must be by certified mail), on the earlier of the date of receipt or the fifth day after deposit in the mail, (iii) if given by overnight delivery by courier of national reputation, on the first business day after depositing with such courier properly addressed or (iv) if given by hand delivery or any other means not referenced in clause (i), (ii) or (iii) of this sentence, on the date of receipt.
(i)**Entire Agreement**. This Agreement, along with the other Related Transaction Documents and exhibits hereto, set forth the entire, complete and final agreement of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, inducements or conditions, express or implied, oral or written.
(j)**Expenses**. Each of the parties will bear its own expenses in connection with the preparation, execution and performance of this Agreement and the transactions contemplated by this Agreement, with Partnership Transaction Expenses being paid in accordance with Section Eleventh, paragraph (h). For the avoidance of doubt, this Section Fourteenth, paragraph (j) shall be without duplication of any adjustments to the proceeds received by the Redeeming Partners or the Withdrawing GP Members pursuant to the First Amendment or the GP Agreement Amendment, as applicable.
(k)**Specific Performance**. The parties recognize that in the event any party should refuse to perform under the provisions of this Agreement, monetary damages alone will not be adequate. The non-breaching party shall therefore, prior to Closing, be entitled, in addition to any other remedies that may be available, including money damages, to obtain specific performance of the terms of this Agreement without any obligation to post bond or other security.
(l)**Construction**. All references to the consent or approval of the General Partner prior to the Closing Date shall be construed to refer to the consent or approval of Members of the General Partner holding at least two-thirds of the interests of the General Partner as of the day immediately prior to the Closing Date, including, for the avoidance of doubt, the Withdrawing GP Members.
**Fifteenth** **- DEFINITIONS:** Capitalized terms used and not otherwise defined herein have the same meanings as set forth in Exhibit “A” attached hereto and incorporated herein by reference.
*[Signature Page Follows]*
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**AllDale Minerals III, LP - Subscription Agreement**
**Signature Page**
By signing below, the Subscriber (1) confirms that the information contained in the Agreement provided by Subscriber is accurate and complete, (2) agrees to the terms of the Agreement, the Limited Partnership Agreement and the GP Company Agreement, (3) requests that the records of the Partnership reflect the Subscriber’s admission as a limited partner at the Closing as contemplated by the terms of the Agreement and (4) if Subscriber’s GP Commitment is not $0, requests that the records of the General Partner reflect the Subscriber’s admission as a Member at the Closing as contemplated by the terms of the Agreement.
**AMOUNT OF COMMITMENT TO PARTNERSHIP:**
**$29,921,915.16**
**AMOUNT OF COMMITMENT TO GENERAL PARTNER:**
**$34,902,044.56**
**Alliance Minerals, LLC**, a Delaware limited liability company
By: /s/ Kirk D. Tholen
Name: Kirk D. Tholen
Title: President
*Signature Page to Subscription Agreement*
The Partnership, the General Partner, and (solely for purposes of Section Thirteenth, paragraph (e) and Section Fourteenth, paragraph (d)) DOC join in this Agreement as of the date set forth above.
**AllDale Minerals III, LP**, a Texas limited partnership
By: AllDale Minerals Management III, LLC, its General Partner
By: /s/ Cody Miller
Cody Miller, Manager
**AllDale Minerals Management III, LLC**, a Texas limited liability company
By: /s/ Cody Miller
Cody Miller, Manager
**Dale Operating Company**, a Texas corporation
By: /s/ Cody Miller
Name: Cody Miller
Title: Co-CEO and General Counsel
*Signature Page to Subscription Agreement*
**EXHIBIT “A”**
**to Subscription Agreement**
When used in the Agreement, the following terms shall have the following meanings:
“**Adjusted Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Affiliate**” of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise.
“**AllDale IV Subscription Agreement**” means the Subscription Agreement for Partnership Interest in AllDale Minerals IV, LP and Membership Interest in AllDale Minerals Management IV, LLC, dated of even date herewith among Alliance Minerals, LLC, a Delaware limited liability company, AllDale Minerals IV, LP, AllDale Minerals Management IV, LLC, and DOC.
“**Alliance Parties**” means Subscriber and each of its Affiliates that is a subscriber under any Related Transaction Document, including a subscriber by assignment from Subscriber.
“**Allocated Value**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Assets**” means all properties and assets, real and personal, tangible and intangible, owned or held by the Partnership, any Subsidiary of the Partnership, or the General Partner.
“**Capital Commitments**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Capital Contribution**” means a capital contribution to the Partnership or the General Partner, as the case may be, by the Subscriber hereunder.
“**Charter Documents**” means, with respect to any Person, the certificate of incorporation, articles of organization, articles of incorporation or association, certificate of partnership, certificate of limited partnership, certificate of formation and by-laws, the limited liability company agreement, operating agreement, or limited partnership agreement or other agreement or agreements that establish the legal organization and personality of such Person and its governance, in each case as amended.
“**Code**” means the Internal Revenue Code of 1986, as amended.
“**Contract**” means, with respect to any Person, any note, bond, mortgage, lease, permit, concession, franchise, license, arrangement, undertaking, contract, commitment, obligation, guaranty, credit agreement, indenture, deed of trust or other instrument, document or agreement (in each case whether written or oral) by which that Person, or any of its present or future properties or assets, is legally bound or subject.
“**Dale Entities**” shall have the meaning set forth in the Limited Partnership Agreement.
A-1
“**Diligence Representative**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Disclosure Letter**” means that certain disclosure letter, dated of even date herewith, delivered by the General Partner and certain of its Affiliates to Subscriber, the Other Subscribers, and the other Alliance Parties under the Related Transaction Documents.
“**Existing Management Company”** means Dale Land & Minerals, LLC, a Texas limited liability company.
“**Final Redemption Payment Date**” shall have the meaning set forth in the First Amendment.
“**GAAP**” means United States generally accepted accounting principles, as consistently applied by the Partnership in accordance with its past practices.
“**Governmental Body**” means any federal, state, local, municipal, or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and any court or governmental tribunal.
“**GP Redemption**” shall have the meaning set forth in the GP Agreement Amendment.
“**Indebtedness**” means, with respect to the Partnership, any Subsidiary, or the General Partner, as applicable, all Liabilities as of the determination date (including the current portion thereof) of such Person (other than accounts payable and trade payables in the ordinary course of business) (i) for the principal amount, plus any related accrued and unpaid interest, fees and prepayment premiums, penalties or other breakage costs, of any borrowed money, including, without limitation, any such obligations under a credit facility or which are evidenced by any note, bond, debenture or other debt security, and short-term vendor loan payables, (ii) with respect to leases required to be capitalized in accordance with GAAP, (iii) under any letter of credit, performance bond, bankers’ acceptance or similar instrument to the extent drawn upon, (iv) under any interest rate swap, hedging or similar arrangement (valued at the termination value thereof if such arrangement were terminated as of the determination date), (v) issued or assumed as the deferred purchase price of property (calculated as the maximum amount of deferred purchase price owing as of the determination date (whether or not then due and payable) (but excluding trade accounts payable and accruals), (vi) with respect to any Liability of any other Person of the type referenced in clauses (i) through (v), the payment of which the Partnership, any Subsidiary or the General Partner (as applicable) is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise and (vii) with respect to any Liability of any other Person of the type referred to in clauses (i) through (vi) that is secured by any Lien on any Asset (whether or not such Liability is assumed by the Partnership, any Subsidiary, or the General Partner).
“**Initial GP Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Initial LP Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the First Amendment.
A-2
“**Initial GP Redemption Proceeds**” shall mean the “Initial Redemption Proceeds” as such term is used in the GP Agreement Amendment
“**Initial LP Redemption Proceeds**” shall mean the “Initial Redemption Proceeds” as such term is used in the First Amendment.
“**Interests**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Laws**” means any and all applicable laws, statutes, rules, regulations, ordinances, orders, codes, decrees, writs, injunctions, judgments, or principles of common law that are promulgated, issued, or enacted by a Governmental Body.
“**Liabilities**” means any and all liabilities or obligations of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise.
“**Lien**” means any lien, mortgage, security interest, pledge, easement, charge, indenture, deed of trust, right of way, restriction on the use of real or personal property, encroachment or other encumbrance, or any restriction on transfer (except for restrictions on transfer under applicable securities laws), right of first refusal, right of first offer, put right, redemption right, option, warrant, proxy, voting agreement, voting trust, conditional sale or other title retention device or arrangement or transfer for the purpose of the payment of any Indebtedness or otherwise, or any restriction similar to any of the foregoing.
“**Limitation Exception**” means a breach of or inaccuracy in a Fundamental Representation by the General Partner, or any intentional misrepresentation or fraud by the General Partner.
“**Limited Partner**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Losses**” means, with respect to any Person, any losses, liabilities, claims, judgments, fines, loss in value, penalties, damages, expenses, fees, costs or amounts incurred by such Person (including reasonable attorneys’ fees, costs or expenses and all reasonable fees, costs or expenses paid in connection with the investigation, defense and compromise of any claim or loss), but excluding punitive, exemplary, special, indirect and consequential damages and also excluding lost revenues, lost profits and diminution of value, except to the extent punitive, exemplary, special, indirect and consequential damages, lost revenues and lost profits are part of a Third Party Claim made against an Indemnified Party; provided, however, that the definition of Losses shall not limit a party’s liability for any such damages that constitute diminution of value and are proven to constitute actual direct damages.
“**Material Adverse Effect**” means any adverse effect on the ownership, operation or value of the Partnership and its Subsidiaries or the Assets, which is material to the ownership, operation or value of the Assets, taken as a whole, or the Partnership and its Subsidiaries, taken as a whole, and if curable, is not cured by AllDale Minerals Management III, LLC or its Affiliates within 30 days after AllDale Minerals Management III, LLC or its Affiliates becomes aware of such material adverse effect; provided, however, that the following shall not be deemed to constitute, create, or cause a Material Adverse Effect: any changes, circumstances or effects that (a) affect generally the
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oil and gas industry, such as fluctuations in the price of commodities, industry inputs, or Hydrocarbons, (b) result from international, national, regional, state, or local economic conditions, (c) result from general developments or conditions in the oil and gas industry, (d) result from changes in Laws (including regulatory or enforcement policy) or accounting principles (including interpretations thereof), (e) result from any public announcement of the transactions contemplated by this Agreement, (f) result from the failure of a Governmental Body to act or omit to act pursuant to Law, (g) result from an outbreak or escalation of hostilities (whether nationally or internationally), or the occurrence of any other calamity or crisis (whether nationally or internationally), including terrorist attacks or (h) any natural or man-made disasters or other force majeure events.
“**Member**” shall have the meaning set forth in the GP Company Agreement.
“**Membership Interest**” shall have the meaning set forth in the GP Company Agreement.
“**Net Redemption Proceeds**” shall have the meaning set forth in the First Amendment.
“**Original GP Purchase Price**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Original LP Purchase Price**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Other AllDale III Subscription Agreements**” means (i) the Subscription Agreement for Partnership Interest dated of even date herewith among the Joseph W. Craft III Foundation, an Oklahoma charitable trust, the Partnership, the General Partner, and DOC and (ii) the Subscription Agreement for Partnership Interest dated of even date herewith among CC OilPlay LLC, a Delaware limited liability company, the Partnership, the General Partner, and DOC.
“**Other Subscribers**” means the Subscribers under the Other AllDale III Subscription Agreements.
“**Partner**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Partnership Interest**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Partnership Transaction Expenses**” means any attorneys’, investment bankers’, accountants’ or other advisors’ or consultants’ fees or expenses or other similar transaction fees and expenses incurred by the General Partner, the Partnership, or any Subsidiary (or by Existing Management Company in connection with or on behalf of the General Partner, the Partnership or any Subsidiary) in connection with the transactions contemplated by this Agreement and the Other AllDale III Subscription Agreements and unpaid as of the Closing. For the avoidance of doubt, Partnership Transaction Expenses include any fees, commissions, or other amounts due to Stephens, Inc. in connection with the transactions contemplated by this Agreement and the Other AllDale III Subscription Agreements, but do not include any fees or other expenses incurred in the ordinary course of business which, for the avoidance of doubt, means recurring operational expenses of the type historically incurred by the Partnership in connection with the ownership and administration of the Interests, including routine accounting, land administration, and management fees, but
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excluding any fees or expenses that have been incurred in connection with, or in contemplation of, the transactions contemplated by this Agreement and the Other AllDale III Subscription Agreements.
“**Permitted Encumbrances**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Person**” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.
“**Proceeding**” means any suit, legal action, or legal, administrative, arbitration or other alternative dispute resolution proceeding, hearing or formal investigation.
“**Redeeming Partners**” shall have the meaning set forth in the First Amendment.
“**Redeeming Partners Majority**” shall have the meaning set forth in the First Amendment.
“**Redemption**” shall have the meaning set forth in the First Amendment.
“**Related Transaction Documents**” means this Agreement, the First Amendment (including Appendix A to the First Amendment), the GP Agreement Amendment, the Management Agreement Amendment, and the Disclosure Letter.
“**Remaining Commitments**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Replacement Management Company”** means DOC, acting in its capacities under the Replacement Management Agreement.
“**Sharing Percentage**” shall have the meaning set forth in the GP Company Agreement.
“**Sharing Ratio**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Subsidiary**” of any particular Person means any other Person that is controlled by such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. Unless expressly stated otherwise in this Agreement, any reference to a “Subsidiary” will be deemed to refer to a Subsidiary of the Partnership.
“**Tax**” or “**Taxes**” means any federal, state, local or foreign income, gross receipts, capital stock, franchise, profits, state nonresident withholding, withholding, social security, unemployment, disability, employment, property, ad valorem, unmined minerals, stamp, severance, excise, motor fuels, heavy vehicle, occupation, sales, use, transfer, value added, unclaimed property, alternative minimum, estimated or other tax, charge, fee, duty, levy or other assessment that is imposed by any Governmental Body, in each case including any interest, penalty or addition thereto that is attributable to any nonpayment thereof or any failure to properly prepare or file a return or report with respect thereto.
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“**Tax Benefit**” means any refund of Taxes paid or reduction in the amount of Taxes which otherwise would have been paid due to a deduction, credit or other Tax benefit or allowance arising by reason of the event giving rise to a claim under Section Thirteenth of this Agreement.
“**Tax Return**” means any return, report, information return or other document (including schedules or any related or supporting information and any amendment thereof) filed or required to be filed with any Governmental Body in connection with the determination, assessment, payment or collection of any Tax.
“**Title Defects**” shall have the meaning set forth in Appendix A to the First Amendment.
“**Treasury Regulations**” means regulations promulgated by the United States Treasury related to the Code.
“**Withdrawing GP Members**” shall have the meaning set forth in the First Amendment.
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---
## EX-10.2
SEC source: [arlp-20260630xex10d2.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d2.htm)
**Exhibit 10.2**
Execution Version
**SUBSCRIPTION AGREEMENT FOR**
**PARTNERSHIP INTEREST IN**
**ALLDALE MINERALS IV, LP**
**AND**
**MEMBERSHIP INTEREST IN**
**ALLDALE MINERALS MANAGEMENT IV, LLC**
**OFFERS AND SALES OF LIMITED PARTNER INTERESTS IN ALLDALE MINERALS IV, LP AND MEMBERSHIP INTERESTS IN ALLDALE MINERALS MANAGEMENT IV, LLC HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR FOREIGN SECURITIES LAWS, OR APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR BY ANY FEDERAL, STATE OR FOREIGN AUTHORITY. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS SUCH INTERESTS ARE FIRST REGISTERED PURSUANT TO ALL SUCH APPLICABLE LAWS OR UNLESS COUNSEL SATISFACTORY TO THE GENERAL PARTNER SHALL HAVE RENDERED AN OPINION SATISFACTORY TO THE GENERAL PARTNER THAT SUCH REGISTRATION IS NOT REQUIRED. THE SALE, ASSIGNMENT OR OTHER TRANSFER OF SUCH INTERESTS IS ALSO RESTRICTED BY** **ARTICLE IX** **OF THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ALLDALE MINERALS IV, LP AND** **ARTICLE 9** **OF THE FIRST AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ALLDALE MINERALS MANAGEMENT IV, LLC.**
Effective as of June 4, 2026, the undersigned, Alliance Minerals, LLC, a Delaware limited liability company (“**Subscriber**”), and ALLDALE MINERALS IV, LP, a Texas limited partnership (the “**Partnership**”), and AllDale Minerals Management IV, LLC, a Texas limited liability company (the “**General Partner**”), and solely for purposes of Section Thirteenth, paragraph (e), and Section Fourteenth, paragraph (d), Dale Operating Company, a Texas corporation (“**DOC**”), hereby agree as follows:
**First** **- SUBSCRIPTION:** In accordance with the terms of the First Amended and Restated Limited Partnership Agreement of the Partnership, as previously amended and as to be further amended by the Second Amendment (the “**Second Amendment**”) to the First Amended and Restated Limited Partnership Agreement of the Partnership (as amended by the Second Amendment, the “**Limited Partnership Agreement**”), attached as Exhibit “A-1” to the Disclosure Letter and the First Amended and Restated Limited Liability Company Agreement of the General Partner, as to be amended by the First Amendment (the “**GP Agreement Amendment**”) to the First Amended and Restated Limited Liability Company Agreement of the General Partner (as amended by the GP Agreement Amendment, the “**GP Company Agreement**”), attached as Exhibit “A-2” to the Disclosure Letter, copies of which have been provided to the Subscriber, and subject to the terms and conditions of this Agreement, the Subscriber hereby subscribes for a Partnership Interest as a limited partner interest in the Partnership in the aggregate amount (the “**Commitment**”) set forth on the signature page of this subscription agreement (this “**Subscription Agreement**” or this “**Agreement**”) and of the Series of Interest in the Partnership set forth below, which Commitment represents the Original LP Purchase Price. The Subscriber, at Closing (as defined below), will make a Capital Contribution to the Partnership in the full amount of the
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Commitment. The Subscriber further subscribes for a Membership Interest in the aggregate amount (the “**GP Commitment**”) set forth on the signature page of this Agreement (if such GP Commitment is not $0) of the Classes of Interest in the General Partner set forth below, which GP Commitment represents the Original GP Purchase Price. The Subscriber, at Closing, will make a Capital Contribution to the General Partner in the full amount of the GP Commitment.
Subscriber is subscribing for (A) a Partnership Interest in the Partnership, consisting of a limited partner interest with a Sharing Ratio, after giving effect to the Redemption, of 76.4441% and (B) if the GP Commitment is not $0, a Membership Interest in the General Partner, after giving effect to the GP Redemption, consisting of a 55.5925% interest in the General Partner (which, for the avoidance of doubt, includes (1) a Sharing Percentage in the General Partner of 55.5925%, (2) a Carry Sharing Percentage in the General Partner of 80.5880% and (3) a Sharing Ratio in the Partnership of 2.0998%). The limited partner Series of Interest subscribed for by Subscriber shall be composed of both Series A Interests and Series L Interests, as Subscriber shall determine. The Membership Interest in the General Partner subscribed for by Subscriber (if any) shall be composed of Class A Interests, Class B Interests and Class C Interests, as Subscriber shall determine.
**Second** **- ACCREDITED INVESTOR:** The Subscriber represents that it is an “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, as amended (“**Securities Act**”).
**Third** **- SUBSCRIBER REPRESENTATIONS AND WARRANTIES:** The Subscriber further represents, warrants, acknowledges and agrees with the Partnership and the General Partner as follows:
(a)Subscriber is entering into this Agreement relying solely on the facts and terms set forth in this Agreement, the Limited Partnership Agreement and the GP Company Agreement (collectively, the “**Offering Documents**”) and Subscriber has received, read and understood each of the Offering Documents, including but not limited to those sections dealing with conflicts of interest, fees and Tax consequences of an investment in the Partnership and an interest in the General Partner. Subscriber has been given the opportunity to ask questions of, and receive answers from the General Partner, the Partnership, or one of their Affiliates, concerning the terms and conditions of the offering and other matters pertaining to an investment in the Partnership and the General Partner, as applicable. Neither the General Partner nor the Partnership has made any representations of any kind or nature to induce the Subscriber to enter into this Agreement except as specifically set forth in the Offering Documents and the other Related Transaction Documents;
(b)Subscriber has made an investigation of the pertinent facts relating to the operation of the Partnership and the General Partner and has reviewed the terms of the Limited Partnership Agreement and the GP Company Agreement to the extent that Subscriber deems necessary in order to be fully informed with respect thereto;
(c)Subscriber has such knowledge and experience in financial and business matters that Subscriber is capable of evaluating the merits and risks of an investment in the Partnership and the General Partner; and the Subscriber is able to bear the economic risk of a complete loss of its investment in the Partnership and the General Partner;
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(d)(i)The Subscriber will be acquiring, as applicable, the limited partner interest in the Partnership and the Membership Interest in the General Partner, for investment, for its own account and not for the interest of any other person and not for distribution or resale to others, and Subscriber will not, prior to Closing, permit any other person to acquire a beneficial interest in such limited partner interest in the Partnership or such Membership Interest in the General Partner without the consent of the General Partner (including, prior to Closing, the Withdrawing GP Members). Subscriber understands that the limited partner interests in the Partnership and the Membership Interests of the General Partner have not been registered under the Securities Act, and Subscriber agrees that its limited partner interest in the Partnership and Membership Interests in the General Partner may not be sold, transferred, or otherwise disposed of except pursuant to an exemption from registration under the Securities Act. Subscriber will not assign its limited partner interest in the Partnership or Membership Interests in the General Partner or any beneficial interests therein, in whole or in part, to any other person, nor will Subscriber be entitled to substitute for itself as a limited partner in the Partnership or member of the General Partner, any other person, except in compliance with the Limited Partnership Agreement, the GP Company Agreement or this Agreement;
(ii)Subscriber understands the effect of the limitations on disposition and of its representation that its limited partner interest in the Partnership and Membership Interests in the General Partner (if applicable) will not be sold, transferred or otherwise disposed of except pursuant to an exemption from registration under the Securities Act. Subscriber understands that transfers can be made only in compliance with the Limited Partnership Agreement or the GP Company Agreement, as applicable; and
(iii)The execution, delivery and performance of this Agreement and each other agreement, instrument or document to be executed by the Subscriber in connection with the transactions contemplated hereby, and the performance of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by all necessary action on the part of the Subscriber and (b) will not violate any Laws applicable to the Subscriber.
**Fourth** **- AUTHORITY:** If the Subscriber is a corporation, partnership, trust or other entity, the person executing this Agreement for the Subscriber has the full power and authority under the Subscriber’s governing instruments to do so and the Subscriber has the full power and authority under its governing instruments to become a limited partner of the Partnership and a member of the General Partner, as applicable.
**Fifth** **- ADMISSION**: The Subscriber understands that the date of the Subscriber’s admission as a Limited Partner and a Member, as applicable, subject to the terms and conditions of this Agreement, will be on the Closing Date (as defined below), and on the Closing Date the Subscriber will join in and agree to be bound by the Limited Partnership Agreement as a limited partner of the Partnership and, if applicable, by the GP Company Agreement as a member of the General Partner.
**Sixth** **- REAFFIRMATION OF SUBSCRIBER’S REPRESENTATIONS AND WARRANTIES:** The Subscriber hereby agrees that any representation made hereunder will be deemed to be reaffirmed by it on the Closing Date.
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**Seventh** **- NOTICE REQUIREMENT:** The Subscriber hereby agrees that if any of the statements, representations, warranties or covenants made by Subscriber herein become untrue or inaccurate, the undersigned shall immediately at such time notify the Partnership and the General Partner.
**Eighth** **- REPRESENTATIONS AND WARRANTIES OF GENERAL PARTNER AND PARTNERSHIP:** Any representation “to the knowledge of the General Partner” or words of similar import means matters within the actual knowledge, without inquiry, of Lawrence B. Dale, Cody Miller, Stephen Abney or Jack Newman. Simultaneously herewith, the General Partner is delivering to Subscriber the Disclosure Letter. Matters disclosed in any particular paragraph of the Disclosure Letter shall qualify the representation and warranty in the matching paragraph of this Section Eighth and any other representation and warranty to which the matters disclosed reasonably relate. The fact that any item of information is disclosed in the Disclosure Letter shall not constitute an admission by the General Partner or Partnership that such item is material, that such item has had or would have a Material Adverse Effect, or that the disclosure of such item be construed to mean that such information is required to be disclosed by this Agreement.
Subject to the foregoing provisions of this Section Eighth, and the other terms and conditions of this Agreement, the General Partner and the Partnership, hereby represent and warrant to Subscriber, as of the date hereof and as of the Closing, and subject to the approval of the Second Amendment and the GP Agreement Amendment, the following:
(a)**Existence and Qualification**. The General Partner is a limited liability company organized, validly existing and with the right to transact business in the state of Texas under the Laws of the state of Texas and is duly qualified to do business as a foreign limited liability company in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. The Partnership is a limited partnership organized, validly existing and with the right to transact business in the state of Texas under the Laws of the state of Texas and is duly qualified to do business as a foreign limited partnership in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. Each Subsidiary is a limited liability company or limited partnership organized, validly existing in the jurisdiction of its formation and is duly qualified to do business as a foreign limited liability company or limited partnership in each jurisdiction where it is required to be qualified by applicable law, except where the failure to so qualify would not have a Material Adverse Effect. Complete and correct copies of the Charter Documents of the General Partner, the Partnership, and each Subsidiary (including all amendments, waivers, and modifications thereto), in each case as in effect as of the date of this Agreement, have been made available to the Subscriber.
(b)**Power**. Each of the General Partner and Partnership has the requisite power to enter into and perform this Agreement and each other agreement, instrument or document to be executed by the General Partner or Partnership, as applicable, in connection with the transactions contemplated hereby and to consummate the transactions contemplated hereby and thereby.
(c)**Authorization and Enforceability**. The execution, delivery and performance of this Agreement and each other agreement, instrument or document to be executed by the General Partner or Partnership in connection with the transactions contemplated hereby, and the
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performance of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary action on the part of the General Partner (including the Withdrawing GP Members) and the Partnership. This Agreement has been duly executed and delivered by each of the General Partner (including the Withdrawing GP Members) and the Partnership (and all documents required hereunder to be executed and delivered by the General Partner or the Partnership at Closing will be duly executed and delivered by the General Partner and Partnership, as applicable) and this Agreement constitutes, and at the Closing such other documents will constitute, the valid and binding obligations of each of the General Partner and Partnership, as applicable, enforceable in accordance with their terms except as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors generally as well as to general principles of equity (regardless of whether such enforceability is considered in a Proceeding in equity or at law).
(d)**No Conflicts**. The execution, delivery and performance of this Agreement by each of the General Partner and the Partnership, and the transactions contemplated by this Agreement by them, will not (i) violate any provision of the Charter Documents of any of the General Partner, the Partnership, or any Subsidiary, (ii) result in a default (with due notice or lapse of time or both) or the creation of any Lien, or give rise to any right of termination, cancellation or acceleration under any of the terms, conditions or provisions of any Contract, promissory note, bond, mortgage, indenture, loan or similar financing instrument to which the General Partner, the Partnership, or any Subsidiary is a party or which affects the Assets, (iii) violate any judgment, order, ruling, or decree applicable to the General Partner, the Partnership, or any Subsidiary or (iv) violate any Laws applicable to the General Partner, the Partnership, or any Subsidiary. Other than as set forth in Section Eighth, paragraph (d) of the Disclosure Letter, there is no consent, approval, waiver or authorization of any Person required (or notice required to be given) under Law or by the terms of any Governmental Authorization or Contract to which the General Partner, the Partnership, or any Subsidiary is a party or the Assets are bound, for the execution and delivery by the General Partner or Partnership of this Agreement and the consummation of the transactions contemplated hereby.
(e)**Subsidiaries**.
(i)Except as disclosed in Section Eighth, paragraph (e) of the Disclosure Letter, the Partnership does not own or hold any stock or any membership, limited liability company, partnership or other equity interest in any Person, and other than a general partner interest in the Partnership, the General Partner does not own or hold any stock or membership, limited liability company, partnership or other equity interest in any Person.
(ii)To the extent the Partnership has one or more Subsidiaries, each such Subsidiary is, directly or indirectly, wholly owned by the Partnership. No Person holds any option, warrant, right of first refusal, or other right to acquire any equity interests or other interests in any Subsidiary, and no such Subsidiary is party to or bound by any agreement to issue such option, warrant, right of first refusal or other right to acquire any equity or other interest in any such Subsidiary.
(iii)All equity interests in each Subsidiary (A) are duly authorized and validly issued, (B) are non-assessable except as provided in the Charter Documents of such Subsidiary, (C) were not issued in violation of any pre-emptive rights, right of first refusal or other rights of
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any Person, and (D) were offered and sold by such Subsidiary in compliance with all applicable securities Laws.
(f)**Ownership**. Each Partner in the Partnership and each Member in the General Partner is identified in Section Eighth, paragraph (f) of the Disclosure Letter and set opposite each such Partner or Member’s name therein are the Partnership Interests held by each Partner in the Partnership or the Membership Interests held by each Member in the General Partner, as the case may be, including each Partner and Member’s Capital Commitments, Capital Contributions, Remaining Commitments, Sharing Ratios and Sharing Percentages as of immediately prior to the Closing Date. Except for this Agreement, the Limited Partnership Agreement, the GP Company Agreement and the other Related Transaction Documents, there is not outstanding any option, warrant, right of first refusal, or other right to acquire any partnership interests or other interests in the Partnership or any Membership Interests or other interests in the General Partner and neither the General Partner nor the Partnership is party to or bound by any agreement to issue such option, warrant, right of first refusal or other right to acquire a partnership or other interest in the Partnership. Neither the Partnership Interests nor the Membership Interests are certificated. To the General Partner’s knowledge, each of the Partnership Interests and Membership Interests are held by the Partner or Member, as the case may be, to whom attributed in Section Eighth, paragraph (f) of the Disclosure Letter free and clear of all Liens. All of the Partnership Interests and Membership Interests identified in Section Eighth, paragraph (f) of the Disclosure Letter (i) are duly authorized and validly issued, (ii) are non-assessable (except for, in the case of the Partnership Interests, the obligation to make Capital Contributions equal to the Remaining Commitments under the Limited Partnership Agreement), (iii) were not issued in violation of any pre-emptive rights, right of first refusal or other rights of any Person, and (iv) were offered and sold by the Partnership and/or the General Partner in compliance with all applicable securities Laws. Upon effectiveness of the Redemption and GP Redemption, the Subscriber and KC-AllDale IV, LLC, a Delaware limited liability company, shall be the only limited partners in the Partnership and the only members in the General Partner. The partnership interests and Membership Interests issued to Subscriber hereunder will (i) be duly authorized and validly issued, (ii) be non-assessable, except for the Subscriber’s Commitment and GP Commitment, as applicable, and (iii) not be issued in violation of any preemptive rights, right of first refusal or other rights of any Person (except for rights set forth in the Limited Partnership Agreement or the GP Company Agreement, which will be waived upon effectiveness of the Second Amendment and the GP Agreement Amendment). Except as disclosed in Section Eighth, paragraph (f) of the Disclosure Letter, the General Partner is the only general partner of the Partnership and has not, assigned, granted a Lien (except for transfer restrictions on the General Partner’s Partnership Interests imposed by the Partnership Agreement) in or otherwise transferred to any Person, or agreed to assign, grant a Lien (except for transfer restrictions on the General Partner’s Partnership Interests imposed by the Partnership Agreement) in or otherwise transfer to any Person, any of the General Partner’s right, title and interest in, to and under the Partnership or the Limited Partnership Agreement.
(g)**Liability for Partnership Transaction Expenses**. Except as provided in Section Eleventh, paragraph (h), neither Subscriber nor any of its Affiliates (including, after Closing, the Partnership or the General Partner) will, directly or indirectly have any responsibility, liability or expense, as a result of undertakings or agreements of the General Partner, Partnership, the Existing Management Company or any of their Affiliates, for any Partnership Transaction Expenses. For
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the avoidance of doubt, Subscriber shall pay its own expenses in accordance with Section Fourteenth, paragraph (j).
(h)**Litigation**. Except as disclosed in Section Eighth, paragraph (h) of the Disclosure Letter, there are no pending Proceedings against the General Partner, the Partnership, or any Subsidiary (or the Existing Management Company with respect to the Partnership or any Subsidiary) before any Governmental Body or arbitrator to which the General Partner, Partnership, any Subsidiary or any Assets are subject, and to the General Partner’s knowledge, no such Proceeding is threatened.
(i)**Taxes and Assessments**.
(i)The General Partner, the Partnership, and all Subsidiaries have timely filed all federal and state income Tax Returns and all other material Tax Returns that are required to be filed by each (taking into account applicable extensions to file), and such Tax Returns are complete and accurate in all material respects and have not subsequently been amended. The General Partner, the Partnership, and all Subsidiaries have paid all Taxes shown thereon as due and owing by each. All material Taxes which the General Partner, the Partnership, or any Subsidiary, as applicable, are obligated to withhold by Law, including from amounts owing to or allocable to any owner (including the Partners and the Members), employee, creditor or third party, have been duly withheld or collected and, to the extent required have been paid over to the proper Governmental Body.
(ii)There is no material dispute or claim concerning any Tax Liability of the General Partner, the Partnership, or any Subsidiary claimed or raised by any Governmental Body of which the General Partner, the Partnership, any Subsidiary, or the Existing Management Company has received written notice or the General Partner has knowledge. None of the General Partner, the Partnership, or any Subsidiary has waived any statute of limitations in respect of Taxes beyond the date hereof or agreed to any extension of time beyond the date hereof with respect to a material Tax assessment or deficiency.
(iii)To the General Partner’s knowledge, none of the Partners or Members is a foreign person within the meaning of Treasury Regulations Section 1.1445-2(b)(2) and Section 1445(f)(3) of the Code.
(iv)None of the General Partner, the Partnership, or any Subsidiary is a party to, bound by or obligated under, any Tax allocation, indemnity, sharing or similar Contract or arrangement (other than the Limited Partnership Agreement, the GP Company Agreement and any agreement entered into in the ordinary course of business the primary purpose of which is not Taxes, including any agreement with respect to property Taxes payable with respect to properties leased from third parties). Each Subsidiary is a disregarded entity for U.S. federal income Tax purposes.
(v)Except as set forth in Section Eighth, paragraph (i)(v) of the Disclosure Letter, there are no Tax Liens upon any Assets (other than Liens for Taxes not yet due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings by
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the General Partner, the Partnership, or the applicable Subsidiary and for which appropriate reserves have been reflected in the Financial Statements (as defined below)).
(vi)None of the General Partner, the Partnership, or any Subsidiary has participated in a “listed transaction” or “reportable transaction” as defined in Section 6707A of the Code or Treasury Regulations Section 1.6011-4 (or any predecessor provision thereto) or any corresponding or similar provision of state or local Laws.
(vii)True and complete copies of the Tax Returns of the General Partner, the Partnership, and all Subsidiaries have been provided to Subscriber.
(viii)Except as set forth in Section Eighth, paragraph (i)(viii) of the Disclosure Letter, there are no past due ad valorem Taxes respecting any of the Assets, except those being contested in good faith in the ordinary course of business for which adequate reserves have been established in the Financial Statements (as defined below).
(j)**Compliance with Laws; Governmental Authorizations**. Except as disclosed in Section Eighth, paragraph (j) of the Disclosure Letter, since December 31, 2023, the General Partner, the Partnership, the Subsidiaries and their respective Assets and operations have been, and currently are, in material compliance with the provisions and requirements of all Laws of all Governmental Bodies having jurisdiction with respect to the General Partner, the Partnership, the Subsidiaries, and their respective Assets. The General Partner, the Partnership, and each Subsidiary have obtained and are maintaining all federal, state and local governmental licenses, permits, franchises, orders, exemptions, variances, waivers, authorizations, certificates, consents, rights, privileges and applications therefor (the “**Governmental Authorizations**”) that are presently necessary or required for the ownership and operation of the Assets as currently operated, and no violations exist in respect of any material Governmental Authorizations except where the failure to obtain or maintain or the violation of which would not cause a Material Adverse Effect.
(k)**Contracts**.
(i)Section Eighth, paragraph (k) of the Disclosure Letter sets forth, a true, complete and correct list as of the date of this Agreement (including amendments) of all Contracts to which the General Partner, the Partnership, any Subsidiary, or their respective Assets are bound, or respecting which the General Partner or the Existing Management Company is a party in connection with the Partnership or any Subsidiary, other than (A) leases, easements, rights-of-way and other similar agreements affecting only mineral or other interests in real property, (B) letters of intent relating to transactions that have been fully consummated, and (C) purchase and sale agreements and similar agreements relating to the acquisition or disposition of Assets where (1) such transaction has been fully consummated and all conditions to closing thereunder have been satisfied or waived and (2) such agreement does not contain indemnification or other obligations that remain in effect as of the date hereof. Each Contract required to be listed at Section Eighth, paragraph (k) of the Disclosure Letter is a “Material Contract”.
(ii)Each Material Contract is in full force and effect to the extent provided therein and the General Partner has provided to the Subscriber a true and complete copy of each Material Contract and any and all amendments thereto. The Partnership, General Partner, each
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Subsidiary and the Existing Management Company are not, and to the General Partner’s knowledge, no other party is, in default in any material respect under any Material Contract.
(l)**Bankruptcy**. There are no bankruptcy, reorganization or receivership Proceedings pending, being contemplated by or, to the General Partner’s knowledge, threatened against the General Partner, the Partnership or any Subsidiary. The General Partner, the Partnership, and each Subsidiary is solvent.
(m)**Wells and Equipment Status; Working Interests**. Neither the Partnership nor any Subsidiary owns any wells, pipelines or other tangible assets, or any working interests, other than as set forth in Section Eighth, paragraph (m) of the Disclosure Letter.
(n)**Financial Statements**. True, correct and complete copies of the balance sheets, statements of operations, statements of changes in partners’ capital, statements of cash flows and related notes to financial statements of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of and for the fiscal years ended on December 31, 2025, December 31, 2024 and December 31, 2023, as audited by the Company’s accountants (the “**Audited Financial Statements**”), are contained in Section Eighth, paragraph (n) of the Disclosure Letter. True, correct and complete copies of the unaudited balance sheet, statement of operations, statement of changes in partners’ capital and statement of cash flows of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of and for the period ended on March 31, 2026 (such financial statements, the “**Interim Financial Statements**” and such date, the “**Interim Financial Statement Date**”) are also contained in Section Eighth, paragraph (n) of the Disclosure Letter. The Audited Financial Statements and the Interim Financial Statements, present fairly, in all material respects, the consolidated financial position of the Partnership and its Subsidiaries (taken as a whole) and the General Partner as of the dates thereof and the consolidated results of operations and cash flows of the Partnership and its Subsidiaries (taken as a whole) and the General Partner for the periods covered by said statements, in accordance with GAAP consistently applied through the periods covered thereby, except for in the case of the Interim Financial Statements (i) year-end adjustments and (ii) the omission of footnote disclosures and other presentation items required by GAAP. The Audited Financial Statements and the Interim Financial Statements are referred to collectively as the “Financial Statements.”
(o)**Indebtedness; Assets; Undisclosed Liabilities**.
(i)None of the General Partner, the Partnership, or any Subsidiary has any Indebtedness. Except as otherwise set forth in Section Eighth, paragraph (o) of the Disclosure Letter, none of the General Partner, the Partnership, or any Subsidiary has granted or suffered to exist any Liens on any of the Assets other than the Permitted Encumbrances. The immediately preceding sentence shall not apply to any Liens on Assets of the Partnership or any Subsidiary that were in existence prior to such Assets being acquired by the Partnership or such Subsidiary where such Liens were not granted by the Partnership or such Subsidiary.
(ii)Except as otherwise set forth in Section Eighth, paragraph (o) of the Disclosure Letter and as reflected on the Interim Financial Statements, neither the Partnership nor the General Partner has any Liabilities required to be reflected on or referenced in financial statements in accordance with GAAP, except (A) Liabilities other than Indebtedness which have
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arisen after the Interim Financial Statement Date in the ordinary course of business under any Contracts to which the General Partner, the Partnership or any Subsidiary is a party or their respective Assets are bound or (B) trade payables.
(iii)Except for the Interests, the Partnership owns and has good and valid title to all the Assets reflected as owned in the Interim Financial Statements and all the Assets (other than Interests) acquired by the Partnership since the Interim Financial Statement Date, except for such Assets as have been disposed of in the ordinary course of business.
(iv)With respect to the Interests, the Partnership warrants that the Partnership or a Subsidiary, as applicable, holds title to the Interests, free and clear of any Title Defects created by, through or under the Partnership or any Affiliate of the Partnership (including the Subsidiaries), but not otherwise; provided, however, that in no event shall the Subscriber Indemnitees be entitled to recover any Losses under this Agreement for a breach of this Section Eighth, paragraph (o)(iv) (A) with respect to any Interest in excess of the Allocated Value of such Interest, or (B) to the extent such Losses have already been recovered from the Initial Purchase Price Escrow Amount (as defined in Appendix A to the Second Amendment).
(v)The General Partner is a special purpose entity and the only assets of the General Partner are general partnership interests in the Partnership and any rights or privileges incidental thereto. The General Partner has never owned, leased, or otherwise held any other properties or assets.
(p)**Employees**. None of the General Partner, the Partnership, or any Subsidiary has any employees, or has ever had any employees.
(q)**Bank Accounts.** Section Eighth, paragraph (q) of the Disclosure Letter contains a true and complete list of the name and location of each bank, trust company, savings and loan association or other financial institution at which the General Partner, the Partnership, any Subsidiary or the Existing Management Company for the Partnership or any Subsidiary, has an account, safety deposit box or custody agreement, along with the account names and numbers, or other identifying information for safety deposit boxes or custody agreements, and the names of the Persons authorized to draw thereon or to withdraw therefrom.
(r)**Affiliated Transactions**. Except as set forth in Section Eighth, paragraph (r) of the Disclosure Letter, other than as a Partner of the Partnership, none of the General Partner, the Existing Management Company, or any of their Affiliates (or any investment vehicle which they manage) or any of their respective officers, directors, managers, members or controlling or other equity holders (including any of the Partners), or any of the respective Affiliates of any of the foregoing Persons, or, to the General Partner’s knowledge, any of such officer’s, director’s, manager’s, member’s or equity holder’s immediate family members, is a party to, or has any interest in any material asset or property held or used by the Partnership or any Subsidiary.
(s)**No Other Representations or Warranties**. EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS AGREEMENT, THE SECOND AMENDMENT AND APPENDIX A THERETO, THE GP AGREEMENT AMENDMENT, AND ANY AND ALL OTHER AGREEMENTS, THE DISCLOSURE LETTER, AND CERTIFICATES, THE
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PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY MAKE NO REPRESENTATIONS OR WARRANTIES WHATSOEVER TO THE SUBSCRIBER AND HEREBY DISCLAIM ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN WRITING) TO SUBSCRIBER OR ITS REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN (OR MAY BE IN CONNECTION WITH THIS AGREEMENT) PROVIDED TO SUBSCRIBER BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR REPRESENTATIVE OF THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY OR ANY AFFILIATE THEREOF). THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY MAKE NO REPRESENTATIONS OR WARRANTIES TO SUBSCRIBER REGARDING THE PROBABLE SUCCESS OR PROFITABILITY OF THE PARTNERSHIP OR THE GENERAL PARTNER. EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, NO REPRESENTATION OR WARRANTY IS MADE BY THE PARTNERSHIP, GENERAL PARTNER AND EXISTING MANAGEMENT COMPANY TO THE SUBSCRIBER AS TO THE CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OF ANY ASSETS OF THE PARTNERSHIP, AND THE PARTNERSHIP AND GENERAL PARTNER ARE NOT MAKING ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO ANY PROJECTIONS OR FORECASTS HERETOFORE DELIVERED OR MADE AVAILABLE TO SUBSCRIBER RELATING TO THE PARTNERSHIP.
**Ninth** **- CONDITIONS OF SUBSCRIBER TO CLOSE:** The obligations of the Subscriber under this Agreement, including the obligation to make any Capital Contribution and join in the Limited Partnership Agreement and (if applicable) the GP Company Agreement, shall be subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which the Subscriber may waive in writing in whole or any part):
(a)**Compliance by the General Partner and the Partnership**. Each of the General Partner and Partnership shall have complied with and performed in all material respects all of their respective agreements and covenants required to be complied with or performed by each of them under this Agreement and the other Related Transaction Documents on or prior to the Closing Date.
(b)**Representations and Warranties**. The representations and warranties of the General Partner and Partnership contained in Section Eighth of this Agreement shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (except for representations and warranties made as of a specified date, which need be so true and correct only as of the specified date).
(c)**Closing Certificate**. The Subscriber shall have received one or more certificates executed by an officer (or person performing a similar function) of the General Partner dated as of the Closing Date, certifying (i) that the conditions specified in paragraphs (a) and (b) above have been fulfilled, (ii) true and complete copies of the Charter Documents of the General Partner and the Partnership, in the form previously provided to the Subscriber as the General Partner’s and Partnership’s Charter Documents (including the Limited Partnership Agreement as amended by
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the Second Amendment and the GP Company Agreement as amended by the GP Agreement Amendment) and (iii) resolutions of the board of the General Partner and other appropriate Persons authorizing the General Partner and the Partnership entering this Agreement, the documents to be delivered in connection herewith and the transactions contemplated hereby.
(d)**No Prohibition**. No temporary restraining order, preliminary or permanent injunction or other order or decree by any domestic or foreign court of competent jurisdiction or other Governmental Body that prevents the consummation of the transactions contemplated hereby or imposes material conditions with respect thereto shall have been issued and remain in effect and no action shall have been taken, and no statute, rule or regulation shall have been enacted, by any Governmental Body that would prevent the consummation of the transactions contemplated hereby or impose material conditions with respect thereto.
(e)**Second Amendment**. The Second Amendment shall have been executed and delivered by each of the Partners, to be effective as of the Closing Date, subject to Closing.
(f)**GP Agreement Amendment**. The GP Agreement Amendment shall have been executed and delivered by each of the Members to be effective as of the Closing Date, subject to Closing.
(g)**Termination and Replacement Management Agreement**. (i) Existing Management Company, the Partnership and the other parties thereto shall have terminated in writing the Mineral Interest Acquisition Agreement dated as of January 18, 2017 among Existing Management Company, the Partnership, the General Partner and the other parties thereto, as amended (the “**Existing Management Agreement**”), (ii) Replacement Management Company, the Partnership and the other parties thereto shall have executed the Second Amendment to Mineral Interest Management Agreement, in the form attached as Exhibit “B” to the Disclosure Letter (the “**Management Agreement Amendment**”), which amends the Mineral Interest Management Agreement dated effective April 1, 2020 among Replacement Management Company, certain Affiliates of Subscriber and certain other parties, as amended by the First Amendment to Mineral Interest Management Agreement dated as of March 8, 2022 (as so amended, the “**Replacement Management Agreement**”), such Management Agreement Amendment to be effective as of the Closing Date, subject to Closing.
(h)**Material Consents**. The Partnership, General Partner or Subscriber, as applicable, shall have received a duly executed copy of each consent or approval of any Person required for consummation of the transactions hereunder where the failure to obtain such consent or approval would reasonably be expected to result in a Material Adverse Effect, in each case, in form and substance reasonably satisfactory to the Subscriber, each of which shall be in full force and effect as of the Closing Date.
(i)**Other Closings**. Each Closing under, and as defined in, each AllDale III Subscription Agreement shall simultaneously occur with the Closing hereunder.
**Tenth** **- CONDITIONS OF PARTNERSHIP AND GENERAL PARTNER:** The obligations of the Partnership and the General Partner under this Agreement to accept the Capital Contribution and admit the Subscriber as a Partner or Member, as the case may be, shall be subject
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to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any of which the General Partner (including the Withdrawing GP Members), including on behalf of the Partnership, may waive in writing in whole or any part):
(a)**Compliance by the Subscriber**. Subscriber shall have complied with and performed in all material respects all of its agreements and covenants required to be complied with or performed by it under this Agreement and the other Related Transaction Documents on or prior to the Closing Date.
(b)**Representations and Warranties**. The representations and warranties of the Subscriber contained in this Agreement shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (except for representations and warranties made as of a specified date, which need be so true and correct only as of the specified date).
(c)**Closing Certificate**. The General Partner shall have received a certificate executed by an officer (or person performing a similar function) of the Subscriber dated as of the Closing Date, certifying that the conditions specified in paragraphs (a) and (b) above have been fulfilled.
(d)**No Prohibition**. No temporary restraining order, preliminary or permanent injunction or other order or decree by any domestic or foreign court of competent jurisdiction or other Governmental Body that prevents the consummation of the transactions contemplated hereby or imposes material conditions with respect thereto shall have been issued and remain in effect and no action shall have been taken, and no statute, rule or regulation shall have been enacted, by any Governmental Body that would prevent the consummation of the transactions contemplated hereby or impose material conditions with respect thereto.
(e)**Second Amendment**. The Second Amendment shall have been executed and delivered by each of the Partners other than the General Partner and any Partner controlled by the General Partner or any Affiliate of the General Partner to be effective as of the Closing Date, subject to Closing.
(f)**GP Agreement Amendment****.** The GP Agreement Amendment shall have been executed and delivered by each of the Members to be effective as of the Closing Date, subject to Closing.
(g)**Other Closings**. Each Closing under, and as defined in, each AllDale III Subscription Agreement shall simultaneously occur with the Closing hereunder.
**Eleventh** - **ADDITIONAL COVENANTS AND AGREEMENTS:**
(a)**Closing**. Subject to the terms and conditions hereof, the closing of the transactions contemplated by this Agreement (the “**Closing**”) shall take place remotely on July 1, 2026. The date of the Closing is herein referred to as the “**Closing Date**.” At the Closing:
(i)Subscriber shall make the Capital Contributions to each of the Partnership and the General Partner required hereby by wire transfer of immediately available funds to the accounts for each of the Partnership and the General Partner designated by the General Partner in writing;
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(ii)The Subscriber shall execute and deliver the joinder agreements to the Partnership Agreement and (if Subscriber has a GP Commitment that is not $0) the GP Company Agreement in the forms attached to the Disclosure Letter as Exhibit “C-1” and Exhibit “C-2”, respectively;
(iii)The Second Amendment and the GP Agreement Amendment will become effective, and in accordance therewith and as contemplated thereby, (A) the Subscriber, or its successor or assign, shall, immediately prior to the Redemption and the GP Redemption, be admitted as a limited partner to the Partnership and as a Member to the General Partner, (B) the Redemption and the GP Redemption shall occur, (C) the Redeeming Partners shall automatically withdraw from the Partnership and cease to be Partners and (D) the Withdrawing GP Members shall automatically withdraw from the General Partner and cease to be Members;
(iv)The Existing Management Agreement will be terminated, the Management Agreement Amendment will become effective, and the Replacement Management Agreement will become the “Management Agreement” under, and as defined in, the Limited Partnership Agreement; and
(v)The General Partner shall deliver to the Partnership and Subscriber releases in the form attached to the Disclosure Letter as Exhibit “D” from the General Partner, each Withdrawing GP Member, the Dale Entities and the General Partner’s other Affiliates as requested by Subscriber, Lawrence B. Dale, Cody Miller, Stephen Abney and Jack Newman.
The foregoing transactions shall be deemed to occur and given effect as of 12:01 a.m. Central Prevailing Time on the Closing Date.
Notwithstanding anything to the contrary herein, the intended U.S. federal and applicable state and local income Tax treatment of the foregoing transactions is as described in Section 1(c) of the Second Amendment and Section 1(c) of the GP Agreement Amendment.
(b)**Conduct of Business**. The General Partner and the Partnership shall, and shall cause the Existing Management Company to, from and after the date hereof and until Closing (i) conduct the Partnership’s and the General Partner’s business and affairs, and cause the business and affairs of each Subsidiary to be conducted, in the ordinary course of business and consistent with past practice and in compliance with the Charter Documents of the General Partner, the Partnership and the Subsidiaries, (ii) use commercially reasonable efforts to preserve intact the current business organization of the Partnership, the Subsidiaries, and General Partner and maintain their respective relations and goodwill with lessors, lessees, suppliers, agents and other Persons having business relationships with the Partnership, the Subsidiaries, or the General Partner, (iii) comply in all material respects with applicable Laws, the Contracts of the Partnership, the Subsidiaries and the General Partner and the Charter Documents of the General Partner, the Partnership and the Subsidiaries, and (iv) keep in full force and effect, without amendment, all material rights relating to the Assets and the business of the Partnership and the General Partner. Except as otherwise expressly permitted by this Agreement, without the prior written consent of the Subscriber, neither the General Partner nor Partnership will (and the General Partner will not permit the Partnership to, and neither will permit any Subsidiary to):
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(i)make any distributions to the Partners, other than any distributions expressly permitted under the Second Amendment or the GP Agreement Amendment or any pro rata distributions of cash in the ordinary course of business pursuant to the Limited Partnership Agreement, or make any discretionary payments to the Existing Management Company or any other Person;
(ii)amend (A) any Charter Documents, other than amendment of the Limited Partnership Agreement pursuant to the Second Amendment, amendment of the GP Company Agreement pursuant to the GP Agreement Amendment, or (B) the Existing Management Agreement;
(iii)amend or enter into any Material Contract other than immaterial amendments to Material Contracts in the ordinary course of business;
(iv)make any capital expenditure or investment in excess of $50,000, individually, or $250,000, in the aggregate;
(v)sell, lease or otherwise dispose of any Interests or other Assets, other than leases entered in the ordinary course of business consistent with past practice and on terms customary for the geographic area in which such Interests are located;
(vi)change accounting methods in use by the Partnership, the General Partner, and the Subsidiaries, or make any Tax elections;
(vii)incur any Indebtedness (which excludes trade payables incurred in the ordinary course of business) or grant or suffer to exist a Lien on any of the Assets other than (A) Permitted Encumbrances and (B) Liens on Assets of the Partnership or any Subsidiary which were in existence prior to the subject Assets being acquired by the Partnership or any Subsidiary;
(viii)issue or redeem any Partnership Interests in the Partnership or Membership Interests in the General Partner or any equity interests in any Subsidiary; or
(ix)commit to or enter any Contract to do any of the foregoing.
From the date hereof to the Closing, General Partner and the Partnership will use commercially reasonable efforts (and cause the Subsidiaries to use commercially reasonable efforts) to comply with and fulfill its duties and obligations under all leases and other Contracts to which the Partnership, any Subsidiary or the General Partner is a party or by which any of their respective Assets are bound.
(c)**Future Litigation; Breaches of Representations And Warranties; Notification**. From the date hereof until the Closing Date, the General Partner shall advise the Subscriber in writing promptly upon becoming aware of the commencement or threat against the Partnership, any Subsidiary or General Partner, or the Existing Management Company respecting the Partnership, of any Proceeding or Tax audit unless such disclosure is prohibited by law. Promptly upon becoming aware of any breach of any representation, warranty or covenant of the General Partner or Partnership contained herein, the General Partner shall notify Subscriber in writing of
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such breach and the circumstances giving rise thereto. Any disclosure of a breach shall not relieve the breaching party of any Liability for such breach.
(d)**Exclusive Dealing**. During the period from the date of this Agreement through the Closing or the earlier termination of this Agreement pursuant to Section Twelfth, the General Partner shall not, and shall cause the Partnership and the General Partner’s Affiliates (including all Subsidiaries) and representatives not to, directly or indirectly, entertain, solicit, respond to, discuss or enter into negotiations with respect to any other offers from or potential transactions with prospective buyers of all or any portion of the Partnership Interests, Membership Interests in the General Partner, any equity interests in any Subsidiaries, or the Assets (either by merger, consolidation, transfer or otherwise), and shall suspend any discussions with or dissemination of information to any such prospective buyers. If the General Partner, the Partnership or the General Partner’s Affiliates or representatives receive any offers from any new or existing offerees, they will (i) remain silent or advise the offeror that they are not in a position to negotiate or accept any offers at that time and (ii) promptly notify the Subscriber in writing of such offers.
(e)**Diligence****.** Up to the Closing Date and subject to any applicable Law, any applicable privileges (including the attorney-client privilege), trade secrets, and contractual confidentiality obligations, Subscriber shall be entitled, through its employees, advisors, consultants, representatives, contractors, counsel and independent accountants, to make such investigation of the Assets, business and operations of the Partnership, the Subsidiaries, and the General Partner and their business and such examination of the books, records and financial condition of the Partnership, the Subsidiaries, and the General Partner and their business as Subscriber reasonably requests, provided that any such investigation and examination shall be conducted at reasonable times and under reasonable circumstances and in a manner so as not to interfere with the normal business operations of the business; provided, however, such entitlement shall not extend to the physical inspection of the properties underlying the Interests. The General Partner shall direct the management of the Partnership, the Subsidiaries, General Partner and Existing Management Company to make available to such Persons during such period all such information and copies of all such documents concerning the affairs of the Partnership, the Subsidiaries, and the General Partner and business as such Persons may reasonably request, shall permit such Persons access to the properties of the Partnership and the Subsidiaries and all parts thereof, and shall cause the Partnership’s, the Subsidiaries’, General Partner’s and the Existing Management Company’s employees, advisors, consultants, representatives, contractors, counsel and independent accountants to cooperate fully with such Persons in connection with their review and examination.
(f)**Conditions; Disclosure**. Each of the parties shall use commercially reasonable efforts to cause the conditions set forth in Sections Ninth and Tenth to be satisfied, and to consummate the transactions contemplated herein as of the Closing Date. The General Partner will provide to each Limited Partner a written summary, which shall be reasonably satisfactory to the Subscriber of the material terms and conditions of the Related Transaction Documents and the transactions contemplated thereby, and all other material information required by applicable securities Laws in connection with requesting the Limited Partners’ approval of the Second Amendment and the transactions contemplated hereby, and recommend, subject to any fiduciary duties, to each Limited Partner such Limited Partner approve, execute and deliver the Second Amendment.
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(g)**Further Assurances**. The General Partner agrees, and agrees to cause the Existing Management Company and Replacement Management Company to, after Closing, take such further actions and to execute, acknowledge and deliver such further documents, as are reasonably requested by the Subscriber for giving effect to the transactions contemplated by this Agreement and the other Related Transaction Documents.
(h)**Partnership Transaction Expenses**. If Closing occurs, the Partnership shall pay and discharge when due all Partnership Transaction Expenses, and the entire amount of the Partnership Transaction Expenses shall reduce the amounts payable to the Redeeming Partners and the Withdrawing GP Members in accordance with the terms of the Second Amendment and the GP Agreement Amendment, as applicable. If Closing does not occur, the General Partner shall pay and discharge any amounts that may be due as described under this Section Eleventh, paragraph (h).
(i)**Disclosure**. Except as and to the extent required by Law, without the prior written consent of Subscriber, the General Partner (including the Withdrawing GP Members) shall not, and shall direct the Partnership, the Existing Management Company and their respective representatives not to, directly or indirectly, make any public comment or public statement with respect to, or otherwise disclose or permit the disclosure of the Related Transaction Documents or the transactions contemplated hereby, including any of the terms, conditions or other aspects of the Related Transaction Documents; provided, however, this provision does not prohibit the Existing Management Company from reporting the performance or investment returns of the Partnership or the general nature of the transaction (without naming Subscriber, KC-AllDale IV, LLC, or any of their respective Affiliates) following Closing. Subscriber will provide any press release or public disclosure to the General Partner for the General Partner’s review in advance of releasing such press release or public disclosure. The General Partner shall request that the Limited Partners and Members (including the Withdrawing GP Members) comply with the foregoing disclosure restrictions, but the General Partner and Partnership shall not have any liability for violations of such disclosure requirements by any Limited Partner or Member not controlled by General Partner or its Affiliates.
(j)**754 Election****.** The General Partner shall make (on behalf of the General Partner), and shall cause the Partnership to make (on behalf of the Partnership), a Section 754 election under the Code for the taxable year in which the Closing Date occurs, if such an election is not already in effect for the General Partner or the Partnership, respectively.
(k)**Review of LP/Member Communications**.
(i)From the date hereof until the Closing Date, the General Partner shall, and shall cause the Partnership to, provide Subscriber with a reasonable opportunity to review and comment on any written materials, notices, solicitations, consent requests, summaries or other disclosures (including any summary of the Related Transaction Documents prepared pursuant to Section Eleventh, paragraph (f)) proposed to be delivered, distributed or otherwise made available by or on behalf of the General Partner, the Partnership or the Existing Management Company to any Limited Partner or Member (including any Withdrawing GP Member) in connection with this Agreement, the other Related Transaction Documents or the transactions contemplated hereby or thereby (collectively, “**LP/Member Communications**”). The General Partner shall deliver each
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proposed LP/Member Communication to Subscriber reasonably in advance of the proposed delivery, distribution or release thereof, shall consider in good faith any comments timely provided by Subscriber, and shall not deliver, distribute or release any LP/Member Communication that is not in form and substance reasonably acceptable to Subscriber.
(ii)The foregoing shall not apply to (A) communications consisting solely of routine administrative or ministerial matters not related to this Agreement, the other Related Transaction Documents or the transactions contemplated hereby or thereby, or (B) responses to unsolicited inquiries from individual Limited Partners or Members, provided that such responses are consistent in all material respects with LP/Member Communications previously reviewed by Subscriber.
**Twelfth** **- TERMINATION:** This Agreement may be terminated at any time prior to the Closing by written notice given prior to or at the Closing:
(a)(i) by Subscriber if there is a material violation or breach by the General Partner or Partnership of any covenant or obligation contained in this Agreement and such violation or breach has not been waived by Subscriber or cured by the General Partner or Partnership within fifteen (15) days following Subscriber’s written notice of same to the General Partner; or (ii) by the General Partner if there is a material violation or breach by Subscriber of any covenant or obligation contained in this Agreement and such violation or breach has not been waived by the General Partner or cured by Subscriber within fifteen (15) days following written notice by the General Partner of the same to Subscriber;
(b)(i) by Subscriber if there is a material violation or breach by the General Partner or Partnership of any of their representations or warranties contained in this Agreement such that the condition set forth in paragraph (b) of Section Ninth would not be satisfied, and such violation or breach has not been waived by Subscriber or cured by the General Partner within fifteen (15) days following Subscriber’s written notice of same to the General Partner; or (ii) by the General Partner if there is a material violation or breach by Subscriber of its representations or warranties contained in this Agreement such that the condition set forth in paragraph (b) of Section Tenth would not be satisfied, and such violation or breach has not been waived by the General Partner or cured by the Subscriber within fifteen (15) days following General Partner’s written notice of same to the Subscriber;
(c)by Subscriber or the General Partner if the transactions contemplated by this Agreement have not been consummated by September 30, 2026 (unless such deadline is extended by mutual written agreement of the Subscriber and the General Partner); **provided** that neither party shall be entitled to terminate this Agreement pursuant to this paragraph (c) if such party’s failure to perform its obligations under this Agreement (and in the case of the General Partner, either the General Partner or the Partnership has failed to perform its obligations) has prevented the consummation of the transactions contemplated by this Agreement;
(d)by mutual written consent of Subscriber and the General Partner; or
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(e)by Diligence Representative, on behalf of Subscriber, or by the Existing Management Company, on behalf of the Partnership and the General Partner, as permitted by Appendix A to the Second Amendment.
Each party’s right of termination under this Section Twelfth is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. In the event of termination of this Agreement as provided in Section Twelfth, the provisions of this Agreement shall immediately become of no further force and effect (other than this Section Twelfth and Section Fourteenth, each of which shall survive the termination of this Agreement) without any party being liable to any other party; provided, however, that in the event that this Agreement is terminated pursuant to paragraph (a) or (b) of Section Twelfth, the parties shall be entitled to all damages available at law and in equity for breaches of this Agreement by the other parties.
**Thirteenth** **- INDEMNIFICATION:**
(a)**Survival**. The representations and warranties contained in this Agreement shall survive the Closing and consummation of the transactions contemplated by this Agreement and shall terminate on the Final Redemption Payment Date; provided, that the representations and warranties of the General Partner set forth in Section Eighth, paragraphs (a), (b), (c), (e), (f), (g), (i), and (o) (the “**Fundamental Representations**”), shall survive the Closing and consummation of the transactions contemplated by this Agreement and shall terminate on the first anniversary of the Final Redemption Payment Date, with the exception of Section Eighth, paragraph (o)(iv), which shall terminate on the Final Redemption Payment Date. The covenants and agreements contained in this Agreement shall survive the Closing and consummation of the transactions contemplated hereby and shall terminate on the first anniversary of the Final Redemption Payment Date. For the avoidance of doubt and subject to the below provisos, after Closing neither party shall be entitled to initiate any action, claim or litigation relating to any representation (including Fundamental Representations), warranty, covenant or agreement after its termination in accordance with this paragraph (a) and waives all rights in respect thereof (such actions, claims or litigations forever being barred) it being understood that this limitation constitutes the expression of the parties’ desire to reduce the statute of limitations with respect to any such action, claim or litigation; provided, however, if an Indemnified Party (as defined below) provides written notice to the Indemnifying Party (as defined below) of a claim for indemnification respecting the breach of a representation, warranty, covenant or agreement prior to the termination of such representation, warranty, covenant or agreement, such representation, warranty, covenant or agreement shall survive solely with respect to such claim (and any and all actions and litigation arising out of such claim brought within two years of such notice of such claim), shall not terminate and shall survive until such claim for indemnification (and related actions and litigation brought within two years of such notice of such claim) are finally resolved; provided, further, that such indemnification will continue to be limited as set forth in paragraph (d) of this Section Thirteenth, which also survives. Furthermore, the parties stipulate that they agree that this is an agreement relating to the sale or purchase of a business entity for purposes of Texas Civil Practice & Remedies Code §16.070(b), if, however, it is determined not to be an agreement relating to the sale or purchase of a business entity for purposes of Texas Civil Practice & Remedies Code §16.070(b), then the relevant termination dates will be two years from the Closing Date.
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(b)**Indemnity by General Partner****.** Subject to the limitations set forth below, from and after the Closing (but subject to the terms and conditions of this Section Thirteenth), the General Partner shall indemnify and hold harmless the Subscriber and each of its Affiliates (which after the Closing shall be deemed to include the Partnership) and each of their respective officers, directors, managers, equity holders, partners, employees, agents and representatives (collectively, the “**Subscriber Indemnitees**”) from, and shall pay to and reimburse the Subscriber Indemnitees for the amount of, any and all Losses that Subscriber Indemnitees or any of them may suffer, sustain, or become subject to, as a result of, in connection with, or relating to:
(i)any breach of or inaccuracy in any representation or warranty of the General Partner or Partnership contained in this Agreement;
(ii)any breach of any covenant or agreement of the General Partner or, at or prior to the Closing, the Partnership contained in this Agreement; or
(iii)any Partnership Transaction Expenses, to the extent not paid at Closing pursuant to Section Eleventh, paragraph (h).
(c)**Indemnity by Subscriber**. Subject to the limitations set forth below, from and after the Closing (but subject to the terms and conditions of this Section Thirteenth), the Subscriber shall indemnify and hold harmless the General Partner (including the Withdrawing GP Members) and each of its Affiliates and each of their respective officers, directors, managers, equity holders, partners, employees, agents and representatives (collectively, the “**General Partner Indemnitees**”) from, and shall pay to and reimburse the General Partner Indemnitees for the amount of, any and all Losses that General Partner Indemnitees or any of them may suffer, sustain, or become subject to, as a result of, in connection with, or relating to:
(i)any breach of or inaccuracy in any representation or warranty of the Subscriber contained in this Agreement; or
(ii)any breach of any covenant or agreement of the Subscriber or, after the Closing, the Partnership contained in this Agreement.
(d)**Limitation****.** A Subscriber Indemnitee shall have the right to set off any claims made under Section Thirteenth, paragraph (b) above against the Adjusted Purchase Price Escrow Amount; provided that any claims under Section Thirteenth, paragraph (b) above first asserted after the Second Redemption Payment Date (as defined in the Second Amendment) shall only be set off against the Adjusted Purchase Price Escrow Amount less the amount of any First Release Net Redemption Proceeds (as defined in the Second Amendment) released from escrow on the Second Redemption Payment Date (the “**Remaining Adjusted Purchase Price Escrow Amount**”). No further claim may be made under this Section Thirteenth for which an adjustment to the Adjusted Purchase Price Escrow Amount has been made pursuant to Appendix A of the Second Amendment such that an Indemnified Party would otherwise receive duplicative payments under this Section Thirteenth. Notwithstanding anything to the contrary set forth in this Agreement, even if a Subscriber Indemnitee would otherwise be entitled to recover a Loss pursuant to Section Thirteenth, paragraph (b), no Subscriber Indemnitee shall be entitled to any indemnification with respect thereto in excess of the Adjusted Purchase Price Escrow Amount or,
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in the case of any indemnification arising after the Second Redemption Payment Date, in excess of the Remaining Adjusted Purchase Price Escrow Amount, except with respect to a Limitation Exception, in which case no Subscriber Indemnitee shall be entitled to any indemnification with respect thereto in excess of the Net Redemption Proceeds paid to the Withdrawing GP Members. After the Closing, set-off against the Adjusted Purchase Price Escrow Amount (or the Remaining Adjusted Purchase Price Escrow Amount, as applicable) held in the escrow account pursuant to this Section Thirteenth shall act as the sole and exclusive remedy for any and all Losses, liabilities, claims, breaches or set-offs arising under, out of, or related to this Agreement or the transactions contemplated hereby, except for Losses arising out of a Limitation Exception (which shall be limited as described in the previous sentence hereof) and for the remedy of specific performance and injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j). The Subscriber, the General Partner (including the Withdrawing GP Members) and the Partnership expressly waive all other remedies available after Closing for breaches of this Agreement other than as provided in this Section Thirteenth and Subscriber’s right to the remedy of specific performance and injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j). Subscriber shall have no obligation to post bond or other security for the remedy of specific performance or injunctive relief respecting Section Eleventh, paragraphs (g), (h), (i), and (j), which obligations to post bond or other security are hereby waived.
(e)**Matters Involving Third Parties**.
(i)If any third party shall notify any Person entitled to indemnification hereunder (the “**Indemnified Party**”) with respect to any matter (a “**Third Party Claim**”) that is reasonably expected to give rise to a claim for indemnification against the General Partner or Subscriber, as applicable (the “**Indemnifying Party**”) under this Section Thirteenth, then the Indemnified Party shall promptly (and in any event within ten business days after receiving notice of the Third Party Claim) notify the Indemnifying Party thereof in writing. Failure to notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that it may have to the Indemnified Party, except to the extent the defense of such claim is materially prejudiced by the Indemnified Party’s failure to give such notice.
(ii)The Indemnifying Party and, if the Indemnifying Party is the General Partner, DOC, acting on behalf of and as representative of the Redeeming Partners and the Withdrawing GP Members (and not in any individual capacity or in its capacity as Replacement Management Company), shall have the right to assume and thereafter conduct the defense of the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party and the Indemnifying Party (or DOC, as applicable) shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that DOC’s right to assume or control the defense of any Third Party Claim under this Section Thirteenth, paragraph (e)(ii) shall automatically terminate, and control of such defense shall revert to the Indemnified Party, at such time as the Adjusted Purchase Price Escrow Amount (or, following the Second Redemption Payment Date, the Remaining Adjusted Purchase Price Escrow Amount) has been reduced to zero, whether by release, set-off, or otherwise, it being understood that DOC will have no right to control the defense of any Third Party Claim for which no escrow proceeds remain available to satisfy any resulting indemnification obligation; provided, further, that the Indemnifying Party (or DOC, as applicable) shall not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim which provides for or results in any
21
payment by or Liability of the Indemnified Party of or for any damages or other amount, any encumbrance on any property of the Indemnified Party, any finding of responsibility or liability on the part of the Indemnified Party or any sanction or injunction of, restriction upon the conduct of any business by, or other equitable relief upon the Indemnified Party without the prior written consent of the Indemnified Party (not to be unreasonably withheld). If the Indemnifying Party (or DOC, as applicable) assumes and thereafter conducts the defense of the Third Party Claim, the Indemnifying Party (or DOC, as applicable) will not have to pay the cost of counsel of the Indemnified Party. Notwithstanding the foregoing, the Indemnifying Party (or DOC, as applicable) shall not be entitled to defend or control the defense of any Third Party Claim if (I) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation, or in the case of any non-criminal Proceeding by a Governmental Body that would reasonably be expected to materially and adversely affect the operations or conduct of the Partnership; (II) the Third Party Claim seeks an injunction or equitable relief against the Indemnified Party; (III) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend such Third Party Claim; (IV) the Indemnified Party reasonably believes that the Losses relating to such Third Party Claim could exceed the maximum amount that such Indemnified Party could then be entitled to recover under the applicable provisions of this Section Thirteenth; or (V) the Indemnifying Party (or DOC, as applicable) does not provide the Indemnified Party with reasonable evidence that the Indemnifying Party (or DOC, as applicable) has the financial resources to defend such Third Party Claim and to fulfill its indemnification obligations under this Section Thirteenth.
(iii)Unless and until the Indemnifying Party (or DOC) assumes the defense of the Third Party Claim as provided in Section Thirteenth, paragraph (e)(ii), the Indemnified Party may defend against the Third Party Claim in any manner it reasonably may deem appropriate. After the Indemnifying Party (or DOC) assumes the defense of a Third Party Claim, the Indemnified Party may participate in such defense with counsel of its choosing at the Indemnified Party’s expense.
(iv)In no event shall the Indemnified Party consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (or DOC, as applicable), which consent shall not be unreasonably withheld.
(f)**Waiver of Rights and Remedies**.
(i)Notwithstanding anything to the contrary in this Agreement, if Subscriber has knowledge (A) on or prior to the date hereof or (B) after the date hereof (and, in the case of this clause (B), has the right to terminate this Agreement pursuant to Section Twelfth as a result of the breach) of the breach of any representation or warranty of the General Partner or the Partnership under this Agreement and nonetheless proceeds to the Closing, the Subscriber and its Affiliates, shall be deemed to have waived any rights to indemnification under Section Thirteenth with respect to such breach. For purposes of this Agreement, Subscriber’s “knowledge” shall be limited to the actual knowledge, without inquiry, of Joseph W. Craft III, Kirk Tholen, R. Eberley Davis, Tyson Schwerdtfeger, Matt Lewis, and Joey Ross.
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(ii)Notwithstanding anything to the contrary in this Agreement, if the General Partner or the Partnership has knowledge (A) on or prior to the date hereof or (B) after the date hereof (and, in the case of this clause (B), has the right to terminate this Agreement pursuant to Section Twelfth as a result of the breach) of the breach of any representation or warranty of the Subscriber under this Agreement and nonetheless proceeds to the Closing, the General Partner (including the Withdrawing GP Members), the Partnership and their Affiliates shall be deemed to have waived any rights to indemnification with respect to such breach.
(g)**Determination of Amount of Losses; Duty to Mitigate**.
(i)Any Indemnified Party seeking indemnification hereunder shall give promptly to the party obligated to provide indemnification to such Indemnified Party a written notice (a “**Claim Notice**”) describing in reasonable detail the facts giving rise to the claim for indemnification hereunder and shall include in such Claim Notice (if then known) the amount or the method of computation of the amount of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder or in connection herewith upon which such claim is based. The failure of any Indemnified Party to give the Claim Notice promptly as required by this Section Thirteenth shall not affect such Indemnified Party’s rights under this Section Thirteenth except to the extent such failure is actually prejudicial to the rights and obligations of the Indemnifying Party.
(ii)The Losses giving rise to any indemnification obligation hereunder shall be limited to the Losses actually suffered by the Indemnified Party (reduced by (i) any insurance proceeds or other payments or recoupments received, realized or retained by the Indemnified Party as a result of the events giving rise to the claim for indemnification net of any expenses related to the receipt of such proceeds, payment or recoupment and (ii) any Tax Benefit recognized by the Indemnified Party (or the affiliated group of which it is a member) resulting from such Losses). Upon the request of the Indemnifying Party, the Indemnified Party shall provide the Indemnifying Party with information (to the extent in the Indemnified Party’s possession or reasonable control) sufficient to allow the Indemnifying Party to calculate the amount of the indemnity payment in accordance with this Section Thirteenth. Each Indemnified Party shall use its commercially reasonable efforts (without any obligation to bring a Proceeding) to recover under insurance policies or similar agreements for any Losses. If the Indemnified Party receives insurance proceeds for Losses after an indemnification payment for such Losses has been made by the Indemnifying Party to the Indemnified Party, the Indemnified Party will refund the Indemnifying Party the amount of such insurance proceeds received by the Indemnified Party up to the amount of the Indemnification payment. An Indemnified Party shall take all commercially reasonable steps to mitigate damages in respect of any claim for which it is seeking indemnification.
(h)**Tax Treatment of Indemnity Payments**. The parties hereto agree that all indemnification payments made under this Agreement shall be treated as purchase price adjustments for applicable Tax purposes.
(i)**Additional Remedy Matters**. To the extent any claim may be recoverable pursuant to more than one subsection of this Section Thirteenth, the Indemnified Party may make such claim under any such subsection in the alternative; provided, however, that nothing in this Agreement is intended to allow an Indemnified Party to receive duplicative payments and to the extent an
23
Indemnified Party has been paid for any Loss under one Section of this Agreement, such Indemnified Party shall not be permitted to seek payment for that Loss under another Section of this Agreement.
(j)**Applicability of Indemnities**. All indemnities in this Section Thirteenth shall apply without regard to the negligence of the Indemnified Party, whether such negligence be sole, joint and/or concurrent, active or passive.
**Fourteenth** **- MISCELLANEOUS:**
(a)**Successors and Assigns**. This Agreement shall inure to the benefit of and be binding upon each of the parties hereto and their successors, heirs and assigns.
(b)**Counterparts**. This Agreement may be executed in counterparts, any one of which need not contain the signatures of more than one party, but each of which will be an original and all of which together shall constitute one and the same agreement binding on all the parties hereto.
(c)**Assignment**. This Agreement shall not be assigned without the prior written consent of the parties hereto, except that Subscriber may assign this Agreement (and its right to acquire some or all of the interests in the Partnership or the General Partner contemplated hereby) and its rights and obligations hereunder, in each case, in whole or part, to any one or more Affiliates of Subscriber upon written notice to the General Partner, in which event such Affiliate(s) shall be substituted as and be the “Subscriber” hereunder. Such assignment shall not relieve Subscriber of its liability for the obligations of Subscriber under this Agreement.
(d)**Amendment; Waiver**. No waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided. This Agreement may not be amended except in a writing signed by each of the General Partner, the Partnership, the Subscriber and DOC. Additionally, if any such amendment would amend this Agreement in a manner that would adversely affect (i) the indemnification rights of any Withdrawing GP Member or any Redeeming Partner pursuant to Section 5.4 of the Partnership Agreement (subject to Sections 1(g) and 1(h) of the Second Amendment) or Article 12 of the GP Company Agreement (subject to Section 1(g) and 1(h) of the GP Agreement Amendment), or (ii) the amount of, or the payment of, Net Redemption Proceeds to any Withdrawing GP Member or any Redeeming Partner, whether as Partners or creditors of the Partnership or Members or creditors of the General Partner, as the case may be, such amendment will not be effective without the prior written consent of the Redeeming Partners Majority (as defined in the Second Amendment) or the Redeeming Members Majority (as defined in the GP Agreement Amendment), as applicable.
(e)**Severability**. If any provision of this Agreement shall be finally determined to be unenforceable, illegal or 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
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as to any party, be deemed severed from this Agreement and the remainder of this Agreement shall continue to be effective and enforceable.
(f)**Governing Law**. This Agreement shall be governed by, and construed under, the laws of the State of Texas and all rights and remedies shall be governed by said laws, without regard to conflict of laws principles. In addition, any and all disputes, controversies, causes of action or claims asserted by any party (against the other), whether those claims sound in breach of contract, tort, fraud, or any other statutory or judicially created cause of action and whether or not such claims are asserted in an arbitration, court of law or any other forum, shall be governed by, and construed under, the laws of the State of Texas and all rights and remedies shall be governed by said laws, without regard to conflict of laws principles.
(g)**WAIVER OF JURY TRIAL**. THE PARTIES KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. EACH PARTY AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
(h)**Addresses and Notices**. All notices, requests or other communications to any party hereunder shall be in writing (which may include e-mail transmission) and shall be given,
if to Subscriber, to the following address:
Alliance Minerals, LLC
1717 S. Boulder Avenue, Suite 400
Tulsa, OK 74119
Attention: Kirk Tholen
e-mail: Kirk.Tholen@arlp.com
with a copy (which shall not constitute notice) to:
R. Eberley Davis
Senior Vice President, General Counsel and Secretary
Alliance Resource Partners, L.P.
1146 Monarch Street
Lexington, KY 40513
e-mail: Eb.Davis@arlp.com
And
GableGotwals
Attn: Stephen W. Lake, Tom Hutchison
110 North Elgin Avenue, Suite 200
Tulsa, OK 74120
e-mail: slake@gablelaw.com, thutchison@gablelaw.com
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and if to the General Partner or Partnership
Cody Miller
General Counsel, Dale Operating Company
110 Manufacturing St.
Dallas, TX 75207
United States of America
e-mail: cody@dale-energy.com
Any such communication will be effective (i) if given by e-mail transmission, when transmitted to the applicable address specified in (or pursuant to) this paragraph (h) (with confirming copy by United States mail), (ii) if given by United States mail (which must be by certified mail), on the earlier of the date of receipt or the fifth day after deposit in the mail, (iii) if given by overnight delivery by courier of national reputation, on the first business day after depositing with such courier properly addressed or (iv) if given by hand delivery or any other means not referenced in clause (i), (ii) or (iii) of this sentence, on the date of receipt.
(i)**Entire Agreement**. This Agreement, along with the other Related Transaction Documents and exhibits hereto, set forth the entire, complete and final agreement of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, inducements or conditions, express or implied, oral or written.
(j)**Expenses**. Each of the parties will bear its own expenses in connection with the preparation, execution and performance of this Agreement and the transactions contemplated by this Agreement, with Partnership Transaction Expenses being paid in accordance with Section Eleventh, paragraph (h). For the avoidance of doubt, this Section Fourteenth, paragraph (j) shall be without duplication of any adjustments to the proceeds received by the Redeeming Partners or the Withdrawing GP Members pursuant to the Second Amendment or the GP Agreement Amendment, as applicable.
(k)**Specific Performance**. The parties recognize that in the event any party should refuse to perform under the provisions of this Agreement, monetary damages alone will not be adequate. The non-breaching party shall therefore, prior to Closing, be entitled, in addition to any other remedies that may be available, including money damages, to obtain specific performance of the terms of this Agreement without any obligation to post bond or other security.
(l)**Construction**. All references to the consent or approval of the General Partner prior to the Closing Date shall be construed to refer to the consent or approval of Members of the General Partner holding at least two-thirds of the interests of the General Partner as of the day immediately prior to the Closing Date, including, for the avoidance of doubt, the Withdrawing GP Members.
**Fifteenth** **- DEFINITIONS:** Capitalized terms used and not otherwise defined herein have the same meanings as set forth in Exhibit “A” attached hereto and incorporated herein by reference.
*[Signature Page Follows]*
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**ALLDALE MINERALS IV, LP - SUBSCRIPTION AGREEMENT**
**SIGNATURE PAGE**
By signing below, the Subscriber (1) confirms that the information contained in the Agreement provided by Subscriber is accurate and complete, (2) agrees to the terms of the Agreement, the Limited Partnership Agreement and the GP Company Agreement, (3) requests that the records of the Partnership reflect the Subscriber’s admission as a limited partner at the Closing as contemplated by the terms of the Agreement and (4) if Subscriber’s GP Commitment is not $0, requests that the records of the General Partner reflect the Subscriber’s admission as a Member at the Closing as contemplated by the terms of the Agreement.
**AMOUNT OF COMMITMENT TO PARTNERSHIP:**
**$115,289,168.58**
**AMOUNT OF COMMITMENT TO GENERAL PARTNER:**
**$26,128,321.32**
**Alliance Minerals, LLC**, a Delaware limited liability company
By: /s/ Kirk D. Tholen
Name: Kirk D. Tholen
Title: President
*Signature Page to Subscription Agreement*
The Partnership, the General Partner, and (solely for purposes of Section Thirteenth, paragraph (e) and Section Fourteenth, paragraph (d)) DOC join in this Agreement as of the date set forth above.
**AllDale Minerals IV, LP**, a Texas limited partnership
By: AllDale Minerals Management IV, LLC, its General Partner
By: /s/ Cody Miller
Cody Miller, Manager
**AllDale Minerals Management IV, LLC**, a Texas limited liability company
By: /s/ Cody Miller
Cody Miller, Manager
**Dale Operating Company**, a Texas corporation
By: /s/ Cody Miller
Name: Cody Miller
Title: Co-CEO and General Counsel
*Signature Page to Subscription Agreement*
**EXHIBIT “A”**
**to Subscription Agreement**
When used in the Agreement, the following terms shall have the following meanings:
“**Adjusted Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Affiliate**” of any particular Person means any other Person controlling, controlled by or under common control with such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise.
“**AllDale III Subscription Agreements**” means (i) the Subscription Agreement for Partnership Interest in AllDale Minerals III, LP dated of even date herewith among the Joseph W. Craft III Foundation, an Oklahoma charitable trust, AllDale Minerals III, LP, AllDale Minerals Management III, LLC, and DOC (ii) the Subscription Agreement for Partnership Interest in AllDale Minerals III, LP dated of even date herewith among CC OilPlay LLC, a Delaware limited liability company, AllDale Minerals III, LP, AllDale Minerals Management III, LLC, and DOC; and (iii) the Subscription Agreement for Partnership Interest in AllDale Minerals III, LP and Membership Interest in AllDale Minerals Management III, LLC dated of even date herewith among Alliance Minerals, LLC, a Delaware limited liability company, AllDale Minerals III, LP, AllDale Minerals Management III, LLC, and DOC.
“**Allocated Value**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Assets**” means all properties and assets, real and personal, tangible and intangible, owned or held by the Partnership, any Subsidiary of the Partnership, or the General Partner.
“**Capital Commitments**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Capital Contribution**” means a capital contribution to the Partnership or the General Partner, as the case may be, by the Subscriber hereunder.
“**Charter Documents**” means, with respect to any Person, the certificate of incorporation, articles of organization, articles of incorporation or association, certificate of partnership, certificate of limited partnership, certificate of formation and by-laws, the limited liability company agreement, operating agreement, or limited partnership agreement or other agreement or agreements that establish the legal organization and personality of such Person and its governance, in each case as amended.
“**Code**” means the Internal Revenue Code of 1986, as amended.
“**Contract**” means, with respect to any Person, any note, bond, mortgage, lease, permit, concession, franchise, license, arrangement, undertaking, contract, commitment, obligation, guaranty, credit agreement, indenture, deed of trust or other instrument, document or agreement (in each case whether written or oral) by which that Person, or any of its present or future properties or assets, is legally bound or subject.
A-1
“**Dale Entities**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Diligence Representative**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Disclosure Letter**” means that certain disclosure letter, dated of even date herewith, delivered by the General Partner and certain of its Affiliates to Subscriber under the Related Transaction Documents.
“**Existing Management Company”** means Dale Land & Minerals, LLC, a Texas limited liability company.
“**Final Redemption Payment Date**” shall have the meaning set forth in the Second Amendment.
“**GAAP**” means United States generally accepted accounting principles, as consistently applied by the Partnership in accordance with its past practices.
“**Governmental Body**” means any federal, state, local, municipal, or other government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and any court or governmental tribunal.
“**GP Redemption**” shall have the meaning set forth in the GP Agreement Amendment.
“**Indebtedness**” means, with respect to the Partnership, any Subsidiary, or the General Partner, as applicable, all Liabilities as of the determination date (including the current portion thereof) of such Person (other than accounts payable and trade payables in the ordinary course of business) (i) for the principal amount, plus any related accrued and unpaid interest, fees and prepayment premiums, penalties or other breakage costs, of any borrowed money, including, without limitation, any such obligations under a credit facility or which are evidenced by any note, bond, debenture or other debt security, and short-term vendor loan payables, (ii) with respect to leases required to be capitalized in accordance with GAAP, (iii) under any letter of credit, performance bond, bankers’ acceptance or similar instrument to the extent drawn upon, (iv) under any interest rate swap, hedging or similar arrangement (valued at the termination value thereof if such arrangement were terminated as of the determination date), (v) issued or assumed as the deferred purchase price of property (calculated as the maximum amount of deferred purchase price owing as of the determination date (whether or not then due and payable) (but excluding trade accounts payable and accruals), (vi) with respect to any Liability of any other Person of the type referenced in clauses (i) through (v), the payment of which the Partnership, any Subsidiary or the General Partner (as applicable) is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise and (vii) with respect to any Liability of any other Person of the type referred to in clauses (i) through (vi) that is secured by any Lien on any Asset (whether or not such Liability is assumed by the Partnership, any Subsidiary, or the General Partner).
“**Initial GP Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the Second Amendment.
A-2
“**Initial LP Purchase Price Escrow Amount**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Initial GP Redemption Proceeds**” shall mean the “Initial Redemption Proceeds” as such term is used in the GP Agreement Amendment
“**Initial LP Redemption Proceeds**” shall mean the “Initial Redemption Proceeds” as such term is used in the Second Amendment.
“**Interests**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Laws**” means any and all applicable laws, statutes, rules, regulations, ordinances, orders, codes, decrees, writs, injunctions, judgments, or principles of common law that are promulgated, issued, or enacted by a Governmental Body.
“**Liabilities**” means any and all liabilities or obligations of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise.
“**Lien**” means any lien, mortgage, security interest, pledge, easement, charge, indenture, deed of trust, right of way, restriction on the use of real or personal property, encroachment or other encumbrance, or any restriction on transfer (except for restrictions on transfer under applicable securities laws), right of first refusal, right of first offer, put right, redemption right, option, warrant, proxy, voting agreement, voting trust, conditional sale or other title retention device or arrangement or transfer for the purpose of the payment of any Indebtedness or otherwise, or any restriction similar to any of the foregoing.
“**Limitation Exception**” means a breach of or inaccuracy in a Fundamental Representation by the General Partner, or any intentional misrepresentation or fraud by the General Partner.
“**Limited Partner**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Losses**” means, with respect to any Person, any losses, liabilities, claims, judgments, fines, loss in value, penalties, damages, expenses, fees, costs or amounts incurred by such Person (including reasonable attorneys’ fees, costs or expenses and all reasonable fees, costs or expenses paid in connection with the investigation, defense and compromise of any claim or loss), but excluding punitive, exemplary, special, indirect and consequential damages and also excluding lost revenues, lost profits and diminution of value, except to the extent punitive, exemplary, special, indirect and consequential damages, lost revenues and lost profits are part of a Third Party Claim made against an Indemnified Party; provided, however, that the definition of Losses shall not limit a party’s liability for any such damages that constitute diminution of value and are proven to constitute actual direct damages.
“**Material Adverse Effect**” means any adverse effect on the ownership, operation or value of the Partnership and its Subsidiaries or the Assets, which is material to the ownership, operation or value of the Assets, taken as a whole, or the Partnership and its Subsidiaries, taken as a whole, and if curable, is not cured by AllDale Minerals Management IV, LLC or its Affiliates within 30 days
A-3
after AllDale Minerals Management IV, LLC or its Affiliates becomes aware of such material adverse effect; provided, however, that the following shall not be deemed to constitute, create, or cause a Material Adverse Effect: any changes, circumstances or effects that (a) affect generally the oil and gas industry, such as fluctuations in the price of commodities, industry inputs, or Hydrocarbons, (b) result from international, national, regional, state, or local economic conditions, (c) result from general developments or conditions in the oil and gas industry, (d) result from changes in Laws (including regulatory or enforcement policy) or accounting principles (including interpretations thereof), (e) result from any public announcement of the transactions contemplated by this Agreement, (f) result from the failure of a Governmental Body to act or omit to act pursuant to Law, (g) result from an outbreak or escalation of hostilities (whether nationally or internationally), or the occurrence of any other calamity or crisis (whether nationally or internationally), including terrorist attacks or (h) any natural or man-made disasters or other force majeure events.
“**Member**” shall have the meaning set forth in the GP Company Agreement.
“**Membership Interest**” shall have the meaning set forth in the GP Company Agreement.
“**Net Redemption Proceeds**” shall have the meaning set forth in the Second Amendment.
“**Original GP Purchase Price**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Original LP Purchase Price**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Partner**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Partnership Interest**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Partnership Transaction Expenses**” means any attorneys’, investment bankers’, accountants’ or other advisors’ or consultants’ fees or expenses or other similar transaction fees and expenses incurred by the General Partner, the Partnership, or any Subsidiary (or by Existing Management Company in connection with or on behalf of the General Partner, the Partnership or any Subsidiary) in connection with the transactions contemplated by this Agreement and unpaid as of the Closing. For the avoidance of doubt, Partnership Transaction Expenses include any fees, commissions, or other amounts due to Stephens, Inc. in connection with the transactions contemplated by this Agreement, but do not include any fees or other expenses incurred in the ordinary course of business which, for the avoidance of doubt, means recurring operational expenses of the type historically incurred by the Partnership in connection with the ownership and administration of the Interests, including routine accounting, land administration, and management fees, but excluding any fees or expenses that have been incurred in connection with, or in contemplation of, the transactions contemplated by this Agreement.
“**Permitted Encumbrances**” shall have the meaning set forth in Appendix A to the Second Amendment.
A-4
“**Person**” means any individual, firm, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, government or agency or subdivision thereof or any other entity.
“**Proceeding**” means any suit, legal action, or legal, administrative, arbitration or other alternative dispute resolution proceeding, hearing or formal investigation.
“**Redeeming Partners**” shall have the meaning set forth in the Second Amendment.
“**Redeeming Partners Majority**” shall have the meaning set forth in the Second Amendment.
“**Redemption**” shall have the meaning set forth in the Second Amendment.
“**Related Transaction Documents**” means this Agreement, the Second Amendment (including Appendix A to the Second Amendment), the GP Agreement Amendment, the Management Agreement Amendment, and the Disclosure Letter.
“**Remaining Commitments**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Replacement Management Company”** means DOC, acting in its capacities under the Replacement Management Agreement.
“**Sharing Percentage**” shall have the meaning set forth in the GP Company Agreement.
“**Sharing Ratio**” shall have the meaning set forth in the Limited Partnership Agreement.
“**Subsidiary**” of any particular Person means any other Person that is controlled by such particular Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise. Unless expressly stated otherwise in this Agreement, any reference to a “Subsidiary” will be deemed to refer to a Subsidiary of the Partnership.
“**Tax**” or “**Taxes**” means any federal, state, local or foreign income, gross receipts, capital stock, franchise, profits, state nonresident withholding, withholding, social security, unemployment, disability, employment, property, ad valorem, unmined minerals, stamp, severance, excise, motor fuels, heavy vehicle, occupation, sales, use, transfer, value added, unclaimed property, alternative minimum, estimated or other tax, charge, fee, duty, levy or other assessment that is imposed by any Governmental Body, in each case including any interest, penalty or addition thereto that is attributable to any nonpayment thereof or any failure to properly prepare or file a return or report with respect thereto.
“**Tax Benefit**” means any refund of Taxes paid or reduction in the amount of Taxes which otherwise would have been paid due to a deduction, credit or other Tax benefit or allowance arising by reason of the event giving rise to a claim under Section Thirteenth of this Agreement.
“**Tax Return**” means any return, report, information return or other document (including schedules or any related or supporting information and any amendment thereof) filed or required
A-5
to be filed with any Governmental Body in connection with the determination, assessment, payment or collection of any Tax.
“**Title Defects**” shall have the meaning set forth in Appendix A to the Second Amendment.
“**Treasury Regulations**” means regulations promulgated by the United States Treasury related to the Code.
“**Withdrawing GP Members**” shall have the meaning set forth in the Second Amendment.
A-6
---
## EX-10.3
SEC source: [arlp-20260630xex10d3.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d3.htm)
**Exhibit 10.3**
**CONTRIBUTION AND EXCHANGE AGREEMENT**
**(AllDale III)**
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (this “Agreement”) is made effective as of July 1, 2026 (the “Effective Date”), by and among AllDale Minerals Management III, LLC, a Texas limited liability company (“AllDale III GP”), AllDale Minerals III, LP, a Texas limited partnership (“AllDale III LP”), Alliance Minerals, LLC, a Delaware limited liability company (“Alliance Minerals”), KC-AllDale, LLC, a Delaware limited liability company (“KC-AllDale”), the Joseph W. Craft III Foundation, an Oklahoma charitable trust (the “JWC III Foundation”), CC OilPlay LLC, a Delaware limited liability company (“CC OilPlay”), and AllRoy GP, LLC, a Delaware limited liability company (“AllRoy GP” and together with AllDale III GP, AllDale III LP, Alliance Minerals, KC-AllDale, JWC III Foundation, and CC OilPlay, each a “Party” and collectively, the “Parties”).
**RECITALS**
WHEREAS, capitalized terms used but not defined in this Agreement have the meanings given to them in the LP Agreement or the LLC Agreement (each as defined below), as applicable;
WHEREAS, on the Effective Date but immediately prior to giving effect to the transactions contemplated by this Agreement, (1) the Third Amended and Restated Agreement of Limited Partnership of AllDale III LP, dated May 15, 2017 (the “LP Agreement”), was amended by that certain First Amendment to the Third Amended and Restated Limited Partnership Agreement (the “First LPA Amendment”) which, along with certain related transaction documents, provided for, among other things, (a) the admission of new Limited Partners of AllDale III LP and (b) the redemption of limited partner Partnership Interests of certain Limited Partners of AllDale III LP; and (2) the Second Amended and Restated Limited Liability Company Agreement of AllDale III GP, dated July 1, 2017 (the “LLC Agreement”) was amended by that certain First Amendment to the Second Amended and Restated Limited Liability Company Agreement (the “First LLCA Amendment” and together with the First LPA Amendment, the “Amendments”) which, along with certain related transaction documents, provided for, among other things, (a) the admission of a new Member of AllDale III GP and (b) the redemption of Membership Interests of certain Members of AllDale III GP;
WHEREAS, as of the effectiveness of the Amendments, but before giving effect to the transactions contemplated by this Agreement, (1) AllDale III GP continued to be the sole General Partner of AllDale III LP and continued to hold a general partner Partnership Interest with a Sharing Ratio of 2.007% (the “GP Interest”), (2) Alliance Minerals and KC-AllDale collectively owned all of the Membership Interests in AllDale III GP, and (3) Alliance Minerals, KC-AllDale, JWC III Foundation, and CC OilPlay collectively owned all of the limited partner Partnership Interests in AllDale III LP; and
WHEREAS, the Parties desire for the following to occur simultaneously under this Agreement: (1) AllDale III GP will contribute the GP Interest to AllDale III LP in exchange for certain limited partner Partnership Interests in AllDale III LP (the “LP Interests”); (2) AllDale III GP will immediately distribute the LP Interests to its Members; (3)(a) AllDale III GP will withdraw as the General Partner of AllDale III LP, (b) all of the Partners of AllDale III LP will approve the withdrawal, waive any conflicting provisions in the LP Agreement, consent to the
reconstitution of the Partnership, and appoint AllRoy GP as the substituted General Partner of AllDale III LP, and (c) AllRoy GP will accept this appointment as the substituted General Partner and be issued a non-economic general partner Partnership Interest in AllDale III LP; and (4) the LP Agreement, as amended by the First LPA Amendment, will be amended and restated in its entirety as set out in the Fourth A&R LPA (as defined below), with the effect of the foregoing being that all Partnership Interests in the Partnership are held in the amounts set out on Exhibit A. Exhibit A reflects the Partners Schedule (Schedule A) to the Fourth A&R LPA.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1.The Transactions. Subject to the terms and conditions of this Agreement, as of the Effective Date and immediately after giving effect to the transactions contemplated by the Amendments, the following transactions shall occur simultaneously:
(a)Contribution and Exchange. AllDale III GP contributes, transfers, assigns, conveys and delivers to AllDale III LP, and AllDale III LP acquires and accepts from AllDale III GP, all of AllDale III GP’s right, title and interest in and to all of the GP Interest. In exchange for and in full consideration of the contribution of the GP Interest, AllDale III LP issues to AllDale III GP the LP Interests, and AllDale III GP acquires and accepts the LP Interests.
(b)Distribution of LP Interests. AllDale III GP distributes, transfers, assigns, conveys and delivers the LP Interests to its Members, so that after giving effect to the contribution, exchange and distribution, the AllDale III LP limited partner Partnership Interests are held in the amounts set out on Exhibit A.
(c)Withdrawal and Appointment. AllDale III GP withdraws as the General Partner of AllDale III LP, and the necessary Parties approve of AllDale III GP’s withdrawal, waive any provisions in the LP Agreement that conflict with AllDale III GP’s withdrawal, consent to the reconstitution of AllDale III LP in accordance with Section 8.3 of the LP Agreement, and appoint AllRoy GP as the substitute General Partner of AllDale III LP. AllRoy GP accepts its appointment as substitute General Partner of AllDale III LP, and AllDale III LP issues to AllRoy GP a non-economic general partner Partnership Interest, as more specifically described in the Fourth Amended and Restated Agreement of Limited Partnership of AllDale III LP that is being executed by the applicable Parties simultaneously with this Agreement (the “Fourth A&R LPA”).
(d)Fourth A&R LPA. The LP Agreement, as amended by the First LPA Amendment, is amended and restated in its entirety as set out in the Fourth A&R LPA.
2.Effect of the Transactions. Each Party acknowledges and agrees that, as of the Effective Date and immediately after giving effect to the transactions contemplated by the Amendments and this Agreement, all Partnership Interests in the Partnership are held by the Persons and in the amounts set out on Exhibit A.
3.Representations and Warranties of AllDale III GP. AllDale III GP represents and warrants that the following statements are true and correct:
2
(a)Authority and Capacity. AllDale III GP has full legal capacity, power, and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed and delivered by AllDale III GP and is the legal, valid and binding obligation of AllDale III GP, enforceable against AllDale III GP in accordance with its terms, except as enforceability may be limited by principles of public policy, applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other similar laws affecting the enforcement of creditors’ rights and remedies generally or general principles of equity, regardless of whether considered and applied in a proceeding at law or in equity (collectively, the “Bankruptcy and Equity Exceptions”).
(b)No Conflicts. The execution, delivery and performance of this Agreement by AllDale III GP do not and will not (with or without notice or lapse of time or both) conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which AllDale III GP is a party or by which it is bound.
(c)Ownership. AllDale III GP is the sole beneficial and record holder of, and has good and marketable title to, all of the GP Interest.
4.Representations and Warranties of AllDale III LP. AllDale III LP represents and warrants that the following statements are true and correct:
(a)Authority and Capacity. AllDale III LP has full legal capacity, power, and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed and delivered by AllDale III LP and is the legal, valid, and binding obligation of AllDale III LP, enforceable against AllDale III LP in accordance with its terms, except as enforceability may be limited by the Bankruptcy and Equity Exceptions.
(b)No Conflicts. The execution, delivery, and performance of this Agreement by AllDale III LP do not and will not (with or without notice or lapse of time or both) conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which AllDale III LP is a party or by which it is bound.
(c)Valid Issuance. The LP Interests being issued and delivered in accordance with this Agreement are duly and validly authorized and issued.
5.Tax Treatment. The Parties acknowledge and agree that for U.S. federal income tax purposes (and applicable state and local income tax purposes), (a) the contribution and exchange shall be treated as a tax-free exchange under Section 721(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) the distribution shall be treated as a tax-free distribution under Section 731 of the Code (collectively, the “Agreed Tax Treatment”). The Parties shall not take any position on any tax return or otherwise that is inconsistent with the Agreed Tax Treatment, unless otherwise required by a “determination” within the meaning of Section 1313(a) of the Code.
6.Further Assurances. The Parties agree to execute any and all documents and instruments of transfer, assignment, assumption or novation and to perform such all other acts that
3
are reasonably necessary or expedient to further the purposes of this Agreement and the transactions contemplated by this Agreement.
7.Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
8.Assignments and Successors. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior consent of the other Parties. Any purported assignment of rights or delegation of obligations in violation of this Section 8 will be void. Subject to the foregoing, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the heirs, executors, administrators, legal representatives, successors, and permitted assigns of the Parties.
9.Waiver of Jury Trial*.* EACH PARTY, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY, WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.
10.Governing Law. This Agreement and the rights and duties of the Parties arising out of this Agreement shall be governed by and construed, enforced, and performed in accordance with the laws of the State of Texas, as the same may be amended from time to time, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Texas.
11.Authorizations. The Parties’ signatures to this Agreement include their respective approvals of this Agreement and all agreements, certificates, instruments and actions contemplated by this Agreement on behalf of AllDale III LP and AllDale III GP, in each of their respective capacities as all of the Partners and all of the Members of AllDale III LP and AllDale III GP, as if formal resolutions approving this Agreement on behalf of AllDale III LP and AllDale III GP had been adopted at meetings duly held after all required notices had been given, or by written consents, in each case in accordance with applicable law and the respective governing documents of such Parties. In addition, all of the Members of AllDale III GP hereby appoint R. Eberley Davis as Authorized Officer for purposes of executing this Agreement on behalf of AllDale III GP.
12.Miscellaneous. This Agreement (a) is the Parties’ sole agreement with respect to its subject matter, and supersedes all prior and contemporaneous written or oral agreements with respect to its subject matter; (b) is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing in this Agreement confers upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever; (c) may only be amended, modified, supplemented or waived by a written agreement signed by all Parties; and (d) may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by e-mail or other means of electronic transmission will have the same legal effect as delivery of an original signed copy of this Agreement. In the event of any conflict between this Agreement and the Fourth A&R LPA, this Agreement shall govern with respect to the transactions occurring on the Effective Date, and the Fourth A&R LPA shall govern thereafter.
4
[*Signature Pages Attached*]
5
THIS CONTRIBUTION AND EXCHANGE AGREEMENT is made and effective as of the Effective Date.
**AllDale Minerals Management III, LLC**, a Texas limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Authorized Officer
**AllDale Minerals III, LP**, a Texas limited partnership
By: **AllDale Minerals Management III, LLC**, a Texas limited liability company (the withdrawing General Partner)
By: /s/ R. Eberley Davis
R. Eberley Davis, Authorized Officer
By: **AllRoy GP, LLC**, a Delaware limited liability company (the substituted General Partner)
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
**Alliance Minerals, LLC**, a Delaware limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
*Signature Page*
*Contribution And Exchange Agreement*
**KC-AllDale, LLC**, a Delaware limited liability company
By: Craft Capital, LLC, its Managing Member
By: /s/ Mark Fiddes
Mark Fiddes, Investment Manager
**Joseph W. Craft III Foundation**, an Oklahoma charitable trust
By: /s/ Joseph W. Craft III
Joseph W. Craft III, Trustee
**CC OilPlay LLC**, a Delaware limited liability company
By: /s/ Deborah Lackey
Deborah Lackey, Manager
**AllRoy GP, LLC**, a Delaware limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
*Signature Page*
*Contribution And Exchange Agreement*
**EXHIBIT A**
**Partnership Interests in AllDale Minerals III, LP**
| Name | General Partner Interest | Limited Partner Interest / Percentage Interest |
| --- | --- | --- |
| AllRoy GP, LLC | 100.000% (non-economic) | 0.000% |
| Alliance Minerals, LLC | 0.000% | 46.920% |
| KC-AllDale, LLC | 0.000% | 17.408% |
| Joseph W. Craft III Foundation | 0.000% | 17.836% |
| CC OilPlay LLC | 0.000% | 17.836% |
| Total | 100.000% | 100.000% |
*EXHIBIT A*
*CONTRIBUTION AND EXCHANGE AGREEMENT*
---
## EX-10.4
SEC source: [arlp-20260630xex10d4.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d4.htm)
**Exhibit 10.4**
**CONTRIBUTION AND EXCHANGE AGREEMENT**
**(AllDale IV)**
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (this “Agreement”) is made effective as of July 1, 2026 (the “Effective Date”), by and among AllDale Minerals Management IV, LLC, a Texas limited liability company (“AllDale IV GP”), AllDale Minerals IV, LP, a Texas limited partnership (“AllDale IV LP”), Alliance Minerals, LLC, a Delaware limited liability company (“Alliance Minerals”), KC-AllDale IV, LLC, a Delaware limited liability company (“KC-AllDale IV”), and AllRoy GP, LLC, a Delaware limited liability company (“AllRoy GP” and together with AllDale IV GP, AllDale IV LP, Alliance Minerals and KC-AllDale IV, each a “Party” and collectively, the “Parties”).
**RECITALS**
WHEREAS, capitalized terms used but not defined in this Agreement have the meanings given to them in the LP Agreement or the LLC Agreement (each as defined below), as applicable;
WHEREAS, on the Effective Date but immediately prior to giving effect to the transactions contemplated by this Agreement, (1) the First Amended and Restated Agreement of Limited Partnership of AllDale IV LP, dated July 11, 2018 (as subsequently amended, the “LP Agreement”), was amended by that certain Second Amendment to the First Amended and Restated Limited Partnership Agreement (the “Second LPA Amendment”) which, along with certain related transaction documents, provided for, among other things, (a) the admission of a new Limited Partner of AllDale IV LP and (b) the redemption of limited partner Partnership Interests of certain Limited Partners of AllDale IV LP; and (2) the First Amended and Restated Limited Liability Company Agreement of AllDale IV GP, dated March 25, 2019 (the “LLC Agreement”) was amended by that certain First Amendment to the First Amended and Restated Limited Liability Company Agreement (the “First LLCA Amendment” and together with the Second LPA Amendment, the “Amendments”) which, along with certain related transaction documents, provided for, among other things, (a) the admission of a new Member of AllDale IV GP and (b) the redemption of Membership Interests of certain Members of AllDale IV GP;
WHEREAS, as of the effectiveness of the Amendments, but before giving effect to the transactions contemplated by this Agreement, (1) AllDale IV GP continued to be the sole General Partner of AllDale IV LP and continued to hold a general partner Partnership Interest with a Sharing Ratio of 3.7771% (the “GP Interest”), (2) Alliance Minerals and KC-AllDale IV collectively owned all of the Membership Interests in AllDale IV GP, and (3) Alliance Minerals and KC-AllDale IV collectively owned all of the limited partner Partnership Interests in AllDale IV LP; and
WHEREAS, the Parties desire for the following to occur simultaneously under this Agreement: (1) AllDale IV GP will contribute the GP Interest to AllDale IV LP in exchange for certain limited partner Partnership Interests in AllDale IV LP (the “LP Interests”); (2) AllDale IV GP will immediately distribute the LP Interests to its Members; (3)(a) AllDale IV GP will withdraw as the General Partner of AllDale IV LP, (b) all of the Partners of AllDale IV LP will approve the withdrawal, waive any conflicting provisions in the LP Agreement, consent to the
reconstitution of the Partnership, and appoint AllRoy GP as the substituted General Partner of AllDale IV LP, and (c) AllRoy GP will accept this appointment as the substituted General Partner and be issued a non-economic general partner Partnership Interest in AllDale IV LP; and (4) the LP Agreement, as amended by the Second LPA Amendment, will be amended and restated in its entirety as set out in the Second A&R LPA (as defined below), with the effect of the foregoing being that all Partnership Interests in the Partnership are held in the amounts set out on Exhibit A. Exhibit A reflects the Partners Schedule (Schedule A) to the Second A&R LPA.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1.The Transactions. Subject to the terms and conditions of this Agreement, as of the Effective Date and immediately after giving effect to the transactions contemplated by the Amendments, the following transactions shall occur simultaneously:
(a)Contribution and Exchange. AllDale IV GP contributes, transfers, assigns, conveys and delivers to AllDale IV LP, and AllDale IV LP acquires and accepts from AllDale IV GP, all of AllDale IV GP’s right, title and interest in and to all of the GP Interest. In exchange for and in full consideration of the contribution of the GP Interest, AllDale IV LP issues to AllDale IV GP the LP Interests, and AllDale IV GP acquires and accepts the LP Interests.
(b)Distribution of LP Interests. AllDale IV GP distributes, transfers, assigns, conveys and delivers the LP Interests to its Members, so that after giving effect to the contribution, exchange and distribution, the AllDale IV LP limited partner Partnership Interests are held in the amounts set out on Exhibit A.
(c)Withdrawal and Appointment. AllDale IV GP withdraws as the General Partner of AllDale IV LP, and the necessary Parties approve of AllDale IV GP’s withdrawal, waive any provisions in the LP Agreement that conflict with AllDale IV GP’s withdrawal, consent to the reconstitution of AllDale IV LP in accordance with Section 8.3 of the LP Agreement, and appoint AllRoy GP as the substitute General Partner of AllDale IV LP. AllRoy GP accepts its appointment as substitute General Partner of AllDale IV LP, and AllDale IV LP issues to AllRoy GP a non-economic general partner Partnership Interest, as more specifically described in the Second Amended and Restated Agreement of Limited Partnership of AllDale IV LP that is being executed by the applicable Parties simultaneously with this Agreement (the “Second A&R LPA”).
(d)Second A&R LPA. The LP Agreement, as amended by the Second LPA Amendment, is amended and restated in its entirety as set out in the Second A&R LPA.
2.Effect of the Transactions. Each Party acknowledges and agrees that, as of the Effective Date and immediately after giving effect to the transactions contemplated by the Amendments and this Agreement, all Partnership Interests in the Partnership are held by the Persons and in the amounts set out on Exhibit A.
3.Representations and Warranties of AllDale IV GP. AllDale IV GP represents and warrants that the following statements are true and correct:
2
(a)Authority and Capacity. AllDale IV GP has full legal capacity, power, and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed and delivered by AllDale IV GP and is the legal, valid and binding obligation of AllDale IV GP, enforceable against AllDale IV GP in accordance with its terms, except as enforceability may be limited by principles of public policy, applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other similar laws affecting the enforcement of creditors’ rights and remedies generally or general principles of equity, regardless of whether considered and applied in a proceeding at law or in equity (collectively, the “Bankruptcy and Equity Exceptions”).
(b)No Conflicts. The execution, delivery and performance of this Agreement by AllDale IV GP do not and will not (with or without notice or lapse of time or both) conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which AllDale IV GP is a party or by which it is bound.
(c)Ownership. AllDale IV GP is the sole beneficial and record holder of, and has good and marketable title to, all of the GP Interest.
4.Representations and Warranties of AllDale IV LP. AllDale IV LP represents and warrants that the following statements are true and correct:
(a)Authority and Capacity. AllDale IV LP has full legal capacity, power, and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed and delivered by AllDale IV LP and is the legal, valid, and binding obligation of AllDale IV LP, enforceable against AllDale IV LP in accordance with its terms, except as enforceability may be limited by the Bankruptcy and Equity Exceptions.
(b)No Conflicts. The execution, delivery, and performance of this Agreement by AllDale IV LP do not and will not (with or without notice or lapse of time or both) conflict with, breach, violate, or cause a default under any contract, agreement, instrument, order, judgment, or decree to which AllDale IV LP is a party or by which it is bound.
(c)Valid Issuance. The LP Interests being issued and delivered in accordance with this Agreement are duly and validly authorized and issued.
5.Tax Treatment. The Parties acknowledge and agree that for U.S. federal income tax purposes (and applicable state and local income tax purposes), (a) the contribution and exchange shall be treated as a tax-free exchange under Section 721(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) the distribution shall be treated as a tax-free distribution under Section 731 of the Code (collectively, the “Agreed Tax Treatment”). The Parties shall not take any position on any tax return or otherwise that is inconsistent with the Agreed Tax Treatment, unless otherwise required by a “determination” within the meaning of Section 1313(a) of the Code.
6.Further Assurances. The Parties agree to execute any and all documents and instruments of transfer, assignment, assumption or novation and to perform such all other acts that
3
are reasonably necessary or expedient to further the purposes of this Agreement and the transactions contemplated by this Agreement.
7.Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
8.Assignments and Successors. No Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior consent of the other Parties. Any purported assignment of rights or delegation of obligations in violation of this Section 8 will be void. Subject to the foregoing, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the heirs, executors, administrators, legal representatives, successors, and permitted assigns of the Parties.
9.Waiver of Jury Trial*.* EACH PARTY, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY, WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE.
10.Governing Law. This Agreement and the rights and duties of the Parties arising out of this Agreement shall be governed by and construed, enforced, and performed in accordance with the laws of the State of Texas, as the same may be amended from time to time, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Texas.
11.Authorizations. The Parties’ signatures to this Agreement include their respective approvals of this Agreement and all agreements, certificates, instruments and actions contemplated by this Agreement on behalf of AllDale IV LP and AllDale IV GP, in each of their respective capacities as all of the Partners and all of the Members of AllDale IV LP and AllDale IV GP, as if formal resolutions approving this Agreement on behalf of AllDale IV LP and AllDale IV GP had been adopted at meetings duly held after all required notices had been given, or by written consents, in each case in accordance with applicable law and the respective governing documents of such Parties. In addition, all of the Members of AllDale IV GP hereby appoint R. Eberley Davis as Authorized Officer for purposes of executing this Agreement on behalf of AllDale IV GP.
12.Miscellaneous. This Agreement (a) is the Parties’ sole agreement with respect to its subject matter, and supersedes all prior and contemporaneous written or oral agreements with respect to its subject matter; (b) is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing in this Agreement confers upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever; (c) may only be amended, modified, supplemented or waived by a written agreement signed by all Parties; and (d) may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by e-mail or other means of electronic transmission will have the same legal effect as delivery of an original signed copy of this Agreement. In the event of any conflict between this Agreement and the Second A&R LPA, this Agreement shall govern with respect to the transactions occurring on the Effective Date, and the Second A&R LPA shall govern thereafter.
4
[*Signature Pages Attached*]
5
THIS CONTRIBUTION AND EXCHANGE AGREEMENT is made and effective as of the Effective Date.
**AllDale Minerals Management IV, LLC**, a Texas limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Authorized Officer
**AllDale Minerals IV, LP**, a Texas limited partnership
By: **AllDale Minerals Management IV, LLC**, a Texas limited liability company (the withdrawing General Partner)
By: /s/ R. Eberley Davis
R. Eberley Davis, Authorized Officer
By: **AllRoy GP, LLC**, a Delaware limited liability company (the substituted General Partner)
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
**Alliance Minerals, LLC**, a Delaware limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
*Signature Page*
*Contribution And Exchange Agreement*
**KC-AllDale IV, LLC**, a Delaware limited liability company
By: Craft Capital, LLC, its Managing Member
By: /s/ Mark Fiddes
Mark Fiddes, Investment Manager
**AllRoy GP, LLC**, a Delaware limited liability company
By: /s/ R. Eberley Davis
R. Eberley Davis, Senior Vice-President, General Counsel and Secretary
*Signature Page*
*Contribution And Exchange Agreement*
**EXHIBIT A**
**Partnership Interests in AllDale Minerals IV, LP**
| Name | General Partner Interest | Limited Partner Interest / Percentage Interest |
| --- | --- | --- |
| AllRoy GP, LLC | 100.000% (non-economic) | 0.000% |
| Alliance Minerals, LLC | 0.000% | 78.573% |
| KC-AllDale IV, LLC | 0.000% | 21.427% |
| Total | 100.000% | 100.000% |
*EXHIBIT A*
*CONTRIBUTION AND EXCHANGE AGREEMENT*
---
## EX-10.5
SEC source: [arlp-20260630xex10d5.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d5.htm)
**Exhibit 10.5**
**Master Supply, Distribution, and Services Agreement**
This Master Supply, Distribution, and Services Agreement (this “**Agreement**”) is entered into as of July 1, 2026 (the “**Effective Date**”), by and between Saminco Solutions LLC (“**Saminco**”) and Matrix Design Africa (PTY) LTD (“**Matrix**”). Saminco and Matrix are sometimes referred to collectively as the “**Parties**” and individually as a “**Party**.”
1.**PURPOSE AND COMMERCIAL FRAMEWORK**
1.1.**Commercial Relationship.** The Parties wish to establish a commercial relationship under which:
(a) Matrix will act as Saminco’s non-exclusive distributor for certain Saminco products in Africa, India, and Australia with other jurisdictions allowed only by prior written approval of Saminco (the “**Territory**”);
(b) Matrix may purchase products from Saminco for resale to Matrix’s customers in the Territory;
(c) Saminco may purchase products from Matrix for incorporation into Saminco’s own products and for resale to Saminco’s customers; and
(d) either Party may provide repair, refurbishment, and other agreed services to the other Party under purchase orders issued from time to time.
1.2.**Replacement of Prior Distribution Agreement.** This Agreement replaces the Distribution Agreement dated October 3, 2025, between Saminco and Saminco Trading (PTY) LTD, as previously assigned to Matrix. Unless otherwise agreed, this Agreement governs the Parties’ relationship from and after the Effective Date, and the prior Distribution Agreement will no longer apply except with respect to rights and obligations arising from transactions entered into before the Effective Date.
1.3.**Purchase Order Structure.** The Parties intend this Agreement to serve as the master framework for the purchase and sale of products and services between them. Each purchase order accepted under this Agreement will create a separate transaction governed by this Agreement and the terms of the applicable purchase order.
1.4.**Non-Exclusive Relationship.** This Agreement is non-exclusive. Neither Party is required to purchase any minimum volume of products or services from the other, and either Party may buy from, sell to, or work with other parties, including competitors, unless otherwise expressly agreed in writing.
2.**PURCHASE ORDERS AND TRANSACTION TERMS**
2.1.**Purchase Orders.** From time to time, either Party may submit a purchase order to the other Party for products (“**Products**”) or services (“**Services**”) under this Agreement. Each purchase order accepted by the receiving Party will create a separate transaction governed by this
Agreement and the terms of the applicable purchase order. A purchase order is accepted when the receiving Party confirms acceptance in writing (including by email), signs and returns the purchase order, or begins performance.
2.2.**What Governs Each Transaction.** Each transaction under this Agreement is governed by: (a) this Agreement; (b) the applicable purchase order and its attachments; and (c) any documents the purchase order expressly incorporates by reference. If those documents conflict, they control in that order unless the purchase order expressly says otherwise. Terms proposed by the selling Party that are not expressly included in or accepted through the purchase order do not apply.
2.3.**Services and Subcontractors.** A Party providing Services under this Agreement may use subcontractors to perform those Services. If the purchasing Party reasonably objects to a proposed subcontractor, it may terminate the affected purchase order by written notice given within ten (10) days after receiving notice of that subcontractor.
2.4.**Changes.** No change to a purchase order shall be effective unless set forth in a written change order executed by an Authorized Representative of each Party. For purposes of this Agreement, an "Authorized Representative" means, with respect to Matrix, its Managing Director, and, with respect to Saminco, its Chief Financial Officer, or, in either case, such other individual as the applicable Party may designate from time to time by written notice to the other Party.
2.5.**Product Sales and Resale.** Matrix may purchase Saminco Products for resale in the Territory under purchase orders issued under this Agreement. Saminco may also purchase Matrix products under this Agreement for incorporation into Saminco’s own products, systems, or offerings, or for resale to Saminco’s customers, in each case under the applicable purchase order.
2.6.**Product Changes.** Either Party may improve, modify, replace, or discontinue its products at any time, provided it honors any purchase order already in effect. If a Party plans to modify or replace a product the other Party regularly purchases, it will use commercially reasonable efforts to give at least thirty (30) days’ prior written notice. If a Party plans to discontinue such a product line, it will use commercially reasonable efforts to give at least ninety (90) days’ prior written notice.
3.**PRICING, INVOICING, AND PAYMENT**
3.1.**Prices.** The price for any Product or Service will be the price stated in the applicable purchase order. Unless the purchase order says otherwise, each Party remains free to set its own resale prices and terms for products it resells.
3.2.**Price Changes.** If the selling Party wants to increase the price of any Product after a purchase order has been issued, it must give at least thirty (30) days’ prior written notice before shipment. The purchasing Party may cancel the affected order in accordance with Section 5 if it does not accept the price increase.
3.3.**Service Pricing.** Unless a purchase order states otherwise, Services will be charged at the selling Party’s then-current hourly labor rates, or the rates of its contractor, that generally apply in the region where the Services are performed.
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3.4.**Taxes.** Prices do not include sales, use, excise, value-added, import, tariff, or similar taxes, duties, or charges. The purchasing Party is responsible for those amounts unless the purchase order says otherwise or the purchasing Party provides a valid exemption certificate.
3.5.**Pricing Protection.** Unless the applicable purchase order states otherwise, each Party will offer the other commercially reasonable pricing for Products and Services consistent with pricing offered to similarly situated customers for similar products or services under similar circumstances. Upon reasonable request, and not more than two times per year, either Party may review relevant records during normal business hours, at its own expense, to confirm compliance with this section. If an overcharge is found, the selling Party will promptly refund the excess charge or provide another agreed adjustment.
3.6.**Invoices.** Unless a purchase order states otherwise, the selling Party may invoice the purchasing Party when Products are shipped or when Services are completed. If requested, the selling Party will provide reasonable supporting documentation for its invoice and correct any deficiency the purchasing Party identifies. Payment of an invoice does not by itself mean the Products or Services have been accepted. The selling Party may require advance payment for special Products or Services if that requirement is stated in the applicable purchase order.
3.7.**Payment Terms.** The purchasing Party will pay all undisputed amounts within forty-five (45) days after receiving a properly supported invoice, unless the purchase order states otherwise. Payment will be made in the currency stated in the purchase order, by electronic funds transfer or another agreed payment method. Any undisputed amount not paid when due will bear interest at the rate of 1.5% per month or the highest lawful rate, if lower. Amounts disputed in good faith will not accrue interest while the dispute is pending. The purchasing Party may withhold or offset only amounts disputed in good faith or amounts finally determined to be owed by the selling Party under this Agreement or an applicable purchase order. The Parties will cooperate in good faith to resolve any invoice dispute within fifteen (15) business days after notice. No payment will constitute acceptance of Products or Services or a waiver of any claim.
4.**DELIVERY, INSPECTION, AND RISK OF LOSS**
4.1.**Delivery Terms.** Unless a purchase order states otherwise, Products will be shipped F.O.B. the selling Party’s facility. The purchasing Party is responsible for freight, packaging, handling, and other shipping charges unless this Agreement or the applicable purchase order provides otherwise. Each purchase order should specify the shipment point, carrier allocation, export-clearance responsibility, importer of record, and destination-country duties and taxes.
4.2.**Return Shipments.** Unless a purchase order states otherwise, the purchasing Party is responsible for the cost of returning Products to the selling Party. If the purchasing Party returns a Product during the inspection period and the Product is found to be damaged, defective, or otherwise non-conforming, the selling Party will reimburse or credit the reasonable return shipping charges. If a Product is returned for warranty service and the warranty applies, the selling Party will bear the cost of shipping the repaired or replacement Product back to the purchasing Party, subject to any terms stated in the applicable purchase order.
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4.3.**Method of Shipment.** Products will be shipped using the method stated in the applicable purchase order and the selling Party’s standard packaging practices, unless the Parties agree otherwise in writing. If the purchasing Party requests expedited shipping, it will be responsible for any additional cost of that expedited shipment unless the Parties agree otherwise.
4.4.**Title and Risk of Loss.** Unless a purchase order states otherwise, title to and risk of loss for Products pass from the selling Party to the purchasing Party upon delivery to the carrier at the selling Party’s facility. Title passes only upon payment in full to the extent a retention-of-title right is enforceable under applicable law; otherwise title passes with risk of loss. For Products returned by the purchasing Party to the selling Party, risk of loss passes back to the selling Party when the returned Products are delivered to and unloaded at the selling Party’s designated delivery point.
4.5.**Inspection.** Unless a purchase order states otherwise, the purchasing Party will have fifteen (15) days after receiving a Product or after completion of a Service to inspect it for defects or non-conformance with the applicable purchase order or this Agreement. Payment does not waive inspection rights.
4.6.**Acceptance.** If the purchasing Party does not give written notice of a defect, damage, or other non-conformance within the inspection period, the Product or Service will be deemed accepted. Acceptance does not limit any rights the purchasing Party may have under an applicable warranty.
4.7.**Non-Conforming Products and Services.** If the purchasing Party gives timely notice that a Product or Service is damaged, defective, or otherwise non-conforming, the selling Party will, at its expense, correct, replace, or re-perform the affected Product or Service within a reasonable time. If the selling Party cannot do so within a reasonable time, it will refund the amount paid for the affected Product or Service or provide another commercially reasonable adjustment agreed by the Parties.
5.**CANCELLATION, DELAY, AND PURCHASE ORDER REMEDIES**
5.1.**Cancellation for Price Increase.** If the selling Party gives notice of a price increase under Section 3.2, the purchasing Party may cancel the affected order by written notice given within ten (10) business days after receiving that notice. If the purchasing Party cancels, the selling Party will promptly refund any amounts paid for the cancelled Products.
5.2.**Cancellation of Product Orders.** Unless the applicable purchase order states otherwise, Products will be treated as “standard” products unless the purchase order expressly identifies them as nonstandard or custom products.
(a)Standard Products. The purchasing Party may cancel a standard-product order at any time before shipment. If the cancellation is made within thirty (30) days of the scheduled shipment date, the selling Party may charge a restocking fee of up to twenty percent (20%) of the purchase price.
(b)Nonstandard Products. The purchasing Party may cancel a nonstandard-product order at any time before shipment, but the selling Party may charge a reasonable cancellation
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fee based on completed work, committed materials, and other documented costs. If the nonstandard product has already been completed, the selling Party may require the purchasing Party to take and pay for it.
5.3.**Cancellation of Services.** The purchasing Party may cancel a Service order by giving at least ten (10) business days’ prior written notice before the scheduled Service date, unless the selling Party agrees to a shorter period. If the purchasing Party cancels later than that, it will reimburse the selling Party for reasonable, documented costs already incurred in preparation for the Services, including ordered materials and committed labor.
5.4.**Delay and Non-Performance.** The purchasing Party may cancel a purchase order without penalty if:
(a)the selling Party fails to ship Products within fifteen (15) days after the scheduled shipment date; or
(b)the selling Party fails to perform Services on the scheduled date and does not promptly cure after written notice,
unless the delay is caused by an event beyond the selling Party’s reasonable control and continues only for a commercially reasonable period.
5.5.**Rescheduling.** The purchasing Party may request that shipment or performance be rescheduled to an earlier or later date. The selling Party will not unreasonably withhold, delay, or condition its agreement to that change. Any resulting adjustment to price, schedule, or both will be documented in a written change order.
5.6.**Supplier Remedies at the Purchase Order Level.** The selling Party may suspend performance, delay shipment, or terminate the affected purchase order if:
(a)the purchasing Party fails to pay an undisputed amount within fifteen (15) days after written notice of nonpayment;
(b)the purchasing Party materially breaches the applicable purchase order or this Agreement and does not cure that breach within thirty (30) days after written notice; or
(c)the purchasing Party becomes insolvent, files for bankruptcy, makes a general assignment for the benefit of creditors, or is otherwise unable to pay its debts as they come due.
6.**WARRANTIES AND PRODUCT SUPPORT**
6.1.**Title Warranty.** The selling Party warrants that it will transfer good and marketable title to all Products sold under this Agreement, free and clear of all liens and encumbrances. This title warranty does not expire.
6.2.**Product Warranty.** Subject to the terms of this Agreement, the selling Party warrants that each Product it sells under this Agreement will be free from defects in design, materials,
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manufacturing, and workmanship during the applicable warranty period. Unless the applicable purchase order states otherwise, that warranty period begins on the earlier of: (a) eighteen (18) months after the selling Party invoices the Product; or (b) the date the purchasing Party ships or invoices that Product to its own customer, and continues for one (1) year after that date.
6.3.**Downstream Warranty Responsibility.** Except as expressly stated in this Agreement, the purchasing Party is responsible for managing and fulfilling warranty obligations to its own customers. The purchasing Party will not offer its customers a warranty that is broader than the selling Party’s applicable standard warranty for the Product because the selling Party's reimbursement obligation under Section 6.5 is limited to defects covered by the selling Party's standard Product Warranty. The selling Party may update its standard warranty terms from time to time on prior written notice, but any such update will apply only on a going-forward basis.
6.4.**Warranty Remedies.** If a Product does not comply with the Product Warranty, the selling Party will, at its option and expense, repair the Product, provide replacement parts, or provide a replacement Product. If the selling Party recalls a Product because of a covered warranty issue, it will provide the parts or replacement Product needed to address that issue, at its expense, except to the extent the applicable purchase order places specific import duties, tariffs, or similar charges on the purchasing Party. The purchasing Party will return any recalled Product the selling Party asks it to return, at the selling Party’s shipping cost.
6.5.**Field Warranty Support and Reimbursement.** If the purchasing Party performs diagnostic, repair, or replacement work in the field on a Product supplied under this Agreement, and the failure is covered by the Product Warranty, the selling Party will reimburse the purchasing Party for reasonable, documented labor and approved expenses in accordance with any procedures, rates, or requirements set out in the applicable purchase order or otherwise agreed by the Parties. If no such procedures or rates have been agreed, reimbursement will be at commercially reasonable local market rates for labor, travel, lodging, and consumables actually incurred. The selling Party is not required to reimburse costs caused by misuse, modification, improper installation, operation outside specifications, or unauthorized repair by the purchasing Party or any third party.
6.6.**Recall Support.** The purchasing Party will maintain reasonable records, including part-number and serial-number tracking where applicable, to help identify Products resold to its customers and support any recall process. If the selling Party issues a recall, it will identify the affected products or product range, and the purchasing Party will be responsible for notifying its own customers and carrying out any required downstream recall communications. Except to the extent a recall results from the purchasing Party’s unauthorized modification, misuse, storage, installation, or service practices, the selling Party will bear the direct out-of-pocket costs of a recall relating to a defect in design, materials, manufacturing, labeling, or regulatory non-compliance of the supplied Product, including reasonable notification, shipping, repair, replacement, and field-campaign costs. The purchasing Party will be responsible for losses arising from its failure to provide those recall notices properly.
6.7.**Service Warranty.** The selling Party warrants that all Services it provides under this Agreement will be performed in a diligent and workmanlike manner, using qualified personnel and suitable equipment and materials, and in compliance with the applicable purchase order, this Agreement, and applicable law. Unless the applicable purchase order states otherwise, this
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warranty continues for ninety (90) days after the Services are completed. If Services include installation of Products, those Products will also be covered by the applicable Product Warranty.
6.8.**Remedy for Defective Services.** If Services do not comply with the Service Warranty, the selling Party will, at its expense, re-perform or correct the affected Services within a reasonable time after notice from the purchasing Party. If the selling Party determines that the issue cannot reasonably be corrected, it will refund the amount paid for the affected Services or provide another commercially reasonable adjustment agreed by the Parties. If the purchasing Party requests expedited corrective work, the selling Party may charge an expedited service fee if the purchasing Party approves that fee in writing in advance.
6.9.**Extended Warranties and Training.** The selling Party may, but is not required to, offer extended warranties for new or refurbished Products and may also provide product training. Any extended warranty or training will be addressed in the applicable purchase order or another written agreement between the Parties.
6.10.**Manufacturer Warranties.** To the extent permitted, the selling Party assigns to the purchasing Party any manufacturer warranties it receives for parts or third-party components included in Products sold under this Agreement. That assignment does not limit any warranty obligations the selling Party has under this Agreement.
6.11.**Warranty Disclaimer.** EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, THE SELLING PARTY MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The selling Party has no warranty responsibility for any Product that has been misused, improperly installed, improperly maintained, repaired without authorization, or altered other than as permitted by the selling Party’s written specifications or written approval. For the avoidance of doubt, nothing in this Section 6.11 disclaims, limits, or modifies the express warranties provided elsewhere in this Agreement; and this Section 6.11 applies only to Products and Services supplied by the selling Party under this Agreement and does not impose or create any warranty obligation with respect to Matrix Solutions or other products not supplied by a Party in its capacity as the selling Party under a purchase order.
6.12.**Acknowledgment Regarding Discount Pricing.** The Parties acknowledge and agree that initial pricing on sales by Saminco to Matrix under this Agreement is expected to continue to be discounted in line with historical levels and, the foregoing provisions of Section 6 notwithstanding, with respect to all sales subject to such discounted pricing (to be noted on the purchase orders), Saminco provides no warranty, express or implied, and has no warranty, repair, replacement, reimbursement, or support obligation with respect to such sales, except to the extent the Parties expressly agree otherwise in a writing signed by both Parties.
7.**DISTRIBUTION AND BRAND RIGHTS**
7.1.**Distribution Appointment.** Saminco appoints Matrix, and Matrix accepts appointment, as Saminco’s non-exclusive distributor for Products in the Territory, on the terms of this Agreement. Nothing in this Agreement restricts either Party from appointing, using, or
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working with other distributors, resellers, or sales channels unless the Parties expressly agree otherwise in writing.
7.2.**License to Use Saminco Brand.** During the term of this Agreement, Saminco grants Matrix a fully paid-up, royalty-free, non-exclusive, non-transferable, and non-sublicensable license to use the Saminco name, the Saminco International name, and related trademarks, logos, and brand materials (collectively, the "Saminco Brand") outside the United States solely in connection with Matrix's distribution, marketing, promotion, resale, and after-sale support of Products manufactured by Saminco and supplied to Matrix under this Agreement ("Saminco-Manufactured Products") in the Territory. Any other use of the Saminco Brand, including in connection with the marketing, promotion, distribution, or sale of Matrix Solutions or any product, component, system, service, or offering not manufactured by Saminco, is prohibited unless and until Matrix has obtained the prior written approval of an Authorized Representative of Saminco, which approval may be granted, conditioned, or withheld in Saminco's sole discretion and may be limited in scope, duration, geography, or product line as Saminco may specify. “Matrix Solutions” means products, platforms, systems, software, services, technologies, equipment, traction drives, power systems, electrical machines, data analytics tools, digital applications, monitoring systems, and other solutions developed, manufactured, owned, licensed, or commercially offered by Matrix or its Affiliates, whether alone or with third parties, including jointly developed offerings.
Matrix acknowledges that Saminco recently acquired rights in certain brand materials and is not giving any separate warranty as to those rights. This license does not convey any ownership interest in the Saminco Brand.
7.3.**Brand Use Standards.** Matrix will use the Saminco Brand in the form and presentation in which Saminco has historically used it, including with respect to trademark form, logo, color, and placement. Saminco may issue written brand guidelines to Matrix during the term of this Agreement; any such guidelines will apply to Matrix on a going-forward basis upon thirty (30) days' prior written notice, will not require Matrix to recall, withdraw, or re-label inventory, marketing materials, or collateral produced before the effective date of the guidelines, and will not prevent or materially restrict Matrix from using the Saminco Brand in the manner expressly permitted by this Agreement.
7.4.**No Implied Manufacturer or Warranty Status.** Use of the Saminco Brand on Matrix Solutions does not mean Saminco is the manufacturer or supplier of those Matrix Solutions and does not mean Saminco provides any warranty or support for them, unless the Parties expressly agree otherwise in writing. Responsibility for those Matrix Solutions remains with Matrix unless otherwise agreed.
7.5.**Matrix Distributor Responsibilities.** As Saminco’s distributor in the Territory, Matrix will, at its own expense:
(a)maintain inventory levels reasonably sufficient to support expected sales and delivery needs for Saminco Products it elects to purchase for resale;
(b)market, promote, and sell Saminco Products using commercially reasonable efforts;
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(c)maintain a qualified sales, marketing, and distribution organization for Saminco Products in the Territory;
(d)obtain and maintain any licenses, permits, registrations, or approvals required for Matrix to market and sell Saminco Products in the Territory;
(e)promptly notify Saminco of material complaints, adverse claims, or potential product safety issues involving Saminco Products of which Matrix becomes aware; and
(f)maintain adequate books and records relating to Matrix’s transactions in Saminco Products under this Agreement.
7.6.**Restrictions on Saminco Products.** Unless the Parties expressly agree otherwise in writing, Matrix will not modify Saminco-supplied products, including their technical specifications, labeling, or packaging, and will not market or sell those products other than in the form in which Saminco supplied them. This restriction applies only to products manufactured and supplied by Saminco under this Agreement and does not apply to Matrix Solutions or other products developed, manufactured, or supplied by Matrix or third parties and branded under the Saminco name as permitted by this Agreement.
7.7.**Business Conduct.** Matrix will not engage in unfair, misleading, deceptive, or anti-competitive practices in connection with Saminco, Saminco Products, or the activities covered by this Agreement.
8.**INDEMNIFICATION AND LIABILITY LIMITS**
8.1.**Indemnification by Saminco.** Saminco will indemnify, defend, and hold harmless Matrix, its Affiliates, and their respective directors, officers, employees, managers, and agents from and against any third-party claim, and any related losses, liabilities, damages, judgments, costs, and reasonable attorneys’ fees, to the extent arising out of:
(a)Saminco’s breach of this Agreement;
(b)the distribution, sale, installation, use, operation, servicing, or repair by Saminco or its contractors (other than Matrix) of any Product;
(c)personal injury, death, or property damage caused by a defect in any Product or Service sold by Saminco to Matrix, to the extent that defect constitutes a breach of the applicable Product Warranty; or
(d)any claim that a Product sold by Saminco to Matrix infringes a patent, trademark, or other intellectual property right, or gives rise to product liability, except to the extent the claim arises from a modification made by Matrix.
8.2.**Indemnification by Matrix.** Matrix will indemnify, defend, and hold harmless Saminco, its Affiliates, and their respective directors, officers, employees, managers, and agents from and against any third-party claim, and any related losses, liabilities, damages, judgments, costs, and reasonable attorneys’ fees, to the extent arising out of:
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(a)Matrix’s breach of this Agreement;
(b)the distribution, sale, installation, use, operation, servicing, or repair by Matrix or its contractors (other than Saminco) of any Product, other than claims arising from a breach of the Product Warranty or defects for which Saminco is responsible under this Agreement;
(c)personal injury, death, or property damage caused by a defect in any Product or Service sold by Matrix to Saminco, to the extent that defect constitutes a breach of the applicable Product Warranty; or
(d)any claim that a Product sold by Matrix to Saminco infringes a patent, trademark, or other intellectual property right, or gives rise to product liability, except to the extent the claim arises from a modification made by Saminco.
8.3.**Indemnity Process.** A Party seeking indemnification must give the other Party reasonably prompt written notice of the third-party claim after becoming aware of it. A delay in notice will not relieve the indemnifying Party of its obligations unless the delay materially prejudices its ability to defend the claim. The indemnifying Party will have the right to control the defense and settlement of the claim, using counsel reasonably acceptable to the indemnified Party. If the indemnifying Party does not promptly assume the defense, the indemnified Party may do so at the indemnifying Party’s expense. The indemnified Party may also participate in the defense at its own expense. The indemnifying Party may not settle any claim on terms that impose non-monetary obligations on the indemnified Party without that Party’s consent, not to be unreasonably withheld. Each Party will reasonably cooperate in the defense of any covered claim.
8.4.**Limitation of Liability.** Neither Party will be liable to the other for any indirect, incidental, special, consequential, or exemplary damages, including lost profits, lost revenue, or lost business, arising out of or relating to this Agreement, any purchase order, or any Product or Service supplied under this Agreement, whether the claim is based in contract, tort, or any other legal theory. Except for liabilities arising from (a) a Party’s fraud, gross negligence, or willful misconduct; (b) breach of Section 10.3 (Confidentiality); (c) infringement or misappropriation of the other Party’s intellectual property rights; (d) a Party’s indemnification obligations under this Agreement; (e) death, personal injury, or tangible property damage; or (f) payment obligations for Products or Services properly due, neither Party will be liable to the other for any indirect, incidental, special, consequential, punitive, or exemplary damages, including lost profits, lost revenue, loss of goodwill, or business interruption, arising out of or relating to this Agreement, any purchase order, or any Product or Service supplied under this Agreement. Subject to the foregoing carve-outs, each Party’s aggregate liability arising out of or relating to this Agreement and all purchase orders in any rolling twelve (12) month period will not exceed the greater of (i) the amounts paid or payable under this Agreement and all purchase orders during such period, or (ii) US$1,000,000.
9.**TERM AND TERMINATION**
9.1.**Term.** This Agreement begins on the Effective Date and will continue for an initial term of five (5) years, unless it is terminated earlier in accordance with this Agreement. After the
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initial term, this Agreement will automatically renew for successive one-year periods unless either Party gives the other Party at least thirty (30) days’ prior written notice that it does not want to renew.
9.2.**Termination Without Cause.** Either Party may terminate this Agreement for any reason on ninety (90) days’ prior written notice to the other Party.
9.3.**Termination for Cause.** Either Party may terminate this Agreement on written notice if the other Party materially breaches this Agreement and does not cure that breach within thirty (30) days after receiving written notice describing the breach in reasonable detail. Either Party may also terminate this Agreement immediately upon written notice if the other Party becomes insolvent, files for bankruptcy, makes a general assignment for the benefit of creditors, or ceases doing business in the ordinary course.
9.4.**Effect on Existing Purchase Orders.** Termination or expiration of this Agreement does not, by itself, terminate any purchase order or other transaction already in effect at the time of termination or expiration, unless the applicable purchase order expressly says otherwise. Any purchase order or transaction that remains in effect after termination of this Agreement will continue to be governed by this Agreement until it is completed or otherwise terminated in accordance with its terms. For a period of six (6) months after expiration or termination of this Agreement other than for Matrix’s uncured material breach, Matrix may sell through its remaining inventory of Saminco Products in the Territory in the ordinary course, subject to continued compliance with this Agreement’s trademark, warranty, confidentiality, and payment provisions. Upon request, the Parties will cooperate in good faith on an orderly transition of open quotes, service matters, and customer communications.
9.5.**Survival.** Any provision of this Agreement that by its nature should continue after termination or expiration will continue in effect, including payment obligations, confidentiality obligations, warranty obligations, indemnification obligations, liability limitations, intellectual property provisions, and governing law provisions.
10.**GENERAL TERMS**
10.1.**Compliance with Law.** Each Party will perform its obligations under this Agreement and each purchase order in compliance with applicable law. If a Party is delivering Products across international borders, that Party will be responsible for complying with applicable export laws and obtaining any required export approvals or licenses, unless the applicable purchase order states otherwise. Unless a purchase order states otherwise, the purchasing Party will be responsible for import clearance and for any import duties, tariffs, and related charges.
10.2.**Site Policies and Environmental Compliance.** When work is performed on the other Party’s site, the performing Party will comply with the site owner’s generally applicable health and safety and drug and alcohol policies that have been provided to it. Each Party also warrants that the Products and Services it supplies under this Agreement will comply with applicable environmental laws and regulations. If requested, the supplying Party will provide reasonable use, handling, disposal, and compliance documentation, including current material safety data sheets for any chemical or hazardous products brought onto the other Party’s premises.
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10.3.**Confidentiality.** Each Party will keep confidential all non-public business, technical, commercial, and customer information it receives from the other Party or learns in connection with this Agreement and will use that information only as needed to perform this Agreement, support the resale or servicing of Products, or exercise its rights under this Agreement. A Party may share confidential information with its Affiliates, subcontractors, and customers on a need-to-know basis if they are bound by confidentiality obligations at least as protective as those in this Agreement. Information is not confidential if it was already known without restriction, is received from a third party without restriction, becomes public through no fault of the receiving Party, or is independently developed without use of the other Party’s confidential information. A Party may also disclose confidential information if required by law, subpoena, court order, or applicable securities rules, but will give prompt notice after disclosure where legally permitted. Either Party may seek injunctive or other equitable relief for a threatened or actual breach of this section.
10.4.**Independent Contractors.** The Parties are independent contractors. Nothing in this Agreement creates an employment relationship, partnership, joint venture, agency relationship, or similar arrangement between them. Each Party is responsible for its own employees, contractors, and supervisors and for the manner in which it performs its work, subject to the requirements of this Agreement and any applicable purchase order.
10.5.**Force Majeure.** Neither Party will be liable for a delay or failure in performance (except for payment obligations) to the extent caused by events beyond its reasonable control, including labor disputes, civil disturbances, government action, export or import restrictions, material shortages, war, fire, flood, acts of God, or power failures. The affected Party will promptly notify the other Party, use commercially reasonable efforts to mitigate the effects of the event, and resume performance as soon as reasonably practicable. Force majeure does not excuse payment obligations for amounts already due. If a force majeure event continues for more than ninety (90) consecutive days and materially affects a purchase order, either Party may terminate the affected purchase order without further liability except for amounts accrued before termination.
10.6.**Insurance.** Each Party will maintain, at its own expense, insurance coverage that is reasonable and customary for the work it performs under this Agreement and any applicable purchase order. Whenever a Party is acting as the supplier under a purchase order, it will provide certificates of insurance before starting the applicable work and will provide renewals on request. To the extent required by this Agreement or the applicable purchase order, those certificates will name the purchasing Party and its affiliates as additional insureds, except under workers’ compensation policies, and will provide for prior notice of cancellation or material change.
10.7.**Intellectual Property.** Except as expressly stated in this Agreement, neither Party acquires any ownership right in the other Party’s trademarks, software, or other intellectual property. Any transfer of software ownership or software rights must be stated in a separate written agreement. Use of the Saminco Brand in connection with Matrix Solutions is governed only by the sections of this Agreement that expressly address that use.
10.8.**Assignment.** Neither Party may assign this Agreement or delegate its obligations under it without the other Party’s prior written consent, except that: (a) a Party may assign this Agreement to a financing party or to a successor in connection with a merger, restructuring, or sale
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of substantially all of its assets, on notice to the other Party; and (b) a Party acting as the supplier may use affiliates or subcontractors to perform work to the extent permitted by this Agreement.
10.9.**Lien Protection.** If the purchasing Party has paid all undisputed amounts due under a purchase order, the selling Party will keep the purchasing Party’s property free of liens arising from the selling Party’s work, materials, subcontractors, or suppliers. If such a lien is filed, the selling Party will promptly discharge it, bond it off, or otherwise resolve it in a manner reasonably acceptable to the purchasing Party.
10.10.**Governing Law; Venue; Jury Waiver.** This Agreement and each purchase order will be governed by the laws of the State of Kentucky, without regard to conflict-of-laws principles. Any dispute arising out of or relating to this Agreement or any purchase order must be brought in a court of competent jurisdiction in Kentucky, and each Party submits to that jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods does not apply. To the fullest extent permitted by law, each Party waives any right to a jury trial in any dispute arising out of or relating to this Agreement or any purchase order.
10.11.**Notices.** Any notice required or permitted under this Agreement must be in writing and delivered by certified or registered mail, personal delivery, nationally recognized overnight courier, or email, using the contact information most recently designated by the receiving Party. Notices sent by mail, courier, or personal delivery are effective on receipt. Notices sent by email are effective on receipt during normal business hours, or at the start of the next business day if received after hours.
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**If to Saminco, to:**
For Purchase Orders and Invoicing:
Saminco Solutions LLC
10030 Amberwood Road
Fort Myers, FL 33913
Attention: Cari Wilcox
Email: cwilcox@samincotechnologies.com
For All Other Notices:
Saminco Solutions LLC
10030 Amberwood Road
Fort Myers, FL 33913
Attention: Cari Wilcox / Deborah Lackey
Email: cwilcox@samincotechnologies.com
Email: dlackey@samincotechnologies.com
**If to Matrix, to:**
For Purchase Orders and Invoicing:
Matrix Design Africa (PTY) LTD
Wapadrand Office Park, 90 Kingbolt Crescent, Wapadrand, Pretoria, Gauteng, 0050
Attention: Alex Mac Donald
Email: Alex.MacDonald@Matrixteam.com
For All Other Notices:
Matrix Design Africa (PTY) LTD
Wapadrand Office Park, 90 Kingbolt Crescent, Wapadrand, Pretoria, Gauteng, 0050
Attention: Alex Mac Donald
Email: Alex.MacDonald@Matrixteam.com
10.12.**Severability.** If any provision of this Agreement is held invalid or unenforceable, that provision will be enforced to the maximum extent permitted by law and the rest of the Agreement will remain in effect. If necessary, the invalid or unenforceable provision will be interpreted or revised only to the extent needed to make it enforceable while preserving the Parties’ original intent as closely as possible.
10.13.**Waiver.** A Party’s failure to enforce any provision of this Agreement or any purchase order, or to exercise any right under them, will not operate as a waiver of that provision or right unless the waiver is made expressly in writing.
10.14.**No Change by Conduct.** No review, comment, approval, instruction, or failure to object by either Party will change the other Party’s obligations under this Agreement or any purchase order unless the Parties expressly agree to that change in writing.
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10.15.**Entire Agreement; Amendments.** This Agreement, together with any applicable purchase order and any documents expressly incorporated into that purchase order, is the complete agreement between the Parties with respect to its subject matter and supersedes prior discussions on that subject. Any amendment to this Agreement or any purchase order must be in writing and signed by both Parties.
10.16.**Counterparts and Electronic Signatures.** This Agreement may be signed in counterparts, each of which will be treated as an original, and all of which together will form one agreement. Signatures exchanged electronically will have the same effect as original signatures.
10.17.**Anti-Corruption.** Each Party represents, warrants, and agrees that it and its affiliates, directors, officers, employees, agents, and others acting on its behalf will comply with applicable anti-corruption and anti-bribery laws, including the U.S. Foreign Corrupt Practices Act and any similar laws that apply to the supply, distribution, marketing, sale, or servicing of Products and Services and all other activities under this Agreement. Neither Party will directly or indirectly offer, promise, authorize, give, solicit, or accept any bribe, kickback, facilitation payment, or other improper payment or benefit in connection with any Product, Service, or other transaction under this Agreement.
11.**SIGNATURES**
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
**SAMINCO:**
**Saminco Solutions LLC**
By: /s/ Edward J. Quinn III
Name: Edward J. Quinn III
Title: President
**MATRIX:**
**Matrix Design Africa (PTY) LTD**
By: /s/ Mark Watson
Name: Mark Watson
Title: CEO
15
---
## EX-10.6
SEC source: [arlp-20260630xex10d6.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex10d6.htm)
**Exhibit 10.6**
Execution Version
**CREDIT AGREEMENT**
dated as of July 1, 2026
among
**ALLIANCE RESOURCE PARTNERS, L.P.**
and
**ALLIANCE RESOURCE OPERATING PARTNERS, L.P.**,
as Holdings
**ALLIANCE MINERALS, LLC**,
as Borrower
**THE LENDERS FROM TIME TO TIME PARTY HERETO**
**TRUIST BANK**,
as Administrative Agent
**TRUIST SECURITIES, INC.**,
as Lead Arranger and Bookrunner
**TABLE OF CONTENTS**
| Line item | | Page |
| --- | --- | --- |
| Article I DEFINITIONS; CONSTRUCTION | | 1 |
| Section 1.1 | Definitions | 1 |
| Section 1.2 | Classifications of Loans and Borrowings | 32 |
| Section 1.3 | Accounting Terms and Determination | 32 |
| Section 1.4 | Terms Generally | 33 |
| Section 1.5 | Divisions | 33 |
| Section 1.6 | Rates | 33 |
| Section 1.7 | Times of Day | 34 |
| Article II AMOUNT AND TERMS OF THE COMMITMENT | | 34 |
| Section 2.1 | General Description of Facility | 34 |
| Section 2.2 | Commitments | 34 |
| Section 2.3 | Funding of Borrowings | 34 |
| Section 2.4 | Interest Elections | 35 |
| Section 2.5 | Repayment of Loans | 36 |
| Section 2.6 | Evidence of Indebtedness | 36 |
| Section 2.7 | Optional Prepayments | 37 |
| Section 2.8 | Mandatory Prepayments | 37 |
| Section 2.9 | Interest on Loans | 38 |
| Section 2.10 | Fees | 39 |
| Section 2.11 | Computation of Interest and Fees | 39 |
| Section 2.12 | Inability to Determine Interest Rates; Benchmark Replacement Setting | 39 |
| Section 2.13 | Illegality | 41 |
| Section 2.14 | Increased Costs | 41 |
| Section 2.15 | Funding Indemnity | 42 |
| Section 2.16 | Taxes | 43 |
| Section 2.17 | Payments Generally; Pro Rata Treatment; Sharing of Set-offs | 46 |
| Section 2.18 | Mitigation of Obligations | 47 |
| Section 2.19 | Replacement of Lenders | 48 |
| Section 2.20 | Defaulting Lenders | 48 |
| Article III CONDITIONS PRECEDENT TO LOANS | | 49 |
| Section 3.1 | Conditions to Effectiveness | 49 |
| Section 3.2 | Additional Conditions | 53 |
| Section 3.3 | Delivery of Documents | 53 |
| Article IV REPRESENTATIONS AND WARRANTIES | | 53 |
| Section 4.1 | Existence; Power | 53 |
| Section 4.2 | Organizational Power; Authorization; Enforceability | 53 |
| Section 4.3 | Governmental Approvals; No Conflicts | 54 |
| Section 4.4 | Financial Statements | 54 |
| Section 4.5 | Litigation and Environmental Matters | 54 |
| Section 4.6 | Compliance with Laws and Agreements | 54 |
| Section 4.7 | Investment Company Act | 55 |
| Section 4.8 | Taxes | 55 |
| Section 4.9 | Margin Regulations | 55 |
| Section 4.10 | ERISA | 55 |
| Section 4.11 | Rights in Properties; Insurance | 56 |
| Section 4.12 | Disclosure | 57 |
| Section 4.13 | Labor Relations | 58 |
i
**TABLE OF CONTENTS**
| Line item | | Page |
| --- | --- | --- |
| Section 4.14 | Borrower, Subsidiary Loan Parties and Restricted Entities | 58 |
| Section 4.15 | Solvency | 58 |
| Section 4.16 | Deposit and Disbursement Accounts | 58 |
| Section 4.17 | Collateral Documents | 59 |
| Section 4.18 | Hedging Transactions | 59 |
| Section 4.19 | Material Agreements | 59 |
| Section 4.20 | Sanctions and Anti-Corruption Laws | 59 |
| Section 4.21 | Affected Financial Institutions | 59 |
| Section 4.22 | Outbound Investment Rules | 59 |
| Article V AFFIRMATIVE COVENANTS | | 60 |
| Section 5.1 | Financial Statements and Other Information | 60 |
| Section 5.2 | Notices of Material Events | 61 |
| Section 5.3 | Existence; Conduct of Business | 63 |
| Section 5.4 | Compliance with Laws | 63 |
| Section 5.5 | Payment of Obligations | 63 |
| Section 5.6 | Books and Records | 63 |
| Section 5.7 | Visitation and Inspection | 64 |
| Section 5.8 | Maintenance of Properties; Insurance | 64 |
| Section 5.9 | Use of Proceeds; Margin Regulations | 64 |
| Section 5.10 | Casualty and Condemnation | 64 |
| Section 5.11 | Cash Management | 64 |
| Section 5.12 | Additional Loan Parties and Collateral | 65 |
| Section 5.13 | Further Assurances | 66 |
| Section 5.14 | Additional Beneficial Ownership Certifications | 66 |
| Article VI FINANCIAL COVENANTS | | 66 |
| Section 6.1 | Secured Leverage Ratio | 66 |
| Section 6.2 | Total Leverage to Consolidated Cash Flow Ratio | 66 |
| Article VII NEGATIVE COVENANTS | | 67 |
| Section 7.1 | Indebtedness and Preferred Equity | 67 |
| Section 7.2 | Liens | 67 |
| Section 7.3 | Fundamental Changes | 68 |
| Section 7.4 | Investments, Loans | 69 |
| Section 7.5 | Restricted Payments | 70 |
| Section 7.6 | Sale of Assets | 71 |
| Section 7.7 | Transactions with Affiliates | 72 |
| Section 7.8 | Restrictive Agreements | 72 |
| Section 7.9 | Sale and Leaseback Transactions | 73 |
| Section 7.10 | Hedging Transactions | 73 |
| Section 7.11 | Amendment to Material Documents | 74 |
| Section 7.12 | Accounting Changes | 74 |
| Section 7.13 | Sanctions and Anti-Corruption Laws | 74 |
| Section 7.14 | Outbound Investment Rules | 74 |
| Section 7.15 | Foreign Subsidiaries | 74 |
| Article VIII EVENTS OF DEFAULT | | 74 |
| Section 8.1 | Events of Default | 74 |
| Section 8.2 | Application of Proceeds from Collateral | 77 |
ii
**TABLE OF CONTENTS**
| Line item | | Page |
| --- | --- | --- |
| Article IX THE ADMINISTRATIVE AGENT | | 78 |
| Section 9.1 | Appointment of the Administrative Agent | 78 |
| Section 9.2 | Nature of Duties of the Administrative Agent | 79 |
| Section 9.3 | Lack of Reliance on the Administrative Agent | 79 |
| Section 9.4 | Certain Rights of the Administrative Agent | 80 |
| Section 9.5 | Reliance by the Administrative Agent | 80 |
| Section 9.6 | The Administrative Agent in its Individual Capacity | 80 |
| Section 9.7 | Successor Administrative Agent | 81 |
| Section 9.8 | Withholding Tax | 81 |
| Section 9.9 | The Administrative Agent May File Proofs of Claim | 81 |
| Section 9.10 | Authorization to Execute Other Loan Documents | 82 |
| Section 9.11 | Collateral and Guaranty Matters | 82 |
| Section 9.12 | No Other Duties, Etc | 83 |
| Section 9.13 | Right to Realize on Collateral and Enforce Guarantee | 83 |
| Section 9.14 | Secured Bank Product Obligations and Hedging Obligations | 83 |
| Section 9.15 | Erroneous Payments | 83 |
| Article X MISCELLANEOUS | | 85 |
| Section 10.1 | Notices | 85 |
| Section 10.2 | Waiver; Amendments | 88 |
| Section 10.3 | Expenses; Indemnification | 90 |
| Section 10.4 | Successors and Assigns | 92 |
| Section 10.5 | Governing Law; Jurisdiction; Consent to Service of Process | 95 |
| Section 10.6 | WAIVER OF JURY TRIAL | 96 |
| Section 10.7 | Right of Set-off | 96 |
| Section 10.8 | Counterparts; Integration | 97 |
| Section 10.9 | Survival | 97 |
| Section 10.10 | Severability | 97 |
| Section 10.11 | Confidentiality | 97 |
| Section 10.12 | Interest Rate Limitation | 98 |
| Section 10.13 | Waiver of Effect of Corporate Seal | 98 |
| Section 10.14 | Patriot Act and Beneficial Ownership Regulation | 98 |
| Section 10.15 | No Advisory or Fiduciary Responsibility | 99 |
| Section 10.16 | Electronic Signatures | 99 |
| Section 10.17 | Acknowledgment and Consent to Bail-In of Affected Financial Institutions | 99 |
| Section 10.18 | Certain ERISA Matters. | 100 |
| Section 10.19 | Acknowledgment Regarding any Supported QFCs | 101 |
| Section 10.20 | Non-Recourse to the General Partner and Associated Persons | 102 |
iii
Schedules
Schedule I - Applicable Margin
Schedule II - Commitment Amounts
Schedule III - Closing Date Acquisition Agreement
Schedule 4.5 - Environmental Matters
Schedule 4.14 - Loan Parties and Restricted Entities
Schedule 4.16 - Deposit and Disbursement Accounts
Schedule 4.19 - Material Agreements
Schedule 7.1 - Existing Indebtedness
Schedule 7.2 - Existing Liens
Schedule 7.4 - Existing Investments
Schedule 10.1 - Address for Notices
Exhibits
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Notice of Conversion/Continuation
Exhibits D-1 – D-4 - Form of Tax Certificates
iv
**CREDIT AGREEMENT**
This **CREDIT AGREEMENT** (this “Agreement”) is made and entered into as of July 1, 2026, by and among **ALLIANCE RESOURCE PARTNERS, L.P.**, a Delaware limited partnership (“ARLP”), **ALLIANCE RESOURCE OPERATING PARTNERS, L.P.**, a Delaware limited partnership (“AROP”, and together with ARLP, whether collectively or individually (as the context may require), “Holdings”), **ALLIANCE MINERALS, LLC**, a Delaware limited liability company (the “Borrower”), the several banks and other financial institutions and lenders from time to time party hereto (the “Lenders”), and **TRUIST BANK**, in its capacity as administrative agent for the Lenders (in such capacity, the “Administrative Agent”).
**W I T N E S S E T H****:**
WHEREAS, the Borrower has requested that the Lenders extend credit to the Borrower, in the form of a term loan; and
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, to the extent of their respective Commitments as defined herein, are willing severally to make a term loan to the Borrower.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, Holdings, the Borrower, the Lenders and the Administrative Agent, hereby agree as follows:
**Article I**
**DEFINITIONS; CONSTRUCTION**
Section 1.1**Definitions**. In addition to the other terms defined herein, the following terms used herein shall have the meanings herein specified:
“Acquired Consolidated Cash Flow” means, with respect to any Acquired Entity or Business (any of the foregoing, a “Pro Forma Entity”) for any period, the amount for such period of Consolidated Cash Flow of such Pro Forma Entity (determined using such definitions as if references to the Borrower and the Subsidiary Loan Parties therein were to such Pro Forma Entity and in the case of any Acquired Entity or Business, its Subsidiaries that become Subsidiary Loan Parties, all as determined on a consolidated basis for such Pro Forma Entity).
“Acquired Entity or Business” shall have the meaning provided in the definition of the term “Consolidated Cash Flow.”
“Acquisition” shall mean, as to any Person, (a) the purchase or other acquisition (in one transaction or a series of transactions, including through a merger) of a majority or more of the equity interests of another Person or all or substantially all of the property, assets or business of another Person or of the assets constituting a business unit, line of business or division of another Person or (b) the acquisition (in one transaction or a series of transactions, including through a merger) of any Oil and Gas Properties of another Person.
“Administrative Agent” shall mean Truist Bank, in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Questionnaire” shall mean, with respect to each Lender, an administrative questionnaire in the form provided by or otherwise acceptable to the Administrative Agent and submitted to the Administrative Agent duly completed by such Lender.
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“Affected Financial Institution” shall mean (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” shall mean, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the specified Person. For the purposes of this definition, “Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ability to exercise voting power, by control or otherwise. The terms “Controlling” and “Controlled” have meanings correlative thereto.
“Agreement” shall have the meaning set forth in the introductory paragraph hereof.
“AllDale I” shall mean AllDale Minerals, LP, a Texas limited partnership.
“AllDale II” shall mean AllDale Minerals II, LP, a Texas limited partnership.
“AllDale III” shall mean AllDale Minerals III, LP, a Texas limited partnership.
“AllDale IV” shall mean AllDale Minerals IV, LP, a Texas limited partnership.
“Alliance Royalty” shall mean Alliance Royalty, LLC, a Delaware limited liability company.
“AllRoy GP” shall mean AllRoy GP, LLC, a Delaware limited liability company.
“Anti-Corruption Laws” shall mean all laws, rules and regulations of any jurisdiction applicable to Holdings, the Borrower, each other Group Member, their respective Subsidiaries and/or their respective Unrestricted Subsidiaries concerning or relating to bribery or corruption.
“Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or such Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.
“Applicable Margin” shall mean, as of any date, the percentage per annum determined by reference to the applicable principal amount of the Loan outstanding on such date as set forth on Schedule I.
“Approved Fund” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“AR Midland” shall mean AR Midland, LP, a Delaware limited partnership.
“ARLP” shall have the meaning set forth in the introductory paragraph hereof.
“AROP” shall have the meaning set forth in the introductory paragraph hereof.
“AROP Indenture” means the Indenture, dated June 12, 2024, among AROP and Alliance Resource Finance Corporation, as issuers, ARLP, the guarantors party thereto and Computershare Trust Company, N.A., as trustee.
2
“AROP Notes” means, collectively (i) the 8.625% Senior Notes due June 15, 2029 issued by AROP and Alliance Resource Finance Corporation (as co-issuer) pursuant to the AROP Indenture on June 12, 2024 and (ii) any other notes issued by AROP and Alliance Resource Finance Corporation (or an Affiliate of AROP and/or Alliance Resource Finance Corporation) pursuant to the AROP Indenture.
“Arranger” shall mean Truist Securities, Inc., in its capacity as sole lead arranger and bookrunner.
“Asset Sale” shall mean any Disposition by the Borrower, any Subsidiary Loan Party or any Restricted Entity of property pursuant to Section 7.6(i), 7.6(k) or 7.6(l).
“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.4(b)) and accepted by the Administrative Agent, in substantially the form of Exhibit A attached hereto or any other form approved by the Administrative Agent.
“Associated Persons” shall have the meaning set forth in Section 10.20.
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.12(e).
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” shall mean (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank Product Obligations” shall mean, collectively, all obligations and other liabilities of the Borrower and the Subsidiary Loan Parties to any Bank Product Provider arising with respect to any Bank Products.
“Bank Product Provider” shall mean any Person that, at the time it provides any Bank Product to the Borrower or any Subsidiary Loan Party, (i) is a Lender or an Affiliate of a Lender and (ii) except when the Bank Product Provider is Truist Bank and its Affiliates, has provided prior written notice to the Administrative Agent which has been acknowledged by the Borrower of (x) the existence of such Bank Product, (y) the maximum dollar amount of obligations arising thereunder (the “Bank Product Amount”) and (z) the methodology to be used by such parties in determining the obligations under such Bank Product from time to time. In no event shall any Bank Product Provider acting in such capacity be deemed a Lender for purposes hereof to the extent of and as to Bank Products except that each reference to the term “Lender” in Article IX and Section 10.3(b) shall be deemed to include such Bank Product Provider and in no event
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shall the approval of any such person in its capacity as Bank Product Provider be required in connection with the release or termination of any security interest or Lien of the Administrative Agent. The Bank Product Amount may be changed from time to time upon written notice to the Administrative Agent by the applicable Bank Product Provider. No Bank Product Amount may be established at any time that a Default or Event of Default exists.
“Bank Products” shall mean any of the following services provided to the Borrower or any Subsidiary Loan Party by any Bank Product Provider: (a) any treasury or other cash management services, including deposit accounts, automated clearing house (ACH) origination and other funds transfer, depository (including cash vault and check deposit), zero balance accounts and sweeps, return items processing, controlled disbursement accounts, positive pay, lockboxes and lockbox accounts, account reconciliation and information reporting, payables outsourcing, payroll processing, trade finance services, investment accounts and securities accounts, and (b) card services, including credit cards (including purchasing cards and commercial cards), prepaid cards, including payroll, stored value and gift cards, merchant services processing, and debit card services.
“Base Rate” shall mean for any day a rate per annum equal to the highest of (i) the rate of interest which the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time (the “Prime Rate”), (ii) the Federal Funds Rate, as in effect from time to time, plus 0.50%, (iii) Term SOFR for an Interest Period of one (1) month, plus 1.00% and (iv) zero percent (0%). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer. The Administrative Agent and the Lenders may make commercial loans or other loans at rates of interest at, above, or below the Administrative Agent’s prime lending rate. Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate, or Term SOFR will be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Rate, or Term SOFR, respectively.
“Base Rate Borrowing” shall mean a Borrowing that bears interest at a rate based on the Base Rate.
“Base Rate Loan” shall mean a Loan that bears interest at a rate based on the Base Rate.
“Base Rate Term SOFR Determination Day” shall have the meaning set forth the definition of “Term SOFR”.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.12(b).
“Benchmark Replacement” shall mean with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(a)Daily Simple SOFR; and
(b)the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities and (ii) the related Benchmark Replacement Adjustment.
4
If the Benchmark Replacement would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.
“Benchmark Replacement Date” shall mean a date and time determined by the Administrative Agent, which date shall be no later than the earlier to occur of the following events with respect to the then-current Benchmark:
(a)in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b)in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority
5
with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” shall mean, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.12 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.12.
“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“Borrower” shall have the meaning set forth in the introductory paragraph hereof.
“Borrowing” shall mean a borrowing of the Loan.
“Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or interest on, a conversion of or into, or an Interest Period for, a SOFR Loan, a determination of Term SOFR or a notice with respect to any of the foregoing, any day that is also a U.S. Government Securities Business Day.
“Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as a Capitalized Lease, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP (subject to the provisions of Section 1.3).
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“Capital Stock” shall mean all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock, profits interests or any other “equity security” (as such term is defined in Rule 3a11 1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Exchange Act).
“Capitalized Lease” shall mean, for any Person, each lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP (subject to the provisions of Section 1.3).
“Cavalier Minerals” shall mean Cavalier Minerals JV, LLC, a Delaware limited liability company.
“CavMM” shall mean CavMM, LLC, a Delaware limited liability company.
“Change in Control” shall mean the occurrence of one or more of the following events:
(a)the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission thereunder as in effect on the Closing Date), other than the Permitted Holders, of the right to elect or appoint a majority of the board of directors of the general partner of ARLP or, if ARLP no longer has a general partner, the board of directors (or Person performing a similar function) of ARLP;
(b)(i) Alliance Resource Management GP, LLC ceases to be the sole general partner of ARLP or (ii) MGP II, LLC ceases to be the managing general partner of AROP;
(c)(i) ARLP ceases to directly or indirectly own 100% of the Capital Stock of AROP, AllRoy GP or MGP II, LLC or (ii) AROP ceases to directly own 100% of the Capital Stock of the Borrower;
(d)AllRoy GP ceases to (i) directly own 100% of the Capital Stock of CavMM or (ii) be the sole general partner of AR Midland, AllDale I, AllDale II, AllDale III or AllDale IV;
(e)CavMM ceases to be the sole managing member of Cavalier Minerals;
(f)(i) the Borrower ceases to directly own 100% of the Capital Stock of Alliance Royalty, (ii) Alliance Royalty and AllRoy GP cease to collectively directly own 100% of the Capital Stock of AR Midland, (iii) the Borrower ceases to directly own at least 96% of the membership interests of Cavalier Minerals, (iv) Alliance Royalty ceases to directly own at least 28.33% of the limited partnership interests of AllDale I or Alliance Royalty ceases to directly own at least 27.18% of the limited partnership interests of AllDale II, or (v) the Borrower ceases to directly own at least 46.92% of the limited partnership interests of AllDale III or the Borrower ceases to directly own at least 78.573% of the limited partnership interests of AllDale IV;
(g)Cavalier Minerals ceases to directly own at least 71.66% of the limited partnership interests of AllDale I or at least 72.81% of the limited partnership interests of AllDale II;
(h)(i) AllDale III ceases to directly own 100% of the Capital Stock of Orchid AD3, LLC, Arbala AD3, LLC, North Fork AD3, LLC or Tundra AD3 GP, LLC or directly or indirectly
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own 100% of the Capital Stock of Tundra AD3, LP or (ii) AllDale IV ceases to directly own 100% of the Capital Stock of Ranchito AD4 GP, LLC, Herrera AD4, LLC, Ojeda AD4, LLC, Calle Doce AD4, LLC, Avila AD4, LLC or Maudie AD4 GP, LLC or directly or indirectly own 100% of the Capital Stock of Ranchito AD4, LP or Maudie AD4, LP; or
(i)the occurrence of a “change of control”, or similar provision, under or with respect to any Material Indebtedness.
“Change in Law” shall mean the occurrence, after the Closing Date, of any of the following: (i) the adoption or taking effect of any law, rule, regulation or treaty, (ii) any change in any law, rule, regulation or treaty, or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (iii) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III or Basel IV, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued.
“Closing Date” shall mean the date on which the conditions precedent set forth in Sections 3.1 and 3.2 have been satisfied or waived in accordance with Section 10.2.
“Closing Date Acquisition” shall mean, collectively, the acquisition by the Borrower of limited partner interests in AllDale III and AllDale IV and interests in the general partners of AllDale III and AllDale IV such that, following such acquisition, conversion of partnership interests and simplification of the partnership interest ownership in AllDale III and AllDale IV, on the Closing Date, Borrower and AllRoy GP collectively own (i) all of the general partnership interest (composed of a 0% non-economic general partnership interest) in each of AllDale III and AllDale IV, (ii) 46.92% of the limited partnership interests in AllDale III, and (iii) 78.573% of the limited partnership interests in AllDale IV, all pursuant to the terms of the Closing Date Acquisition Documents.
“Closing Date Acquisition Agreement” shall mean, collectively, the agreements identified on Schedule III.
“Closing Date Acquisition Documents” shall mean, collectively, the Closing Date Acquisition Agreement and each other document, instrument, certificate and agreement executed and delivered in connection therewith.
“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.
“Collateral” shall mean all property and assets of any Loan Party, now owned or hereafter acquired, upon which a Lien in favor of the Administrative Agent is created or purported to be created pursuant to the Collateral Documents.
“Collateral Documents” shall mean, collectively, the Guaranty and Security Agreements, the Control Account Agreements and all other instruments and agreements now or hereafter securing or perfecting the Liens securing the whole or any part of the Obligations or any Guarantee thereof, all UCC financing statements, fixture filings, stock powers, acknowledgments of pledge and all other documents, instruments, agreements and certificates executed and delivered by any Loan Party to the Administrative Agent and the Lenders in connection with the foregoing.
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“Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make a Loan hereunder on the Closing Date, in a principal amount not exceeding the amount set forth with respect to such Lender on Schedule II. The aggregate principal amount of all Lenders’ Commitments as of the Closing Date is $150,000,000.
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended and in effect from time to time, and any successor statute.
“Commodity Hedging Transaction” means any Hedging Transaction relating to Hydrocarbons.
“Compliance Certificate” shall mean a certificate from the principal executive officer or the principal financial officer of the Borrower in the form of, and containing the certifications set forth in, the certificate attached hereto as Exhibit B.
“Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate”, the definition of “Business Day”, the definition of “U.S. Government Securities Business Day”, the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.15 and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Consolidated Cash Flow” shall mean, for the Borrower and the Subsidiary Loan Parties for any period, the excess, if any of (i) the sum of (A) Consolidated Net Income for such period plus (B) to the extent deducted in determining Consolidated Net Income for such period and to the extent not excluded from Consolidated Net Income pursuant to the definition thereof, and without duplication (1) non-cash charges acceptable to the Administrative Agent determined on a consolidated basis in accordance with GAAP, (2) Consolidated Interest Expense and (3) income tax expense determined on a consolidated basis in accordance with GAAP over (ii) the sum of (A) any non-cash items increasing Consolidated Net Income for such period and (B) any cash charges for such period to the extent that such charges constituted non-cash items for a previous period and to the extent such charges are not otherwise included in the determination of Consolidated Net Income; provided that Consolidated Cash Flow shall be increased or decreased by (without duplication):
(1) there shall be included in determining Consolidated Cash Flow for any period, without duplication, the Acquired Consolidated Cash Flow of any Person or business, or attributable to any property or asset acquired by the Borrower or any Subsidiary Loan Party during such period (but not the Acquired Consolidated Cash Flow of any related Person or business or any Acquired Consolidated Cash Flow attributable to any assets or property, in each case to the extent not so acquired) to the extent not subsequently sold, transferred, abandoned or otherwise disposed by the Borrower or such Subsidiary Loan Party (each such Person, business, property or asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”), based on the actual Acquired Consolidated Cash Flow of such Acquired
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Entity or Business for such period (including the portion thereof occurring prior to such acquisition or conversion); and
(2) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated Cash Flow for any period the Disposed Cash Flow of any Person, property, business or asset sold, transferred, abandoned or otherwise disposed of, closed or classified as discontinued operations by the Borrower or any Subsidiary Loan Party during such period (each such Person, property, business or asset so sold or disposed of, a “Sold Entity or Business”) based on the actual Disposed Cash Flow of such Sold Entity or Business for such period (including the portion thereof occurring prior to such sale, transfer or disposition or conversion).
For the purposes of calculating Consolidated Cash Flow, (x) no amounts of any Restricted Entities or any Unrestricted Subsidiaries shall be taken into account in calculating Consolidated Cash Flow, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Restricted Entity or such Unrestricted Subsidiary, as the case may be, (y) no amounts of any Person that is not a Subsidiary of the Borrower or any Subsidiary Loan Party or that is accounted for by the equity method of accounting shall be taken into account in calculating Consolidated Cash Flow, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Person, and (z) no amounts of any non-consolidated entity of the Borrower or the Subsidiary Loan Parties or in which any other Person has a joint interest or any joint venture shall be taken into account in calculating Consolidated Cash Flow, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such, as the case may be.
“Consolidated Debt Service” shall mean, for the Borrower and the Subsidiary Loan Parties for any period, the sum (without duplication) of (i) interest on the Loans accrued or paid during period and (ii) scheduled principal payments of the Loans accrued or paid during such period.
“Consolidated EBITDA” shall mean, for the Borrower and the Subsidiary Loan Parties for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period and to the extent not excluded from Consolidated Net Income pursuant to the definition thereof, and without duplication, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP, and (D) all other non-cash charges acceptable to the Administrative Agent determined on a consolidated basis in accordance with GAAP, in each case for such period; less (iii) to the extent included in determining Consolidated Net Income for such period, and without duplication, (A) unusual and non-recurring gains, and (B) non-cash gains, excluding any non-cash gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash items in any prior period (other than any such accruals or cash reserves that have been added back to Consolidated Net Income in calculating Consolidated EBITDA in accordance with this definition); provided that, for purposes of calculating compliance with the financial covenants set forth in Article VI, to the extent that during such period the Borrower or any Subsidiary Loan Party shall have consummated an Acquisition or any sale, transfer or other disposition of any Person, business, property or assets, in each case, involving a Person, business, property or assets which generated in excess of five percent (5%) of the Consolidated EBITDA during such period, Consolidated EBITDA shall be calculated on a Pro Forma Basis with respect to such Person, business, property or assets so acquired or disposed of. For the purposes of calculating Consolidated EBITDA, (x) no amounts of any Restricted Entities or any Unrestricted Subsidiaries shall be taken into account in calculating Consolidated EBITDA, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Restricted Entity or such Unrestricted Subsidiary, as the case may be, (y) no amounts of any Person that is not a Subsidiary of the Borrower or any Subsidiary Loan Party or
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that is accounted for by the equity method of accounting shall be taken into account in calculating Consolidated EBITDA, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Person, and (z) no amounts of any non-consolidated entity of the Borrower or the Subsidiary Loan Parties or in which any other Person has a joint interest or any joint venture shall be taken into account in calculating Consolidated EBITDA, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such, as the case may be.
“Consolidated Interest Expense” shall mean, for the Borrower and the Subsidiary Loan Parties for any period, determined on a consolidated basis in accordance with GAAP, the sum of (i) total interest expense, including the interest component of any payments in respect of Capital Lease Obligations, capitalized or expensed during such period (whether or not actually paid during such period) plus (ii) the net amount payable (or minus the net amount receivable) with respect to Hedging Transactions during such period (whether or not actually paid or received during such period). For the avoidance of doubt, no amounts of any Restricted Entities or any Unrestricted Subsidiaries shall be taken into account in calculating Consolidated Interest Expense.
“Consolidated Net Income” shall mean, for the Borrower and the Subsidiary Loan Parties for any period, the net income (or loss) of the Borrower and the Subsidiary Loan Parties for such period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary gains or losses, (ii) any gains attributable to write-ups of assets or the sale of assets (other than the sale of inventory in the ordinary course of business), (iii) any equity interest of the Borrower or any Subsidiary Loan Party in the unremitted earnings of any Person that is not a Subsidiary Loan Party and (iv) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary Loan Party or is merged into or consolidated with the Borrower or any Subsidiary Loan Party or the date that such Person’s assets are acquired by the Borrower or any Subsidiary Loan Party. For the purposes of calculating Consolidated Net Income, (x) no amounts of any Restricted Entities or any Unrestricted Subsidiaries shall be taken into account in calculating Consolidated Net Income, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Restricted Entity or such Unrestricted Subsidiary, as the case may be, (y) no amounts of any Person that is not a Subsidiary of the Borrower or any Subsidiary Loan Party or that is accounted for by the equity method of accounting shall be taken into account in calculating Consolidated Net Income, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such Person, and (z) no amounts of any non-consolidated entity of the Borrower or the Subsidiary Loan Parties or in which any other Person has a joint interest or any joint venture shall be taken into account in calculating Consolidated Net Income, except to the extent of the amount of dividends or distributions actually paid in cash to the Borrower or a Subsidiary Loan Party during such period by such, as the case may be.
“Consolidated Total Debt” shall mean, as of any date, all Indebtedness of the Borrower and the Subsidiary Loan Parties measured on a consolidated basis as of such date, but excluding Indebtedness of the type described in clause (xi) of the definition thereof.
“Consolidated Total Secured Debt” shall mean, as of any date, all Indebtedness of the Borrower and the Subsidiary Loan Parties that is secured by, or required to be secured by, a Lien (including, for the avoidance of doubt, Indebtedness under the Loan Documents) measured on a consolidated basis as of such date, but excluding Indebtedness of the type described in clause (xi) of the definition thereto.
“Contractual Obligation” of any Person shall mean any provision of any security issued by such Person or of any agreement, instrument or undertaking under which such Person is obligated or by which it or any of the property in which it has an interest is bound.
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“Control Account Agreement” shall mean any tri-party agreement by and among a Loan Party, the Administrative Agent and a Permitted Third Party Bank, in each case in form and substance satisfactory to the Administrative Agent.
“Controlled Account” shall have the meaning set forth in Section 5.11(a).
“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.
“Debt Service Coverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated EBITDA to (ii) Consolidated Debt Service, in each case, measured for the four consecutive Fiscal Quarters ending on or immediately prior to such date for which financial statements are required to have been delivered under this Agreement; provided, that (a) for the Fiscal Quarter ending September 30, 2026, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for such Fiscal Quarter by four (4) and Consolidated Debt Service will be calculated by multiplying Consolidated Debt Service for such Fiscal Quarter by four (4), (b) for the Fiscal Quarter ending December 31, 2026, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for the two (2) Fiscal Quarter period ending on December 31, 2026 by two (2) and Consolidated Debt Service will be calculated by multiplying Consolidated Debt Service for the two (2) Fiscal Quarter period ending on December 31, 2026 by two (2), (c) for the Fiscal Quarter ending March 31, 2027, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for the three (3) Fiscal Quarter period ending on March 31, 2027 by four-thirds (4/3) and Consolidated Debt Service will be calculated by multiplying Consolidated Debt Service for the three (3) Fiscal Quarter period ending on March 31, 2027 by four-thirds (4/3), and (d) for each Fiscal Quarter thereafter, Consolidated EBITDA will be calculated by adding Consolidated EBITDA for the four (4) consecutive Fiscal Quarters ending on such date and Consolidated Debt Service will be calculated by adding Consolidated Debt Service for the four (4) consecutive Fiscal Quarters ending on such date.
“Debtor Relief Laws” shall mean the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” shall mean any condition or event that, with the giving of notice or the lapse of time or both, would constitute an Event of Default.
“Default Interest” shall have the meaning set forth in Section 2.9(b).
“Defaulting Lender” shall mean, subject to Section 2.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based
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on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent or the Borrower), or (d) has, or has a direct or indirect Parent Company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect Parent Company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(b)) upon delivery of written notice of such determination to the Borrower and each Lender.
“Disposed Cash Flow” means, with respect to any Sold Entity or Business for any period, the amount for such period of Consolidated Cash Flow of such Sold Entity or Business (determined as if references to the Borrower and the Subsidiary Loan Parties in the definition of Consolidated Cash Flow were references to such Sold Entity or Business and its respective Subsidiaries that were Subsidiary Loan Parties), all as determined on a consolidated basis for such Sold Entity or Business.
“Disposition” shall have the meaning set forth in Section 7.6.
“Dollar(s)” and the sign “$” shall mean the lawful money of the United States.
“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” shall mean any Person that meets the requirements to be an assignee under Section 10.4 (subject to such consents, if any, as may be required under Section 10.4(b)(iii)).
“Engagement Letter” shall mean that certain engagement letter, dated June 1, 2026, executed by Truist Securities, Inc. and Truist Bank and accepted by ARLP and the Borrower.
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“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters concerning exposure to Hazardous Materials.
“Environmental Liability” shall mean any liability, contingent or otherwise (including any liability for damages, costs of environmental investigation and remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), of Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity directly or indirectly resulting from or based upon (i) any actual or alleged violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous Materials, (iv) the Release or threatened Release of any Hazardous Materials or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute and the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” shall mean any person that for purposes of Title I or Title IV of ERISA or Section 412 of the Code would be deemed at any relevant time to be a “single employer” or otherwise aggregated with Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
“ERISA Event” shall mean (i) any “reportable event” as defined in Section 4043(c) of ERISA with respect to a Pension Plan (other than an event as to which the PBGC has waived under Part 4043 of the PBGC Regulations the requirement of Section 4043(a) of ERISA that it be notified of such event); (ii) any failure to make a required contribution to any Plan that would result in the imposition of a lien or other encumbrance or the provision of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a lien or encumbrance on any assets of a Loan Party, there being or arising any “unpaid minimum required contribution” or “accumulated funding deficiency” (as defined or otherwise set forth in Section 4971 of the Code or Part 3 of Subtitle B of Title 1 of ERISA), whether or not waived, or any filing of any request for or receipt of a minimum funding waiver under Section 412 of the Code or Section 302 of ERISA with respect to any Plan or Multiemployer Plan, or that such filing may be made, or any determination that any Plan is, or is expected to be, in at-risk status under Title IV of ERISA; (iii) any incurrence by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any of their respective ERISA Affiliates of any liability under Title IV of ERISA with respect to any Plan or Multiemployer Plan (other than for premiums due and not delinquent under Section 4007 of ERISA); (iv) any institution of proceedings, or the occurrence of an event or condition which would reasonably be expected to constitute grounds for the institution of proceedings by the PBGC, under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (v) any incurrence by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any of their respective ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Pension Plan or Multiemployer Plan, or the receipt by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any of their respective ERISA Affiliates of any notice that a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA; (vi) any receipt by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any of their respective ERISA Affiliates of any notice, or any receipt by any Multiemployer Plan from Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any of their respective ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Title IV of ERISA; (vii) engaging in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section
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406 of ERISA; or (viii) any filing of a notice of intent to terminate any Pension Plan if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, any filing under Section 4041(c) of ERISA of a notice of intent to terminate any Pension Plan, or the termination of any Plan under Section 4041(c) of ERISA.
“Erroneous Payment” shall have the meaning set forth in Section 9.15(a).
“Erroneous Payment Deficiency Assignment” shall have the meaning set forth in Section 9.15(d).
“Erroneous Payment Return Deficiency” shall have the meaning set forth in Section 9.15(d).
“Erroneous Payment Subrogation Rights” shall have the meaning set forth in Section 9.15(d).
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“Event of Default” shall have the meaning set forth in Section 8.1.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time.
“Excluded Accounts” shall mean (a) each account for which all of the deposits consist of amounts utilized to fund payroll, employee benefit or tax obligations of Holdings, the Borrower or any Subsidiary Loan Party, (b) escrow, pre-funding, trust and fiduciary accounts, in each case, solely holding amounts held for the benefit of third parties in the ordinary course of business (including, without limitation, escrow accounts in respect of Investments permitted under this Agreement) and (c) “zero balance” accounts.
“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guarantee of such Guarantor becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.16, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately
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before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.16 and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Extraordinary Receipts” shall mean any cash received by the Borrower or any Subsidiary Loan Party in respect of (a) indemnity payments or (b) any purchase price adjustment (other than a working capital adjustment) received in connection with any purchase or acquisition agreement.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or, if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent. For purposes of this Agreement the Federal Funds Rate shall not be less than zero percent (0%).
“Fiscal Quarter” shall mean any fiscal quarter of Holdings or the Borrower, as the context may require.
“Fiscal Year” shall mean any fiscal year of Holdings or the Borrower, as the context may require.
“Fitch” means Fitch Ratings Inc., and any successor thereto.
“Floor” shall mean a rate of interest equal to 0%.
“Foreign Lender” shall mean (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.
“Foreign Person” shall mean any Person that is not a U.S. Person.
“Foreign Subsidiary” shall mean, with respect to any Person, a Subsidiary of such Person that is organized under the laws of a jurisdiction other than one of the fifty states of the United States or the District of Columbia.
“GAAP” shall mean generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3.
“Governmental Authority” shall mean the government of the United States or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Group Members” shall mean, collectively, each Loan Party and each Restricted Entity.
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“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly and including any obligation, direct or indirect, of the guarantor (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued in support of such Indebtedness or obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (but not to exceed any cap or maximum liability applicable to the Guarantee) or, if not so stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning.
“Guarantor” shall mean Holdings and each of the Subsidiary Loan Parties.
“Guaranty and Security Agreement” shall mean the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties) and/or the Guaranty and Security Agreement (Holdings), as the context requires.
“Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties)” shall mean the Guaranty and Security Agreement, dated as of the Closing Date, made by the Borrower and the Subsidiary Loan Parties in favor of the Administrative Agent, for the benefit of the Secured Parties.
“Guaranty and Security Agreement (Holdings)” shall mean the Guaranty and Security Agreement, dated as of the Closing Date, made by Holdings in favor of the Administrative Agent, for the benefit of the Secured Parties.
“Guaranty and Security Agreement Joinder” shall mean each joinder substantially in the form of Annex I to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties), executed and delivered by a Subsidiary Loan Party pursuant to Section 5.12.
“Guaranty and Security Agreement Supplement” shall mean each supplement substantially in the form of Annex III to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties), executed and delivered by a Subsidiary Loan Party pursuant to Section 5.12.
“Hazardous Materials” shall mean all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Hedge Termination Value” shall mean, in respect of any one or more Hedging Transactions, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Transactions, (a) for any date on or after the date such Hedging Transactions have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a) above, the amount(s) determined as the mark-to-market value(s) for such Hedging Transactions, as determined based upon one or more mid-market or other readily available
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quotations provided by any recognized dealer in such Hedging Transactions (which may include a Lender or any Affiliate of a Lender).
“Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under (i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions and modifications of any Hedging Transactions and any and all substitutions for any Hedging Transactions.
“Hedging Transaction” of any Person shall mean (a) any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into by such Person that is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, spot transaction, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Holdings” shall have the meaning set forth in the introductory paragraph hereof.
“Holdings’ General Partners” shall have the meaning set forth in Section 10.20.
“Hydrocarbon Interests” has the meaning set forth in the definition of “Oil and Gas Properties”.
“Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate and all other liquid or gaseous hydrocarbons produced or to be produced in conjunction therewith from a well bore and all products, by products and other substances derived therefrom or the processing thereof, including natural gas liquids, and all other minerals and substances produced in conjunction with such substances, including, sulfur, geothermal steam, water, carbon dioxide, helium and any and all minerals, ores or substances of value and the products and proceeds therefrom.
“Increased Cost Lender” shall have the meaning set forth in Section 2.19.
“Indebtedness” of any Person shall mean, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business; provided that, for purposes of Section 8.1(f), trade payables overdue by more than sixty (60) days shall be included in this definition except to the extent that any of such trade payables are being disputed in good faith and by appropriate measures), (iv) all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations, contingent or otherwise, of such Person under or in respect of (x) letters of credit, bankers’ acceptances, demand guarantees and similar independent undertakings or (y) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person (other than surety
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bonds, performance bonds and similar instruments incurred in the ordinary course of business and required by Requirements of Law in connection with the exploration, development or operation of coal properties or Oil and Gas Properties), (vii) all Guarantees of such Person of the type of Indebtedness described in clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on property owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, (x) all Off-Balance Sheet Liabilities and (xi) all net Hedging Obligations. For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company or the foreign equivalent thereof) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Transaction on any date shall be deemed to be the Hedge Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (viii) above that is expressly made nonrecourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness and (y) the fair market value of the property encumbered thereby as determined by such Person in good faith.
“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a) above, Other Taxes.
“Interest Period” shall mean with respect to any SOFR Borrowing, a period of one (1), three (3) or six (6) months (in each case, subject to the availability thereof); provided that:
(a)the initial Interest Period for such Borrowing shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of another Type), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;
(b)if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the immediately preceding Business Day;
(c)any Interest Period which begins on the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such calendar month;
(d)each principal installment of the Loan shall have an Interest Period ending on each installment payment date and the remaining principal balance (if any) of the Loan shall have an Interest Period determined as set forth above;
(e)no Interest Period may extend beyond the Maturity Date; and
(f)no tenor that has been removed from this definition pursuant to Section 2.12(e) shall be available for specification in such Notice of Conversion/Continuation.
“Investments” shall have the meaning set forth in Section 7.4.
“IRS” shall mean the United States Internal Revenue Service.
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“Lender-Related Hedge Provider” shall mean any Person that, (a) at the time it enters into a Hedging Transaction with any Loan Party, is a Lender or an Affiliate of a Lender and (b) except when the Lender-Related Hedge Provider is Truist Bank or any of its Affiliates, such Person has provided prior written notice to the Administrative Agent, which has been acknowledged by the Borrower, setting forth (x) the existence of such Hedging Transaction and (y) the methodology to be used by such parties in determining the obligations under such Hedging Transaction from time to time. In no event shall any Lender-Related Hedge Provider acting in such capacity be deemed a Lender for purposes hereof to the extent of and as to Hedging Obligations except that each reference to the term “Lender” in Article IX and Section 10.3(b) shall be deemed to include such Lender-Related Hedge Provider. In no event shall the approval of any such Person in its capacity as Lender-Related Hedge Provider be required in connection with the release or termination of any security interest or Lien of the Administrative Agent.
“Lenders” shall have the meaning set forth in the introductory paragraph hereof, but does not include the Administrative Agent in its capacity as the Administrative Agent.
“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise), charge, encumbrance, hypothecation, collateral assignment, deposit arrangement, or other arrangement having the practical effect of any of the foregoing or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having the same economic effect as any of the foregoing).
“Loan Documents” shall mean, collectively, this Agreement, the Collateral Documents, the Engagement Letter, all Notices of Conversion/Continuation, all Compliance Certificates, any promissory notes issued hereunder and any and all other instruments, agreements, documents and writings executed in connection with any of the foregoing.
“Loan Parties” shall mean the Borrower and the Guarantors.
“Loans” shall mean the term loan made by the Lenders to the Borrower pursuant to Section 2.2.
“Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, resulting in a material adverse change in, or a material adverse effect on, (i) the business, results of operations, financial condition, assets or liabilities of the Loan Parties taken as a whole, (ii) the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents, (iii) the rights and remedies of the Administrative Agent or the Lenders under any of the Loan Documents or (iv) the legality, validity or enforceability of any of the Loan Documents.
“Material Agreements” shall mean, (i) with respect to the Borrower, the Subsidiary Loan Parties and the Restricted Entities, (a) all agreements, indentures or notes governing the terms of any Material Indebtedness of the Borrower, any Subsidiary Loan Party or any Restricted Entity, (b) all employment and non-compete agreements with management of the Borrower, any Subsidiary Loan Party or any Restricted Entity, (c) the Closing Date Acquisition Documents to which the Borrower, any Subsidiary Loan Party or any Restricted Entity is a party, and (d) all other agreements, documents, contracts, indentures and instruments pursuant to which (x) the Borrower, any Subsidiary Loan Party or any Restricted Entity is obligated to make payments in any twelve (12)-month period of $5,000,000 or more, (y) the Borrower, any Subsidiary Loan Party or any Restricted Entity expects to receive revenue in any twelve (12)-month period of $5,000,000 or more and (z) a default, breach or termination thereof could reasonably be expected to result in a Material Adverse Effect and (ii) with respect to Holdings, (a) all agreements, indentures or notes
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governing the terms of any Material Indebtedness of Holdings and (b) the Closing Date Acquisition Documents to which Holdings is a party.
“Material Indebtedness” shall mean any Indebtedness (other than the Commitments and the Loans) of Holdings, the Borrower or any Subsidiary Loan Party individually or in an aggregate committed or outstanding principal amount exceeding the Threshold Amount. For purposes of determining the amount of attributed Indebtedness from Hedging Obligations, the “principal amount” of any Hedging Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging Obligations.
“Maturity Date” shall mean the earlier of (i) January 1, 2028 and (ii) the date on which the principal amount of the outstanding Loan has been declared or automatically has become due and payable (whether by acceleration or otherwise).
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Multiemployer Plan” shall mean any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be an obligation to contribute of) Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or an ERISA Affiliate, and each such plan for the five (5)-year period immediately following the latest date on which Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or an ERISA Affiliate contributed to or had an obligation to contribute to such plan.
“Net Cash Proceeds” shall mean (a) in connection with any Asset Sale, Recovery Event or Extraordinary Receipts, the proceeds thereof actually received by Borrower or a Subsidiary Loan Party in the form of cash and cash equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received), net of (i) reasonable and documented attorneys’ fees, accountants’ fees and investment banking and similar fees, in each case, directly attributable to such transactions, actually paid in connection therewith to Persons who are not Affiliates of Holdings, the Borrower or any other Group Member, (ii) amounts required to be applied to the repayment of Indebtedness (other than the Obligations) secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event and (iii) Taxes paid and the Borrower’s reasonable and good faith estimate of income, franchise, sales, and other applicable Taxes payable by the Borrower or any Subsidiary Loan Party in connection with such Asset Sale, Recovery Event or Extraordinary Receipt; provided, that if such estimated amounts exceed the amount of actual Taxes required to be paid in respect of such Asset Sale, Recovery Event or Extraordinary Receipt, the amount of such excess shall constitute Net Cash Proceeds and (b) in connection with any incurrence or issuance of Indebtedness or Capital Stock, the cash proceeds actually received by Borrower or a Subsidiary Loan Party from any such issuance or incurrence, net of reasonable and documented attorneys’ fees, investment banking and similar fees and accountants’ fees, in each case, directly attributable to such transactions, and actually paid in connection therewith to Persons who are not Affiliates of Holdings, the Borrower or any other Group Member, and any Taxes paid or reasonably estimated to be actually paid in connection therewith; provided, that if such estimated amounts exceed the amount of actual Taxes required to be paid in respect of such incurrence or issuance of Indebtedness or Capital Stock, the amount of such excess shall constitute Net Cash Proceeds.
“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of determination with respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to such Hedging Obligation as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date), and “unrealized profits” shall mean the fair market value of the gain to such Person of replacing such
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Hedging Transaction as of the date of determination (assuming such Hedging Transaction were to be terminated as of that date).
“Non-Consenting Lender” shall mean any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all or all affected Lenders in accordance with the terms of Section 10.2(b) and (ii) has been approved by the Required Lenders.
“Non-Defaulting Lender” shall mean, at any time, a Lender that is not a Defaulting Lender.
“Non-U.S. Plan” shall mean any plan, fund (including any superannuation fund) or other similar program established, contributed to (regardless of whether through direct contributions or through employee withholding) or maintained outside the United States by Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries, primarily for the benefit of employees of Holdings, the Borrower, such other Group Member or such Subsidiary residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement, or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.
“Notes Indebtedness” means, collectively, (i) all Indebtedness under the AROP Notes, (ii) all Indebtedness of Holdings evidenced by bonds, debentures, notes or other similar instruments that are comparable to the AROP Notes or the AROP Indenture, and (iii) all Refinancing Indebtedness with respect to the Indebtedness described in the foregoing clauses (i) and (ii).
“Notice of Conversion/Continuation” shall have the meaning set forth in Section 2.4(b).
“Obligations” shall mean (a) all amounts owing by the Loan Parties to the Administrative Agent, any Lender or the Arranger pursuant to or in connection with this Agreement or any other Loan Document or otherwise with respect to any Commitment or Loan including all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), reimbursement obligations of the Loan Parties under the Loan Documents, obligations pursuant to the Administrative Agent’s Erroneous Payment Subrogation Rights, fees, expenses, indemnification and reimbursement payments, costs and expenses (including all fees and expenses of counsel to the Administrative Agent and any Lender incurred pursuant to this Agreement or any other Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now existing or hereafter arising under this Agreement or the other Loan Documents, (b) all Hedging Obligations owed by Borrower or any Subsidiary Loan Party to any Lender-Related Hedge Provider, and (c) all Bank Product Obligations, together with all renewals, extensions, modifications or refinancings of any of the foregoing; provided that with respect to any Guarantor, the Obligations shall not include any Excluded Swap Obligations.
“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (ii) any liability of such Person under any sale and leaseback transactions that do not create a liability on the balance sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person.
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“Oil and Gas Properties” means (i) all present and future interests and estates existing under any oil, gas and/or mineral leases, or other liquid or gaseous hydrocarbon leases, including, without limitation, working interests, royalty interests, overriding royalty interests, production payments, net profits interests and carried interests, (ii) all present and future rights in mineral fee interests, including without limitation, any reversionary interests relating thereto (the Properties and interests referred to in the foregoing clause (i) and this clause (ii), collectively, the “Hydrocarbon Interests”), (iii) all rights, titles and interests created by or arising under the terms of all present and future unitization, communitization or pooling arrangements (and all Properties covered and units created thereby) whether arising by contract or operation of law which now or hereafter include all or any part of the Hydrocarbon Interests, (iv) all rights, titles and interest created by or arising under the terms of all present and future farmouts including, without limitation, any back in interests related thereto, (v) all Hydrocarbons in and under and which may be produced and saved from or attributable to the Hydrocarbon Interests, (vi) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (vii) all rights, remedies, powers and privileges with respect to any of the foregoing. Unless otherwise provided herein, “Oil and Gas Properties” means the Oil and Gas Properties of the Borrower, the Subsidiary Loan Parties and the Restricted Entities.
“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended from time to time, and any successor statute.
“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).
“Outbound Investment Rules” shall mean the regulations administered and enforced, together with any related public guidance issued, by the United States Treasury Department under U.S. Executive Order 14105 of August 9, 2023, or any similar law or regulation; as of the date of this Agreement, and as codified at 31 C.F.R. § 850.101 et seq.
“Paid in Full” or “Payment in Full” shall mean (i) the indefeasible payment in full in cash of all outstanding Loans, together with accrued and unpaid interest thereon, (ii) the termination of all Hedging Obligations constituting Obligations and payments of all amounts owing thereunder (or other arrangements satisfactory to the applicable Lender-Related Hedge Provider shall have been made), (iii) the indefeasible payment in full in cash of all other Secured Obligations (as such term is defined in each of the Guaranty and Security Agreements) (other than contingent indemnification obligations for which no claim has been made and other obligations expressly stated to survive the payment and termination of this Agreement) and (iv) the termination of all Commitments.
“Parent Company” shall mean, with respect to a Lender, the “bank holding company” as defined in Regulation Y, if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.
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“Participant” shall have the meaning set forth in Section 10.4(d).
“Participant Register” shall have the meaning set forth in Section 10.4(d).
“Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, as amended and in effect from time to time.
“Payment Office” shall mean the office of the Administrative Agent located at 214 N. Tryon St., Charlotte, North Carolina 28202, or such other location as to which the Administrative Agent shall have given written notice to the Borrower and the Lenders.
“PBGC” shall mean the U.S. Pension Benefit Guaranty Corporation referred to and defined in ERISA, and any successor entity performing similar functions.
“Pension Plan” shall mean any employee pension benefit plan as defined in Section 3(2) of ERISA that is maintained or is contributed to by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Periodic Term SOFR Determination Day” shall have the meaning set forth in the definition of “Term SOFR”.
“Permitted Encumbrances” shall mean:
(a)Liens imposed by law for Taxes not yet due or which are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained in accordance with GAAP;
(b)statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen and other Liens imposed by law in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained in accordance with GAAP;
(c)pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e)judgment and attachment liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are being maintained in accordance with GAAP;
(f)customary rights of set-off, revocation, refund or chargeback under deposit agreements or under the UCC or common law of banks or other financial institutions where the Borrower, any Subsidiary Loan Party or any Restricted Entity maintains deposits (other than deposits intended as cash collateral) in the ordinary course of business;
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(g)easements, zoning restrictions, reservations, covenants, conditions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business, and irregularities of title, that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower, any Subsidiary Loan Party or any Restricted Entity taken as a whole;
(h)with respect to any real property in which the Borrower, any Subsidiary Loan Party or any Restricted Entity holds a leasehold interest, terms, agreements, provisions, conditions, and limitations contained in the leases granting such leasehold interest and the rights of lessors thereunder (and their heirs, executors, administrators, successors, and assigns) that do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower, any Subsidiary Loan Party or any Restricted Entity taken as a whole; and
(i)(A) with respect to the Oil and Gas Properties in which the Borrower, a Subsidiary Loan Party or a Restricted Entity is a lessee, any interest of a lessor for royalties, overriding royalties, net profits interests, production payments and similar non-operating burdens on production; (B) with respect to the Oil and Gas Properties, Liens arising in the ordinary course of business under pooling, unitization and communitization agreements, operating agreements and other agreements that are usual or customary in the oil and gas business and are for claims which are not delinquent or that are being contested in good faith and by appropriate proceedings for which appropriate reserves have been established to the extent required by and in accordance with GAAP; provided, that any such Lien referred to in this clause does not materially impair the use of the property covered by such Lien for the purposes for which such property is held by the Borrower, any Subsidiary Loan Party or any Restricted Entity or materially impair the value of the affected Oil and Gas Properties, taken as a whole;
provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“Permitted Investments” shall mean:
(a)direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one (1) year from the date of acquisition thereof;
(b)commercial paper having the highest rating, at the time of acquisition thereof, of S&P, Moody’s or Fitch and in any case maturing within six (6) months from the date of acquisition thereof;
(c)certificates of deposit, bankers’ acceptances and time deposits maturing within one hundred eighty (180) days of the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;
(d)fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and
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(e)mutual funds investing solely in any one or more of the Permitted Investments described in clauses (a) through (d) above.
“Permitted Liens” shall mean Liens permitted by Section 7.2.
“Permitted Third Party Bank” shall mean any bank or other financial institution with whom any Loan Party maintains a Controlled Account and with whom a Control Account Agreement has been executed.
“Person” shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” shall mean any Pension Plan or any other “employee benefit plan” as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) that is maintained or contributed to by Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any ERISA Affiliate or to which Holdings, the Borrower, any other Group Member, any of their respective Subsidiaries or any ERISA Affiliate has or may have an obligation to contribute.
“Platform” shall mean Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.
“Pledged Certificated Stock” shall have the meaning assigned to such term in each of the Guaranty and Security Agreements.
“Pro Forma Basis” shall mean, (i) with respect to any Person, business, property or asset acquired in an Acquisition, the inclusion as “Consolidated EBITDA” of the EBITDA (i.e. net income before interest, taxes, depreciation and amortization) for such Person, business, property or asset as if such Acquisition had been consummated on the first (1st) day of the applicable period, based on historical results accounted for in accordance with GAAP and (ii) with respect to any Person, business, property or asset sold, transferred or otherwise disposed of, the exclusion from “Consolidated EBITDA” of the EBITDA (i.e. net income before interest, taxes, depreciation and amortization) for such Person, business, property or asset so disposed of during such period as if such disposition had been consummated on the first (1st) day of the applicable period, in accordance with GAAP.
“Pro Forma Entity” has the meaning provided in the definition of the term “Acquired Consolidated Cash Flow”.
“Pro Rata Share” shall mean with respect to any Commitment or Loan of any Lender at any time, a percentage, the numerator of which shall be such Lender’s Commitment (or if such Commitment has been terminated or expired or the Loans have been declared to be due and payable, such Lender’s Loan), and the denominator of which shall be the sum of all Commitments of all Lenders (or if such Commitments have been terminated or expired or the Loans have been declared to be due and payable, the Loan of all Lenders).
“Property” of a Person means any and all property, whether real, personal, tangible, intangible or mixed, of such Person, or any other assets owned, operated or leased by such Person, including Capital Stock and contract rights.
“PTE” shall mean a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Recipient” shall mean, as applicable, (a) the Administrative Agent and (b) any Lender.
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“Recovery Event” shall mean any settlement of, award or payment in respect of any property or casualty insurance (excluding business interruption insurance) claim or any condemnation, eminent domain or similar proceeding relating to any asset of the Borrower, any Subsidiary Loan Party or any Restricted Entity.
“Refinancing Indebtedness” means, with respect to Indebtedness, any other Indebtedness that is incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) such Indebtedness, including Indebtedness that refinances Refinancing Indebtedness.
“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the managers, administrators, trustees, partners, directors, officers, employees, agents, advisors or other representatives of such Person and such Person’s Affiliates.
“Related Transaction Documents” shall mean the Loan Documents, the Closing Date Acquisition Documents and all other agreements or instruments executed in connection with the Related Transactions.
“Related Transactions” shall mean, collectively, the making of the initial Loans on the Closing Date, the Closing Date Acquisition, the payment of all fees, costs and expenses associated with all of the foregoing and the execution and delivery of all Related Transaction Documents.
“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor thereto.
“Required Lenders” shall mean, at any time, Lenders holding more than 50% of the aggregate outstanding Commitments at such time or, if the Lenders have no Commitments outstanding, then Lenders holding more than 50% of the aggregate outstanding Loans of the Lenders at such time; provided that to the extent that any Lender is a Defaulting Lender, such Defaulting Lender and all of its Loans shall be excluded for purposes of determining Required Lenders; and provided, further, at any time that there are two or more unaffiliated Non-Defaulting Lenders, Required Lenders shall consist of at least two such Non-Defaulting Lenders.
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“Requirement of Law” for any Person shall mean the articles or certificate of incorporation, bylaws, partnership certificate and agreement, or limited liability company certificate of organization and agreement, as the case may be, and other organizational and governing documents of such Person, and any law, treaty, rule or regulation, or determination of a Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Resolution Authority” shall mean an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” shall mean (x) with respect to certifying compliance with the financial covenants set forth in Article VI, the chief financial officer or the treasurer of the Borrower and (y) with respect to all other provisions, any of the president, the chief executive officer, the chief operating officer, the chief financial officer, the treasurer or a vice president of Holdings, the Borrower or a Subsidiary Loan Party, as the context may require, or such other representative of Holdings, the Borrower or a Subsidiary Loan Party, as the context may require, as may be designated in writing by any one of the foregoing with the consent of the Administrative Agent.
“Restricted Entities” shall mean, collectively, (a) AllDale I, AllDale II, AllDale III, AllDale IV, Cavalier Minerals and each of their respective Subsidiaries and (b) any Subsidiary of the Borrower or any other Subsidiary Loan Party that has been designated as a Restricted Entity in compliance with Section 5.12(b) and all Subsidiaries of any Subsidiary so designated. As of the Closing Date, the Restricted Entities are AllDale I, AllDale II, AllDale III, AllDale IV, Cavalier Minerals, Orchid AD3, LLC, Arbala AD3, LLC, North Fork AD3, LLC, Tundra AD3 GP, LLC, Tundra AD3, LP, Ranchito AD4, LP, Ranchito AD4 GP, LLC, Herrera AD4, LLC, Ojeda AD4, LLC, Calle Doce AD4, LLC, Avila AD4, LLC, Maudie AD4 GP, LLC and Maudie AD4, LP. Restricted Entities shall exclude the Unrestricted Subsidiaries.
“Restricted Payment” shall mean, for any Person, any dividend or distribution on any class of its Capital Stock, or any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of any shares of its Capital Stock, any Indebtedness subordinated to the Obligations or any Guarantee thereof or any options, warrants or other rights to purchase such Capital Stock or such Indebtedness, whether now or hereafter outstanding, or any management or similar fees payable to the holders of its Capital Stock.
“S&P” shall mean S&P Global Ratings, a division of S&P Global Inc., and any successor thereto.
“Sanctioned Country” shall mean, at any time, a country, region or territory that is, or whose government is, the subject or target of any Sanctions (which as of the Closing Date includes the so called Donetsk People’s Republic, the so called Luhansk People’s Republic and the Crimea, Zaporizhzhia and Kherson Regions of Ukraine, Cuba, Iran, North Korea and Syria).
“Sanctioned Person” shall mean, at any time, (a) any Person that is the subject or target of any Sanctions, (b) any Person located, organized, operating or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person.
“Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, (b) the United Nations Security Council, the European Union or His Majesty’s Treasury of the United Kingdom or (c) any other relevant sanctions authority.
“Secured Leverage Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total Secured Debt as of such date to (ii) Consolidated EBITDA for the four consecutive Fiscal Quarters ending on or
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immediately prior to such date for which financial statements are required to have been delivered under this Agreement; provided, that (a) for the Fiscal Quarter ending September 30, 2026, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for such Fiscal Quarter by four (4), (b) for the Fiscal Quarter ending December 31, 2026, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for the two (2) Fiscal Quarter period ending on December 31, 2026 by two (2), (c) for the Fiscal Quarter ending March 31, 2027, Consolidated EBITDA will be calculated by multiplying Consolidated EBITDA for the three (3) Fiscal Quarter period ending on March 31, 2027 by four-thirds (4/3), and (d) for each Fiscal Quarter thereafter, Consolidated EBITDA will be calculated by adding Consolidated EBITDA for the four (4) consecutive Fiscal Quarters ending on such date.
“Secured Parties” shall have the meaning assigned to such term in each of the Guaranty and Security Agreements.
“SOFR” shall mean a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Borrowing” shall mean a Borrowing that bears interest at a rate based on Term SOFR, other than pursuant to clause (iii) of the definition of “Base Rate”.
“SOFR Loan” shall mean a Loan that bears interest at a rate based on Term SOFR, other than pursuant to clause (iii) of the definition of “Base Rate”.
“Sold Entity or Business” has the meaning provided in the definition of the term “Consolidated Cash Flow”.
“Solvent” shall mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including subordinated and contingent liabilities, of such Person; (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and liabilities, including subordinated and contingent liabilities as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability.
“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, partnership, joint venture, limited liability company, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, partnership, joint venture, limited liability company, association or other entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (ii) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent; provided, that such term shall not include any Unrestricted Subsidiary.
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“Subsidiary Loan Party” shall mean AllRoy GP, each Subsidiary of AllRoy GP existing on the Closing Date and each Subsidiary of the Borrower existing on the Closing Date and any other Subsidiary of AllRoy GP or the Borrower that is required to execute or become party to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties) pursuant to Section 5.12(a); provided, that “Subsidiary Loan Party” expressly excludes any Restricted Entity and any Unrestricted Subsidiary. As of the Closing Date, the Subsidiary Loan Parties are AllRoy GP, CavMM, Alliance Royalty and AR Midland.
“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Synthetic Lease” shall mean a lease transaction under which the parties intend that (i) the lease will be treated as an “operating lease” by the lessee pursuant to Accounting Standards Codification Sections 840-10 and 840-20, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property.
“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of (i) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (ii) all rental and purchase price payment obligations of such Person under such Synthetic Leases assuming such Person exercises the option to purchase the lease property at the end of the lease term.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees, or charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean,
(a)for any calculation with respect to a SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b)for any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one (1) month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided that if as of 5:00 p.m. on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate
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for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day; provided, that if Term SOFR determined as provided above (including pursuant to the proviso under clause (a) or (b) above) shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.
“Term SOFR Administrator” shall mean the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Threshold Amount” shall mean $15,000,000.
“Total Leverage to Consolidated Cash Flow Ratio” shall mean, as of any date, the ratio of (i) Consolidated Total Debt as of such date to (ii) Consolidated Cash Flow for the four consecutive Fiscal Quarters ending on or immediately prior to such date for which financial statements are required to have been delivered under this Agreement; provided, that (a) for the Fiscal Quarter ending September 30, 2026, Consolidated Cash Flow will be calculated by multiplying Consolidated Cash Flow for such Fiscal Quarter by four (4), (b) for the Fiscal Quarter ending December 31, 2026, Consolidated Cash Flow will be calculated by multiplying Consolidated Cash Flow for the two (2) Fiscal Quarter period ending on December 31, 2026 by two (2), (c) for the Fiscal Quarter ending March 31, 2027, Consolidated Cash Flow will be calculated by multiplying Consolidated Cash Flow for the three (3) Fiscal Quarter period ending on March 31, 2027 by four-thirds (4/3), and (d) for each Fiscal Quarter thereafter, Consolidated Cash Flow will be calculated by adding Consolidated Cash Flow for the four (4) consecutive Fiscal Quarters ending on such date.
“Type”, when used in reference to a Loan or a Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to Term SOFR or the Base Rate.
“UCC” shall have the meaning assigned to such term in each of the Guaranty and Security Agreements.
“UK Financial Institution” shall mean any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” shall mean the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Unfunded Pension Liability” of any Pension Plan shall mean the amount, if any, by which the value of the accumulated plan benefits under the Pension Plan, determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all Pension Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).
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“United States” or “U.S.” shall mean the United States of America.
“Unrestricted Subsidiary” means any subsidiary of the Borrower or AllRoy GP or any of their respective subsidiaries that has been designated as an Unrestricted Subsidiary in compliance with Section 5.12(c) and all subsidiaries of any subsidiary so designated. As of the Closing Date, there are no Unrestricted Subsidiaries.
“U.S. Borrower” shall mean any Borrower that is a U.S. Person.
“U.S. Government Securities Business Day” shall mean any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” shall mean (i) for purposes of Sections 4.22 and 7.14, any United States citizen, lawful permanent resident, entity organized under the laws of the United States or any jurisdiction within the United States, including any foreign branch of any such entity, or any Person in the United States and (ii) otherwise, any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” shall have the meaning set forth in Section 2.16(g)(ii)(B)(3).
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” shall mean the Borrower, any other Loan Party or the Administrative Agent, as applicable.
“Write-Down and Conversion Powers” shall mean (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.2**Classifications of Loans and Borrowings**. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g. “SOFR Loan” or “Base Rate Loan”). Borrowings also may be classified and referred to by Type (e.g. “SOFR Borrowing” or “Base Rate Borrowing”).
Section 1.3**Accounting Terms and Determination**. Unless otherwise defined or specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a basis consistent with the most recent audited consolidated financial statements of the Borrower delivered pursuant to Section 5.1(a) (or, if no such financial statements have been delivered, on a basis consistent with the audited consolidated financial statements of the Borrower last delivered to the Administrative Agent in connection with this Agreement); provided that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any
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covenant in Article VI to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification Section 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary of any Loan Party at “fair value”, as defined therein.
Section 1.4**Terms Generally**. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the word “to” means “to but excluding”. The word “or” is not exclusive. The word “year” shall refer (i) in the case of a leap year, to a year of 366 days, and (ii) otherwise, to a year of 365 days. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as it was originally executed and as it may from time to time be amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and “hereunder” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules to this Agreement, (v) any definition of or reference to any law shall include all statutory and regulatory provisions consolidating, amending, or interpreting any such law and any reference to or definition of any law or regulation, unless otherwise specified, shall refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
Section 1.5**Divisions**. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.
Section 1.6**Rates**. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Base Rate (provided, that it is acknowledged that the Administrative Agent administers the Prime Rate), the Term SOFR Reference Rate or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Base Rate, the Term SOFR Reference Rate, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any
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Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of the Base Rate, the Term SOFR Reference Rate, Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to Holdings and the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Base Rate, the Term SOFR Reference Rate, Term SOFR or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to Holdings, the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
Section 1.7**Times of Day**. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).
**Article II**
**AMOUNT AND TERMS OF THE COMMITMENT**
Section 2.1**General Description of Facility**. Subject to and upon the terms and conditions herein set forth, each Lender severally agrees to make a Loan to the Borrower in a principal amount equal to (but not exceeding) such Lender’s Commitment on the Closing Date in accordance with Section 2.2.
Section 2.2**Commitments**. Subject to the terms and conditions set forth herein, each Lender severally agrees to make a single loan to the Borrower on the Closing Date in a principal amount equal to the Commitment of such Lender. The Loan may be, from time to time, a Base Rate Loan or SOFR Loan or a combination thereof; provided that on the Closing Date the Loan shall be a Base Rate Loan. The execution and delivery of this Agreement by the Borrower and the satisfaction of all conditions precedent pursuant to Section 3.1 shall be deemed to constitute the Borrower’s request to borrow the Loan on the Closing Date. The Commitments shall terminate on the Closing Date upon the making of the Loan pursuant to this Section 2.2.
Section 2.3**Funding of Borrowings**.
(a)Each Lender will make available each Loan to be made by it hereunder on the proposed date thereof by wire transfer in immediately available funds by 11:00 a.m. to the Administrative Agent at the Payment Office. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts that it receives, in like funds by the close of business on such proposed date, to an account maintained by the Borrower with the Administrative Agent or, at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent.
(b)Unless the Administrative Agent shall have been notified by any Lender prior to 5:00 p.m. one (1) Business Day prior to the date of a Borrowing in which such Lender is to participate that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date, and the Administrative Agent, in reliance on such assumption, may make available to the Borrower on such date a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender on the date of such Borrowing, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest (x) at the Federal Funds Rate until the second (2nd) Business Day after such demand and (y) at the Base Rate at all
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times thereafter. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent together with interest at the rate specified for such Borrowing. Nothing in this paragraph shall be deemed to relieve any Lender from its obligation to fund its Pro Rata Share of any Borrowing hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.
(c)No Lender shall be responsible for any default by any other Lender in its obligations hereunder, and each Lender shall be obligated to make its Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.
Section 2.4**Interest Elections**.
(a)The Borrowing of the Loan initially shall be a Base Rate Borrowing. Thereafter, the Borrower may elect to convert such Borrowing into a different Type or to continue such Borrowing, all as provided in this Section. The Borrower may elect different options with respect to different portions of the Borrowing, in which case each such portion shall be allocated ratably among the Lenders, and the portion of the Loan comprising each such portion of the Borrowing shall be considered a separate Borrowing. At no time shall the total number of SOFR Borrowings outstanding at any time exceed four (4).
(b)To make an election pursuant to this Section, the Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Borrowing that is to be converted or continued, as the case may be, substantially in the form of Exhibit C (a “Notice of Conversion/Continuation”) (x) prior to 10:00 a.m. one (1) Business Day prior to the requested date of a conversion into a Base Rate Borrowing and (y) prior to 11:00 a.m. three (3) U.S. Government Securities Business Days prior to a continuation of or conversion into a SOFR Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing to which such Notice of Conversion/Continuation applies and, if different options are being elected with respect to different portions thereof, the portions thereof that are to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing), (ii) the effective date of the election made pursuant to such Notice of Conversion/Continuation, which shall be a Business Day, (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a SOFR Borrowing, and (iv) if the resulting Borrowing is to be a SOFR Borrowing, the Interest Period applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Interest Period”. If any such Notice of Conversion/Continuation requests a SOFR Borrowing but does not specify an Interest Period, the Borrower shall be deemed to have selected an Interest Period of one (1) month. The aggregate principal amount of each SOFR Borrowing shall not be less than $5,000,000 or a larger multiple of $1,000,000, and the aggregate principal amount of each Base Rate Borrowing shall not be less than $1,000,000 or a larger multiple of $100,000.
(c)If, on the expiration of any Interest Period in respect of any SOFR Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/Continuation, then, unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have continued such Borrowing as a SOFR Borrowing with the same Interest Period. Notwithstanding the forgoing, if any such deemed continuation would result in such SOFR Borrowing having an Interest Period ending after the Maturity Date, then the Borrower shall be deemed to have elected to convert such Borrowing to a Base Rate Borrowing unless the Borrower delivers a Notice of Conversion/Continuation with respect to such Borrowing. No Borrowing may be converted into,
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or continued as (or deemed continued as), a SOFR Borrowing if a Default or an Event of Default exists, unless the Administrative Agent and each of the Lenders shall have otherwise consented in writing and, in the absence of such consent such SOFR Borrowing shall be converted to a Base Rate Borrowing. No conversion of any SOFR Loan shall be permitted except on the last day of the Interest Period in respect thereof.
(d)Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent shall promptly notify each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
Section 2.5**Repayment of Loans**. The Borrower unconditionally promises to pay to the Administrative Agent, for the account of each Lender, the then aggregate outstanding principal amount of the Loan of such Lenders in installments (together with accrued and unpaid interest thereon) on the dates set forth below, with each such installment being in the aggregate principal amount for all Lenders set forth opposite such date below (and on such other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement):
| Installment Date | Aggregate Principal Amount |
| --- | --- |
| September 30, 2026 | $18,750,000 |
| December 31, 2026 | $18,750,000 |
| March 31, 2027 | $18,750,000 |
| June 30, 2027 | $18,750,000 |
| September 30, 2027 | $18,750,000 |
| December 31, 2027 | $18,750,000 |
To the extent not previously paid, the Borrower unconditionally promises to pay to the Administrative, Agent for the account of each Lender, the aggregate principal balance of the Loan (together with accrued and unpaid interest thereon) of such Lenders outstanding on the Maturity Date.
Section 2.6**Evidence of Indebtedness**.
(a)Each Lender shall maintain in accordance with its usual practice appropriate records evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Lender from time to time under this Agreement. The Administrative Agent shall maintain appropriate records in which shall be recorded (i) the Commitment of each Lender, (ii) the amount of each Loan made hereunder by each Lender, Type thereof and, in the case of each SOFR Loan, the Interest Period applicable thereto, (iii) the date of any continuation of any Loan pursuant to Section 2.4, (iv) the date of any conversion of all or a portion of any Loan to another Type pursuant to Section 2.4, (v) the date and amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder in respect of the Loans and (vi) both the date and amount of any sum received by the Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata Share thereof. The entries made in such records shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided that the failure or delay of any Lender or the Administrative Agent in maintaining or making entries into any such record or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms of this Agreement.
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(b)This Agreement evidences the obligation of the Borrower to repay the Loans and is being executed as a “noteless” credit agreement. However, at the request of any Lender at any time, the Borrower agrees that it will prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment permitted hereunder) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
Section 2.7**Optional Prepayments**. The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, without premium or penalty, by giving written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than (i) in the case of any prepayment of any SOFR Borrowing, 11:00 a.m. not less than three (3) U.S. Government Securities Business Days prior to the date of such prepayment and (ii) in the case of any prepayment of any Base Rate Borrowing, not less than one (1) Business Day prior to the date of such prepayment. Each such notice may be conditioned on the consummation of a transaction but shall otherwise be irrevocable and shall specify the proposed date of such prepayment and the principal amount of each Borrowing or portion thereof to be prepaid. Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment. If such notice is given (and such transaction is consummated, if applicable), the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.9(c); provided that if a SOFR Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.15. Each partial prepayment of a Borrowing shall be in an amount that would be permitted in the case of conversion or continuation of a Borrowing of the same Type pursuant to Section 2.4(b). Each prepayment of a Borrowing shall be applied to principal installments of the Loan in inverse order of maturity.
Section 2.8**Mandatory Prepayments**.
(a)No later than three (3) Business Days following the date of receipt by Borrower or any Subsidiary Loan Party of any Net Cash Proceeds from any Asset Sale, Recovery Event or Extraordinary Receipts, the Borrower shall prepay the Obligations in an amount equal to 100% of such Net Cash Proceeds. Notwithstanding the foregoing and so long as no Default or Event of Default has occurred and is continuing, (1) in lieu of prepaying the Obligations with such Net Cash Proceeds the Borrower or any Subsidiary Loan Party, at its election (which election may be made by provision of written notice to the Administrative Agent of its intent to reinvest Net Cash Proceeds prior to the Business Day following receipt of same), may reinvest all or any portion of such Net Cash Proceeds within (i) ninety (90) days following receipt of such Net Cash Proceeds or (ii) if the Borrower or any Subsidiary Loan Party enters into a legally binding commitment or letter of intent to so reinvest such Net Cash Proceeds within ninety (90) days following receipt thereof, within the later of (A) ninety (90) days following receipt thereof and (B) ninety (90) days following the date of such legally binding commitment or letter of intent; provided that, until such time as such Net Cash Proceeds have been reinvested or prepaid, as the case may be, such Net Cash Proceeds shall be held in Controlled Accounts subject to Control Account Agreements until reinvested and (2) the first $5,000,000 of Net Cash Proceeds from all Asset Sales, Recovery Events and Extraordinary Receipts over the term of this Agreement shall not be required to be used to prepay the Obligations pursuant to this Section 2.8(a). Any such prepayment (including any portion of such Net Cash Proceeds not actually reinvested in accordance with the foregoing) shall be applied in accordance with paragraph (c) of this Section.
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(b)No later than three (3) Business Days following the date of receipt by the Borrower or any Subsidiary Loan Party of any Net Cash Proceeds from any issuance by the Borrower, any Subsidiary Loan Party or any Restricted Entity of Indebtedness or Capital Stock, the Borrower shall prepay the Obligations in an amount equal to 100% of such Net Cash Proceeds; provided that the Borrower shall not be required to prepay the Obligations with respect to proceeds of Indebtedness permitted under Section 7.1 or capital contributions from Holdings. Any such prepayment shall be applied in accordance with paragraph (c) of this Section.
(c)Any prepayments made by the Borrower pursuant to Section 2.8(a) or 2.8(b) shall be applied as follows: first, to the Administrative Agent’s fees and reimbursable expenses then due and payable pursuant to any of the Loan Documents; and second, to the principal balance of the Loan, until the same shall have been paid in full, pro rata to the Lenders based on their Pro Rata Shares of the Loan, and applied to installments of the Loan in inverse order of maturity.
Section 2.9**Interest on Loans**.
(a)The Borrower shall pay interest on (i) each Base Rate Loan at the Base Rate plus the Applicable Margin in effect from time to time and (ii) each SOFR Loan at Term SOFR for the applicable Interest Period in effect for such Loan plus the Applicable Margin in effect from time to time.
(b)Notwithstanding paragraph (a) of this Section, at the option of the Required Lenders if an Event of Default has occurred and is continuing, and automatically after acceleration or with respect to any past due amount hereunder, the Borrower shall pay interest (“Default Interest”) with respect to all SOFR Loans at the rate per annum equal to 200 basis points above the otherwise applicable interest rate for such SOFR Loans during the continuation of such Event of Default, and thereafter, and with respect to all Base Rate Loans and all other Obligations hereunder (other than Loans), at the rate per annum equal to 200 basis points above the otherwise applicable interest rate for Base Rate Loans during the continuation of such Event of Default.
(c)Interest on the principal amount of all Loans shall accrue from and including the date such Loans are made to but excluding the date of any repayment thereof. Interest on all outstanding Base Rate Loans shall be payable quarterly in arrears on the last day of each March, June, September and December and on the Maturity Date. Interest on all outstanding SOFR Loans shall be payable on the last day of each Interest Period applicable thereto, and, in the case of any SOFR Loans having an Interest Period in excess of three (3) months, on each day which occurs every three (3) months after the initial date of such Interest Period, and on the Maturity Date. Interest on any Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable on the date of such conversion or on the date of any such repayment or prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall be payable on demand.
(d)The Administrative Agent shall determine each interest rate applicable to the Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or by telephone, promptly confirmed in writing). Any such determination shall be conclusive and binding for all purposes, absent manifest error.
(e)In connection with the use or administration of Term SOFR, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. The Administrative Agent will promptly
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notify the Borrower and the Lenders of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
Section 2.10**Fees**. The Borrower shall pay on the Closing Date to the Administrative Agent and its affiliates all fees in the Engagement Letter that are due and payable on the Closing Date.
Section 2.11**Computation of Interest and Fees**. Interest hereunder based on the Administrative Agent’s prime lending rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and all fees hereunder shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of an interest rate or fee hereunder shall be made in good faith and, except for manifest error, shall be final, conclusive and binding for all purposes.
Section 2.12**Inability to Determine Interest Rates; Benchmark Replacement Setting**.
(a)Inability to Determine SOFR. Subject to paragraphs (b) through (f) below, if, prior to the commencement of any Interest Period for any SOFR Borrowing:
(i)the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof, or
(ii)the Administrative Agent shall have received notice from the Required Lenders that Term SOFR for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making, funding or maintaining their SOFR Loans for such Interest Period,
then the Administrative Agent shall give written notice thereof (or telephonic notice, promptly confirmed in writing) to the Borrower and to the Lenders as soon as practicable thereafter.
Upon notice thereof by the Administrative Agent to the Borrower, any obligation of the Lenders to make SOFR Loans, and any right of the Borrower to continue SOFR Loans or to convert Base Rate Loans to SOFR Loans, shall be suspended (to the extent of the affected SOFR Loans or affected Interest Periods) until the Administrative Agent revokes such notice. Upon receipt of such notice, (i) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected SOFR Loans or affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans in the amount specified therein and (ii) any outstanding affected SOFR Loans will be deemed to have been converted into Base Rate Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 2.15. Subject to paragraphs (b) through (f) below, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that “Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the interest rate on Base Rate Loans shall be determined by the Administrative Agent without reference to clause (iii) of the definition of “Base Rate” until the Administrative Agent revokes such determination.
(b)Benchmark Replacement.
(i)Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date
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have occurred prior to any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. If the Benchmark Replacement is based on Daily Simple SOFR, all interest payments will be payable on a quarterly basis.
(ii)No swap agreement shall be deemed to be a “Loan Document” for purposes of this Section 2.12.
(c)Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(d)Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will notify the Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 2.12(e) and (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.12, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.12.
(e)Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or
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analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(f)Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any pending request for a SOFR Borrowing of, conversion to or continuation of SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Borrowing of or conversion to Base Rate Loans. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.
Section 2.13**Illegality**. If any Change in Law shall make it unlawful or impossible for any Lender to perform any of its obligations hereunder, to make, maintain or fund any SOFR Loan or to or to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate or Term SOFR and such Lender shall so notify the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist, (i) the obligation of such Lender to make SOFR Loans, or to continue or convert outstanding Loans as or into SOFR Loans, shall be suspended and (ii) the Base Rate shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (iii) thereof. If the affected SOFR Loan is then outstanding, such Loan shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such SOFR Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain such SOFR Loan to such date (and in each instance the Base Rate shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (iii) thereof). Notwithstanding the foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent, use reasonable efforts to designate a different Applicable Lending Office if such designation would avoid the need for giving such notice and if such designation would not otherwise be disadvantageous to such Lender in the good faith exercise of its discretion. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.15.
Section 2.14**Increased Costs**.
(a)If any Change in Law shall:
(i)impose, modify or deem applicable any reserve (including pursuant to regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D)), special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;
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(ii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes); or
(iii)impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or any Loans made by such Lender or participation in any such Loan;
and the result of any of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining a SOFR Loan or to reduce the amount received or receivable by such Lender hereunder (whether of principal, interest or any other amount),
then, from time to time, such Lender may provide the Borrower (with a copy thereof to the Administrative Agent) with written notice and demand with respect to such increased costs or reduced amounts, and within five (5) Business Days after receipt of such notice and demand, the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for any such increased costs incurred or reduction suffered.
(b)If any Lender shall have determined that any Change in Law regarding capital or liquidity ratios or requirements has or would have the effect of reducing the rate of return on such Lender’s capital (or on the capital of the Parent Company of such Lender) as a consequence of its obligations hereunder to a level below that which such Lender or Parent Company could have achieved but for such Change in Law (taking into consideration such Lender’s policies or the policies of such Parent Company with respect to capital adequacy and liquidity), then, from time to time, such Lender may provide the Borrower (with a copy thereof to the Administrative Agent) with written notice and demand with respect to such reduced amounts, and within five (5) Business Days after receipt of such notice and demand the Borrower shall pay to such Lender such additional amounts as will compensate such Lender or Parent Company for any such reduction suffered.
(c)A certificate of such Lender setting forth the amount or amounts necessary to compensate such Lender or the Parent Company of such Lender specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive, absent manifest error.
(d)Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender under this Section for any increased costs or reductions incurred more than one hundred eighty (180) days prior to the date that such Lender notifies the Borrower of such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided, further, that if the Change in Law giving rise to such increased costs or reductions is retroactive, then such one hundred eighty (180)-day period shall be extended to include the period of such retroactive effect.
Section 2.15**Funding Indemnity**. In the event of (a) the payment of any principal of a SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion or continuation of a SOFR Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, prepay, convert or continue any SOFR Loan on the date specified in any applicable notice (regardless of whether such notice is withdrawn or revoked, except in the case of prepayment notices conditioned on the consummation of a transaction), then, in any such event, the Borrower shall compensate each Lender, within five (5) Business Days after written demand from such Lender, for any loss, cost or expense attributable to such event. In the case of a SOFR Loan, such loss, cost or expense shall be deemed to include an amount determined by such Lender
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to be the excess, if any, of (A) the amount of interest that would have accrued on the principal amount of such SOFR Loan if such event had not occurred at Term SOFR applicable to such SOFR Loan for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such SOFR Loan) over (B) the amount of interest that would accrue on the principal amount of such SOFR Loan for the same period if Term SOFR were set on the date such SOFR Loan was prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such SOFR Loan. A certificate as to any additional amount payable under this Section submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be conclusive, absent manifest error.
Section 2.16**Taxes**.
(a)Defined Terms. For purposes of this Section 2.16, the term “applicable law” includes FATCA.
(b)Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)Payment of Other Taxes. The Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d)Indemnification by the Borrower. The Borrower shall indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e)Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.4(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or
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asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).
(f)Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower or any other Loan Party to a Governmental Authority pursuant to this Section 2.16, the Borrower or other Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(g)Status of Lenders.
(i)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Sections 2.16(g)(ii)(A), 2.16(g)(ii)(B) and 2.16(g)(ii)(D)) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii)Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Borrower,
(A)any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), an executed copy of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
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(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, an executed copy of IRS Form W-8BEN or IRS Form W 8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) an executed copy of IRS Form W-8ECI;
(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit D-1) to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E; or
(4) to the extent a Foreign Lender is not the beneficial owner, an executed copy of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit D-2 or D-3, an executed IRS Form W-9, or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit D-4 on behalf of each such direct and indirect partner;
(C)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), an executed copy of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the
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Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the Closing Date.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h)Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.16 (including by the payment of additional amounts pursuant to this Section 2.16), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(i)Survival. Each party’s obligations under this Section 2.16 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
Section 2.17**Payments Generally; Pro Rata Treatment; Sharing of Set-offs**.
(a)The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees, or of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 12:00 p.m. on the date when due, in immediately available funds, free and clear of any defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at the Payment Office, except that payments pursuant to Sections 2.14, 2.15, 2.16 and 10.3 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by
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it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be made payable for the period of such extension. All payments hereunder shall be made in Dollars.
(b)If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied as follows: first, to all fees and reimbursable expenses of the Administrative Agent then due and payable pursuant to any of the Loan Documents; second, to all reimbursable expenses of the Lenders then due and payable pursuant to any of the Loan Documents, pro rata to the Lenders based on their respective pro rata shares of such fees and expenses; third, to all interest and fees then due and payable hereunder, pro rata to the Lenders based on their respective pro rata shares of such interest and fees; and fourth, to all principal of the Loans then due and payable hereunder, pro rata to the parties entitled thereto based on their respective pro rata shares of such principal.
(c)If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder that would result in such Lender receiving payment of a greater proportion of the aggregate amount of its Loan and accrued interest and fees thereon than the proportion received by any other Lender with respect to its Loan, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loan of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loan; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender) or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in its Loan to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount or amounts due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
Section 2.18**Mitigation of Obligations**. If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental
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Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the sole judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable under Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all costs and expenses incurred by any Lender in connection with such designation or assignment.
Section 2.19**Replacement of Lenders**. If (a) any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16 (an “Increased Cost Lender”), (b) any Lender is a Defaulting Lender, or (c) any Lender is a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Increased Cost Lender, Defaulting Lender or Non-Consenting Lender, as applicable, to assign and delegate, without recourse (in accordance with and subject to the restrictions set forth in Section 10.4(b)), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.14 or 2.16, as applicable) and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender) (a “Replacement Lender”); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal amount of all Loans owed to it, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (in the case of such outstanding principal and accrued interest) and from the Borrower (in the case of all other amounts), (iii) in the case of any Increased Cost Lender, such assignment will result in a reduction in such compensation or payments, and (iv) in the case of a Non Consenting Lender, each Replacement Lender shall have provided its consent to such amendment, modification, waiver or consent. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Notwithstanding anything in this Section to the contrary, the Lender that acts as the Administrative Agent may not be replaced under this Section.
Section 2.20**Defaulting Lenders**.
(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definitions of “Required Lenders” and in Section 10.2.
(ii)Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.7 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against
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such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fourth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 3.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(b)Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the applicable Commitments, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
**Article III**
**CONDITIONS PRECEDENT TO LOANS**
Section 3.1**Conditions to Effectiveness**. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.2):
(a)The Administrative Agent shall have received payment of all fees, expenses and other amounts due and payable on or prior to the Closing Date, including reimbursement or payment of all out-of-pocket expenses of the Administrative Agent, the Arranger and their Affiliates (including reasonable fees, charges and disbursements of counsel to the Administrative Agent) required to be reimbursed or paid by the Borrower hereunder, under any other Loan Document and under any agreement with the Administrative Agent or the Arranger.
(b)The Administrative Agent (or its counsel) shall have received the following, each to be in form and substance satisfactory to the Administrative Agent:
(i)a counterpart of this Agreement signed by or on behalf of each party hereto;
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(ii)a certificate of a Responsible Officer of each Loan Party, (A) attaching (1) certified copies of its articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents, (2) copies of its bylaws, or partnership agreement or limited liability company agreement or comparable organizational documents, (3) the resolutions of its board of directors or other equivalent governing body, or comparable authorizations, authorizing the execution, delivery and performance of the Loan Documents to which it is a party and (4) certificates of good standing or existence, as may be available from the Secretary of State of its jurisdiction of organization and each other jurisdiction where it is required to be qualified to do business as a foreign corporation and (B) certifying the name, title and true signature of each officer of such Loan Party executing the Loan Documents to which it is a party;
(iii)a certificate of a Responsible Officer of AllRoy GP, (A) attaching (1) certified copies of each Restricted Entity’s articles or certificate of incorporation, certificate of organization or limited partnership, or other registered organizational documents, (2) copies of such Restricted Entity’s bylaws, or partnership agreement or limited liability company agreement or comparable organizational documents, (3) consents of appropriate Persons, to the extent required by such Restricted Entity’s organizational documents, authorizing the pledge of all of the Loan Parties’ Capital Stock in such Restricted Entity pursuant to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties) and (4) certificates of good standing or existence, as may be available from the Secretary of State of such Restricted Entity’s jurisdiction of organization and each other jurisdiction where such Restricted Entity is required to be qualified to do business as a foreign corporation and (B) certifying the name, title and true signature of each officer of such Restricted Entity (or its general partner or managing member) executing an acknowledgment of pledge with respect to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties);
(iv)(A) a favorable written opinion of Rose Camenisch Stewart Mains PLLC, counsel to the Loan Parties, addressed to the Administrative Agent and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein as the Administrative Agent shall reasonably request (which opinions will expressly permit reliance by permitted successors and assigns of the Administrative Agent and the Lenders); and (B) a favorable opinion of GableGotwals, New York counsel to the Loan Parties, addressed to the Administrative Agent and each of the Lenders, and covering such matters relating to the Loan Parties, the Loan Documents and the transactions contemplated therein as the Administrative Agent shall reasonably request (which opinions will expressly permit reliance by permitted successors and assigns of the Administrative Agent and the Lenders);
(v)a certificate dated the Closing Date and signed by a Responsible Officer of each of Borrower and Holdings, certifying that after giving effect to the funding of the Loan to be made on the Closing Date, the conditions set forth in Sections 3.2(a) and 3.2(b) have been satisfied;
(vi)a duly executed funds disbursement agreement, together with a report setting forth the sources and uses of the Loans made on the Closing Date;
(vii)copies of all consents, approvals, authorizations, registrations and filings and orders required or advisable to be made or obtained under any Requirement of Law, or by any Contractual Obligation of any Loan Party, Restricted Entity or holder of Capital
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Stock of any Restricted Entity in connection with the execution, delivery, performance, validity and enforceability of the Related Transaction Documents or any of the transactions contemplated hereby or thereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired, and no investigation or inquiry by any Governmental Authority regarding the Commitments or any transaction being financed with the proceeds thereof shall be ongoing;
(viii)(A) copies of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of March 31, 2026, (B) the related unaudited consolidated statements of income, shareholders’ equity and cash flows as of March 31, 2026, (C) a pro forma consolidated balance sheet of the Borrower and its Subsidiaries as of March 31, 2026, and related pro forma consolidated statements of income of the Borrower and its Subsidiaries for the twelve (12)-month period ending on such date, giving effect to the Closing Date Acquisition and the financing contemplated by this Agreement as if such transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statements of income) and (D) pro forma projections based on information provided by the sellers under the Closing Date Acquisition Agreement, in each case, in form and substance reasonably acceptable to the Administrative Agent (together with any supporting data reasonably requested by the Administrative Agent);
(ix)a duly completed and executed Compliance Certificate, including calculations of the financial covenants set forth in Article VI as of March 31, 2026, calculated on a Pro Forma Basis as if the Loan to be made on the Closing Date had been funded as of the first (1st) day of the relevant period for testing compliance (and setting forth in reasonable detail such calculations);
(x)a certificate, dated the Closing Date and signed by the chief financial officer or treasurer of Holdings, confirming that the Borrower is, and the Loan Parties, taken as a whole, are Solvent before and after giving effect to the funding of the Loan on the Closing Date and the consummation of the Related Transactions;
(xi)the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties), duly executed by the Borrower and each Subsidiary Loan Party, together with (A) UCC financing statements and other applicable documents under the laws of all necessary or appropriate jurisdictions with respect to the perfection of the Liens granted under the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties), as requested by the Administrative Agent in order to perfect such Liens, (B) copies of UCC, tax, judgment and fixture lien search reports in all necessary or appropriate jurisdictions and under all legal and trade names of the Borrower and the Subsidiary Loan Parties and the Restricted Entities as requested by the Administrative Agent, indicating that there are no prior Liens on any of the Collateral other than Permitted Liens and Liens to be released on the Closing Date, (C) original certificates evidencing all issued and outstanding shares of Pledged Certificated Stock (if any), (D) stock or membership interest powers or other appropriate instruments of transfer executed in blank by the Borrower and the Subsidiary Loan Parties with respect to any Pledged Certificated Stock, as applicable, and (E) acknowledgments of pledge from each pledged Restricted Entity acknowledging the Borrower’s and each Subsidiary Loan Party’s, as applicable, pledge of Capital Stock in such Restricted Entity pursuant to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties);
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(xii)the Guaranty and Security Agreement (Holdings), duly executed by Holdings, together with (A) UCC financing statements and other applicable documents under the laws of all necessary or appropriate jurisdictions with respect to the perfection of the Liens granted under the Guaranty and Security Agreement (Holdings), as requested by the Administrative Agent in order to perfect such Liens, (B) copies of UCC, tax, judgment and fixture lien search reports in all necessary or appropriate jurisdictions and under all legal and trade names of Holdings as requested by the Administrative Agent, indicating that there are no prior Liens on any of the Collateral other than Permitted Liens and Liens to be released on the Closing Date, (C) original certificates evidencing all issued and outstanding shares of Pledged Certificated Stock (if any), (D) stock or membership interest powers or other appropriate instruments of transfer executed in blank by Holdings with respect to any Pledged Certificated Stock, as applicable, and (E) acknowledgments of pledge from the Borrower and AllRoy GP acknowledging Holdings’ pledge of Capital Stock in the Borrower and AllRoy GP, as applicable, pursuant to the Guaranty and Security Agreement (Holdings);
(xiii)Control Account Agreements, duly executed by each Permitted Third Party Bank and the applicable Loan Party;
(xiv)payoff letters and lien releases (if any);
(xv)at least five (5) days prior to the Closing Date, all documentation and other information required by bank regulatory authorities or reasonably requested by the Administrative Agent or any Lender under or in respect of applicable “know your customer” and anti-money laundering Legal Requirements including the Patriot Act and, if Holdings and/or the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification in relation to Holdings and/or the Borrower, as applicable;
(xvi)certified copies of all Material Agreements; and
(xvii)certificates of insurance, in form and detail acceptable to the Administrative Agent, describing the types and amounts of insurance (property and liability) maintained by any of the Loan Parties, together with endorsements naming the Administrative Agent as lenders’ loss payee or additional insured, as the case may be.
(c)Holdings, the Borrower and each Subsidiary Loan Party shall have taken all steps required under Section 6.2(c) of each Guaranty and Security Agreement for Administrative Agent to have “control” over the assets described in, and as and to the extent required by, such Section.
(d)All conditions precedent to the Closing Date Acquisition, other than the funding of the Loans, shall have been satisfied, and the Closing Date Acquisition shall be consummated simultaneously with the closing and funding of the Loans in accordance with the Closing Date Acquisition Agreement, without alteration, amendment or other change, supplement or modification of the Closing Date Acquisition Agreement except for waivers of conditions that are not material or adverse to the Lenders or as otherwise approved in writing by the Required Lenders. The Administrative Agent (or its counsel) shall have received certified copies of the Closing Date Acquisition Agreement and all other material Closing Date Acquisition Documents, each in form and substance satisfactory to the Administrative Agent and the Arranger.
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Without limiting the generality of the provisions of this Section, for purposes of determining compliance with the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved of, accepted or been satisfied with each document or other matter required thereunder to be consented to, approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
Section 3.2**Additional Conditions**. The obligation of each Lender to make a Loan on the occasion of the Borrowing hereunder is subject to the satisfaction of the following conditions:
(a)at the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be continuing; and
(b)at the time of and immediately after giving effect to such Borrowing, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of such date and after giving effect thereto, as though made on and as of such date except to the extent any such representations and warranties (i) are expressly limited to an earlier date, in which case, on and as of such date, such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date or (ii) are already qualified by materiality, Material Adverse Effect or a similar qualification, in which case, such representations and warranties shall be true and correct in all respects.
A Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.
Section 3.3**Delivery of Documents**. All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article, unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders and in sufficient counterparts or copies for each of the Lenders and shall be in form and substance satisfactory in all respects to the Administrative Agent.
**Article IV**
**REPRESENTATIONS AND WARRANTIES**
Each of Holdings and the Borrower represents and warrants, both before and after giving effect to the Related Transactions, to the Administrative Agent and each Lender as follows:
Section 4.1**Existence; Power**. Each Group Member (a) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company, as applicable, under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to (i) carry on its business as now conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and (c) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified and in good standing could not reasonably be expected to result in a Material Adverse Effect.
Section 4.2**Organizational Power; Authorization; Enforceability**. The execution, delivery and performance by each Group Member of the Loan Documents and the other Related Transaction Documents to which it is a party are within such Group Member’s organizational powers and have been duly authorized by all necessary organizational and, if required, shareholder, partner or member action. Each Loan Document and Related Transaction Document has been duly executed and delivered by each Group Member party thereto and constitutes valid and binding obligations of such Group Member,
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enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.
Section 4.3**Governmental Approvals; No Conflicts**. The execution, delivery and performance by each Group Member of the Loan Documents and the other Related Transaction Documents to which it is a party (a) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect and except for filings necessary to perfect or maintain perfection of the Liens created under the Loan Documents, (b) will not violate any Requirement of Law applicable to Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries or any judgment, order or ruling of any Governmental Authority, (c) will not violate or result in a default under any Material Agreement or give rise to a right thereunder to require any payment to be made by Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries. and (d) will not result in the creation or imposition of any Lien on any asset of Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries, except Liens created under the Loan Documents.
Section 4.4**Financial Statements**. Holdings and the Borrower have furnished to each Lender (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 2025, and the related audited consolidated statements of income, shareholders’ equity and cash flows for the Fiscal Year then ended, prepared by Grant Thornton LLP and (ii) the consolidated financial statements of Borrower and its Subsidiaries as of and for the three-month period ended March 31, 2026 utilized by management in its internal reporting and in preparing the unaudited consolidated financial statements of ARLP for the same time period, certified by a Responsible Officer. Such financial statements fairly present the consolidated financial condition of the Borrower and its Subsidiaries as of such dates and the consolidated results of operations for such periods in conformity with GAAP consistently applied, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above. Since December 31, 2025, there have been no changes which have had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
Section 4.5**Litigation and Environmental Matters**.
(a)No litigation, investigation or proceeding of or before any arbitrators or Governmental Authorities is pending against or, to the knowledge of Holdings or the Borrower, threatened against or affecting Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity or enforceability of this Agreement or any other Loan Document or Related Transaction Document.
(b)Except for the matters set forth on Schedule 4.5, no Group Member (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability, except in each case where such matter could not reasonably be expected to result in a Material Adverse Effect.
Section 4.6**Compliance with Laws and Agreements**. Holdings, the Borrower and each other Group Member is in compliance with (a) all Requirements of Law and all judgments, decrees and orders of any Governmental Authority and (b) all Material Agreements and other indentures, agreements or other
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instruments binding upon it or its properties, except where non-compliance, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 4.7**Investment Company Act**. None of Holdings, the Borrower or any other Group Member is (a) an “investment company” or is “controlled” by an “investment company”, as such terms are defined in, or subject to regulation under, the Investment Company Act of 1940, as amended and in effect from time to time, or (b) otherwise subject to any other regulatory scheme limiting its ability to incur debt or requiring any approval or consent from, or registration or filing with, any Governmental Authority in connection therewith.
Section 4.8**Taxes**. Holdings, the Borrower and each other Group Member have timely filed or caused to be filed all Federal and state income tax returns and all other material tax returns that are required to be filed by them, and have paid all taxes shown to be due and payable on such returns or on any assessments made against it or its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority, except where the same are currently being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Group Member, as the case may be, has set aside on its books adequate reserves in accordance with GAAP. The charges, accruals and reserves on the books of Holdings, the Borrower and each other Group Member in respect of such taxes are adequate, and no tax liabilities that could be materially in excess of the amount so provided are anticipated.
Section 4.9**Margin Regulations**. None of the proceeds of any of the Loans will be used, directly or indirectly, for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of such terms under Regulation U or for any purpose that violates the provisions of Regulation T, Regulation U or Regulation X. None of Holdings, the Borrower or any other Group Member is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock”.
Section 4.10**ERISA**.
(a)Each Plan is in substantial compliance in form and operation with its terms and with ERISA and the Code (including the Code provisions compliance with which is necessary for any intended favorable tax treatment) and all other applicable laws and regulations, except where non-compliance could not reasonably be expected to result in a Material Adverse Effect.
(b)Each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code covering all applicable tax law changes, or is comprised of a master or prototype plan that has received a favorable opinion letter from the IRS, and nothing has occurred since the date of such determination that would adversely affect such determination (or, in the case of a Plan with no determination, nothing has occurred that would adversely affect the issuance of a favorable determination letter or otherwise adversely affect such qualification), except where the failure to be so qualified or have such determination could not reasonably be expected to result in a Material Adverse Effect.
(c)No ERISA Event has occurred or is reasonably expected to occur that could reasonably be excepted to result in a Material Adverse Effect.
(d)There exists no Unfunded Pension Liability with respect to any Plan that could reasonably be expected to result in a Material Adverse Effect.
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(e)None of Holdings, the Borrower or any other Group Member or any ERISA Affiliate is making or accruing an obligation to make contributions, or has, within any of the five (5) calendar years immediately preceding the date this assurance is given or deemed given, made or accrued an obligation to make, contributions to any Multiemployer Plan. There are no actions, suits or claims pending against or involving a Plan (other than routine claims for benefits) or, to the knowledge of Holdings or the Borrower, any other Group Member, any of their respective Subsidiaries or any ERISA Affiliate, threatened, which would reasonably be expected to be asserted successfully against any Plan and, if so asserted successfully, would reasonably be expected either singly or in the aggregate to result in liability to Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries that could reasonably be expected to result in a Material Adverse Effect.
(f)Holdings, the Borrower, each other Group Member and each ERISA Affiliate have made all contributions to or under each Plan and Multiemployer Plan required by law within the applicable time limits prescribed thereby, by the terms of such Plan or Multiemployer Plan, respectively, or by any contract or agreement requiring contributions to a Plan or Multiemployer Plan, except where the failure to make such contributions could not reasonably be expected to result in a Material Adverse Effect.
(g)No Plan which is subject to Section 412 of the Code or Section 302 of ERISA has applied for or received an extension of any amortization period within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA, where such extension could reasonably be expected to result in a Material Adverse Effect.
(h)None of Holdings, the Borrower, any other Group Member or any ERISA Affiliate have ceased operations at a facility so as to become subject to the provisions of Section 4068(a) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Plan subject to Section 4064(a) of ERISA to which it made contributions, where in each case such cessation or withdrawal could reasonably be expected to result in a Material Adverse Effect.
(i)Each Non-U.S. Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, except as would not reasonably be expected to result in liability to Holdings, the Borrower or any other Group Member. All contributions required to be made with respect to a Non-U.S. Plan have been timely made, except as would not reasonably be expected to result in liability to Holdings, the Borrower or any other Group Member. Neither Holdings, the Borrower nor any other Group Member has incurred any obligation in connection with the termination of, or withdrawal from, any Non-U.S. Plan, except as would not reasonably be expected to result in liability to Holdings, the Borrower or any other Group Member. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan, determined as of the end of Holdings’ most recently ended Fiscal Year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities, except as would not reasonably be expected to result in liability to Holdings, the Borrower or any other Group Member.
Section 4.11**Rights in Properties; Insurance**.
(a)The Borrower, each Subsidiary Loan Party and each Restricted Entity has good and indefeasible title to, or valid leasehold interests in, all of its real and personal property (other than Oil and Gas Properties, which are covered by Section 4.11(b) below) material to the operation
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of its business, including all such properties reflected in the most recent audited consolidated balance sheet referred to in Section 4.4, in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are material to the business or operations of the Borrower, the Subsidiary Loan Parties and the Restricted Entities are, in all material respects, valid and subsisting and are, in all material respects, in full force.
(b)The Borrower, each Subsidiary Loan Party and each Restricted Entity has good and defensible title in and to the Oil and Gas Properties contributing revenue accounted for in the financial statements most recently-delivered pursuant to this Agreement. Such Oil and Gas Properties are free and clear of all Liens, except Permitted Liens. No Person other than the Borrower, such Subsidiary Loan Party or such Restricted Entity has any ownership interests, whether legal or beneficial, in the Borrower’s, such Subsidiary Loan Party’s or such Restricted Entity’s purported interests in such Oil and Gas Properties, except for co-owners, leasehold operators, or other parties whose interests do not diminish such Loan Party’s entitlement to its proportionate share of production contributing revenue accounted for in the financial statements most recently-delivered pursuant to this Agreement. For purposes of this Section 4.11, “good and defensible title” with respect to Oil and Gas Properties means title that (i) entitles the Loan Parties and the Restricted Entities to receive not less than the net revenue interest attributable to such Oil and Gas Properties as reflected in the Borrower’s internal title records, and (ii) does not obligate the Loan Parties and the Restricted Entities to bear costs greater than their corresponding share as reflected in the Borrower’s internal title records, in each case except for Permitted Encumbrances. The Borrower’s internal title records have been, and are being, maintained in accordance with usual and customary practices for the oil and gas industry and accurately reflect, in all material respects, the Loan Parties’ and the Restricted Entities’ interests in their respective Oil and Gas Properties.
(c)The properties of Holdings, the Borrower and each other Group Member are insured with financially sound and reputable insurance companies which are not Affiliates of Holdings, the Borrower or any other Group Member (except respecting usual and customary captive insurance arrangements made in the ordinary course of business), in such amounts with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Holdings, the Borrower and each other Group Member operates.
Section 4.12**Disclosure**.
(a)As of the date hereof, Holdings and the Borrower have disclosed to the Administrative Agent and the Lenders all agreements, instruments, and corporate or other restrictions to which any Group Member or any of its Subsidiaries is subject, and all other matters known to any of them, that, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports (including all reports that ARLP is required to file with the Securities and Exchange Commission), financial statements, certificates or other information furnished by or on behalf of Holdings or the Borrower to the Administrative Agent or any Lender in connection with the negotiation or syndication of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by any other information so furnished) contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, taken as a whole in light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, Holdings and the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time, it being understood that (i) any such projected financial information is merely a prediction as to future events and its not to be viewed as fact, (ii) such projected financial information is subject to
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significant uncertainties and contingencies, many of which are beyond the control of Holdings and the Borrower and (iii) no assurance can be given that any particular projections will be realized and that actual results during the period or periods covered by any such projections may differ significantly from the projected results and such differences may be material.
(b)As of (i) the Closing Date, the information included in the Beneficial Ownership Certification delivered pursuant to Section 3.1(b)(xv) is true and correct in all respects and (ii) as of the date delivered, the information included in each Beneficial Ownership Certification delivered pursuant to Section 5.14 is true and correct in all respects.
Section 4.13**Labor Relations**. There are no strikes, lockouts or other material labor disputes or grievances against Holdings, the Borrower or any other Group Member, or, to Holdings’ or the Borrower’s knowledge, threatened against or affecting Holdings, the Borrower or any other Group Member, and no significant unfair labor practice charges or grievances are pending against Holdings, the Borrower or any other Group Member, or, to Holdings’ and the Borrower’s knowledge, threatened against Holdings, the Borrower or any other Group Member before any Governmental Authority. All payments due from Holdings, the Borrower or any other Group Member pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of Holdings, the Borrower or any such Group Member, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
Section 4.14**Borrower, Subsidiary Loan Parties and Restricted Entities**. Schedule 4.14 – Part 1 sets forth the name of the Borrower, each Subsidiary Loan Party and each Restricted Entity, the authorized Capital Stock of the Borrower, such Subsidiary Loan Party or such Restricted Entity (by class and type and the amount of Capital Stock that is issued and outstanding), the number and percentage, as applicable, of ownership interests in the Borrower, such Subsidiary Loan Party or such Restricted Entity, the jurisdiction of incorporation or organization of, and the type of the Borrower, such Subsidiary Loan Party or such Restricted Entity and identifies whether such entity is the Borrower, a Subsidiary Loan Party or a Restricted Entity. Except as set forth on Schedule 4.14 – Part 2, (a) all of the outstanding Capital Stock of the Borrower, each such Subsidiary Loan Party and each such Restricted Entity has been validly issued and is fully paid and non-assessable, (b) there are no subscriptions, options, warrants or calls relating to any Capital Stock of the Borrower, any Subsidiary Loan Party or any Restricted Entity, (c) none of the Borrower, any Subsidiary Loan Party or any Restricted Entity is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its Capital Stock or any security convertible into or exchangeable for any of its Capital Stock and (d) the Capital Stock of the Borrower, each Subsidiary Loan Party and each Restricted Entity is not subject to (and their respective organizational documents do not contain) any profits interests or requirements for the non-ratable payment of distributions and dividends to the holders of such Capital Stock.
Section 4.15**Solvency**. After giving effect to the execution and delivery of the Loan Documents and the other Related Transaction Documents, and the making of the Loans under this Agreement and the consummation of the other Related Transactions, each Loan Party is Solvent.
Section 4.16**Deposit and Disbursement Accounts**. Schedule 4.16 lists all banks and other financial institutions at which Borrower, any Subsidiary Loan Party or any Restricted Entity maintains deposit accounts, lockbox accounts, disbursement accounts, investment accounts or other similar accounts as of the Closing Date, and such Schedule correctly identifies the name, address and telephone number of each financial institution, the name in which the account is held, the type of the account, and the complete account number therefor.
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Section 4.17**Collateral Documents**. Each Guaranty and Security Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in such Guaranty and Security Agreement), and when UCC financing statements in appropriate form are filed in the offices specified on Schedule 3 to each Guaranty and Security Agreement, the Liens created under each Guaranty and Security Agreement shall constitute a fully perfected Lien (to the extent that such Lien may be perfected by the filing of a UCC financing statement) on, and security interest in, all right, title and interest of the grantors thereunder in all Collateral (as defined in such Guaranty and Security Agreement), other than Collateral (as defined in such Guaranty and Security Agreement) constituting Pledged Certificated Stock, prior and superior in right to any other Person, other than, in the case of priority, Permitted Liens which are prior as a matter of law or contract. When the certificates evidencing all Pledged Certificated Stock are delivered to the Administrative Agent, together with appropriate stock powers or other similar instruments of transfer duly executed in blank, the Liens on, and security interest in, such Pledged Certificated Stock shall be fully perfected first priority security interests, subject, in the case of priority only, to Permitted Encumbrances described in clause (a) of the definition of such term which are prior as a matter of law.
Section 4.18**Hedging Transactions**. Holdings and the Borrower have disclosed in writing to the Administrative Agent and the Lenders a complete and correct list of all Hedging Transactions entered into by the Borrower, any Subsidiary Loan Party or any Restricted Entity and the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the Hedge Termination Value thereof, and the counterparty thereto.
Section 4.19**Material Agreements**. As of the Closing Date, all Material Agreements of Holdings, the Borrower and each other Group Member are described on Schedule 4.19, and each such Material Agreement is in full force and effect. As of the Closing Date, Holdings and the Borrower do not have any knowledge of any pending amendments or threatened termination of any of the Material Agreements. As of the Closing Date, the Borrower has delivered to the Administrative Agent a true, complete and correct copy of each Material Agreement (including all material schedules, exhibits, amendments, supplements, modifications, assignments and all other material documents delivered pursuant thereto or in connection therewith).
Section 4.20**Sanctions and Anti-Corruption Laws**.
(a)None of any Group Member, any Group Member’s Subsidiaries or any Unrestricted Subsidiaries or any of their respective directors, officers, employees, agents or affiliates is a Sanctioned Person.
(b)Each Group Member, each Group Member’s Subsidiaries and each of the Unrestricted Subsidiaries and their respective directors, officers and employees and, to the knowledge of each of Holdings and the Borrower, the agents of each Group Member, each Group Member’s Subsidiaries and each of the Unrestricted Subsidiaries are in compliance with applicable Anti-Corruption Laws and applicable Sanctions. Each Group Member, each Group Member’s Subsidiaries and each of the Unrestricted Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance with applicable Sanctions and Anti-Corruption Laws.
Section 4.21**Affected Financial Institutions**. No Loan Party is an Affected Financial Institution.
Section 4.22**Outbound Investment Rules**. No Group Member or any of its Subsidiaries is a “covered foreign person” as that term is used in the Outbound Investment Rules. No Group Member or
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any of its Subsidiaries currently engages, or has any present intention to engage in the future, directly or indirectly, in (i) a “covered activity” or a “covered transaction”, as each such term is defined in the Outbound Investment Rules, (ii) any activity or transaction that would constitute a “covered activity” or a “covered transaction”, as each such term is defined in the Outbound Investment Rules or (iii) any other activity that would cause the Administrative Agent or the Lenders to be in violation of the Outbound Investment Rules or cause the Administrative Agent or the Lenders to be legally prohibited by the Outbound Investment Rules from performing under this Agreement.
**Article V**
**AFFIRMATIVE COVENANTS**
Until the Payment in Full, each of Holdings and the Borrower covenants and agrees with the Administrative Agent and the Lenders that:
Section 5.1**Financial Statements and Other Information**. The Borrower will deliver to the Administrative Agent and each Lender:
(a)as soon as available and in any event within one hundred twenty (120) days after the end of each Fiscal Year (commencing with the Fiscal Year ending December 31, 2026), a copy of the annual audited report for such Fiscal Year for the Borrower and its Subsidiaries, containing a consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows (together with all footnotes thereto) of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all in reasonable detail and accompanied by an unqualified opinion of Grant Thornton LLP or other independent public accountants of nationally recognized standing (without a “going concern” or like qualification, exception or explanation (other than as a result of, a current maturity in the final year of any Indebtedness permitted under Section 7.1) and without any qualification or exception as to the scope of such audit) to the effect that such financial statements present fairly in all material respects the financial condition and the results of operations of the Borrower and its Subsidiaries for such Fiscal Year on a consolidated basis in accordance with GAAP and that the examination by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;
(b)as soon as available and in any event within sixty (60) days after the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending September 30, 2026, but excluding the fourth Fiscal Quarter of any year), an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and the related unaudited consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such Fiscal Quarter and the then elapsed portion of such Fiscal Year, setting forth in each case in comparative form the figures for the corresponding Fiscal Quarter and the corresponding portion of the Borrower’s previous Fiscal Year;
(c)concurrently with the delivery of the financial statements referred to in paragraphs (a) and (b) of this Section (other than the financial statements for the fourth Fiscal Quarter of each Fiscal Year delivered pursuant to paragraph (b) of this Section), a Compliance Certificate signed by a Responsible Officer of Holdings and the Borrower (i) certifying as to whether there exists a Default or Event of Default on the date of such certificate and, if a Default or an Event of Default then exists, specifying the details thereof and the action which Holdings and the Borrower have taken or proposes to take with respect thereto, (ii) setting forth in reasonable detail calculations demonstrating compliance with the financial covenants set forth in Article VI, (iii) specifying any
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change in the identity of the Group Members as of the end of such Fiscal Year or Fiscal Quarter from the Group Members identified to the Lenders on the Closing Date or as of the most recent Fiscal Year or Fiscal Quarter, as the case may be, and (iv) stating whether any change in GAAP or the application thereof has occurred since the date of the mostly recently delivered audited financial statements of the Borrower, the Subsidiary Loan Parties and their respective Subsidiaries, and, if any change has occurred, specifying the effect of such change on the financial statements accompanying such Compliance Certificate;
(d)concurrently with the delivery of the financial statements referred to in paragraph (a) above, a certificate of the accounting firm that opined on such financial statements stating whether they obtained any knowledge during the course of their examination of such financial statements of any continuing Default or Event of Default (which certificate may be limited to the extent required by accounting rules or guidelines);
(e)as soon as available and in any event within sixty (60) days after the end of the calendar year, forecasts and a pro forma budget for the succeeding Fiscal Year, containing an income statement, balance sheet and statement of cash flow of the Borrower, the Subsidiary Loan Parties and their respective Subsidiaries;
(f)within thirty (30) days following any request therefor, (i) a report covering each of the Oil and Gas Properties of the Borrower, the Subsidiary Loan Parties and the Restricted Entities detailing Hydrocarbon production volumes on a well by well basis for the most recently completed month and (ii) a report setting forth the identities and addresses of all Persons remitting to the Borrower, any Subsidiary Loan Party or any Restricted Entity proceeds from the sale of Hydrocarbon production from or attributable to the Oil and Gas Properties of the Borrower, such Subsidiary Loan Parties or such Restricted Entity;
(g)promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all functions of said Commission, or with any national securities exchange, or distributed by ARLP to its shareholders generally, as the case may be, provided, that the reporting requirement of this clause (g) shall be satisfied by filing the applicable report, proxy statement or other information with the Securities and Exchange Commission so long as such filing is freely available to the public; and
(h)promptly following any request therefor, (i) such other information regarding the results of operations, business affairs and financial condition of any Group Member or any of its Subsidiaries as the Administrative Agent or any Lender may reasonably request and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” requirements under the PATRIOT Act or other applicable anti-money laundering laws.
Section 5.2**Notices of Material Events**.
(a)The Borrower will furnish to the Administrative Agent and each Lender prompt and, in any event, not later than five (5) Business Days after a Responsible Officer of Holdings or Borrower becomes aware thereof (except with respect to paragraph (iv) below which shall not be later than within fifteen (15) days after a Responsible Officer of an ERISA Affiliate becomes aware thereof) written notice of the following:
(i)the occurrence of any Default or Event of Default;
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(ii)the filing or commencement of, or any material development in, any action, suit or proceeding by or before any arbitrator or Governmental Authority against or, to the knowledge of Holdings or the Borrower, affecting any Group Member or any of its Subsidiaries which, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(iii)the occurrence of any event or any other development by which any Group Member (A) fails to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (B) becomes subject to any Environmental Liability, (C) receives notice of any claim with respect to any Environmental Liability, or (D) becomes aware of any basis for any Environmental Liability, in each case which, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
(iv)(A) any ERISA Event has occurred that could reasonably be expected to result in a Material Adverse Effect, a certificate of the chief financial officer of Holdings and the Borrower describing such ERISA Event and the action, if any, proposed to be taken with respect to such ERISA Event and a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA Event and any notices received by any Group Member or any of its Subsidiaries or any ERISA Affiliate from the PBGC or any other governmental agency with respect thereto, (B) there has been an increase in Unfunded Pension Liabilities (not taking into account Plans with negative Unfunded Pension Liabilities) since the date the representations hereunder are given or deemed given, or from any prior notice, as applicable, which increase could reasonably be expected to result in a Material Adverse Effect, (C) that there has been any Withdrawal Liability which could reasonably be expected to result in a Material Adverse Effect, (D) that there has been any adoption of, or the commencement of contributions to, any Plan subject to Section 412 of the Code by any Group Member, any of its Subsidiaries or any ERISA Affiliate, that could reasonably be expected to result in a Material Adverse Effect, or (E) that there has been any adoption of any amendment to a Plan subject to Section 412 of the Code which results in a material increase in contribution obligations of any Group Member, any of its Subsidiaries or any ERISA Affiliate, that could reasonably be expected to result in a Material Adverse Effect, a detailed written description thereof from the chief financial officer of Holdings and the Borrower;
(v)the occurrence of any default or event of default, or the receipt by any Group Member or any of its Subsidiaries of any written notice of an alleged default or event of default, with respect to any Material Indebtedness of any Group Member or any of its Subsidiaries;
(vi)any material amendment or modification to any Material Agreement (together with a copy thereof), and prompt notice of any termination, expiration or loss of any Material Agreement, provided, that the reporting requirement of this clause (vi) shall be satisfied by filing the applicable Material Agreement with the Securities and Exchange Commission so long as such filing is freely available to the public;
(vii)any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and
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(viii)any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in part (c) or (d) of such certification.
(b)Holdings and the Borrower will furnish to the Administrative Agent and each Lender promptly, and in any event at least thirty (30) days prior thereto (or such shorter period of time as Administrative Agent may approve), notice of any change (i) in any Group Member’s legal name, (ii) in any Group Member’s chief executive office, its principal place of business, any office in which it maintains books or records or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility), (iii) in any Group Member’s identity or legal structure, (iv) in any Group Member’s federal taxpayer identification number or organizational number or (v) in any Group Member’s jurisdiction of organization.
Each notice or other document delivered under this Section shall be accompanied by a written statement of a Responsible Officer setting forth the details of the event or development requiring such notice or other document and any action taken or proposed to be taken with respect thereto.
Section 5.3**Existence; Conduct of Business**. Holdings and the Borrower will, and will cause each other Group Member to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its legal existence and its respective rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that nothing in this Section shall prohibit any merger, consolidation, liquidation or dissolution permitted under Section 7.3 and; provided further that neither the Borrower nor any other Group Member shall be required to preserve any right, license, permit, privilege or franchise material or, in the case of any Subsidiary of the Borrower or AllRoy GP, the existence of such Subsidiary if the board of directors (or persons performing similar functions) of or on behalf of the Borrower or such other Group Member shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower or such other Group Member, as the case may be, and that the loss thereof, individually or in the aggregate, would not reasonably be expected to materially and adversely impact the Administrative Agent and the Lenders.
Section 5.4**Compliance with Laws**. Holdings and the Borrower will, and will cause each other Group Member to, comply with all laws, rules, regulations and requirements of any Governmental Authority applicable to its business and properties, including all Environmental Laws, ERISA and OSHA, except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Holdings and the Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by each Group Member, each Group Member’s Subsidiaries and each Unrestricted Subsidiary and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws and applicable Sanctions.
Section 5.5**Payment of Obligations**. Holdings and the Borrower will, and will cause each other Group Member to, pay and discharge at or before maturity all of its obligations and liabilities (including all taxes, assessments and other governmental charges, levies and all other claims that could result in a statutory Lien) before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) Holdings, the Borrower or such other Group Member has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
Section 5.6**Books and Records**. Holdings and the Borrower will, and will cause each other Group Member to, keep proper books of record and account in which full, true and correct entries shall be made of all dealings and transactions in relation to its business and activities to the extent necessary to
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prepare the consolidated financial statements of Holdings, the Borrower and the other Group Members in conformity with GAAP.
Section 5.7**Visitation and Inspection**. Holdings and the Borrower will, and will cause each other Group Member to, permit any representative of the Administrative Agent or any Lender to visit and inspect its properties, to examine its books and records and to make copies and take extracts therefrom, and to discuss its affairs, finances and accounts with any of its officers and with its independent certified public accountants, all at such reasonable times and as often as the Administrative Agent or any Lender may reasonably request after reasonable prior notice to Holdings; provided that if an Event of Default has occurred and is continuing, no prior notice shall be required.
Section 5.8**Maintenance of Properties; Insurance**. Holdings and the Borrower will, and will cause each other Group Member to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, (b) maintain with financially sound and reputable insurance companies which are not Affiliates of Holdings, the Borrower or any other Group Member (except respecting usual and customary captive insurance arrangements made in the ordinary course of business) (i) insurance with respect to their respective properties and business, and the properties and business of the other Group Members, against loss or damage of the kinds customarily insured against by companies in the same or similar businesses operating in the same or similar locations (including, in any event, flood insurance) and (ii) all insurance required to be maintained pursuant to the Collateral Documents, and will, upon request of the Administrative Agent, furnish to the Administrative Agent and each Lender at reasonable intervals a certificate of a Responsible Officer setting forth the nature and extent of all insurance maintained by Holdings, the Borrower and each other Group Member in accordance with this Section (and if requested by the Administrative Agent or any Lender a copy of any policy referenced therein if not already delivered), and (c) at all times shall name the Administrative Agent as additional insured on all liability policies of Holdings, the Borrower and each other Loan Party and as lenders’ loss payee (pursuant to a lenders’ loss payee endorsement approved by the Administrative Agent) on all casualty and property insurance policies of Holdings, the Borrower and each other Loan Party respecting property of Holdings, the Borrower and each other Loan Party.
Section 5.9**Use of Proceeds; Margin Regulations**. The Borrower will use the proceeds of all Loans to finance the Closing Date Acquisition. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would violate any rule or regulation of the Board of Governors of the Federal Reserve System, including Regulation T, Regulation U or Regulation X.
Section 5.10**Casualty and Condemnation**. Holdings and the Borrower will (a) furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of any Collateral or the commencement of any action or preceding for the taking of any material portion of any Collateral or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) ensure that the Net Cash Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Collateral Documents.
Section 5.11**Cash Management**.
(a)The Borrower will, and Holdings and the Borrower will cause each Subsidiary Loan Party to: (i) maintain all cash management and treasury business with Truist Bank or a Permitted Third Party Bank, including all deposit accounts, disbursement accounts, investment accounts and lockbox accounts (other than Excluded Accounts) (each such deposit account, disbursement account, investment account and lockbox account, other than an Excluded Account, a “Controlled Account”), (ii) ensure that each Controlled Account shall be subject to a Control
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Account Agreement, and (iii) deposit promptly, and in any event no later than ten (10) Business Days after the date of receipt thereof, all cash, checks, drafts or other similar items of payment relating to or constituting payments made in respect of any and all accounts and other Collateral into Controlled Accounts, in each case except for cash and Permitted Investments the aggregate value of which does not exceed $100,000 at any time.
(b)Holdings and the Borrower will, and will cause each Subsidiary Loan Party to, cause each Restricted Entity to, on a monthly basis, make a Restricted Payment to the holders of such Restricted Entity’s Capital Stock (paid ratably with respect to such Restricted Entity’s Capital Stock and in accordance with such Restricted Entity’s organizational and other governing documents) of all cash, checks, drafts or other similar items of payment received by such Restricted Entity, subject to reasonable reserves maintained by such Restricted Entity consistent with past practice; provided, that the aggregate amount of such reserves for all Restricted Entities shall not exceed $15,000,000 at any one time.
(c)Holdings and the Borrower will promptly notify the Administrative Agent of the opening or acquisition by the Borrower, any Subsidiary Loan Party or any Restricted entity of any deposit accounts, lockbox accounts, disbursement accounts, investment accounts or other similar accounts not listed on Schedule 4.16 and, in such notification provide (i) the name of the bank or other financial institutions at which such account is maintained, (ii) the name, address and telephone number of such bank or financial institution, (iii) the name in which the account is held, (iv) the type of the account, and (v) the complete account number therefor.
Section 5.12**Additional Loan Parties and Collateral**.
(a)In the event that, after the Closing Date, any Subsidiary (other than a Restricted Entity or an Unrestricted Subsidiary), is formed or acquired, (i) the Borrower shall promptly (and, in any event, within three (3) Business Days after such Subsidiary is formed or acquired) notify the Administrative Agent thereof and (ii) within ten (10) Business Days after such Subsidiary is formed or acquired, the applicable Loan Party shall (A) deliver (1) a duly executed Guaranty and Security Agreement Supplement and (2) the original stock certificates evidencing the Capital Stock of such Person, if any, to the Administrative Agent, together with appropriate stock powers executed in blank and (B) cause such Subsidiary to become a Subsidiary Loan Party. A Subsidiary shall become a Subsidiary Loan Party by executing and delivering to the Administrative Agent a Guaranty and Security Agreement Joinder, accompanied by (x) all other Loan Documents related thereto, (y) certified copies of its organizational documents, appropriate authorizing resolutions, lien and legal opinions comparable to those delivered pursuant to Section 3.1(b) and (z) such other documents as the Administrative Agent shall reasonably request.
(b)In the event that, subsequent to the Closing Date, any Person becomes a Subsidiary of the Borrower or another Subsidiary Loan Party, whether pursuant to formation, acquisition or otherwise, and the Borrower elects for such Person to become a Restricted Entity under this Agreement, (i) the Borrower shall notify the Administrative Agent and the Lenders of such election not less than ten (10) Business Days prior to the formation or acquisition of such Restricted Entity, (ii) the applicable Loan Party shall deliver (A) a duly executed Guaranty and Security Agreement Supplement with respect to such Restricted Entity, (B) the original stock certificates evidencing the Capital Stock of such Restricted Entity, if any, to the Administrative Agent, together with appropriate stock powers executed in blank and (C) acknowledgments of pledge from such pledged Restricted Entity acknowledging the applicable Loan Party’s pledge of Capital Stock in such Restricted Entity pursuant to the Guaranty and Security Agreement (Borrower and Subsidiary Loan Parties). Notwithstanding anything herein to the contrary, (i) at no time shall any subsidiary be a
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Restricted Entity if it is a “restricted subsidiary” for purposes of any indenture, credit agreement or similar agreement that contains the concept of “restricted” and “unrestricted” subsidiaries or otherwise provides a guarantee of the obligations thereunder and (ii) the Borrower shall not designate any Subsidiary Loan Party as a Restricted Entity.
(c)In the event that, subsequent to the Closing Date, any Person becomes a subsidiary of the Borrower or another Subsidiary Loan Party, whether pursuant to formation, acquisition or otherwise, and the Borrower elects for such Person to become an Unrestricted Subsidiary under this Agreement, the Borrower shall notify the Administrative Agent and the Lenders of such election not less than ten (10) Business Days prior to the formation or acquisition of such Unrestricted Subsidiary. Notwithstanding anything herein to the contrary, (i) at no time shall any subsidiary be an Unrestricted Subsidiary if it is a “restricted subsidiary” for purposes of any indenture, credit agreement or similar agreement that contains the concept of “restricted” and “unrestricted” subsidiaries or otherwise provides a guarantee of the obligations thereunder and (ii) the Borrower shall not designate any Subsidiary Loan Party as an Unrestricted Subsidiary.
(d)All actions to be taken pursuant to this Section shall be at the expense of the Borrower or the applicable Loan Party and shall be taken to the reasonable satisfaction of the Administrative Agent.
Section 5.13**Further Assurances**. Holdings and the Borrower will, and will cause each other Group Member to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created by the Collateral Documents or the validity or priority of any such Lien, all at the expense of the Loan Parties. Each of Holdings and the Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Collateral Documents.
Section 5.14**Additional Beneficial Ownership Certifications**. At least five (5) days prior to any Person becoming a Loan Party, if requested by the Administrative Agent or any Lender, Holdings and the Borrower shall cause any such Person that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation and has not previously delivered a Beneficial Ownership Certification to deliver a Beneficial Ownership Certification to the Administrative Agent and the Lenders.
**Article VI**
**FINANCIAL COVENANTS**
Until the Payment in Full, the Borrower covenants and agrees with the Administrative Agent and the Lenders that:
Section 6.1**Secured Leverage Ratio**. The Borrower and the Subsidiary Loan Parties will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on September 30, 2026, a Secured Leverage Ratio of not greater than 2:00 to 1:00.
Section 6.2**Total Leverage to Consolidated Cash Flow Ratio**. The Borrower and the Subsidiary Loan Parties will maintain, as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on September 30, 2026, a Total Leverage to Consolidated Cash Flow Ratio of not greater than 2:50 to 1:00.
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**Article VII**
**NEGATIVE COVENANTS**
Until the Payment in Full, each of Holdings and the Borrower covenants and agrees with the Administrative Agent and the Lenders that:
Section 7.1**Indebtedness and Preferred Equity**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, create, incur, assume or suffer to exist any Indebtedness, except:
(a)Indebtedness created pursuant to the Loan Documents;
(b)Indebtedness of the Borrower, the Subsidiary Loan Parties or the Restricted Entities existing on the Closing Date and set forth on Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted average life thereof;
(c)Hedging Obligations permitted by Section 7.10;
(d)Indebtedness consisting of the financing of insurance premiums arising in the ordinary course of business;
(e)Indebtedness incurred in the ordinary course of business with respect to performance bonds, surety, statutory and appeal bonds, bid bonds, completion guarantees and similar obligations; and
(f)other unsecured Indebtedness of the Borrower, the Subsidiary Loan Parties or the Restricted Entities in an aggregate principal amount not to exceed $5,000,000 at any time outstanding.
Holdings will not create, incur, assume or suffer to exist any Notes Indebtedness in aggregate principal amount exceeding $575,000,000 at any time outstanding.
Section 7.2**Liens**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired, except:
(a)Liens securing the Obligations; provided that no Liens may secure Hedging Obligations or Bank Product Obligations without securing all other Obligations on a basis at least pari passu with such Hedging Obligations or Bank Product Obligations and subject to the priority of payments set forth in Sections 2.17 and 8.2;
(b)Permitted Encumbrances;
(c)Liens on any property or asset of the Borrower, the Subsidiary Loan Parties or the Restricted Entities existing on the Closing Date and set forth on Schedule 7.2; provided that such Liens shall not apply to any other property or asset of the Borrower, any Subsidiary Loan Party or any Restricted Entity;
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(d)extensions, renewals, or replacements of any Lien referred to in paragraphs (b) and (c) of this Section; provided that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby;
(e)Liens arising from precautionary UCC financing statements (or foreign equivalents thereof) or similar filings made in respect of operating leases entered into by the Borrower, the Subsidiary Loan Parties or the Restricted Entities;
(f)Liens on earnest money deposits made in cash by the Borrower, the Subsidiary Loan Parties or the Restricted Entities in connection with any letter of intent or purchase agreement in connection with an acquisition permitted under this Agreement;
(g)Liens arising out of conditional sale, title retention, consignment or similar arrangements (including Liens arising under Section 2-502 of the UCC) for the sale of goods entered into by Borrower, any Subsidiary Loan Party or any Restricted Entity in the ordinary course of business;
(h)non-exclusive licenses and sublicenses of intellectual property granted in the ordinary course of business and not interfering, individually or in the aggregate, in any material respect with the ordinary conduct of business of Borrower, any Subsidiary Loan Party or any Restricted Entity;
(i)any interest or title of a lessor or sublessor under any lease permitted by this Agreement;
(j)judgment Liens that do not constitute a Default or an Event of Default under Section 8.1(k); and
(k)normal customary rights of setoff upon deposits of cash in favor of banks and other depository institutions.
Holdings will not create, incur, assume or suffer to exist any Lien on any of its Capital Stock in the Borrower and AllRoy GP, except for Permitted Encumbrances.
Section 7.3**Fundamental Changes**.
(a)Neither Holdings nor the Borrower will, nor will Holdings or the Borrower permit any Subsidiary Loan Parties or Restricted Entities to, merge into or consolidate into any other Person, or permit any other Person to merge into or consolidate with it, or sell, lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all or substantially all of the stock of any Group Member (in each case, whether now owned or hereafter acquired) or liquidate or dissolve; provided that if, at the time thereof and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing, (i) Holdings may merge with a Person if Holdings is the surviving Person, (ii) any Subsidiary Loan Party may merge into another Subsidiary Loan Party, (iii) any Restricted Entity may merge into a Subsidiary Loan Party or, with the consent of the Administrative Agent (such consent not to be unreasonably withheld), another Restricted Entity, (iv) any Subsidiary Loan Party may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to a Subsidiary Loan Party, and (v) any Restricted Entity may sell, transfer, lease or otherwise dispose of all or substantially all of its assets
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to the Borrower, to a Subsidiary Loan Party or, with the consent of the Administrative Agent (such consent not to be unreasonably withheld) another Restricted Entity.
(b)The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, engage in any business other than businesses of the type conducted by the Borrower, the Subsidiary Loan Parties and the Restricted Entities on the Closing Date and businesses reasonably related thereto; provided that, the Borrower, the Subsidiary Loan Parties and the Restricted Entities shall not engage in the business of owning more than a *de minimis* amount (relative to the other Oil and Gas Properties of the Borrower, the Subsidiary Loan Parties and the Restricted Entities, taken as a whole) of working interests, leasehold interests or similar cost-bearing interests.
Section 7.4**Investments, Loans**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Capital Stock, evidence of Indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or make an Acquisition (all of the foregoing being collectively called “Investments”), except:
(a)Investments (other than Permitted Investments) existing on the Closing Date and set forth on Schedule 7.4 (for the avoidance of doubt, with respect to the loans described in item #1 on Schedule 7.4, this Section 7.4(a) applies to such loans that exist immediately prior to the occurrence of the Closing Date and any loans made from and after the occurrence of the Closing Date may not be made pursuant to this Section 7.4(a));
(b)Permitted Investments;
(c)Guarantees by the Borrower, the Subsidiary Loan Parties and the Restricted Entities constituting Indebtedness permitted by Section 7.1; provided that no Indebtedness of a Restricted Entity shall be Guaranteed by the Borrower or any Subsidiary Loan Party;
(d)Investments made by (i) the Borrower in or to any Subsidiary Loan Party, (ii) any Subsidiary Loan Party in or to the Borrower, (iii) any Subsidiary Loan Party in or to any other Subsidiary Loan Party or (iv) any Restricted Entity into the Borrower, any Subsidiary Loan Party or, so long as no Default or Event of Default shall exist at the time of, or immediately following, the making of such Investment, any other Restricted Entity;
(e)(i) Investments made by the Borrower or any Subsidiary Loan Party in or to any Restricted Entity or by any Restricted Entity into another Restricted Entity; provided that (A) such Investment is funded entirely by cash contributed (or loans repaid) by Holdings to the Borrower, such Subsidiary Loan Party or such Restricted Entity, as applicable, within the five (5) Business Day period prior to the date such Investment is made and (B) no Default or Event of Default shall exist at the time of, or immediately following, the making of such Investment and (ii) other Investments made by the Borrower, any Subsidiary Loan Party or any Restricted Entity in or to any Restricted Entity; provided that the aggregate amount of Investments made by the Borrower, the Subsidiary Loan Parties and the Restricted Entities in or to Restricted Entities pursuant to this Section 7.4(e)(ii) during the term of this Agreement shall not exceed $10,000,000;
(f)Investments made by the Borrower or any Subsidiary Loan Party in or to any Unrestricted Subsidiary; provided that (i) such Investment is funded entirely by cash contributed
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(or loans repaid) by Holdings to the Borrower or such Subsidiary Loan Party, as applicable, within the five (5) Business Day period prior to the date such Investment is made and (ii) no Default or Event of Default shall exist at the time of, or immediately following, the making of such Investment;
(g)Hedging Transactions permitted by Section 7.10;
(h)the Closing Date Acquisition;
(i)Investments consisting of the Acquisition of direct ownership interests (including fee and leased interests) in Oil and Gas Properties located within the geographic boundaries of the United States of America; provided that (i) before and after giving effect to such Acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom, and all representations and warranties of each Loan Party set forth in the Loan Documents shall be and remain true and correct in all material respects and (ii) before and after giving effect to such Acquisition, on a Pro Forma Basis, the Borrower is in compliance with each of the covenants set forth in Article VI and the Borrower shall have delivered to the Administrative Agent a pro forma Compliance Certificate signed by a Responsible Officer certifying to the foregoing at least three (3) Business Days prior to the date of the consummation of such Acquisition (provided, that no such Compliance Certificate shall be required if the purchase price to be paid in such Acquisition (or series of related Acquisitions) will not exceed $10,000,000);
(j)Investments consisting of the acquisition of Capital Stock in Persons that primarily hold, directly or indirectly through subsidiaries, ownership interests in Oil and Gas Properties located within the geographic boundaries of the United States of America; provided that (i) before and after giving effect to such acquisition, no Default or Event of Default has occurred and is continuing or would result therefrom, and all representations and warranties of each Loan Party set forth in the Loan Documents shall be and remain true and correct in all material respects, (ii) before and after giving effect to such acquisition, on a Pro Forma Basis, the Borrower is in compliance with each of the covenants set forth in Article VI and the Borrower shall have delivered to the Administrative Agent a pro forma Compliance Certificate signed by a Responsible Officer certifying to the foregoing at least three (3) Business Days prior to the date of the consummation of such Acquisition, (iii) such Person acquired shall become a Subsidiary Loan Party pursuant to Section 5.12(a) or a Restricted Entity pursuant to Section 5.12(b) (and the Borrower and the Subsidiary Loan Parties shall take all such actions required by such Section 5.12(a) or Section 5.12(b), as applicable, with respect to such Subsidiary Loan Party or Restricted Entity, as applicable) and (iv) with respect to any such Persona acquired that is to become a Subsidiary Loan Party, such acquisition shall be for one hundred percent (100%) of the Capital Stock of such Person;
(k)to the extent constituting Investments, Restricted Payments permitted by Section 7.5(d);
(l)Investments in accounts receivable in the ordinary course of business; and
(m)other Investments which in the aggregate do not exceed $10,000,000 in any Fiscal Year.
Section 7.5**Restricted Payments**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
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(a)Restricted Payments made by any Subsidiary Loan Party to Borrower or to another Subsidiary Loan Party;
(b)Restricted Payments made by any Restricted Entity to Borrower or to another Subsidiary Loan Party;
(c)Restricted Payments in the form of cash distributions and dividends made by any Restricted Entity to the holders of its Capital Stock (including the Borrower, Subsidiary Loan Parties and other Restricted Entities), paid ratably with respect to such Restricted Entity’s Capital Stock and in accordance with such Restricted Entity’s organizational and other governing documents; and
(d)Restricted Payments in the form of loans, cash distributions and dividends made by the Borrower to AROP so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom and after giving effect thereto and (ii) the Debt Service Coverage Ratio of the Borrower and the Subsidiary Loan Parties (calculated on a Pro Forma Basis and in a manner reasonably acceptable to the Administrative Agent) is greater than 1.40 to 1.00 (and the Borrower shall have delivered to the Administrative Agent a Compliance Certificate evidencing such compliance and certifying as to the other matters in clauses (i) and (ii) of this paragraph no more than five (5) Business Days prior to and no less than three (3) Business Days prior to the making of such Restricted Payment).
Section 7.6**Sale of Assets**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, convey, sell, lease, assign, transfer or otherwise dispose (collectively, a “Disposition”) of any of its assets, business or property (including Oil and Gas Properties) or, in the case of any Subsidiary Loan Party or Restricted Entity, any of such Subsidiary Loan Party’s or Restricted Entity’s Capital Stock, in each case whether now owned or hereafter acquired, to any Person, except:
(a)the sale of Permitted Investments in the ordinary course of business;
(b)Dispositions made to the extent expressly permitted by Section 7.3;
(c)Investments made to the extent expressly permitted by Section 7.4;
(d)Dispositions of assets by (i) a Subsidiary Loan Party to the Borrower, (ii) the Borrower to a Subsidiary Loan Party and (iii) by a Subsidiary Loan Party to another Subsidiary Loan Party; provided, to the extent such transaction constitutes an Investment, such transaction must be expressly permitted by Section 7.4;
(e)the unwinding of any Hedging Transaction pursuant to its terms;
(f)Dispositions of inventory in the ordinary course of business;
(g)usual and customary leases of Oil and Gas Properties as a lessor pursuant to oil and gas mineral leases entered into in the ordinary course of business;
(h)any involuntary loss, damage or destruction of property;
(i)any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;
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(j)Dispositions of cash and cash equivalents in the ordinary course of business; and
(k)Sales of Oil and Gas Properties so long as (i) the aggregate amount of such sales does not exceed $40,000,000 over the term of this Agreement, (ii) the proceeds of such sale are treated as Net Cash Proceeds pursuant to Section 2.8 (and, in the case of a sale of Oil and Gas Properties by a Restricted Entity, such Restricted Entity shall cause the Borrower or the applicable Subsidiary Loan Party(ies), as applicable, that ultimately owns Capital Stock in such Restricted Entity to receive its share of the sales proceeds within three (3) Business Days following the consummation of such sale so that such sale proceeds can become Net Cash Proceeds under this Agreement on such date), (iii) no Default or Event of Default shall have occurred and be continuing or would result from such sale and after giving effect thereto, (iv) such sale is an arm’s length transaction and the Borrower, the Subsidiary Loan Party or the Restricted Entity, as applicable, party to such sale receives cash consideration not less than the fair market value of the assets being sold (as reasonably determined by the Borrower), and (v) in the case of a sale (or series of related sales) in an amount in excess of $7,500,000, the Borrower shall provide advance written notice of such sale (or series of related sales) not less than five (5) Business Days prior to such sale (or series of related sales); and
(l)Dispositions of other property having a fair market value not to exceed $5,000,000 in the aggregate in any twelve (12)-month period ending on the date of determination thereof.
Holdings will not Dispose of any of its Capital Stock in the Borrower and AllRoy GP to any Person.
Section 7.7**Transactions with Affiliates**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:
(a)in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower, such Subsidiary Loan Party or such Restricted Entity than could be obtained on an arm’s-length basis from unrelated third parties;
(b)transactions solely between or among Loan Parties (other than between Holdings, on the one hand, and the Borrower and/or any Subsidiary Loan Party, on the other hand);
(c)reasonable and customary director and officer compensation (including bonuses and stock option programs), benefits and indemnification arrangements, in each case approved by the board of directors (or a committee thereof) of Borrower, such Subsidiary Loan Party or such Restricted Entity; and
(d)any Restricted Payment permitted by Section 7.5.
Section 7.8**Restrictive Agreements**.
(a)The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (i) the ability of the Borrower, any Subsidiary Loan Party or any Restricted Entity to create, incur or permit any Lien upon any of the Collateral to secure the Obligations, or (ii) the ability of the Borrower, any Subsidiary Loan Party or any Restricted Entity to pay dividends or other distributions with respect to its Capital Stock, to make or repay loans or advances to the Borrower, any Subsidiary Loan Party
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or any Restricted Entity, to Guarantee Indebtedness of the Borrower, any Subsidiary Loan Party or any Restricted Entity or to transfer any of its property or assets to the Borrower, any Subsidiary Loan Party or any Restricted Entity; provided that the foregoing shall not apply to restrictions or conditions imposed by law, the terms of the organizational documents of the Restricted Entities in effect on the Closing Date upon the completion of the Closing Date Acquisition, this Agreement or any other Loan Document or the AROP Indenture (as in effect on the Closing Date); provided, further, that notwithstanding anything in the foregoing proviso to the contrary, no restriction, prohibition or condition imposed by or arising under the AROP Indenture shall, in any event, prohibit, restrict, condition, delay or otherwise impair (A) the ability of the Borrower, any Subsidiary Loan Party or any Restricted Entity to comply with Section 5.11 or to otherwise make Restricted Payments to the Borrower or any Subsidiary Loan Party necessary to permit the timely deposit of cash and other items of payment into Controlled Accounts as required thereunder, (B) the obligation of the Borrower to make, or the ability of any Subsidiary Loan Party to fund, any mandatory prepayment required pursuant to Section 2.8 (including mandatory prepayments arising from Asset Sales, Recovery Events, Extraordinary Receipts or proceeds of Indebtedness or Capital Stock), or (C) the ability of the Borrower or any Subsidiary Loan Party to create, incur or suffer to exist any Lien on any of the Collateral in favor of the Administrative Agent to secure the Obligations or to execute and deliver any Collateral Document or other instrument required to grant or perfect such Liens.
(b)Holdings will not, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (i) the ability of Holdings to create, incur or permit any Lien upon any of the Collateral to secure the Obligations, or (ii) the ability of Holdings to Guarantee Indebtedness of the Borrower or any Subsidiary Loan Party; provided that the foregoing shall not apply to restrictions or conditions imposed by law, this Agreement or any other Loan Document or the AROP Indenture (as in effect on the Closing Date); provided, further, that notwithstanding anything in the foregoing proviso to the contrary, no restriction, prohibition or condition imposed by or arising under the AROP Indenture shall, in any event, prohibit, restrict, condition, delay or otherwise impair the ability of Holdings to (A) create, incur or suffer to exist any Lien on any of the Collateral in favor of the Administrative Agent to secure the Obligations or to execute and deliver any Collateral Document or other instrument required to grant or perfect such Liens or (B) Guarantee Indebtedness of the Borrower or any Subsidiary Loan Party as and to the extent required under any Loan Document.
Section 7.9**Sale and Leaseback Transactions**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.
Section 7.10**Hedging Transactions**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or any Restricted Entities to, enter into any Hedging Transaction, other than Hedging Transactions entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower, any Subsidiary Loan Party or any Restricted Entity is exposed in the conduct of its business or the management of its liabilities; provided that, any such Commodity Hedging Transaction entered into pursuant to this Section 7.10 shall not (i) cause the net aggregate notional volumes (when netted and aggregated with other Commodity Hedging Transactions then in effect) to exceed, as of the date such Commodity Hedging Transaction is entered into, for each full calendar month during the forthcoming sixty (60) full calendar months following such date, ninety percent (90%) of the reasonably anticipated production of oil, natural gas, and natural gas liquids, calculated separately, projected to be
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produced for the Borrower’s, such Subsidiary Loan Party’s or such Restricted Entity’s, as applicable, Oil and Gas Properties and (ii) have a tenor longer than sixty (60) months. Solely for the avoidance of doubt, each of Holdings and the Borrower acknowledges that a Hedging Transaction entered into for speculative purposes or of a speculative nature (which shall be deemed to include any Hedging Transaction under which the Borrower, any Subsidiary Loan Party or any of Restricted Entity is or may become obliged to make any payment (x) in connection with the purchase by any third party of any Capital Stock or any Indebtedness or (y) as a result of changes in the market value of any Capital Stock or any Indebtedness) is not a Hedging Transaction entered into in the ordinary course of business to hedge or mitigate risks.
Section 7.11**Amendment to Material Documents**. Holdings and the Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, amend, modify or waive any of its rights under (a) its certificate of incorporation, certificate of formation, bylaws, company agreement, partnership agreement or other organizational documents or (b) any Material Agreements, except, in each case, in any manner that would not have a Material Adverse Effect.
Section 7.12**Accounting Changes**. Neither Holdings nor the Borrower will, nor will Holdings or the Borrower permit any Subsidiary Loan Parties or Restricted Entities to, make any significant change in accounting treatment or reporting practices, except as required by GAAP, or change the Fiscal Year of Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity.
Section 7.13**Sanctions and Anti-Corruption Laws**. Neither Holdings nor the Borrower will, nor will Holdings or the Borrower permit any Subsidiary Loan Parties, Restricted Entities or Unrestricted Subsidiaries to, request any Loan or, directly or indirectly, use the proceeds of any Loan, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as the Arranger, the Administrative Agent, any Lender, underwriter, advisor, investor or otherwise), or (iii) in furtherance of an offer, payment, promise to pay or authorization of the payment or giving of money or anything else of value to any Person in violation of applicable Anti-Corruption Laws.
Section 7.14**Outbound Investment Rules**. Holdings and the Borrower will not, and will not permit any Subsidiary Loan Parties or Restricted Entities to, (a) be or become a “covered foreign person”, as that term is defined in the Outbound Investment Rules, or (b) engage, directly or indirectly, in (i) a “covered activity” or a “covered transaction”, as each such term is defined in the Outbound Investment Rules, (ii) any activity or transaction that would constitute a “covered activity” or a “covered transaction”, as each such term is defined in the Outbound Investment Rules or (iii) any other activity that would cause the Administrative Agent or the Lenders to be in violation of the Outbound Investment Rules or cause the Administrative Agent or the Lenders to be legally prohibited by the Outbound Investment Rules from performing under this Agreement.
Section 7.15**Foreign Subsidiaries**. The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary Loan Parties or Restricted Entities to, form or acquire any Foreign Subsidiaries.
**Article VIII**
**EVENTS OF DEFAULT**
Section 8.1**Events of Default**. If any of the following events (each, an “Event of Default”) shall occur:
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(a)the Borrower shall fail to pay any principal of any Loan, when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment or otherwise; or
(b)the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount payable under paragraph (a) of this Section or an amount related to a Bank Product Obligation) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days; or
(c)any representation or warranty made or deemed made by, on behalf of or with respect to Holdings, the Borrower, any Subsidiary Loan Parties or any Restricted Entities in or in connection with this Agreement or any other Loan Document (including the Schedules attached hereto and thereto), or in any amendments or modifications hereof or waivers hereunder, or in any certificate, report, financial statement or other document submitted to the Administrative Agent or the Lenders by any Loan Party or any representative of any Loan Party pursuant to or in connection with this Agreement or any other Loan Document shall prove to be incorrect in any material respect (other than any representation or warranty that is expressly qualified by a Material Adverse Effect or other materiality, in which case such representation or warranty shall prove to be incorrect in any respect) when made or deemed made or submitted; or
(d)Holdings or the Borrower shall fail to observe or perform any covenant or agreement contained in Section 5.1, Section 5.2, Section 5.3 (with respect to Holdings’ and the Borrower’s legal existence) or Section 5.11(b) or Article VI or VII; or
(e)any Loan Party shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those referred to in paragraphs (a), (b) and (d) of this Section) or any other Loan Document or related to any Bank Product Obligation, and such failure shall remain unremedied for thirty (30) days after the earlier of (i) any Responsible Officer of Holdings or the Borrower becomes aware of such failure, or (ii) notice thereof shall have been given to the Borrower by the Administrative Agent or any Lender; or
(f)(i) Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entities (whether as primary obligor or as guarantor or other surety) shall fail to pay any principal of, or premium or interest on, any Material Indebtedness (other than any Hedging Obligation) that is outstanding, when and as the same shall become due and payable (whether at scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument evidencing or governing such Indebtedness; or any other event shall occur or condition shall exist under any agreement or instrument relating to any Material Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any Material Indebtedness shall be declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof as a result of a default or event of default thereunder or (ii) there occurs under any Hedging Transaction an Early Termination Date (as defined in such Hedging Transaction) resulting from (A) any event of default under such Hedging Transaction as to which Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity is the Defaulting Party (as defined in such Hedging Transaction) and the Hedge Termination Value owed by Holdings, the Borrower, such Subsidiary Loan Party or such Restricted Entity as a result thereof
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is greater than the Threshold Amount or (B) any Termination Event (as so defined) under such Hedging Transaction as to which Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity is an Affected Party (as so defined) and the Hedge Termination Value owed by Holdings, the Borrower, such Subsidiary Loan Party or such Restricted Entity as a result thereof is greater than the Threshold Amount and is not paid; or
(g)Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for Holdings, the Borrower, such Subsidiary Loan Party or such Restricted Entity or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or
(h)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity or its debts, or any substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or other similar official for Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity or for a substantial part of its assets, and in any such case, such proceeding or petition shall remain undismissed for a period of sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; or
(i)Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity shall become unable to pay, shall admit in writing its inability to pay, or shall fail to pay, its debts as they become due; or
(j)(i) an ERISA Event shall have occurred that, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect, (ii) there is or arises an Unfunded Pension Liability (not taking into account Plans with negative Unfunded Pension Liability) in an aggregate amount exceeding the Threshold Amount that could reasonably be expected to result in a Material Adverse Effect, or (iii) there is or arises any potential Withdrawal Liability in an aggregate amount exceeding the Threshold Amount that could reasonably be expected to result in a Material Adverse Effect; or
(k)any judgment, writ, warrant of attachment or similar process involving an amount in excess of the Threshold Amount in the aggregate shall be rendered against Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of sixty (60) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, that any such judgment, writ, warrant of attachment or similar process shall not be an Event of Default under this Section 8.1(k) if and for so long as (A) the amount of such judgment, writ, warrant of attachment or similar process is covered by a valid and binding policy of insurance between the defendant and the insurer covering payment thereof and (B) such insurer, which shall be rated at
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least “A” by A.M. Best Company at the time such insurance policy is issued to Holdings, the Borrower, such Subsidiary Loan Party or such Restricted Entity, has been notified of, and has not disputed the claim made for payment of, the amount of such judgment, writ, warrant of attachment or similar process; or
(l)any non-monetary judgment or order shall be rendered against Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect, and there shall be a period of sixty (60) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(m)a Change in Control shall occur or exist; or
(n)any provision of any Guaranty and Security Agreement or any other Loan Document shall for any reason (other than pursuant to the terms hereof or thereof) cease to be valid and binding on, or enforceable against, any Loan Party, or any Loan Party shall so state in writing, or any Loan Party shall seek to terminate its obligations under any Guaranty and Security Agreement or any other Loan Document (other than the release of any guaranty or collateral to the extent permitted pursuant to Section 9.11); or
(o)any Lien purported to be created under any Collateral Document shall fail or cease to be, or shall be asserted by any Loan Party or Restricted Entity (with respect to a Lien purported to be created with respect to the Capital Stock of such Restricted Entity) not to be, a valid and perfected Lien on any Collateral, with the priority required by the applicable Collateral Documents (other than by reason of a release of Collateral in accordance with the terms hereof or any other applicable Loan Document);
then, and in every such event (other than an event with respect to the Borrower described in paragraph (g) or (h) of this Section) and at any time thereafter during the continuance of such event, the Administrative Agent may, and upon the written request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitment of each Lender shall terminate immediately, (ii) declare the principal of and any accrued interest on the Loans, and all other Obligations owing hereunder, to be, whereupon the same shall become, due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Holdings and the Borrower, (iii) exercise all remedies contained in any other Loan Document, and (iv) exercise any other remedies available at law or in equity; provided that, if an Event of Default specified in either paragraph (g) or (h) shall occur, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon, and all fees and all other Obligations shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Holdings and the Borrower. Notwithstanding anything herein or otherwise to the contrary, any Event of Default occurring hereunder shall continue to exist (and shall be deemed to be continuing) until such time as such Event of Default is waived in writing in accordance with the terms of Section 10.2 notwithstanding (i) any attempted cure or other action taken by Holdings, the Borrower or any other Person subsequent to the occurrence of such Event of Default or (ii) any action taken or omitted to be taken by the Administrative Agent or any Lender prior to or subsequent to the occurrence of such Event of Default (other than the granting of a waiver in writing in accordance with the terms of Section 10.2).
Section 8.2**Application of Proceeds from Collateral**. All proceeds from each Disposition of, or other realization upon, all or any part of the Collateral by any Secured Party after an Event of Default arises shall be applied as follows:
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(a)first, to the reimbursable expenses of the Administrative Agent incurred in connection with such sale or other realization upon the Collateral, until the same shall have been paid in full;
(b)second, to the fees, all amounts owed pursuant to Erroneous Payment Subrogation Rights, and other reimbursable expenses of the Administrative Agent then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;
(c)third, to all reimbursable expenses, if any, of the Lenders then due and payable pursuant to any of the Loan Documents, until the same shall have been paid in full;
(d)fourth, to the fees and interest then due and payable under the terms of this Agreement, until the same shall have been paid in full;
(e)fifth, to the aggregate outstanding principal amount of the Loans, the Bank Product Obligations and the Hedging Obligations that constitute Obligations, until the same shall have been paid in full, allocated pro rata among the Secured Parties based on their respective pro rata shares of the aggregate amount of such Loans, Bank Product Obligations and Hedging Obligations; and
(f)sixth, to the extent any proceeds remain, to the Borrower or as otherwise provided by a court of competent jurisdiction.
All amounts allocated pursuant to the foregoing clauses third through fifth to the Lenders as a result of amounts owed to the Lenders under the Loan Documents shall be allocated among, and distributed to, the Lenders pro rata based on their respective Pro Rata Shares.
Notwithstanding the foregoing, (i) no amount received from any Guarantor (including any proceeds of any Disposition of, or other realization upon, all or any part of the Collateral owned by such Guarantor) shall be applied to any Excluded Swap Obligation of such Guarantor and (ii) Bank Product Obligations and Hedging Obligations shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the Bank Product Provider or the Lender-Related Hedge Provider, as the case may be. Each Bank Product Provider or Lender-Related Hedge Provider that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.
**Article IX**
**THE ADMINISTRATIVE AGENT**
Section 9.1**Appointment of the Administrative Agent**.
(a)Each Lender irrevocably appoints Truist Bank as the Administrative Agent and authorizes it to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent under this Agreement and the other Loan Documents, together with all such actions and powers that are reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder or under the other Loan Documents by or through any one or more sub-agents or attorneys-in-fact appointed by the Administrative Agent. The Administrative Agent and any such sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions set forth in this Article shall apply to any such sub-agent, attorney-in-fact or Related Party and shall apply to their
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respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as the Administrative Agent.
(b)It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties.
Section 9.2**Nature of Duties of the Administrative Agent**. The Administrative Agent shall not have any duties or obligations except those expressly set forth in this Agreement and the other Loan Documents. The motivations of the Administrative Agent are commercial in nature and not to invest in the general performance or operations of Holdings or the Borrower. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except those discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Holdings, the Borrower, any other Group Member or any of their respective Subsidiaries that is communicated to or obtained by the Administrative Agent or any of its branches or Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it, its sub-agents or its attorneys-in-fact with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.2) or in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final non-appealable judgment. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents or attorneys-in-fact except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents. The Administrative Agent shall not be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof (which notice shall include an express reference to such event being a “Default” or “Event of Default” hereunder) is given to the Administrative Agent by Holdings, the Borrower or any Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent. The Administrative Agent may consult with legal counsel (including counsel for Holdings and the Borrower) concerning all matters pertaining to such duties.
Section 9.3**Lack of Reliance on the Administrative Agent**. Each of the Lenders acknowledges that it has, independently and without reliance upon the Administrative Agent or any other
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Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Lenders also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Arranger, any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, continue to make its own credit analysis, appraisals and decisions in taking or not taking any action under or based on this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties. Each Lender represents and warrants to the Administrative Agent that (i) the Loan Documents set forth the terms of a commercial lending facility and (ii) it is engaged in making, acquiring or holding commercial loans or providing other similar facilities in the ordinary course and is entering into this Agreement as a Lender for the purpose of making, acquiring or holding commercial loans and providing other facilities set forth herein as may be applicable to such Lender, and not for the purpose of investing in the general performance or operations of Holdings or the Borrower or for the purpose of purchasing, acquiring or holding any other type of financial instrument such as a security, and each Lender agrees not to assert a claim in contravention of the foregoing such as a claim under the federal or state securities laws. Each Lender represents and warrants to the Administrative Agent that it is sophisticated with respect to decisions to make, acquire or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities. Each of the Lenders acknowledges and agrees that outside legal counsel to the Administrative Agent in connection with the preparation, negotiation, execution, delivery and administration (including any amendments, waivers and consents) of this Agreement and the other Loan Documents is acting solely as counsel to the Administrative Agent and is not acting as counsel to any Lender (other than the Administrative Agent and its Affiliates) in connection with this Agreement, the other Loan Documents or any of the transactions contemplated hereby or thereby.
Section 9.4**Certain Rights of the Administrative Agent**. If the Administrative Agent shall request instructions from the Required Lenders with respect to any action or actions (including the failure to act) in connection with this Agreement, the Administrative Agent shall be entitled to refrain from such act or taking such act unless and until it shall have received instructions from such Lenders, and the Administrative Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders where required by the terms of this Agreement.
Section 9.5**Reliance by the Administrative Agent**. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, posting or other distribution) believed by it to be genuine and to have been signed, sent or made by the proper Person. The Administrative Agent may also rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (including counsel for Holdings and the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of such counsel, accountants or experts.
Section 9.6**The Administrative Agent in its Individual Capacity**. The bank serving as the Administrative Agent shall have the same rights and powers under this Agreement and any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent; and the terms “Lenders”, “Required Lenders”, or any
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similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity. The bank acting as the Administrative Agent and its branches and Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with Holdings, the Borrower or any other Group Member or any Subsidiary or Affiliate of Holdings, the Borrower or such other Group Member as if it were not the Administrative Agent hereunder.
Section 9.7**Successor Administrative Agent**.
(a)The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent, subject to approval by the Borrower (such approval not to be unreasonably withheld, conditioned or delayed) provided that no Default or Event of Default shall exist at such time. If no successor Administrative Agent shall have been so appointed, and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a commercial bank organized under the laws of the United States or any state thereof or a bank which maintains an office in the United States.
(b)Upon the acceptance of its appointment as the Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. If, within forty-five (45) days after written notice is given of the retiring Administrative Agent’s resignation under this Section, no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such forty-fifth (45th) day (i) the retiring Administrative Agent’s resignation shall become effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all duties of the retiring Administrative Agent under the Loan Documents until such time as the Required Lenders appoint a successor Administrative Agent as provided above. After any retiring Administrative Agent’s resignation hereunder, the provisions of this Article shall continue in effect for the benefit of such retiring Administrative Agent and its representatives and agents in respect of any actions taken or not taken by any of them while it was serving as the Administrative Agent.
Section 9.8**Withholding Tax**. To the extent required by any applicable law, the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax. If the IRS or any authority of the United States or any other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs and any out of pocket expenses.
Section 9.9**The Administrative Agent May File Proofs of Claim**.
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(a)In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on Holdings or the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and its agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 10.3) allowed in such judicial proceeding; and
(ii)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
(b)Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 10.3.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.
Section 9.10**Authorization to Execute Other Loan Documents**. Each Lender hereby authorizes the Administrative Agent to execute on behalf of such Lender all Loan Documents (including the Collateral Documents and any intercreditor and subordination agreements) other than this Agreement.
Section 9.11**Collateral and Guaranty Matters**. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion:
(a)to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon the Payment in Full, (ii) that is sold or to be sold as part of or in connection with any Disposition permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.2; and
(b)to release any Guarantor if 100% of the Capital Stock of such Guarantor is sold in a transaction permitted under the Loan Documents.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property, or to release any Loan Party from its obligations under the applicable Collateral Documents pursuant to this Section. In each case as specified in this Section, the Administrative Agent is authorized (and shall upon the reasonable request of the Borrower), at the Borrower’s expense, to execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of
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Collateral from the Liens granted under the applicable Collateral Documents, or to release such Loan Party from its obligations under the applicable Collateral Documents, in each case in accordance with the terms of the Loan Documents and this Section.
Section 9.12**No Other Duties, Etc**. Anything herein to the contrary notwithstanding, the Arranger shall have no powers, duties or obligations whatsoever in such capacity under this Agreement or any of the other Loan Documents, and shall incur no liability hereunder or thereunder in such capacity, but such Person shall have the benefit of the indemnities provided for hereunder.
Section 9.13**Right to Realize on Collateral and Enforce Guarantee**. Anything contained in any of the Loan Documents to the contrary notwithstanding, Holdings, the Borrower, the Administrative Agent and each Lender hereby agree that (i) no Lender shall have any right individually to realize upon any of the Collateral or to enforce the Collateral Documents, it being understood and agreed that all powers, rights and remedies hereunder and under the Collateral Documents may be exercised solely by the Administrative Agent, and (ii) in the event of a foreclosure by the Administrative Agent on any of the Collateral pursuant to a public or private Disposition, the Administrative Agent or any Lender may be the purchaser or licensor of any or all of such Collateral at any such Disposition and the Administrative Agent, as agent for and representative of the Lenders (but not any Lender or Lenders in its or their respective individual capacities unless the Required Lenders shall otherwise agree in writing), shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such public sale, to use and apply any of the Obligations as a credit on account of the purchase price for any collateral payable by the Administrative Agent at such Disposition.
Section 9.14**Secured Bank Product Obligations and Hedging Obligations**. No Bank Product Provider or Lender-Related Hedge Provider that obtains the benefits of Section 8.2, the Collateral Documents or any Collateral by virtue of the provisions hereof or of any other Loan Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Bank Product Obligations and Hedging Obligations unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Bank Product Provider or Lender-Related Hedge Provider, as the case may be.
Section 9.15**Erroneous Payments**.
(a)If the Administrative Agent notifies a Lender or any other Secured Party, or any Person who has received funds on behalf of a Lender or any other Secured Party (any such Lender, Secured Party or other recipient, a “Payment Recipient”) that the Administrative Agent has determined in its sole discretion (whether or not after receipt of any notice under immediately succeeding paragraph (b)) that any funds received by such Payment Recipient from the Administrative Agent or any of its Affiliates were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Lender, Secured Party or other Payment Recipient on its behalf) (any such funds, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Administrative Agent, and such Lender or other Secured Party shall (or, with respect
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to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two (2) Business Days thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this paragraph (a) shall be conclusive, absent manifest error.
(b)Without limiting immediately preceding paragraph (a), each Lender, each Secured Party, or any other Person who has received funds on behalf of a Lender or any Secured Party, hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Administrative Agent (or any of its Affiliates), or (z) that such Lender or Secured Party, or other such recipient, otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part) in each case:
(i)(A) in the case of immediately preceding clauses (x) or (y), an error shall be presumed to have been made (absent written confirmation from the Administrative Agent to the contrary) or (B) an error has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and
(ii)such Lender or other Secured Party shall (and shall cause any other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one (1) Business Day of its knowledge of such error) notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 9.15(b).
(c)Each Lender and other Secured Party hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Lender or other Secured Party under any Loan Document, or otherwise payable or distributable by the Administrative Agent to such Lender or other Secured Party from any source, against any amount due to the Administrative Agent under immediately preceding paragraph (a) or under the indemnification provisions of this Agreement.
(d)In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with immediately preceding paragraph (a), from any Lender that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Lender at any time, (i) such Lender shall be deemed to have assigned its Loans (but not its Commitments) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Loans (but not Commitments), the “Erroneous Payment Deficiency Assignment”) at par plus any accrued and unpaid interest (with
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the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Borrower) deemed to execute and deliver an Assignment and Acceptance (or, to the extent applicable, an agreement incorporating an Assignment and Acceptance by reference pursuant to a Platform as to which the Administrative Agent and such parties are participants) with respect to such Erroneous Payment Deficiency Assignment, and such Lender shall deliver any promissory notes evidencing such Loans to the Borrower or the Administrative Agent, (ii) the Administrative Agent as the assignee Lender shall be deemed to acquire the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Lender shall become a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Lender shall cease to be a Lender hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Lender, and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Loans subject to the Erroneous Payment Deficiency Assignment. The Administrative Agent may, in its discretion, sell any Loans acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Lender shall be reduced by the net proceeds of the sale of such Loan (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Lender (and/or against any recipient that receives funds on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment will reduce the Commitments of any Lender and such Commitments shall remain available in accordance with the terms of this Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold a Loan (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Lender or other Secured Party under the Loan Documents with respect to each Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”).
(e)The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from the Borrower or any other Loan Party for the purpose of making such Erroneous Payment.
(f)To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payment received, including waiver of any defense based on “discharge for value” or any similar doctrine.
Each party’s obligations, agreements and waivers under this Section 9.15 shall survive the resignation or replacement of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender and/or the Payment in Full.
**Article X**
**MISCELLANEOUS**
Section 10.1**Notices**.
(a)Written Notices.
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(i)Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications to any party herein to be effective shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(A)if to Holdings, the Borrower or the Administrative Agent, to the address or facsimile number specified for such Person on Schedule 10.1 or to such other address or facsimile number as shall be designated by such party in a notice to the other parties hereto; and
(B)if to any other Lender, to the address or facsimile number in its Administrative Questionnaire.
(ii)Any agreement of the Administrative Agent or any Lender herein to receive certain notices by telephone is solely for the convenience and at the request of the Borrower. The Administrative Agent and each Lender shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Administrative Agent and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by the Administrative Agent or any Lender in reliance upon such telephonic notice. The obligation of the Borrower to repay the Loans and all other Obligations hereunder shall not be affected in any way or to any extent by any failure of the Administrative Agent or any Lender to receive written confirmation of any telephonic notice or the receipt by the Administrative Agent or any Lender of a confirmation which is at variance with the terms understood by the Administrative Agent and such Lender to be contained in any such telephonic notice.
(b)Electronic Communications.
(i)Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender if such Lender has notified the Administrative Agent that it is incapable of receiving, or is unwilling to receive, notices by electronic communication. The Administrative Agent, Holdings or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(ii)Unless the Administrative Agent otherwise prescribes, (A) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment) and (B) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (A) of notification that such notice or communication is available and identifying the website address therefor; provided that, in the case of clauses (A) and (B) above, if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
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(iii)Each of Holdings and the Borrower agrees that the Administrative Agent may, but shall not be obligated to, make Communications (as defined below) available to the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak, ClearPar or a substantially similar electronic system.
(iv)THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS RELATED PARTIES WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS IN THE COMMUNICATIONS (AS DEFINED BELOW) AND FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties have any liability to any Loan Party or any of their respective Subsidiaries, any Lender or any other Person or entity for losses, claims, damages, liabilities or expenses of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses, whether or not based on strict liability (whether in tort, contract or otherwise), arising out of any Loan Party’s or the Administrative Agent’s transmission of the Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of the Administrative Agent or such Related Party; provided that in no event shall the Administrative Agent or any Related Party have any liability to any Loan Party or any of their respective Subsidiaries, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages) arising out of any Loan Party’s or the Administrative Agent’s transmission of Communications. “Communications” shall mean, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent or any Lender by means of electronic communications pursuant to this Section, including through the Platform.
(c)Telephonic Notices. In the case of any notices or other communications expressly permitted hereunder to be given by telephone, such notice shall be made (i) if to Holdings, the Borrower, or the Administrative Agent, to the applicable telephone number set forth on Schedule 10.1 and (ii) if to any other Lender, to the telephone number in its Administrative Questionnaire.
(d)Public Information. Each of Holdings and the Borrower hereby acknowledges that (i) the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on the Platform and (ii) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to Holdings, the Borrower or their respective Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Each of Holdings and the Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower
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Materials that may be distributed to Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC”, Holdings and the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to Holdings, the Borrower or their respective securities for purposes of United States Federal and state securities laws (provided that to the extent such Borrower Materials constitute confidential information, they shall be treated as set forth in Section 10.12); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information”; and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information”. Each Public Lender will designate one or more representatives that shall be permitted to receive information that is not designated as being available for Public Lenders.
(e)All such notices and other communications sent to any party hereto in accordance with the provisions of this Agreement or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four (4) Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail, to the extent provided in paragraph (b) above and effective as provided in such paragraph; provided that notices and other communications to the Administrative Agent pursuant to Article II shall not be effective until actually received by such Person. In no event shall a voice mail message be effective as a notice, communication or confirmation hereunder.
Section 10.2**Waiver; Amendments**.
(a)No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document, and no course of dealing between Holdings, the Borrower and the Administrative Agent or any Lender, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power hereunder or thereunder. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies provided by law. No waiver of any provision of this Agreement or of any other Loan Document or consent to any departure by Holdings or the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default or Event of Default at the time.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against Holdings and the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.1 for the benefit of all the Lenders; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit
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(solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) any Lender from exercising setoff rights in accordance with Section 10.7 (subject to the terms of Section 2.17) or (iii) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to Holdings or the Borrower under any Debtor Relief Law; provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise provided to the Administrative Agent pursuant to Section 8.1 and (y) in addition to the matters set forth in clauses (ii) and (iii) of the preceding proviso and subject to Section 2.17, any Lender may, with the consent of the Required Lenders, enforce any rights or remedies available to it and as authorized by the Required Lenders.
(b)Except as otherwise provided in this Agreement, including as provided in Section 2.12 with respect to the implementation of a Benchmark Replacement or Conforming Changes (as set forth therein), no amendment or waiver of any provision of this Agreement or of the other Loan Documents (other than the Engagement Letter), nor consent to any departure by Holdings or the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Holdings, the Borrower and the Required Lenders, or Holdings, the Borrower and the Administrative Agent with the consent of the Required Lenders, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that, in addition to the consent of the Required Lenders, no amendment, waiver or consent shall:
(i)increase the Commitment of any Lender without the written consent of such Lender;
(ii)reduce the principal amount of any Loan or reduce the rate of interest thereon (other than to waive any Default or Event of Default or obligation of the Borrower to pay Default Interest, which shall only require the consent of the Required Lenders), or reduce any fees or other amounts payable hereunder, without the written consent of each Lender affected thereby;
(iii)postpone the date fixed for any payment (other than a mandatory prepayment) of any principal of, or interest on, any Loan or any fees or other amounts hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination of any Commitment, without the written consent of each Lender affected thereby;
(iv)(A) change Section 2.17(b) or 2.17(c) in a manner that would alter the pro rata sharing of payments required thereby, (B) change Section 8.2 in a manner that would alter the pro rata sharing of payments or the order of application required thereby or (C) change any other provision of this Agreement or any of the other Loan Documents that addresses the matters described in clause (A) or (B) or permit any action which would directly or indirectly have the effect of amending any of the provisions described in this clause (iv), in each case without the written consent of each Lender;
(v)change any of the provisions of this paragraph (b) or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the consent of each Lender;
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(vi)release all or substantially all of the Guarantors, or limit the liability of such Guarantors, under any Guaranty and Security Agreement, without the written consent of each Lender;
(vii)release all or substantially all Collateral securing any of the Obligations, without the written consent of each Lender; or
(viii)subordinate, or have the effect of subordinating, (A) the Obligations to any other Indebtedness or (B) except as otherwise permitted under Section 9.11 (as in effect on the Closing Date), the Liens securing the Obligations to Liens securing other Indebtedness, in each case, without the written consent of each Lender affected thereby;
provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights, duties or obligations of the Administrative Agent without the prior written consent of such Person.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended, and amounts payable to such Lender hereunder may not be permanently reduced, without the consent of such Lender (other than reductions in fees and interest in which such reduction does not disproportionately affect such Lender). Notwithstanding anything contained herein to the contrary, this Agreement may be amended and restated without the consent of any Lender (but with the consent of Holdings, the Borrower and the Administrative Agent) if, upon giving effect to such amendment and restatement, such Lender shall no longer be a party to this Agreement (as so amended and restated), the Commitments of such Lender shall have terminated (but such Lender shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 10.3), such Lender shall have no other commitment or other obligation hereunder and such Lender shall have been paid in full all principal, interest and other amounts owing to it or accrued for its account under this Agreement.
Notwithstanding anything to the contrary herein, the Administrative Agent may, with the consent of Holdings and the Borrower only, amend, modify or supplement any Loan Document to cure any obvious error, ambiguity, omission, mistake, defect or inconsistency or any error or omission of a technical nature.
Section 10.3**Expenses; Indemnification**.
(a)The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), including the reasonable fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates and (ii) all out-of-pocket costs and expenses (including the reasonable fees, charges and disbursements of counsel, but excluding allocated overhead cost of the Administrative Agent and the Lenders and their Affiliates) incurred by the Administrative Agent or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b)The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
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claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee, but excluding allocated overhead cost of the Administrative Agent, and the Lenders and their Affiliates), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document, any other Related Transaction Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity, or any Environmental Liability related in any way to Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from (1) the gross negligence or willful misconduct of such Indemnitee or (2) a claim brought by Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document or (y) result from any claim not involving an act or omission of Holdings, the Borrower, any Subsidiary Loan Party or any Restricted Entity and that is brought by an Indemnitee against another Indemnitee (other than against the Arranger or the Administrative Agent in their capacities as such).
(c)The Borrower shall pay, and hold the Administrative Agent and each of the Lenders harmless from and against, any and all present and future stamp, documentary, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein or any payments due thereunder, and save the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes.
(d)To the extent that the Borrower fails to pay any amount required to be paid to the Administrative Agent under paragraph (a), (b) or (c) above, each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (in accordance with its respective Loan determined as of the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified payment, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such.
(e)To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof; provided that nothing in this paragraph (e) shall relieve Holdings or the Borrower of any obligation it may have to indemnify any Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.
(f)All amounts due under this Section shall be payable promptly after written demand therefor.
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Section 10.4**Successors and Assigns**.
(a)The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of Section 10.4(b), (ii) by way of participation in accordance with the provisions of Section 10.4(d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 10.4(f) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 10.4(d) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i)Minimum Amounts.
(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments and Loans at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)in any case not described in Section 10.4(b)(i)(A), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $1,000,000 and in minimum increments of $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).
(ii)Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitments assigned.
(iii)Required Consents. No consent shall be required for any assignment except to the extent required by Section 10.4(b)(i)(B) and, in addition:
(A)the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower
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shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof; and
(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required unless such assignment is to a Lender, an Affiliate of such Lender or an Approved Fund of such Lender.
(iv)Assignment and Acceptance. The parties to each assignment shall deliver to the Administrative Agent (A) a duly executed Assignment and Acceptance, (B) a processing and recordation fee of $3,500, (C) an Administrative Questionnaire unless the assignee is already a Lender and (D) the documents required under Section 2.16(e).
(v)No Assignment to Certain Persons. No such assignment shall be made to (A) Holdings, the Borrower, any other Group Member, any Unrestricted Subsidiary or any of Holdings’, the Borrower’s, such other Group Member’s or such Unrestricted Subsidiary’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural person.
(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 10.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will
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constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section. If the consent of the Borrower to an assignment is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified above), the Borrower shall be deemed to have given its consent unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after notice thereof has actually been delivered by the assigning Lender (through the Administrative Agent) to the Borrower.
(c)The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices in Charlotte, North Carolina a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. Information contained in the Register with respect to any Lender shall be available for inspection by such Lender at any reasonable time and from time to time upon reasonable prior notice; information contained in the Register shall also be available for inspection by the Borrower at any reasonable time and from time to time upon reasonable prior notice. In establishing and maintaining the Register, the Administrative Agent shall serve as the Borrower’s agent solely for tax purposes and solely with respect to the actions described in this Section, and the Borrower hereby agrees that, to the extent Truist Bank serves in such capacity, Truist Bank and its officers, directors, employees, agents, sub-agents and affiliates shall constitute “Indemnitees”.
(d)Any Lender may at any time, without the consent of, or notice to, Holdings, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, Holdings, the Borrower, any other Group Member, any Unrestricted Subsidiary or any of Holdings’, the Borrower’s, such other Group Member’s or such Unrestricted Subsidiary’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Holdings, the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to the following to the extent affecting such Participant: (i) increase the Commitment of such Lender; (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder; (iii) postpone the date fixed for any payment of any principal of, or interest on, any Loan or any fees hereunder or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date for the termination of any Commitment; (iv) change Section 2.17(b) or 2.17(c) in a manner that would alter the pro rata sharing of payments required thereby; (v) change any of the provisions of Section 10.2(b) or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders which are required to waive, amend or modify any rights hereunder or
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make any determination or grant any consent hereunder; (vi) release all or substantially all of the Guarantors, or limit the liability of such Guarantors, under any Guaranty and Security Agreement; or (vii) release all or substantially all of the Collateral. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant agrees to be subject to Section 2.18 as though it were a Lender. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.7 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.17 as though it were a Lender.
Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register in the United States on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”). The entries in the Participant Register shall be conclusive, absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. The Borrower and the Administrative Agent shall have inspection rights to such Participant Register (upon reasonable prior notice to the applicable Lender) solely for purposes of demonstrating that such Loans or other obligations under the Loan Documents are in “registered form” for purposes of the Code. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e)A Participant shall not be entitled to receive any greater payment under Sections 2.14 and 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Sections 2.16(e) and 2.16(f) as though it were a Lender.
(f)Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
Section 10.5**Governing Law; Jurisdiction; Consent to Service of Process**.
(a)This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be construed in accordance with and be governed by the law of the State of New York.
(b)Each of Holdings and the Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court for the Southern District of New York sitting in New York County, and of the Supreme Court of the State of New York sitting in New York County, Borough of Manhattan, and of any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in
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such District Court or New York state court or, to the extent permitted by applicable law, such appellate court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall (i) affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against Holdings or the Borrower or its properties in the courts of any jurisdiction or (ii) waive any statutory, regulatory, common law, or other rule, doctrine, legal restriction, provision or the like providing for the treatment of bank branches, bank agencies, or other bank offices as if they were separate juridical entities for certain purposes, including UCC Sections 4-106, 4-A-105(1)(b) and 5-116(b), ISP Rule 2.02 and URDG 758 Article 3(a).
(c)Each of Holdings and the Borrower irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding described in paragraph (b) of this Section and brought in any court referred to in paragraph (b) of this Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or in any other Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.
Section 10.6**WAIVER OF JURY TRIAL**. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.7**Right of Set-off**. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each Lender shall have the right, at any time or from time to time upon the occurrence and during the continuance of an Event of Default, without prior notice to Holdings or the Borrower, any such notice being expressly waived by Holdings and the Borrower to the extent permitted by applicable law, to set off and apply against all deposits (general or special, time or demand, provisional or final) of Holdings, the Borrower and each Subsidiary Loan Party at any time held or other obligations at any time owing by such Lender to or for the credit or the account of the Borrower against any and all Obligations held by such Lender, irrespective of whether such Lender shall have made demand hereunder and although such Obligations may be unmatured; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20(a) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable
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detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Each Lender agrees promptly to notify the Administrative Agent and the Borrower after any such set-off and any application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. Each Lender agrees to apply all amounts collected from any such set-off to the Obligations before applying such amounts to any other Indebtedness or other obligations owed by Holdings, the Borrower or any Subsidiary Loan Party to such Lender.
Section 10.8**Counterparts; Integration**. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement, the Engagement Letter, the other Loan Documents, and any separate letter agreements relating to any fees payable to the Administrative Agent and its Affiliates constitute the entire agreement among the parties hereto and thereto and their affiliates regarding the subject matters hereof and thereof and supersede all prior agreements and understandings, oral or written, regarding such subject matters. Delivery of an executed counterpart to this Agreement or any other Loan Document by facsimile transmission or by electronic mail in pdf format shall be as effective as delivery of a manually executed counterpart hereof.
Section 10.9**Survival**. All covenants, agreements, representations and warranties made by Holdings and the Borrower herein and in the certificates, reports, notices or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the other Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid. The provisions of Sections 2.14, 2.15, 2.16, and 10.3 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby or the Payment in Full.
Section 10.10**Severability**. Any provision of this Agreement or any other Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without affecting the legality, validity or enforceability of the remaining provisions hereof or thereof; and the illegality, invalidity or unenforceability of a particular provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10.11**Confidentiality**. Each of the Administrative Agent and the Lenders agrees to take normal and reasonable precautions to maintain the confidentiality of any information relating to Holdings, the Borrower or any other Group Member or any of their respective businesses, to the extent designated in writing as confidential and provided to it by Holdings, the Borrower or any other Group Member, other than any such information that is available to the Administrative Agent or such Lender on a non-confidential basis prior to disclosure by Holdings, the Borrower or any other Group Member, except that such information may be disclosed (i) to any Related Party of the Administrative Agent or such Lender including accountants, legal counsel and other advisors, (ii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by any regulatory agency or authority purporting to have jurisdiction over it (including any self-regulatory authority such as the National Association of Insurance Commissioners), (iv) to the extent that such information becomes publicly available other than as a result of a breach of this Section, or which becomes available to the Administrative Agent, any Lender or any Related Party of any of the foregoing on a non-confidential basis from a source other than Holdings, the Borrower or any other Group Member, (v) in connection with the exercise of any remedy hereunder or under any other Loan Documents or any suit, action or proceeding relating to this
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Agreement or any other Loan Documents or the enforcement of rights hereunder or thereunder, (vi) subject to execution by such Person of an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, or (B) any actual or prospective party (or its Related Parties) to any swap or derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (vii) to any rating agency, (viii) to the CUSIP Service Bureau or any similar organization, (ix) to the extent required by a potential or actual insurer or reinsurer in connection with providing insurance, reinsurance or credit risk mitigation coverage under which payments are to be made or may be made by reference to this Agreement or (x) with the consent of the Borrower. Any Person required to maintain the confidentiality of any information as provided for in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.
The Arranger may, at its own expense, place customary tombstone announcements and advertisements or otherwise publicize its engagement hereunder (which may include the reproduction of any Loan Party’s name and logo and other publicly available information) in financial and other newspapers and journals and marketing materials describing its services hereunder. In addition, the Administrative Agent, the Lenders and the Arranger may disclose the existence of this Agreement and information about this Agreement to market data collectors and similar service providers to the lending industry, which information may consist of deal terms and other information customarily found in Gold Sheets and similar industry publications.
For the avoidance of doubt, nothing in this Section 10.11 shall prohibit or impede any Person from voluntarily disclosing or providing information regarding suspected violations of laws, rules, or regulations to a Governmental Authority or self-regulatory authority without any notification to any Person.
Section 10.12**Interest Rate Limitation**. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan or other Obligation owing under this Agreement, together with all fees, charges and other amounts which may be treated as interest on such Loan or other Obligation under any Requirement of Law (collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a Lender or other Person holding such Loan or other Obligation in accordance with Requirements of Law, the rate of interest payable in respect of such Loan or other Obligation hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan or other Obligation but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender or other Person in respect of other Loans or Obligations or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment (to the extent permitted by applicable law), shall have been received by such Lender or other Person.
Section 10.13**Waiver of Effect of Corporate Seal**. Each of Holdings and the Borrower represents and warrants that neither it nor any other Loan Party is required to affix its corporate seal to this Agreement or any other Loan Document pursuant to any Requirement of Law, agrees that this Agreement is delivered by Holdings and the Borrower under seal and waives any shortening of the statute of limitations that may result from not affixing the corporate seal to this Agreement or such other Loan Documents.
Section 10.14**Patriot Act and Beneficial Ownership Regulation**. The Administrative Agent and each Lender hereby notifies the Loan Parties that, (a) pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or the
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Administrative Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act, and (b) pursuant to the Beneficial Ownership Regulation, it is required to obtain a Beneficial Ownership Certification.
Section 10.15**No Advisory or Fiduciary Responsibility**. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower and each other Loan Party acknowledges and agrees and acknowledges its Affiliates’ understanding that (i) (A) the services regarding this Agreement provided by the Administrative Agent and/or the Lenders are arm’s-length commercial transactions between the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Administrative Agent and the Lenders, on the other hand, (B) each of the Borrower and the other Loan Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate, and (C) the Borrower and each other Loan Party is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii)(A) each of the Administrative Agent and the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower, any other Loan Party or any of their respective Affiliates, or any other Person, and (B) neither the Administrative Agent nor any Lender has any obligation to the Borrower, any other Loan Party or any of their Affiliates with respect to the transaction contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and each of the Administrative Agent and the Lenders has no obligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the fullest extent permitted by law, each of the Borrower and the other Loan Parties hereby waives and releases any claims that it may have against the Administrative Agent or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
Section 10.16**Electronic Signatures**. The words “execution”, “execute”, “signed”, “signature” and words of like import in or related to this Agreement or any other document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it.
Section 10.17**Acknowledgment and Consent to Bail-In of Affected Financial Institutions**. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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(a)the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b)the effects of any Bail-in Action on any such liability, including, if applicable (i) a reduction in full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.
Section 10.18**Certain ERISA Matters.**
(a)Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:
(i)such Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments or this Agreement,
(ii)the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96 23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement,
(iii)(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or
(iv)such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
100
(b)In addition, unless either (1) clause (i) in the immediately preceding paragraph (a) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with clause (iv) in the immediately preceding paragraph (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto).
Section 10.19**Acknowledgment Regarding any Supported QFCs**. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Obligations or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
(a)In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b)As used in this Section 10.19, the following terms have the following meanings:
“BHC Act Affiliate” of a party shall mean an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” shall mean any of the following:
(i)a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §252.82(b);
101
(ii)a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §47.3(b); or
(iii)a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §382.2(b).
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§252.81, 47.2 or 382.1, as applicable.
“QFC” shall have the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
Section 10.20**Non-Recourse to the General Partner and Associated Persons**. Each of the Administrative Agent and each Lender agrees on behalf of itself and its successors, assigns and legal representatives, that neither Alliance Resource Management GP, LLC nor MGP II, LLC (collectively, the “Holdings’ General Partners”) nor any Person (in each case other than the Loan Parties) which is a partner, shareholder, member, owner, officer, director, supervisor, trustee or other principal (collectively, “Associated Persons”) of a Loan Party, or any of their respective successors or assigns, shall have any personal liability for the payment or performance of any of the Borrower’s or Guarantors’ obligations hereunder or under any of the Loan Documents and no monetary or other judgment shall be sought or enforced against the Holdings’ General Partners or any of such Associated Persons or any of their respective successors or assigns. Notwithstanding the foregoing, neither the Administrative Agent nor any Lender shall be deemed barred by this Section 10.20 from asserting any claim against any Person based upon an allegation of fraud or misrepresentation.
[Remainder of page intentionally blank; signature pages follow.]
102
**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers 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/ Michael P. Huigens
Name: Michael P. Huigens
Title: Vice-President – Corporate Finance and Treasurer
**ALLIANCE RESOURCE OPERATING PARTNERS, L.P.**
By: **MGP II, LLC**
Its: Managing General Partner
By: /s/ Michael P. Huigens
Name: Michael P. Huigens
Title: Vice President – Corporate Finance and Treasurer
**ALLIANCE MINERALS, LLC**
By: /s/ Michael P. Huigens
Name: Michael P. Huigens
Title: Vice President – Corporate Finance and Treasurer
*Signature Page to Credit Agreement*
**TRUIST BANK**, as the Administrative Agent and a Lender
By: /s/ William Rutkowski
Name: Williams Rutkowski
Title: Director
*Signature Page to Credit Agreement*
**SCHEDULE I**
**Applicable Margin**
| Pricing Level | Principal Amount of Loan Outstanding | Applicable Marginfor SOFR Loans | Applicable Margin for Base Rate Loans |
| --- | --- | --- | --- |
| I | Greater than or equal to $99,000,000 | 2.25%per annum | 1.25%per annum |
| II | Less than $99,000,000, but greater than or equal to $49,500,000 | 2.00%per annum | 1.00%per annum |
| III | Less than $49,500,000 | 1.75%per annum | 0.75%per annum |
**SCHEDULE II**
**Commitment Amounts**
**Lender** **Commitment Amount**
Truist Bank $150,000,000
**Total** **$150,000,000**
**SCHEDULE III**
**Closing Date Acquisition Agreement**
1. AllDale III
A. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP and Membership Interest in AllDale Minerals Management III, LLC, dated effective as of June 4, 2026, by and among Alliance Minerals, LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
B. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP, dated effective as of June 4, 2026, by and among CC OilPlay LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
C. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP, dated effective as of June 4, 2026, by and among Joseph W. Craft III Foundation, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
D. First Amendment to the Third Amended and Restated Limited Partnership Agreement of AllDale Minerals III, LP, dated effective as of July 1, 2026.
E. First Amendment to the Second Amended and Restated Limited Liability Company Agreement of AllDale Minerals Management III, LLC, dated effective as of July 1, 2026.
F. Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management III, LLC, AllDale Minerals III, LP, Alliance Minerals, LLC, KC-AllDale, LLC, the Joseph W. Craft III Foundation, CC OilPlay LLC, and AllRoy GP, LLC.
G. Fourth Amended and Restated Agreement of Limited Partnership AllDale Minerals III, LP dated July 1, 2026.
2. AllDale IV
A. Subscription Agreement for Partnership Interest in AllDale Minerals IV, LP and Membership Interest in AllDale Minerals Management IV, LLC, dated effective as of June 4, 2026, by and among Alliance Minerals, LLC, AllDale Minerals IV, LP, AllDale Minerals Management IV, LLC, and Dale Operating Company.
B. Second Amendment to the First Amended and Restated Limited Partnership Agreement of AllDale Minerals IV, LP, dated effective as of July 1, 2026.
C. First Amendment to the First Amended and Restated Limited Liability Company Agreement of AllDale Minerals Management IV, LLC, dated effective as of July 1, 2026.
D. Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management IV, LLC, AllDale Minerals IV, LP, Alliance Minerals, LLC, KC-AllDale IV, LLC, and AllRoy GP, LLC.
E. Second Amended and Restated Agreement of Limited Partnership AllDale Minerals IV, LP, dated July 1, 2026.
**SCHEDULE 4.5**
**Environmental Matters**
None.
**SCHEDULE 4.14**
**Borrower, Subsidiary Loan Parties and Restricted Entities**
**PART 1**
| Name of Entity | Jurisdiction of Organization | Type of Entity | Credit Agreement Classification | Authorized, Issued and Outstanding Capital Stock |
| --- | --- | --- | --- | --- |
| Alliance Minerals, LLC | Delaware | Limited Liability Company | Borrower | 100% membership interest held by Alliance Resource Operating Partners, L.P. |
| Alliance Royalty, LLC | Delaware | Limited Liability Company | Subsidiary Loan Party | 100% membership interest held by Alliance Minerals, LLC |
| AllRoy GP, LLC | Delaware | Limited Liability Company | Subsidiary Loan Party | 100% membership interest held by Alliance Resource Partners, L.P. |
| AR Midland, LP | Delaware | Limited Partnership | Subsidiary Loan Party | 9,999 LP Units (representing a 99.99% Percentage Interest) held by Alliance Royalty, LLC1 GP Unit (representing a 0.01% Percentage Interest) held by AllRoy GP, LLC |
| CavMM, LLC | Delaware | Limited Liability Company | Subsidiary Loan Party | 100% membership interest held by AllRoy GP, LLC |
| | | | | |
| --- | --- | --- | --- | --- |
| Cavalier Minerals JV, LLC | Delaware | Limited Liability Company | Restricted Entity | 0% non-economic, managing member interest held by CavMM, LLC9,600 Units (representing a 96.00% Percentage Interest) held by Alliance Minerals, LLC400 Units (representing a 4.00% Percentage Interest) held by a Person other than ARLP or a Subsidiary of ARLP25% Profits Interest held by a Person other than ARLP or a Subsidiary of ARLP |
| AllDale Minerals, LP | Texas | Limited Partnership | Restricted Entity | 0.01% general partner interest held by AllRoy GP, LLC71.66% limited partner interest held by Cavalier Minerals JV, LLC28.33% limited partner interest held by Alliance Royalty, LLC |
| AllDale Minerals II, LP | Texas | Limited Partnership | Restricted Entity | 0.01% general partner interest held by AllRoy GP, LLC72.81% limited partner interest held by Cavalier Minerals JV, LLC |
Sch 4.14 -2
| Line item | | | | 27.18% limited partner interest held by Alliance Royalty, LLC |
| --- | --- | --- | --- | --- |
| AllDale Minerals III, LP* | Texas | Limited Partnership | Restricted Entity | 0% general partner interest held by AllRoy GP, LLC46.92% limited partner interest held by Alliance Minerals, LLC53.08% limited partner interests held by Persons other than ARLP or a Subsidiary of ARLP |
| AllDale Minerals IV, LP* | Texas | Limited Partnership | Restricted Entity | 0% general partner interest held by AllRoy GP, LLC78.573% limited partner interest held by Alliance Minerals, LLC21.427% limited partner interests held by Persons other than ARLP or a Subsidiary of ARLP |
| Orchid AD3, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals III, LP |
Sch 4.14 -3
| Arbala AD3, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by All Dale Minerals III, LP |
| --- | --- | --- | --- | --- |
| North Fork AD3, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals III, LP |
| Tundra AD3 GP, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals III, LP |
| Tundra AD3, LP* | Texas | Limited Partnership | Restricted Entity | 0% general partner interest held by Tundra AD3 GP, LLC100% limited partner interest held by AllDale Minerals III, LP |
| Ranchito AD4, LP* | Texas | Limited Partnership | Restricted Entity | 0% general partner interest held by Ranchito AD4 GP, LLC100% limited partner interest held by AllDale Minerals IV, LP |
| Ranchito AD4 GP, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals IV, LP |
| Herrera AD4, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals IV, LP |
| Ojeda AD4, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals IV, LP |
Sch 4.14 -4
| Calle Doce AD4, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by All Dale Minerals IV, LP |
| --- | --- | --- | --- | --- |
| Avila AD4, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals IV, LP |
| Maudie AD4 GP, LLC* | Texas | Limited Liability Company | Restricted Entity | 100% membership interest held by AllDale Minerals IV, LP |
| Maudie AD4, LP* | Texas | Limited Partnership | Restricted Entity | 0% general partner interest held by Maudie AD4 GP, LLC100% limited partner interest held by AllDale Minerals IV, LP |
| AllDale Minerals Management III, LLC** | Texas | Limited Liability Company | | 80.044% membership interest held by Alliance Minerals, LLC19.956% membership interests held by a Person other than ARLP or a Subsidiary of ARLP |
| AllDale Minerals Management IV, LLC** | Texas | Limited Liability Company | | 55.592% membership interest held by Alliance Minerals, LLC44.408% membership interests held by a Person other than ARLP or a Subsidiary of ARLP |
---
*Such entity and the ownership thereof is pro forma after giving effect to the consummation of the Closing Date Acquisition on the Closing Date.
Sch 4.14 -5
**Such entity and the ownership thereof is pro forma after giving effect to the consummation of the Closing Date Acquisition on the Closing Date. Control and majority ownership of each of AllDale Minerals Management III, LLC and AllDale Minerals Management IV, LLC (collectively, the “Exiting GPs”) is being acquired by Borrower in the Closing Date Acquisition. On the Closing Date and as part of the Closing Date Acquisition, (i) substantially all of the assets of the Exiting GPs (composed of general partner interests in AllDale III and AllDale IV) will be converted to limited partner interests in AllDale III and AllDale IV and distributed to the Exiting GPs’ members (including Alliance Minerals, LLC), resulting in the ownership of AllDale III and AllDale IV reflected in this table and (ii) the Exiting GPs will withdraw as general partners of AllDale III and AllDale IV and be replaced by AllRoy GP as the sole general partner of AllDale III and AllDale IV. After the Closing Date Acquisition, the Exiting GPs will have *de minimis* assets. The Exiting GPs will be dissolved after the Closing Date and not be treated as Subsidiaries or Restricted Entities under the Credit Agreement.
**PART 2**
The membership interests and Units in Cavalier Minerals JV, LLC are subject to a 25% Profits Interest pursuant to the Cavalier Minerals JV, LLC Second Amended and Restated Limited Liability Company Agreement.
Sch 4.14 -6
**SCHEDULE 4.16**
**Deposit and Disbursement Accounts**
| Loan Party | Credit Agreement Classification | Account Type | Controlled or Excluded Account | Bank | Bank Address | Bank Telephone | Account Number |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Alliance Minerals, LLC | Borrower | Deposit Account | Controlled Account | BOKF, N.A. | 1 Williams Center Tulsa, OK 74172 | 918-588-6010 | 209987100 |
| Alliance Minerals, LLC | Borrower | Investment Account | Controlled Account | BOK Financial Securities, Inc. | BOK Tower Plaza SEPO Box 2300Tulsa, OK 74192 | 918-588-6067 | 34182 Fund#506 |
| Alliance Royalty, LLC | Subsidiary Loan Party | Deposit Account | Controlled Account | BOKF, N.A. | 1 Williams Center Tulsa, OK 74172 | 918-588-6010 | 209992666 |
| Alliance Royalty, LLC | Subsidiary Loan Party | Investment Account | Controlled Account | BOK Financial Securities, Inc. | BOK Tower Plaza SEPO Box 2300Tulsa, OK 74192 | 918 588-6067 | 34519 Fund#506 |
| AllRoy GP, LLC | Subsidiary Loan Party | Deposit Account | Controlled Account | BOKF, N.A. | 1 Williams Center Tulsa, OK 74172 | 918-588-6010 | 209994723 |
| Cavalier Minerals JV, LLC | Restricted Entity | Deposit Account | Excluded Account | BOKF, N.A. | 1 Williams Center Tulsa, OK 74172 | 918-588-6010 | x3979 |
| AllDale Minerals, L.P. | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1106 |
| All Dale Minerals II, L.P. | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 Mc Kinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x2047 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| AllDale Minerals III, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x0382 |
| AllDale Minerals III, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1125 |
| AllDale Minerals III, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1596 |
| AllDale Minerals Management III, LLC* | | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1216 |
| AllDale Minerals IV, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1126 |
| AllDale Minerals IV, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x1619 |
| AllDale Minerals IV, LP | Restricted Entity | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x9670 |
| AllDale Minerals Management IV, LLC* | | Deposit Account | Excluded Account | Texas Capital Bank | 2000 McKinney Ave., Suite 700 Dallas, TX 75201 | 214-932-6600 | x9662 |
---
* Current accounts of AllDale Minerals Management III, LLC and AllDale Minerals Management IV, LLC. See note in Schedule 4.14 regarding dissolution of these entities.
Sch. 4.16 - 2
**SCHEDULE 4.19**
**Material Agreements**
Material Indebtedness
1. AROP Indenture.
Indenture, dated June 12, 2024, among AROP and Alliance Resource Finance Corporation, as issuers, ARLP, the guarantors party thereto and Computershare Trust Company, N.A., as trustee.
2. Coal Business Bank Credit Facility.
Amendment No. 1, dated as of June 12, 2024, to Credit Agreement, dated as of January 13, 2023, by and among Alliance Coal, LLC, as Borrower, AROP, ARLP, UC Coal, LLC, UC Mining, LLC, UC Processing, LLC and MGP II, LLC, as Additional Alliance Entities, the Initial Lenders, Initial Issuing Banks and Swing Line Bank named therein, PNC Bank, National Association, as Administrative Agent, and the other parties thereto (the “CoalCo Credit Agreement”). Pledge Agreement, dated as of January 13, 2023, among AROP, MGP II, LLC and PNC Bank, National Association, as Collateral Agent, respecting the CoalCo Credit Agreement.
3. Coal Business Securitized Receivables Facility.
A. Performance Guaranty, dated as of January \_\_, 2026, made by ARLP in favor of PNC Bank, National Association.
B. Purchase and Sale Agreement, dated December 5, 2014, by and among AROP, as Buyer, Alliance Coal, LLC and other subsidiaries of AROP, as amended by First Amendment to Purchase and Sale Agreement, dated January 17, 2018, and Second Amendment to Purchase and Sale Agreement, dated January 14, 2022.
C. Sale and Contribution Agreement, dated December 5, 2014, by and among AROP, as Transferor, and AROP Funding, LLC, as the Company, as amended by First Amendment to Sale and Contribution Agreement, dated January 17, 2018.
4. Loan from Alliance Minerals.
Third Amended and Restated Credit Agreement, dated as of February 10, 2026, between AROP, as borrower, and Alliance Minerals, LLC, as lender, respecting a revolving line of credit of up to $200,000,000, and Form of Third Amended and Restated Promissory Note made by AROP, payable to the order of Alliance Minerals, LLC in the maximum principal amount of $200,000,000.
5. Coal Business Equipment Lease.
Master Lease Guaranty, dated February 28, 2024, delivered by ARLP and AROP in favor of PNC Bank, National Association.
Closing Date Acquisition Agreements
3. AllDale III
H. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP and Membership Interest in AllDale Minerals Management III, LLC, dated effective as of June 4, 2026, by and
among Alliance Minerals, LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
I. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP, dated effective as of June 4, 2026, by and among CC OilPlay LLC, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
J. Subscription Agreement for Partnership Interest in AllDale Minerals III, LP, dated effective as of June 4, 2026, by and among Joseph W. Craft III Foundation, AllDale Minerals III, LP, AllDale Minerals Management III, LLC and Dale Operating Company.
K. First Amendment to the Third Amended and Restated Limited Partnership Agreement of AllDale Minerals III, LP, dated effective as of July 1, 2026.
L. First Amendment to the Second Amended and Restated Limited Liability Company Agreement of AllDale Minerals Management III, LLC, dated effective as of July 1, 2026.
M. Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management III, LLC, AllDale Minerals III, LP, Alliance Minerals, LLC, KC-AllDale, LLC, the Joseph W. Craft III Foundation, CC OilPlay LLC, and AllRoy GP, LLC.
N. Fourth Amended and Restated Agreement of Limited Partnership AllDale Minerals III, LP dated July 1, 2026.
4. AllDale IV
F. Subscription Agreement for Partnership Interest in AllDale Minerals IV, LP and Membership Interest in AllDale Minerals Management IV, LLC, dated effective as of June 4, 2026, by and among Alliance Minerals, LLC, AllDale Minerals IV, LP, AllDale Minerals Management IV, LLC, and Dale Operating Company.
G. Second Amendment to the First Amended and Restated Limited Partnership Agreement of AllDale Minerals IV, LP, dated effective as of July 1, 2026.
H. First Amendment to the First Amended and Restated Limited Liability Company Agreement of AllDale Minerals Management IV, LLC, dated effective as of July 1, 2026.
I. Contribution and Exchange Agreement, dated July 1, 2026, by and among AllDale Minerals Management IV, LLC, AllDale Minerals IV, LP, Alliance Minerals, LLC, KC-AllDale IV, LLC, and AllRoy GP, LLC.
J. Second Amended and Restated Agreement of Limited Partnership AllDale Minerals IV, LP, dated July 1, 2026.
Sch. 4.19 - 2
**SCHEDULE 7.1**
**Existing Indebtedness**
1. The Borrower and Subsidiary Loan Parties are guarantors of the AROP Notes pursuant to the AROP Indenture.
**SCHEDULE 7.2**
**Existing Liens**
None.
**SCHEDULE 7.4**
**Existing Investments**
1. Loans made pursuant to that certain Third Amended and Restated Credit Agreement, dated as of February 10, 2026, between AROP, as borrower, and Alliance Minerals, LLC, as lender, respecting a revolving line of credit of up to $200,000,000, and Form of Third Amended and Restated Promissory Note made by AROP, payable to the order of Alliance Minerals, LLC in the maximum principal amount of $200,000,000.
2. Investments by Borrower, the Subsidiary Loan Parties and the Restricted Entities as of the date hereof and immediately after giving effect to the Closing Date Acquisition as reflected on Schedule 4.14 hereto and incorporated by reference.
**SCHEDULE 10.1**
**Address for Notices**
| Holdings: | Alliance Resource Partners, L.P. |
| --- | --- |
| | 1717 South Boulder Avenue |
| | Suite 400 |
| | Tulsa, OK 74119 |
| | Attention: Michael P. Huigens, VP – Corporate Finance and Treasurer |
| | Facsimile number: (918) 295-7324 |
| | Email address: Mike.Huigens@arlp.com |
| | Telephone number: (918) 295-7623 |
| | Alliance Resource Operating Partners, L.P. |
| | 1717 South Boulder Avenue |
| | Suite 400 |
| | Tulsa, OK 74119 |
| | Attention: Michael P. Huigens, VP – Corporate Finance and Treasurer |
| | Facsimile number: (918) 295-7324 |
| | Email address: Mike.Huigens@arlp.com |
| | Telephone number: (918) 295-7623 |
| Borrower: | Alliance Minerals, LLC |
| | 1717 South Boulder Avenue |
| | Suite 400 |
| | Tulsa, OK 74119 |
| | Attention: Michael P. Huigens, VP – Corporate Finance and Treasurer |
| | Facsimile number: (918) 295-7324 |
| | Email address: Mike.Huigens@arlp.com |
| | Telephone number: (918) 295-7623 |
| with a copy to, for both Holdings and Borrower: | |
| | Alliance Resource Partners, L.P. |
| | 1146 Monarch Street |
| | Suite 350 |
| | Lexington, KY 40513 |
| | Attention: R. Eberley Davis, General Counsel |
| | Facsimile number: (859) 223-3057 |
| | Email address: Eb.Davis@arlp.com |
| | Telephone number: (859) 685-6304 |
| Administrative Agent: | Truist Bank |
| | 740 Battery Ave. SE |
| | Atlanta, Georgia 30339 |
| | Attention: Alliance Minerals LLC Portfolio Manager |
| | Email address: william.rutkowski@truist.com |
Telephone number: 404-316-9275
With a copies to (for Information purposes only):
Truist Bank
Complex Bilateral Servicing
2713 Forest Hills Rd SW/2nd Floor
Wilson, NC 27893
Attention: Complex Servicing Manager
Email address: ClientLoanServicing.CIB@truist.com
Telephone number: 252-296-0564
and
Haynes and Boone, LLP
1221 McKinney, Suite 4000
Houston, TX 77010
Attention: Kraig Grahmann
Facsimile Number: 713-236-5524
Email address: kraig.grahmann@haynesboone.com
Telephone number: 713-547-2048
**EXHIBIT A**
Form of Assignment and Acceptance
This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of the Effective Date set forth below and is entered into by and between [*Insert name of Assignor*] (the “Assignor”) and [*Insert name of Assignee*] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (together with all amendments, restatements, supplements or other modifications thereto, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Credit Agreement identified below (including any guarantees included therein) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.
| | | |
| --- | --- | --- |
| 1. | Assignor: | ______________________________ |
| 2. | Assignee: | ______________________________ |
| | | [and is an Affiliate/Approved Fund of [identify Lender]1] |
| 3. | Borrower: | Alliance Minerals, LLC |
| 4. | Administrative Agent: | Truist Bank, as the Administrative Agent under the Credit Agreement |
| 5. | Credit Agreement: | The Credit Agreement dated as of July 1, 2026, among Alliance Resource Partners, L.P., Alliance Resource Operating Partners, L.P., Alliance Minerals, LLC, the Lenders parties thereto, and Truist Bank, as the Administrative Agent. |
---
1 Select as applicable.
6. Assigned Interest:
| Amount of Maximum Commitment Assigned |
| --- |
| $% |
Effective Date: _____________ ___, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed administrative questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Guarantors and their respective Subsidiaries or Affiliates or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.
The terms set forth in this Assignment and Acceptance are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
Name:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
Name:
Title:
[Consented to and]2 Accepted:
TRUIST BANK, as Administrative Agent
By:
Name:
Title:
[Consented to and]3 Accepted:
ALLIANCE MINERALS, LLC
By:
Name:
Title:
---
2 To be added only if the consent of the Administrative Agent is required by Section 10.4(b) of the Credit Agreement.
3 To be added only if the consent of the Borrower is required by Section 10.4(b) of the Credit Agreement.
ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1.Representations and Warranties.
1.1Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, the Guarantors or their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, the Guarantors or their respective Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3General Provisions. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of New York.
**EXHIBIT B**
Form of Compliance Certificate
[Date]
To: Truist Bank, as Administrative Agent
740 Battery Ave. SE
Atlanta, Georgia 30339
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of July 1, 2026 (as amended and in effect on the date hereof, the “Credit Agreement”), among Alliance Minerals, LLC (the “Borrower”), the lenders named therein, Holdings, and Truist Bank, as the Administrative Agent. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.
I, __________________, being the duly elected and qualified, and acting in my capacity as chief financial officer of Holdings and the Borrower, hereby certify to the Administrative Agent and each Lender as follows:
1.The consolidated condensed balance sheets and the related statements of income and cash flows of the Borrower and its Subsidiaries attached hereto for the fiscal **[**quarter**][**year**]** ending ____________________ fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as at the end of such fiscal **[**quarter**][**year**]** on a consolidated basis, in accordance with generally accepted accounting principles consistently applied (subject, in the case of such quarterly financial statements, to normal year-end audit adjustments and the absence of footnotes).
2.The calculations set forth in Attachment 1 are computations of the financial covenants set forth in Article VI of the Credit Agreement calculated from the financial statements referenced in clause 1 above in accordance with the terms of the Credit Agreement.
3.As of the date hereof, no Default or Event of Default exists.
4.To the extent applicable, the Borrower, the Subsidiary Loan Parties and their respective Subsidiaries have complied with all the terms and provisions of Section 302(a) of the Sarbanes-Oxley Act as in effect on the date hereof.
By:
Name:
Title: Chief Financial Officer
Attachment to Compliance Certificate
**EXHIBIT C**
Form of Notice of Conversion/Continuation
Truist Bank,
as Administrative Agent
for the Lenders referred to below
740 Battery Ave. SE
Atlanta, Georgia 30339
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of July 1, 2026 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the undersigned, as Borrower, the lenders named therein, Holdings, and Truist Bank, as the Administrative Agent. Terms defined in the Credit Agreement are used herein with the same meanings. This notice constitutes a Notice of Conversion/Continuation and the Borrower hereby requests the conversion or continuation of a Borrowing under the Credit Agreement, and in that connection the Borrower specifies the following information with respect to the Borrowing to be converted or continued as requested hereby:
(A) Borrowing to which this request applies: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(B) Principal amount of Borrowing to be converted/continued: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(C) Effective date of election (which is a Business Day [or a U.S. Government Securities Business Day]4): \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(D) Interest rate basis: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(E) Interest Period: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Very truly yours,
**ALLIANCE MINERALS, LLC**
By:
Name:
Title:
---
4 Use for SOFR Borrowing.
**EXHIBIT D-1**
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of July 1, 2026 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Alliance Minerals, LLC, as Borrower, Truist Bank, as the Administrative Agent, Holdings and each lender from time to time party thereto.
Pursuant to the provisions of Section 2.16 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER]
By:
Name:
Title:
Date: , 20[ ]
**EXHIBIT D-2**
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of July 1, 2026 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Alliance Minerals, LLC, as Borrower, Truist Bank, as the Administrative Agent, Holdings, and each lender from time to time party thereto.
Pursuant to the provisions of Section 2.16 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT]
By:
Name:
Title:
Date: , 20[ ]
**EXHIBIT D-3**
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of July 1, 2026 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Alliance Minerals, LLC, as Borrower, Truist Bank, as the Administrative Agent, Holdings, and each lender from time to time party thereto.
Pursuant to the provisions of Section 2.16 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF PARTICIPANT]
By:
Name:
Title:
Date: , 20[ ]
**EXHIBIT D-4**
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Credit Agreement dated as of July 1, 2026 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Alliance Minerals, LLC, as Borrower, Truist Bank, as the Administrative Agent, Holdings, and each lender from time to time party thereto.
Pursuant to the provisions of Section 2.16 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER]
By:
Name:
Title:
Date: , 20[ ]
---
## EX-31.1
SEC source: [arlp-20260630xex31d1.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex31d1.htm)
**Exhibit 31.1**
**CERTIFICATION**
I, Joseph W. Craft III certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Alliance Resource Partners, L.P.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the quarterly period ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 6, 2026
20
/s/ Joseph W. Craft III
Joseph W. Craft III
*President, Chief Executive*
*Officer and Chairman*
---
## EX-31.2
SEC source: [arlp-20260630xex31d2.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex31d2.htm)
**Exhibit 31.2**
**CERTIFICATION**
I, Cary P. Marshall, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Alliance Resource Partners, L.P.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the quarterly period ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 6, 2026
Ay 9, 2017
/s/ Cary P. Marshall
Cary P. Marshall
*Senior Vice President and*
*Chief Financial Officer*
---
## EX-32.1
SEC source: [arlp-20260630xex32d1.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex32d1.htm)
**Exhibit 32.1**
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alliance Resource Partners, L.P. (the “Partnership”) on Form 10-Q for the three and six months ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph W. Craft III, President, Chief Executive Officer and Chairman of Alliance Resource Management GP, LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.
ay
By: /s/ Joseph W. Craft III
Joseph W. Craft III
*President, Chief Executive Officer and Chairman*
*of Alliance Resource Management GP, LLC*
*(the general partner of Alliance Resource Partners, L.P.)*
Date: August 6, 2026
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate document. A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
---
## EX-32.2
SEC source: [arlp-20260630xex32d2.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex32d2.htm)
**Exhibit 32.2**
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alliance Resource Partners, L.P. (the “Partnership”) on Form 10-Q for the three and six months ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Cary P. Marshall, Senior Vice President and Chief Financial Officer of Alliance Resource Management GP, LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.
By: /s/ Cary P. Marshall
Cary P. Marshall
*Senior Vice President and*
*Chief Financial Officer*
*of Alliance Resource Management GP, LLC*
(the general partner of Alliance Resource Partners, L.P.)
Date: August 6, 2026
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate document. A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
---
## EX-95.1
SEC source: [arlp-20260630xex95d1.htm](https://www.sec.gov/Archives/edgar/data/1086600/000110465926092001/arlp-20260630xex95d1.htm)
**EXHIBIT 95.1**
Federal Mine Safety and Health Act Information
Our mining operations are subject to extensive and stringent compliance standards established pursuant to the Federal Mine Safety and Health Act of 1977, as amended by the Federal Mine Improvement and New Emergency Response Act of 2006 (as amended, the "Mine Act"). MSHA monitors and rigorously enforces compliance with these standards, and our mining operations are inspected frequently. Citations and orders are issued by MSHA under Section 104 of the Mine Act for violations of the Mine Act or any mandatory health or safety standard, rule, order or regulation promulgated under the Mine Act. A Section 104(a) "Significant and Substantial" or "S&S" citation is generally issued in a situation where the conditions created by the violation do not cause imminent danger, but in the opinion of the MSHA inspector could significantly and substantially contribute to the cause and effect of a mine safety or health hazard. During the three months ended June 30, 2026, our mines were subject to 1,334 MSHA inspection days with an average of only 0.07 S&S citations written per inspection day.
The Mine Act has been construed as authorizing MSHA to issue citations and orders pursuant to the legal doctrine of strict liability, or liability without regard to fault. If, in the opinion of an MSHA inspector, a condition exists that violates the Mine Act or regulations promulgated thereunder, then a citation or order will be issued regardless of whether we had any knowledge of, or fault in, the existence of that condition. Many of the Mine Act standards include one or more subjective elements, so that issuance of a citation often depends on the opinions or experience of the MSHA inspector involved and the frequency of citations will vary from inspector to inspector.
If we disagree with the assertions of an MSHA inspector, we may exercise our right to challenge those findings by "contesting" the citation or order pursuant to the procedures established by the Mine Act and its regulations. These contest proceedings frequently result in the dismissal or modification of previously issued citations, substantial reductions in the penalty amounts originally assessed by MSHA, or both.
The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") requires issuers to include in periodic reports filed with the SEC certain information relating to citations or orders for violations of standards under the Mine Act. The following tables include information required by the Dodd-Frank Act for the three months ended June 30, 2026. The mine data retrieval system maintained by MSHA may show information that is different than what is provided herein. Any such difference may be attributed to the need to update that information on MSHA’s system and/or other factors.
| Line item | Section 104(a) | Section | Section 104(d) | Section | Section | Total Dollar Value of / MSHA Assessments |
| --- | --- | --- | --- | --- | --- | --- |
| Subsidiary Name / MSHA | S&S | 104(b) | Citations and | 110(b)(2) | 107(a) | Proposed |
| Identification Number (1) | Citations(2) | Orders (3) | Orders (4) | Violations (5) | Orders (6) | (in thousands) (7) |
| Illinois Basin Operations | | | | | | |
| Webster County Coal, LLC (KY) | | | | | | |
| 1502132 | - | - | - | - | - | - |
| 1511935 | - | - | - | - | - | - |
| Warrior Coal, LLC (KY) | | | | | | |
| 1505230 | - | - | - | - | - | - |
| 1512083 | - | - | - | - | - | - |
| 1513514 | - | - | - | - | - | - |
| 1516460 | - | - | - | - | - | - |
| 1517216 | 34 | - | - | - | - | $111.3 |
| 1517232 | - | - | - | - | - | - |
| 1517678 | - | - | - | - | - | - |
| 1517740 | - | - | - | - | - | - |
| 1517758 | - | - | - | - | - | - |
| 1514335 | - | - | - | - | - | - |
| Hopkins County Coal, LLC (KY) | | | | | | |
| 1502013 | - | - | - | - | - | - |
| 1517377 | - | - | - | - | - | - |
| 1517515 | - | - | - | - | - | - |
| 1518826 | - | - | - | - | - | - |
| 1517378 | - | - | - | - | - | - |
| River View Coal, LLC (KY) | | | | | | |
| 1503178 | - | - | - | - | - | - |
| 1519374 | 8 | - | - | - | 1 | $16.7 |
| 1502709 | 24 | - | - | - | - | $40.3 |
| White County Coal, LLC (IL) | | | | | | |
| 1102662 | - | - | - | - | - | - |
| 1103058 | - | - | - | - | - | - |
| Hamilton County Coal, LLC (IL) | | | | | | |
| 1103242 | - | - | - | - | - | $0.8 |
| 1103203 | 7 | - | - | - | - | $23.5 |
| Gibson County Coal, LLC (IN) | | | | | | |
| 1202388 | 8 | - | - | - | - | $10.2 |
| 1202215 | - | - | - | - | - | - |
| 1202494 | - | - | - | - | - | - |
| Sebree Mining, LLC (KY) | | | | | | |
| 1519264 | - | - | - | - | - | - |
| 1518547 | - | - | - | - | - | - |
| 1517044 | - | - | - | - | - | - |
| Appalachia Operations | | | | | | |
| MC Mining, LLC (KY) | | | | | | |
| 1508079 | - | - | - | - | - | - |
| 1517733 | - | - | - | - | - | $0.9 |
| 1519515 | - | - | - | - | - | - |
| 1519838 | 15 | - | - | - | - | $23.9 |
| Mettiki Coal, LLC (MD) | | | | | | |
| 1800621 | - | - | - | - | - | - |
| 1800671 | - | - | - | - | - | $0.6 |
| 1800761 | - | - | - | - | - | - |
| Mettiki Coal (WV), LLC | | | | | | |
| 4609028 | - | - | - | - | - | $7.4 |
| Tunnel Ridge, LLC (PA/WV) | | | | | | |
| 4608864 | - | - | - | - | - | $11.1 |
| Other | - | - | - | | | |
| 4403236 | - | - | - | - | - | - |
| 4403255 | - | - | - | - | - | - |
| 4406630 | - | - | - | - | - | - |
| 4406867 | - | - | - | - | - | - |
| CR Services, LLC (KY) | | | | | | |
| B4335 | - | - | - | - | - | - |
| Mid-America Carbonates, LLC (IL) | | | | | | |
| 1103176 | - | - | - | - | - | - |
| Rough Creek Mining, LLC (KY) | | | | | | |
| 1502129 | - | - | - | - | - | - |
| Subsidiary Name / MSHA / Identification Number (1) | Total / Number of / Mining / Related / Fatalities | Received Notice / of Pattern of / Violations Under / Section 104(e) / (yes/no) (8) | Legal / Actions / Pending as of / Last Day of / Period | Legal / Actions / Initiated / During / Period | Legal / Actions / Resolved / During / Period |
| --- | --- | --- | --- | --- | --- |
| Illinois Basin Operations | | | | | |
| Webster County Coal, LLC (KY) | | | | | |
| 1502132 | - | No | - | - | - |
| 1511935 | - | No | - | - | - |
| Warrior Coal, LLC (KY) | | | | | |
| 1505230 | - | No | - | - | - |
| 1512083 | - | No | - | - | - |
| 1513514 | - | No | - | - | - |
| 1516460 | - | No | - | - | - |
| 1517216 | - | No | 14 | 3 | 1 |
| 1517232 | - | No | - | - | - |
| 1517678 | - | No | - | - | - |
| 1517740 | - | No | - | - | - |
| 1517758 | - | No | - | - | - |
| 1514335 | - | No | - | - | - |
| Hopkins County Coal, LLC (KY) | | | | | |
| 1502013 | - | No | - | - | - |
| 1517377 | - | No | - | - | - |
| 1517515 | - | No | - | - | - |
| 1518826 | - | No | - | - | - |
| 1517378 | - | No | - | - | - |
| River View Coal, LLC (KY) | | | | | |
| 1503178 | - | No | 1 | 1 | - |
| 1519374 | - | No | 13 | 3 | 3 |
| 1502709 | - | No | 4 | 3 | 2 |
| White County Coal, LLC (IL) | | | | | |
| 1102662 | - | No | - | - | - |
| 1103058 | - | No | - | - | - |
| Hamilton County Coal, LLC (IL) | | | | | |
| 1103242 | - | No | - | - | - |
| 1103203 | - | No | 1 | - | 7 |
| Gibson County Coal, LLC (IN) | | | | | |
| 1202388 | - | No | 7 | 2 | 2 |
| 1202215 | - | No | - | - | - |
| 1202494 | - | No | - | - | - |
| Sebree Mining, LLC (KY) | | | | | |
| 1519264 | - | No | - | - | - |
| 1518547 | - | No | - | - | - |
| 1517044 | - | No | - | - | - |
| Appalachia Operations | | | | | |
| MC Mining, LLC (KY) | | | | | |
| 1508079 | - | No | - | - | - |
| 1517733 | - | No | - | - | - |
| 1519515 | - | No | - | - | - |
| 1519838 | - | No | 4 | 1 | - |
| Mettiki Coal, LLC (MD) | | | | | |
| 1800621 | - | No | - | - | - |
| 1800671 | - | No | - | - | - |
| 1800761 | - | No | - | - | - |
| Mettiki Coal (WV), LLC | | | | | |
| 4609028 | - | No | - | - | 1 |
| Tunnel Ridge, LLC (PA/WV) | | | | | |
| 4608864 | - | No | 1 | - | 1 |
| Other | | | | | |
| 4403236 | - | No | - | - | - |
| 4403255 | - | No | - | - | - |
| 4406630 | - | No | - | - | - |
| 4406867 | - | No | - | - | - |
| CR Services, LLC (KY) | | | | | |
| B4335 | - | No | - | - | - |
| Mid-America Carbonates, LLC (IL) | | | | | |
| 1103176 | - | No | - | - | - |
| Rough Creek Mining, LLC (KY) | | | | | |
| 1502129 | - | No | - | - | - |
The number of legal actions pending before the Federal Mine Safety and Health Review Commission as of June 30, 2026 that fall into each of the following categories is as follows:
| Subsidiary Name / MSHA / Identification Number (1) | Contests of / Citations / and Orders | Contests of / Proposed / Penalties(9) | Complaints / for / Compensation | Complaints of / Discharge/ / Discrimination / /Interference | Applications / for / Temporary / Relief | Appeals of / Judges / Rulings |
| --- | --- | --- | --- | --- | --- | --- |
| Illinois Basin Operations | | | | | | |
| Webster County Coal, LLC (KY) | | | | | | |
| 1502132 | - | - | - | - | - | - |
| 1511935 | - | - | - | - | - | - |
| Warrior Coal, LLC (KY) | | | | | | |
| 1505230 | - | - | - | - | - | - |
| 1512083 | - | - | - | - | - | - |
| 1513514 | - | - | - | - | - | - |
| 1516460 | - | - | - | - | - | - |
| 1517216 | - | 14 | - | - | - | - |
| 1517232 | - | - | - | - | - | - |
| 1517678 | - | - | - | - | - | - |
| 1517740 | - | - | - | - | - | - |
| 1517758 | - | - | - | - | - | - |
| 1514335 | - | - | - | - | - | - |
| Hopkins County Coal, LLC (KY) | | | | | | |
| 1502013 | - | - | - | - | - | - |
| 1517377 | - | - | - | - | - | - |
| 1517515 | - | - | - | - | - | - |
| 1518826 | - | - | - | - | - | - |
| 1517378 | - | - | - | - | - | - |
| River View Coal, LLC (KY) | | | | | | |
| 1503178 | - | 1 | - | - | - | - |
| 1519374 | - | 13 | - | - | - | - |
| 1502709 | - | 4 | - | - | - | - |
| White County Coal, LLC (IL) | | | | | | |
| 1102662 | - | - | - | - | - | - |
| 1103058 | - | - | - | - | - | - |
| Hamilton County Coal, LLC (IL) | | | | | | |
| 1103242 | - | - | - | - | - | - |
| 1103203 | - | 1 | - | - | - | - |
| Gibson County Coal, LLC (IN) | | | | | | |
| 1202388 | - | 7 | - | - | - | - |
| 1202215 | - | - | - | - | - | - |
| 1202494 | - | - | - | - | - | - |
| Sebree Mining, LLC (KY) | | | | | | |
| 1519264 | - | - | - | - | - | - |
| 1518547 | - | - | - | - | - | - |
| 1517044 | - | - | - | - | - | - |
| Appalachia Operations | | | | | | |
| MC Mining, LLC (KY) | | | | | | |
| 1508079 | - | - | - | - | - | - |
| 1517733 | - | - | - | - | - | - |
| 1519515 | - | - | - | - | - | - |
| 1519838 | - | 4 | - | - | - | - |
| Mettiki Coal, LLC (MD) | | | | | | |
| 1800621 | - | - | - | - | - | - |
| 1800671 | - | - | - | - | - | - |
| 1800761 | - | - | - | - | - | - |
| Mettiki Coal (WV), LLC | | | | | | |
| 4609028 | - | - | - | - | - | - |
| Tunnel Ridge, LLC (PA/WV) | | | | | | |
| 4608864 | - | 1 | - | - | - | - |
| Other | | | | | | |
| 4403236 | - | - | - | - | - | - |
| 4403255 | - | - | - | - | - | - |
| 4406630 | - | - | - | - | - | - |
| 4406867 | - | - | - | - | - | - |
| CR Services, LLC (KY) | | | | | | |
| B4335 | - | - | - | - | - | - |
| Mid-America Carbonates, LLC (IL) | | | | | | |
| 1103176 | - | - | - | - | - | - |
| Rough Creek Mining, LLC (KY) | | | | | | |
| 1502129 | - | - | - | - | - | - |
(1) The statistics reported for each of our subsidiaries listed above are segregated into specific MSHA identification numbers.
(2) Mine Act section 104(a) S&S citations shown above are for alleged violations of mandatory health or safety standards that could significantly and substantially contribute to a coal mine health and safety hazard. It should be noted that, for purposes of this table, S&S citations that are included in another column, such as Section 104(d) citations, are not also included as Section 104(a) S&S citations in this column.
(3) Mine Act section 104(b) orders are for alleged failures to totally abate a citation within the time period specified in the citation.
(4) Mine Act section 104(d) citations and orders are for an alleged unwarrantable failure (*i.e.*, aggravated conduct constituting more than ordinary negligence) to comply with mandatory health or safety standards.
(5) Mine Act section 110(b)(2) violations are for an alleged "flagrant" failure (*i.e.*, reckless or repeated) to make reasonable efforts to eliminate a known violation of a mandatory safety or health standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.
(6) Mine Act section 107(a) orders are for alleged conditions or practices which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated and result in orders of immediate withdrawal from the area of the mine affected by the condition.
(7) Amounts shown include assessments proposed by MSHA during the three months ended June 30, 2026 on all citations and orders, including those citations and orders that are not required to be included within the above chart.
(8) Mine Act section 104(e) written notices are for an alleged pattern of violations of mandatory health or safety standards that could significantly and substantially contribute to a coal mine safety or health hazard.
(9) Pursuant to the Procedural Rules of the Federal Mine Safety and Health Review Commission, mine operators may contest the underlying validity and fact of an alleged citation or order, as well as any special findings of an alleged citation or order, including a significant and substantial or unwarrantable failure designation, as part of any proceeding contesting a proposed penalty assessment.