EXHIBIT (a)(3)
AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
ALLIANCE CAPITAL MANAGEMENT L.P.
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ALLIANCE CAPITAL MANAGEMENT L.P.
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
ACMC...........................................................................2
Additional Limited Partner.....................................................2
Adjusted Property..............................................................2
Adverse Partnership Tax Consequence............................................2
Adverse Tax Determination......................................................2
Affiliate......................................................................2
Affiliated Holders.............................................................2
Agreement......................................................................2
Alliance Holding...............................................................3
Alliance Holding Contribution..................................................3
Alliance Holding Partnership Agreement.........................................3
Alliance Holding GP Unit.......................................................3
Alliance Holding LP Unit.......................................................3
Appraiser......................................................................3
Assignment Determination.......................................................3
Available Cash Flow............................................................3
Book-Tax Disparities...........................................................4
Capital Account................................................................4
Carrying Value.................................................................4
Certificate of Limited Partnership.............................................4
Code...........................................................................4
Commission.....................................................................4
Contributed Property...........................................................4
Contribution...................................................................4
Corporate Affiliate............................................................4
Delaware Act...................................................................5
Departing Partner..............................................................5
Depreciation...................................................................5
Distribution...................................................................5
Effective Time.................................................................5
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ELAS...........................................................................5
Exchange.......................................................................5
General Partner................................................................5
General Partnership Interest...................................................5
Holdback Interests.............................................................5
Indemnification and Reimbursement Agreement....................................5
Indemnified Person.............................................................5
Indemnitee.....................................................................6
Limited Liability Determination................................................6
Limited Partner................................................................6
Limited Partnership Interests..................................................6
Liquidating Trustee............................................................6
LP Certificate.................................................................6
LP Interest Price..............................................................6
Majority Approval..............................................................7
Majority Outside Approval......................................................7
National Securities Exchange...................................................8
Net Income.....................................................................8
Net Loss.......................................................................8
Net Value......................................................................8
New Entity.....................................................................8
Operating Cash Flow............................................................8
Opinion of Counsel............................................................12
Opinion of Outside Counsel....................................................12
Original Agreement of Limited Partnership.....................................12
Other General Partner.........................................................12
Partner.......................................................................12
Partnership...................................................................12
Partnership's Accountants.....................................................12
Partnership Assets............................................................12
Partnership Interest..........................................................12
Percentage Interest...........................................................12
Person........................................................................12
Purchase Date.................................................................13
Purchase Funds................................................................13
Purchase Price................................................................13
Recapture Income..............................................................13
Record Date...................................................................13
Record Holder(s)..............................................................14
Registration Statement........................................................14
Reorganization................................................................14
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Reorganization Agreement......................................................14
Securities Exchange Act.......................................................14
Substituted Limited Partner...................................................14
Tax Determination.............................................................14
Tax Payment...................................................................14
Unrealized Gain...............................................................14
Unrealized Loss...............................................................14
ARTICLE 2
GENERAL PROVISIONS
SECTION 2.01. Formation; Partnership Name....................................15
SECTION 2.02. Names and Addresses of Partners................................15
SECTION 2.03. Principal Office, Registered Agent and Registered Office of the
Partnership....................................................15
SECTION 2.04. Term...........................................................15
SECTION 2.05. Possible Action in the Event of Adverse Tax Developments.......16
ARTICLE 3
PURPOSE
SECTION 3.01. Purpose........................................................17
SECTION 3.02. Powers.........................................................17
ARTICLE 4
CAPITAL CONTRIBUTIONS
SECTION 4.01. General Partner, Limited Partners..............................19
SECTION 4.02. Additional Issuances of Securities.............................20
SECTION 4.03. Record of Contributions........................................22
SECTION 4.04. Splits and Combinations........................................22
SECTION 4.05. No Preemptive Rights...........................................23
SECTION 4.06. No Fractional Interests........................................23
SECTION 4.07. No Withdrawal..................................................23
SECTION 4.08. Loans from Partners; No Interest on Capital Account Balances...23
SECTION 4.09. Capital Accounts...............................................24
SECTION 4.10. Capital Account Calculations and Adjustments...................24
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ARTICLE 5
DISTRIBUTIONS AND ALLOCATIONS
SECTION 5.01. Pass-Through Cash Distributions................................26
SECTION 5.02. Special Distributions..........................................26
SECTION 5.03. General Rules with Respect to Distributions....................26
SECTION 5.04. Allocations of Net Income, Net Loss and Depreciation...........27
SECTION 5.05. Special Provisions Governing Capital Account Allocations.......29
SECTION 5.06. Allocations for Tax Purposes...................................31
SECTION 5.07. Assignments....................................................33
ARTICLE 6
MANAGEMENT AND OPERATION OF BUSINESS
SECTION 6.01. Management.....................................................34
SECTION 6.02. Reliance by Third Parties......................................39
SECTION 6.03. Purchase or Sale of Limited Partnership Interests..............39
SECTION 6.04. Compensation and Reimbursement of the General Partner..........40
SECTION 6.05. Outside Activities.............................................40
SECTION 6.06. Partnership Funds..............................................41
SECTION 6.07. Loans by the Partnership; Transactions and Contracts with
Affiliates.....................................................41
SECTION 6.08. Liability of the General Partner and Other Indemnities.........43
SECTION 6.09. Indemnification................................................43
SECTION 6.10. Other Matters Concerning the General Partner...................45
SECTION 6.11. Title to Partnership Assets....................................46
SECTION 6.12. Sale of the Partnership's Assets...............................46
SECTION 6.13. No New Business................................................46
SECTION 6.14. Reimbursement of Expenses of Alliance Holding..................47
SECTION 6.15. Issuances of Alliance Holding LP Units Pursuant to Employee
Benefit Plans..................................................48
Section 6.16. Repurchase of Alliance Holding LP Units........................49
ARTICLE 7
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
SECTION 7.01. Limitation of Liability........................................49
SECTION 7.02. Management of Business.........................................49
SECTION 7.03. Outside Activities.............................................50
SECTION 7.04. Return of Capital; Additional Capital..........................50
SECTION 7.05. Rights of Limited Partners and Alliance Holding Unitholders and
Limited Partners Relating to the Partnership...................50
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SECTION 7.06. Agreement to be Bound by Terms of Partnership Agreement........51
ARTICLE 8
BOOKS, RECORDS, ACCOUNTING AND REPORTS
SECTION 8.01. Records and Accounting.........................................51
SECTION 8.02. Fiscal Year....................................................52
SECTION 8.03. Reports........................................................52
SECTION 8.04. Other Information..............................................52
ARTICLE 9
TAX MATTERS
SECTION 9.01. Preparation of Tax Returns.....................................53
SECTION 9.02. Tax Elections..................................................53
SECTION 9.03. Tax Controversies..............................................53
SECTION 9.04. Withholding....................................................53
SECTION 9.05. Entity-level Deficiency Collections............................53
ARTICLE 10
POWER OF ATTORNEY
SECTION 10.01. Power of Attorney.............................................54
ARTICLE 11
ISSUANCE OF CERTIFICATES
SECTION 11.01. Issuance of Certificates......................................56
SECTION 11.02. Lost, Stolen, Mutilated or Destroyed Certificates.............56
SECTION 11.03. Record Holder.................................................57
ARTICLE 12
TRANSFER OF PARTNERSHIP INTERESTS
SECTION 12.01. Transfer......................................................57
SECTION 12.02. Avoidance of Publicly Traded Partnership Status...............57
SECTION 12.03. Permitted Transfers of Limited Partnership Interests..........58
SECTION 12.04. Transfer of General Partnership Interests of the General
Partner.......................................................59
SECTION 12.05. Restrictions on Transfer......................................59
SECTION 12.06. Withdrawal of a Limited Partner...............................60
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ARTICLE 13
ADMISSION OF GENERAL PARTNERS
SECTION 13.01. Admission of Additional and Successor General Partner.........60
ARTICLE 14
WITHDRAWAL OR REMOVAL OF PARTNERS
SECTION 14.01. Withdrawal or Removal of the General Partner..................61
SECTION 14.02. Interest of Departing Partner and Successor...................62
SECTION 14.03. Withdrawal of Limited Partners................................63
ARTICLE 15
DISSOLUTION AND LIQUIDATION
SECTION 15.01. Dissolution...................................................64
SECTION 15.02. Liquidation...................................................65
SECTION 15.03. Distribution in Kind..........................................66
SECTION 15.04. Cancellation of Certificate of Limited Partnership............67
SECTION 15.05. Reasonable Time for Winding Up................................67
SECTION 15.06. Return of Contributions.......................................67
SECTION 15.07. No Obligation to Restore Deficit..............................67
SECTION 15.08. Waiver of Partition...........................................67
ARTICLE 16
RIGHT TO PURCHASE LIMITED PARTNERSHIP INTERESTS
SECTION 16.01. Right to Purchase Limited Partnership Interests...............67
ARTICLE 17
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
SECTION 17.01. Amendments to be Adopted Solely by the General Partner........69
SECTION 17.02. Amendment Procedures..........................................70
SECTION 17.03. Special Amendment Requirements................................70
SECTION 17.04. Meetings......................................................71
SECTION 17.05. Notice of Meeting.............................................72
SECTION 17.06. Record Date...................................................72
SECTION 17.07. Adjournment...................................................72
SECTION 17.08. Waiver of Notice; Consent to Meeting; Approval of Minutes.....73
SECTION 17.09. Quorum........................................................73
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SECTION 17.10. Conduct of Meeting............................................73
SECTION 17.11. Instructions by Nominees......................................74
SECTION 17.12. Action Without a Meeting......................................74
ARTICLE 18
GENERAL PROVISIONS
SECTION 18.01. Addresses and Notices.........................................75
SECTION 18.02. Consent of Limited Partners...................................75
SECTION 18.03. Titles and Captions...........................................75
SECTION 18.04. Pronouns and Plurals..........................................75
SECTION 18.05. Further Action................................................75
SECTION 18.06. Binding Effect................................................75
SECTION 18.07. Integration...................................................75
SECTION 18.08. Benefits of this Agreement....................................76
SECTION 18.09. Waiver........................................................76
SECTION 18.10. Counterparts..................................................76
SECTION 18.11. Applicable Law................................................76
SECTION 18.12. Invalidity of Provisions......................................76
Form of Limited Partnership Interests Certificate......................Exhibit A
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AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
ALLIANCE CAPITAL MANAGEMENT L.P.
This Amended and Restated Agreement of Limited Partnership of
Alliance Capital Management L.P. (this "Agreement"), a Delaware limited
partnership formerly known as Alliance Capital Management ▇.▇. ▇▇ (the
"Partnership"), dated as of October 29, 1999, is entered into by and among
Alliance Capital Management Corporation, a Delaware corporation, Alliance
Capital Management Holding L.P., a publicly-traded Delaware limited
partnership formerly known as Alliance Capital Management L.P. ("Alliance
Holding"), together with all other Partners of the Partnership as of the date
hereof, and additional Persons who become Partners of the Partnership, as
hereinafter provided. The parties hereto agree to continue the Partnership as
a limited partnership under the Delaware Act and this Agreement.
WHEREAS, the Partnership was originally formed and established as a
limited partnership pursuant to a Certificate of Limited Partnership, dated as
of April 6, 1999, and is governed by an Agreement of Limited Partnership,
dated as of July 7, 1999 (the "Original Agreement of Limited Partnership");
WHEREAS, at a special meeting of unitholders of Alliance Holding held
on September 22, 1999, such unitholders approved the reorganization of
Alliance Holding, pursuant to which, among other things, Alliance Holding will
(i) transfer or assign all or substantially all of its assets to the
Partnership, in exchange for 100% of the Limited Partnership Interests and the
General Partnership Interest and the assumption by the Partnership of all or
substantially all of the liabilities of Alliance Holding and (ii) offer to
exchange outstanding Alliance Holding LP Units for an equal number of Limited
Partnership Interests held by Alliance Holding (the "Reorganization"); and
WHEREAS, in connection with the Reorganization, the parties hereto
wish to amend and restate the Original Agreement of Limited Partnership,
effective as of the Effective Time.
In consideration of the mutual covenants, conditions and agreements
herein contained, the parties hereto hereby agree as follows:
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ARTICLE 1
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for the purposes of this Agreement, have the meanings
herein specified.
"ACMC" shall mean Alliance Capital Management Corporation, a Delaware
corporation.
"Additional Limited Partner" shall mean a Person admitted to the
Partnership as a limited partner pursuant to Section 4.02 and who is shown as
such on the books and records of the Partnership.
"Adjusted Property" shall mean property the Carrying Value of which
has been adjusted pursuant to Section 4.10.
"Adverse Partnership Tax Consequence" shall mean the Partnership,
Alliance Holding or both (a) being treated for federal income tax purposes as
an association taxable as a corporation, (b) being subject to federal income
tax as a corporation or (c) otherwise becoming subject to federal taxation on
its net income generally.
"Adverse Tax Determination" shall mean a determination by the General
Partner, on the basis of an Opinion of Outside Counsel, that an Adverse
Partnership Tax Consequence has occurred. The General Partner may determine
that an Adverse Tax Determination shall be deemed to have been made for
purposes of any provision of this Agreement as of a date prior to the actual
date of determination, but not earlier than the beginning of the first taxable
period to which the Adverse Partnership Tax Consequence relates. However, no
such determination shall affect the rights of any Partner to distributions
actually received prior to the time such determination was actually made.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by or under common control with the Person in question; however,
none of the Partnership, Alliance Holding, any Person controlled by the
Partnership or Alliance Holding or any Person employed by the Partnership or
Alliance Holding or such a controlled Person shall be considered an Affiliate
of the General Partner. As used in this definition, the term "control" means
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
ownership of voting securities, by contract or otherwise.
"Affiliated Holders" has the meaning specified in Section 16.01(a).
"Agreement" shall mean this Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
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"Alliance Holding" shall mean Alliance Capital Management Holding
L.P., a publicly-traded Delaware limited partnership whose name was changed
from Alliance Capital Management L.P. in connection with the Reorganization.
"Alliance Holding Contribution" shall mean the contribution by
Alliance Holding of all of its assets (other than the Holdback Interests) to
the Partnership in exchange for 100% of the Limited Partnership Interests and
the General Partnership Interest and the assumption by the Partnership of all
or substantially all of the liabilities of Alliance Holding, pursuant to the
Reorganization Agreement.
"Alliance Holding Partnership Agreement" shall mean the Amended and
Restated Agreement of Limited Partnership of Alliance Holding, as it may be
amended, supplemented or restated from time to time.
"Alliance Holding GP Unit" shall mean a unit representing a general
partner interest in Alliance Holding.
"Alliance Holding LP Unit" shall mean a unit representing an
assignment of a beneficial interest in a corresponding limited partner
interest of Alliance Holding.
"Appraiser" shall mean a Person (who may not be the General Partner,
a Corporate Affiliate thereof or any employee of the Partnership, the General
Partner or a Corporate Affiliate thereof) having experience in the valuation
of financial services businesses selected and retained by the General Partner
on behalf of and for the account of the Partnership.
"Assignment Determination" shall mean an Opinion of Outside Counsel
to the effect that with respect to a proposed transaction, (i) advisory
contracts of the Partnership and Alliance Holding which contributed more than
10% of the Partnership's and Alliance Holding's aggregate consolidated
revenues derived from investment management services during the four most
recently completed fiscal quarters would not be automatically terminated or
breached by reason of a change of control resulting from such proposed
transaction, or (ii) requisite consents to avoid such termination or breach
have been obtained.
"Available Cash Flow" shall mean for any period the excess, if any,
of (x) the sum of (A) Operating Cash Flow for such period, and (B) such
portion of the amounts retained in prior periods pursuant to the following
clause (y) as the General Partner determines, in its sole discretion, should
no longer be retained by the Partnership for the purposes described in such
clause (y), over (y) such amounts as the General Partner determines, in its
sole discretion, should be retained by the Partnership for use in its business
(or the businesses of Persons controlled by the Partnership) and not
distributed, including, but not limited to, amounts retained for or in
anticipation of expenses, capital expenditures, working capital requirements
or reserves. The determination of Available Cash Flow for any period by the
General Partner shall, absent
3
manifest error, be binding and conclusive. As used in this definition,
"control" has the meaning given to that term in the definition of Affiliate.
"Book-Tax Disparities" shall mean the differences between a Person's
Capital Account balance, as maintained pursuant to Article 4, and such balance
had the Capital Account been maintained strictly in accordance with federal
income tax accounting principles (such disparities reflecting, among other
items, the differences between the Carrying Value of either Contributed
Property or Adjusted Property, as adjusted from time to time, and the adjusted
basis thereof for federal income tax purposes).
"Capital Account" shall mean a capital account established and
maintained pursuant to Article 4.
"Carrying Value" shall mean (i) with respect to Contributed Property,
the Net Value of such property reduced (but not below zero) by all
amortization, depreciation and cost recovery deductions charged to the Capital
Accounts pursuant to Section 4.09 with respect to such property, and (ii) with
respect to any other property, the adjusted basis of such property for federal
income tax purposes, as of the time of determination. The Carrying Value of
any property shall be adjusted from time to time in accordance with Section
4.10, and to reflect changes, additions or other adjustments to the Carrying
Value for dispositions, acquisitions or improvements of Partnership Assets, as
deemed appropriate by the General Partner, using such reasonable methods as it
in its sole discretion deems appropriate.
"Certificate of Limited Partnership" shall mean the Certificate of
Limited Partnership, and any and all amendments thereto and restatements
thereof, filed on behalf of the Partnership as required under the Delaware
Act.
"Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor to such statute.
"Commission" shall mean the Securities and Exchange Commission.
"Contributed Property" shall mean any Contribution other than cash.
"Contribution" shall mean any cash, cash equivalents or other
property, or any other form of contribution (other than services) permitted by
the Delaware Act, contributed to the Partnership pursuant to this Agreement
(or deemed contributed for federal income tax purposes) by or on behalf of any
Person.
"Corporate Affiliate" shall mean each Person, other than a natural
person, that is an Affiliate of the specified Person.
4
"Delaware Act" shall mean the Delaware Revised Uniform Limited
Partnership Act (6 Del. C. ss.ss.17-101, et seq.), as it may be amended from
time to time, and any successor to such act.
"Departing Partner" shall mean the Person, as of the effective date
of any withdrawal or removal of the General Partner pursuant to Section 14.01,
who has as of such date so withdrawn or been removed.
"Depreciation" shall mean all deductions attributable to the
depreciation, amortization or cost recovery of the cost or basis of any
Partnership Asset which has a useful life in excess of one year.
"Distribution" shall mean any cash, cash equivalents or other
property distributed by the Partnership pursuant to this Agreement (or deemed
distributed for federal income tax purposes) to any Person.
"Effective Time" shall mean the effective time of the Reorganization
pursuant to the Reorganization Agreement.
"ELAS" means The Equitable Life Assurance Society of the United States.
"Exchange" shall mean the exchange by Alliance Holding of the
Alliance Holding LP Units held by any unitholder of Alliance Holding upon the
request of such holder for an equal number of Limited Partnership Interests
held by Alliance Holding, pursuant to the Reorganization Agreement.
"General Partner" shall mean ACMC in its capacity as general partner
of the Partnership, or any successor or additional general partner of the
Partnership admitted pursuant to Section 13.02.
"General Partnership Interest" shall mean the Partnership Interest of
the General Partner in its capacity as such; provided that such interest shall
constitute solely a right to a 1% Percentage Interest in Partnership profits
and losses and distributions of Partnership Assets until such time as the
General Partnership Interest is transferred to the General Partner in exchange
for its general partner interest in Alliance Holding, as referenced in Section
4.01(c).
"Holdback Interests" shall have the meaning set forth in the
Reorganization Agreement.
"Indemnification and Reimbursement Agreement" shall mean the
Indemnification and Reimbursement Agreement, dated as of April 8, 1999, among
the Partnership, Alliance Holding and ELAS, as the same may be amended,
supplemented or restated from time to time.
"Indemnified Person" has the meaning specified in Section 6.09.
5
"Indemnitee" shall mean a Person who is or was the General Partner,
any Person who is or was a Departing Partner, any Person who is or was an
Affiliate of the General Partner or any Departing Partner, any Person who is
or was an officer, director, employee, partner, agent or trustee of the
Partnership, General Partner or any Departing Partner or any such Affiliate,
or any Person who is or was serving at the request of the General Partner or
any Departing Partner or any such Affiliate as a director, officer, employee,
partner, agent or trustee of another Person in connection with the business or
affairs of the Partnership.
"Limited Liability Determination" shall mean an Opinion of Outside
Counsel to the effect that, as a result of the proposed transaction, Limited
Partners do not lose their limited liability pursuant to Delaware law or this
Agreement.
"Limited Partner" shall mean Alliance Holding and any other Person
who is admitted as a limited partner in accordance with this Agreement and is
shown as a limited partner on the books and records of the Partnership.
"Limited Partnership Interests" shall mean the Partnership Interests
of the Limited Partners. Each Partnership Interest of the Limited Partners in
the Partnership shall be denominated as a unit, each unit representing a pro
rata percentage interest in the aggregate Partnership Interests of the Limited
Partners. Each such unit shall be referred to herein as a Limited Partnership
Interest, and all references in this Agreement to numbers of Limited
Partnership Interests shall be deemed to refer to the specified number of such
units of the Partnership Interests of the Limited Partners. The provisions
hereof and of the definition of Percentage Interest are subject to adjustment
by the General Partner in connection with, or as a consequence of, the
issuance of any Limited Partnership Interests or other securities of the
Partnership under Section 4.02 having special designations or preferences or
other special rights or duties. Subject to the establishment of special
classes or groups of Limited Partners or Limited Partnership Interests or
other securities of the Partnership pursuant to Section 4.02, all Limited
Partnership Interests shall be considered to constitute a single class and all
Limited Partners shall vote as a single class under the Delaware Act in
accordance with the terms of this Agreement.
"Liquidating Trustee" shall mean either (i) the General Partner or
(ii) if dissolution of the Partnership was caused by an event described in
Sections 15.01(a)(i), 15.01(a)(ii) or 15.01(a)(v), the Person or committee
appointed pursuant to Section 15.02.
"LP Certificate" shall mean a certificate issued by the Partnership
evidencing ownership of one or more Limited Partnership Interests, such
certificate to be in such form or forms as may be adopted by the General
Partner in its sole discretion, and which shall initially be substantially in
the form of Exhibit A to this Agreement.
"LP Interest Price" shall mean an amount per Limited Partnership
Interest as of any date of determination equal to the average of the last
reported sales price per Alliance Holding LP
6
Unit or, in the event that no such reported sale takes place on any such day,
the average of the last reported bid and ask prices per Alliance Holding LP
Unit, on the NYSE (or any alternate national securities market on which
Alliance Holding LP Units are traded) for the five trading days immediately
prior to such day.
"Majority Approval" shall mean, as of any Record Date, (a) the
written consent of Limited Partners who are Limited Partners with respect to
more than 50% of the issued and outstanding Limited Partnership Interests or
(b) the affirmative vote of Limited Partners who are Limited Partners with
respect to more than 50% of the Limited Partnership Interests of those Limited
Partners voting with respect to the matter at a meeting at which a quorum is
present, in each case excluding, if applicable, the number of Limited
Partnership Interests held by Alliance Holding multiplied by a fraction, the
numerator of which is the number of issued and outstanding Alliance Holding LP
Units and Alliance Holding partnership interests held by persons ineligible to
vote pursuant to the following sentence and the denominator of which is the
number of issued and outstanding Alliance Holding LP Units and Alliance
Holding partnership interests. If a Majority Approval is being sought with
respect to a transaction described in Section 6.12 (other than a transaction
pursuant to Section 2.05), the Limited Partnership Interests of any employee
of the Partnership, Alliance Holding, any Person controlled by the Partnership
or Alliance Holding, or the General Partner who will be employed by or have
any direct or indirect equity interest in any Person acquiring Partnership
Assets shall be ineligible to vote with respect to such Majority Approval and
shall not be counted for purposes of determining the issued and outstanding
Limited Partnership Interests. Each Limited Partnership Interest shall be
entitled to one vote for this purpose. For purposes of this definition, a
Limited Partnership Interest held by an employee or held for the benefit of an
employee, or by or for the benefit of a member of the family of an employee,
shall be treated as if owned by that employee. A determination by the General
Partner that Limited Partnership Interests are held by or for the benefit of
an employee or a member of the family of an employee and that such employee is
ineligible to vote with respect to a particular matter by reason of this
definition shall be binding and conclusive; in making such a determination,
the General Partner may rely on information known to it and need not make a
special investigation.
"Majority Outside Approval" shall mean as of any Record Date, written
consent or affirmative vote of Limited Partners (other than the General
Partner, its Corporate Affiliates and, if applicable, Persons holding Limited
Partnership Interests ineligible to vote pursuant to the following sentence)
who are Limited Partners with respect to more than 50% of the issued and
outstanding Limited Partnership Interests held by such Persons (excluding the
number of Limited Partnership Interests held by Alliance Holding multiplied by
a fraction, the numerator of which is the number of issued and outstanding
Alliance Holding LP Units and Alliance Holding limited partnership interests
held by the General Partner and its Corporate Affiliates and, if applicable,
Persons ineligible to vote pursuant to the following sentence, and the
denominator of which is the number of issued and outstanding Alliance Holding
LP Units and Alliance Holding limited partnership interests) . If Majority
Outside Approval is being sought in connection with a transaction described in
Section 6.12, the Limited Partnership Interests of any employee of the
7
Partnership, Alliance Holding, any Person controlled by the Partnership or
Alliance Holding, or the General Partner who will be employed by or have any
direct or indirect equity interest in any Person acquiring Partnership Assets
(in connection with a transaction described in Section 6.12) shall be
ineligible to vote with respect to such Majority Outside Approval. Each
Limited Partnership Interest shall be entitled to one vote for this purpose.
For purposes of this definition, a Limited Partnership Interest held by an
employee or held for the benefit of an employee, or by or for the benefit of a
member of the family of an employee, shall be treated as if owned by that
employee. A determination by the General Partner that Limited Partnership
Interests are held by or for the benefit of an employee or a member of the
family of an employee and that such employee is ineligible to vote with
respect to a particular matter by reason of this definition shall be binding
and conclusive; in making such a determination, the General Partner may rely
on information known to it and need not make a special investigation.
"National Securities Exchange" shall mean an exchange registered with
the Commission under Section 6(a) of the Securities Exchange Act including,
but not limited to, the New York Stock Exchange, Inc.
"Net Income" and "Net Loss" shall mean an amount equal to the
Partnership's taxable income or taxable loss as determined for federal income
tax purposes for a relevant period, adjusted as provided herein. Net Income
and Net Loss shall be determined in accordance with Section 703(a) of the Code
(for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be included
in taxable income or loss), and adjusted as provided in Section 4.10. There
shall be excluded from Net Income and Net Loss (a) any Depreciation of the
Partnership, (b) any item of income, deduction, gain or loss resulting from a
transaction the proceeds of which are distributed pursuant to Section 5.02 and
(c) any item of income, deduction, gain or loss specially allocated pursuant
to Section 5.05.
"Net Value" shall mean in the case of any Contribution of assets, the
fair market value of such assets reduced by the amount of any indebtedness
either assumed by the Partnership upon such Contribution or to which such
assets are subject when contributed, in each case as such fair market value
shall be determined by the General Partner using such reasonable methods of
valuation as it in its sole discretion deems appropriate, unless such assets
are to be contributed by either the General Partner or any of its Affiliates
and are other than cash or cash equivalents, in which case the fair market
value shall be determined by an Appraiser.
"New Entity" has the meaning specified in Section 2.05.
"Operating Cash Flow" shall mean:
(A) For periods ending on or before December 31, 1999, the excess,
if any, of
(x) the sum of
8
(i) the net income (or loss as a negative amount) of the
Partnership and Persons controlled by it on a consolidated basis for
the period before extraordinary items, as determined in accordance
with generally accepted accounting principles,
(ii) depreciation or amortization of tangible and intangible
assets, losses on sales and other dispositions of assets and other
non-cash charges, to the extent any such item is included in
determining net income (or loss) for such period, all as determined
in accordance with generally accepted accounting principles,
(iii) the net increase in deferred income tax liabilities or
the net decrease in deferred income tax benefits during the period as
reflected on the Partnership's balance sheet (or if there is both
such an increase and such a decrease during the period, the sum of
the absolute amounts thereof), and
(iv) proceeds from sales or other dispositions of assets in
the ordinary course of business,
over
(y) the sum of
(i) gains on sales and other dispositions of assets for such
period to the extent included in determining net income (or loss) for
such period,
(ii) the net decrease in deferred income tax liabilities or
the net increase in deferred income tax benefits during the period as
reflected on the Partnership's balance sheet (or if there is both
such a decrease and such an increase during the period, the sum of
the absolute amounts thereof),
(iii) payments in respect of the principal of indebtedness
(interest being deducted in the determination of net income (loss))
incurred by the Partnership to fund capital expenditures to the
extent no reserve was deducted for such capital expenditures pursuant
to the definition of Available Cash Flow, and
(iv) amounts expended for the purchase of assets in the
ordinary course of business, to the extent no amount was retained for
such expenditures pursuant to clause (y) of the definition of
Available Cash Flow.
In determining Operating Cash Flow for periods ending on or before
December 31, 1999, there shall be excluded from net income (or loss)
(i) the net income (or loss) of any entity not controlled by
the Partnership in which the Partnership or any Person controlled by
it has a joint interest with another
9
Person, except to the extent of the amount of dividends or other
distributions in cash, cash equivalents or other marketable
securities (at the realizable value thereof) actually paid by such
entity to the Partnership or any Person controlled by it during the
period,
(ii) except to the extent includible in net income pursuant
to the foregoing clause (i), the income (or loss) of any acquired
entity prior to the date it becomes controlled by the Partnership or
is merged into or consolidated with the Partnership or any Person
controlled by the Partnership or that entity's assets are acquired by
the Partnership or any Person controlled by the Partnership, and
(iii) the income of any Person controlled by the Partnership
to the extent that the declaration or payment of dividends or similar
distributions by that Person of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Person.
For purposes of this definition, "other non-cash charges" shall mean
amounts that have been charged to income but that have either already
been paid by, or will never result in a cash payment by, the
Partnership or Persons controlled by it (or which will be or has been
funded by a Contribution by the General Partner pursuant to Section
4.01), including, but not limited to,
(i) non-cash expenses incurred under generally accepted
accounting principles in connection with sale by ACMC of Limited
Partnership Interests and Alliance Holding LP Units to employees of
the Partnership or Persons controlled by the Partnership or the grant
of warrants or options to purchase Limited Partnership Interests and
Alliance Holdings LP Units,
(ii) amortization of debt issuance costs, and
(iii) amortization of goodwill.
(B) For any period beginning after December 31, 1999, the excess, if
any, of
(x) the sum of
(i) the net cash provided from (or used in (expressed as a
negative amount)) operating activities of the Partnership and Persons
controlled by it on a consolidated basis for such period, as
reflected in the Partnership's consolidated statement of cash flows
for such period, determined in accordance with generally accepted
accounting principles, excluding increases or decreases in the
receivables and payables related to mutual fund sales activities for
such period,
10
(ii) proceeds received during such period from borrowings
and from sales and other dispositions of assets in the ordinary
course of business, and
(iii) income for such period from investments in marketable
securities, liquid investments and other financial instruments that
are acquired for investment purposes and that have a value that may
be readily established, including any such investment that may be
readily sold or otherwise liquidated in any mutual fund for which the
Partnership or any Person controlled by it serves as investment
manager or advisor, to the extent not otherwise included in (i) or
(ii) above;
over
(y) the sum of
(i) payments during such period in respect of the principal of
borrowings, and
(ii) amounts expended during such period for the purchase of
assets in the ordinary course of business in excess of any amount
retained in a prior period for such expenditures pursuant to clause
(y) of the definition of Available Cash Flow.
In determining net cash provided from (or used in) operating
activities of the Partnership and Persons controlled by it for any
period beginning after December 31, 1999 there shall be excluded from
net income (or loss)
(i) the net income (or loss) for such period of any entity
in which the Partnership has an interest which is not a controlling
interest, except to the extent of the amount of dividends or other
distributions in cash, cash equivalents or other marketable
securities (at the realizable value thereof) actually paid during
such period by such entity to the Partnership or any Person
controlled by it,
(ii) except to the extent includible in net income pursuant
to the foregoing clause (i), the income (or loss) for such period of
any acquired entity prior to the date it becomes controlled by the
Partnership or is merged into or consolidated with the Partnership or
any Person controlled by the Partnership or that entity's assets are
acquired by the Partnership or any Person controlled by the
Partnership, and
(iii) the income for such period of any Person controlled by
the Partnership to the extent that the declaration or payment of
dividends or similar distributions by that Person of that income is
not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Person.
11
(C) The determination of Operating Cash Flow for any period by the
General Partner shall, absent manifest error, be binding and conclusive. As
used in this definition, "control" has the meaning given to that term in the
definition of Affiliate.
"Opinion of Counsel" shall mean a written opinion of counsel (who may
be regular counsel to the Partnership, the General Partner or any Affiliate
thereof) selected by the General Partner.
"Opinion of Outside Counsel" shall mean a written opinion of counsel
(who may be regular counsel to the Partnership, the General Partner or any
Affiliate thereof, but who may not be an employee of the Partnership, the
General Partner or any Affiliate thereof) selected by the General Partner.
"Original Agreement of Limited Partnership" has the meaning specified
in the Recitals.
"Other General Partner" has the meaning specified in Section 12.04(c).
"Partner" shall mean any General Partner or Limited Partner.
"Partnership" shall mean the Delaware limited partnership existing
pursuant to this Agreement.
"Partnership's Accountants" shall mean such nationally recognized
firm of independent public accountants, as is selected, from time to time, by
the General Partner.
"Partnership Assets" shall mean all property, whether tangible or
intangible and whether real, personal or mixed, at any time owned by the
Partnership.
"Partnership Interest" shall mean, as to any Partner, all of the
interests of that Partner in the Partnership, including, but not limited to,
such Partner's (i) right to a distributive share of income and losses of the
Partnership, (ii) right to a distributive share of the Partnership Assets,
(iii) right, if the General Partner, to participate in the management of the
affairs of the Partnership, and (iv) right to vote on certain matters as set
forth herein.
"Percentage Interest" shall mean, subject to such adjustments as the
General Partner may determine in connection with the issuance of Limited
Partnership Interests pursuant to Section 4.02: (a) 1% as to the General
Partner, and (b) as to each Limited Partner, the product of (x) 99% and (y)
the quotient of (i) the number of Limited Partnership Interests held by such
Limited Partner at any time and (ii) the aggregate number of Limited
Partnership Interests held by all of the Limited Partners at such time.
"Person" shall mean any individual, corporation, association,
partnership, joint venture, trust, estate or other entity or organization.
12
"Purchase Date"shall mean the date determined by the General Partner
as the date for purchase of all issued and outstanding Limited Partnership
Interests (other than Limited Partnership Interests owned by the General
Partner and its Corporate Affiliates) pursuant to, and as specified in, the
"Notice of Election to Purchase" delivered pursuant to Article 16.
"Purchase Funds" shall mean an amount in cash equal to the aggregate
Purchase Price of all Limited Partnership Interests subject to purchase on the
Purchase Date in accordance with Article 16.
"Purchase Price" shall mean, as to any class or series, an amount per
Limited Partnership Interest equal to the greater of (i) the highest cash
price paid by the General Partner or any of its Affiliates for any Alliance
Holding LP Unit of such class or series purchased during the 90 days
immediately prior to the date on which the notice described in Article 16 is
first mailed, if any such purchase occurred during such period, or (ii) (a) if
the Alliance Holding LP Units of such class or series are listed or admitted
to trading on one or more National Securities Exchanges, the arithmetic mean
of the last reported sales prices per Alliance Holding LP Unit of such class
or series regular way or, in case no such reported sale has taken place on any
such date, the arithmetic mean of the last reported bid and asked prices per
Alliance Holding LP Unit of such class or series regular way for such date, in
either case on the principal National Securities Exchange on which the
Alliance Holding LP Units of such class or series are listed or admitted to
trading, for the 30 trading days immediately preceding the date of the mailing
of such notice; (b) if the Alliance Holding LP Units of such class or series
are not listed or admitted to trading on a National Securities Exchange but
are quoted through NASDAQ, the arithmetic mean of the last reported sales
prices per Alliance Holding LP Unit of such class or series regular way or, in
case no such reported sale has taken place on any such day or the last
reported sales price is not then quoted, the arithmetic mean of the last
reported bid and asked prices per Alliance Holding LP Unit of such class or
series regular way for such day quoted through NASDAQ, for the 30 trading days
immediately preceding the date of the mailing of such notice; or (c) if the
Alliance Holding LP Units of such class or series are not listed for trading
on a National Securities Exchange and are not quoted through NASDAQ, an amount
equal to the fair market value of an Alliance Holding LP Unit of such class or
series, as of the date of the mailing of such notice, as determined by an
Appraiser.
"Recapture Income" shall mean any gain recognized by the Partnership
(but computed without regard to any adjustment required by Section 734 or 743
of the Code) upon the disposition of any Partnership Asset that does not
constitute capital gain for federal income tax purposes because such gain
represents the recapture of deductions previously taken with respect to such
Partnership Asset.
"Record Date" shall mean the date established by the General Partner
for determining (i) the identity of Limited Partners entitled to notice of or
to vote at any meeting of Limited Partners, or any matter upon which the
General Partner seeks the consent of the Limited Partners, or entitled to
exercise rights in respect of any other lawful action of Limited Partners, or
(ii) the
13
identity of the Partners entitled to receive any report pursuant to the
provisions hereof or any distribution pursuant to Article 5 or 15.
"Record Holder(s)" shall mean the Persons shown as Limited Partners
on the books and records of the Partnership as of the close of business on a
particular day.
"Registration Statement" shall mean the registration statement of the
Partnership, dated August 3, 1999, including the proxy statement/prospectus
and the exchange offer prospectus distributed in connection with the special
meeting of unitholders of Alliance Holding held September 22, 1999 and the
exchange offer.
"Reorganization" has the meaning specified in the Recitals.
"Reorganization Agreement" shall mean the Agreement and Plan of
Reorganization dated as of August 20, 1999 among the Partnership, Alliance
Holding, ACMC and ELAS, as the same may be amended, supplemented or restated
from time to time.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as it may be amended from time to time, and any successor to such
statute.
"Substituted Limited Partner" shall mean a Person who is admitted as
a Limited Partner in the Partnership pursuant to this Agreement in place of,
and with all the rights of, a Limited Partner pursuant to Section 12.03, and
who is shown as a limited partner on the books and records of the Partnership.
"Tax Determination" shall mean an Opinion of Outside Counsel
(containing such conditions, limitations and qualifications as are acceptable
to the General Partner in its sole discretion) to the effect that, as a result
of the proposed transaction, neither the Partnership nor Alliance Holding will
suffer an Adverse Partnership Tax Consequence. Notwithstanding any provision
of this Agreement to the contrary, a Tax Determination shall not be required
in connection with or as a condition to any action at any time after (x) the
General Partner has taken any action pursuant to clause (y) of the first
sentence of Section 2.05 or (y) an Adverse Tax Determination.
"Tax Payment" has the meaning specified in Section 6.14(b).
"Unrealized Gain" shall mean, as of any date of determination, the
excess, if any, of the fair market value of property (as determined under
Section 4.10(c) or 4.10(d) as of such date of determination) over the Carrying
Value of such property as of such date of determination (prior to any
adjustment to be made pursuant to Section 4.10(c) or 4.10(d) as of such date).
"Unrealized Loss" shall mean, as of any date of determination, the
excess, if any, of the Carrying Value of property as of such date of
determination (prior to any adjustment to be made
14
pursuant to Section 4.10(c) or 4.10(d) as of such date) over the fair market
value of such property (as determined under Section 4.10(c) or 4.10(d) as of
such date of determination).
ARTICLE 2
GENERAL PROVISIONS
SECTION 2.01. Formation; Partnership Name. (a) The Partnership was
formed as a Delaware limited partnership pursuant to the filing of the
Certificate of Limited Partnership in the Office of the Secretary of State of
the State of Delaware and was governed by the Original Agreement of Limited
Partnership. In connection with the Reorganization, the Partnership is being
continued as a Delaware limited partnership pursuant to the terms of this
Agreement.
(b) "Alliance Capital Management L.P." shall be the name of the
Partnership. The business of the Partnership shall be conducted under such
name or such other name as the General Partner may from time to time in its
sole discretion determine. "Limited Partnership" or "Ltd." or "L.P." (or
similar words or letters) shall be included in the Partnership's name where
necessary or appropriate to maintain the limited liability of the Limited
Partners or otherwise for the purpose of complying with the laws of any
jurisdiction that so requires or as the General Partner may deem appropriate.
SECTION 2.02. Names and Addresses of Partners. The general partner of
the Partnership is ACMC. The business address of the General Partner is ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The General Partner may
change its address at any time and from time to time. The names and business,
residence or mailing addresses of the Limited Partners and the date upon which
each such Person became a Limited Partner are as set forth from time to time
in the records of the Partnership.
SECTION 2.03. Principal Office, Registered Agent and Registered
Office of the Partnership. (a) The principal office of the Partnership shall
be located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The
General Partner in its sole discretion may, at any time, and from time to
time, change the location of the Partnership's principal office within or
outside the State of Delaware and may establish such additional offices of the
Partnership within or outside the State of Delaware as it may from time to
time determine.
(b) The name of the registered agent for service of process on the
Partnership in the State of Delaware is The Corporation Trust Company. The
address of the registered agent and the address of the registered office of
the Partnership in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 2.04. Term. The Partnership commenced upon the filing of the
Certificate of Limited Partnership in accordance with the Delaware Act and
shall continue in existence until
15
dissolved, and its Certificate of Limited Partnership canceled, in accordance
with any provisions of this Agreement and the Delaware Act.
SECTION 2.05. Possible Action in the Event of Adverse Tax
Developments. Notwithstanding anything to the contrary contained in this
Agreement, in the event that the General Partner reasonably believes that as a
result of (i) the enactment (or imminent enactment) of any legislation, (ii)
the publication of any temporary, proposed or final regulation by the United
States Department of the Treasury or any ruling by the Internal Revenue
Service, (iii) a judicial decision or (iv) other actions or events not caused
by the General Partner or its Corporate Affiliates for the purpose of invoking
this Section 2.05, there is a substantial risk of an Adverse Partnership Tax
Consequence occurring within one year of the actions or events described in
clauses (i) - (iv), the General Partner shall have the right, in its sole
discretion and without the approval of the Limited Partners or any other
Partners, to (x) impose such restrictions on transfer of the Limited
Partnership Interests as the General Partner believes may be necessary or
desirable to prevent the occurrence of the Adverse Partnership Tax
Consequence, including making any amendments to this Agreement as the General
Partner in its sole discretion may determine to be necessary or appropriate in
order to impose such restrictions or (y) modify, restructure or reorganize the
Partnership (by the transfer of all or substantially all of the assets of the
Partnership to a newly-formed corporation or entity or otherwise) as, or
transfer all or substantially all of the assets of the Partnership to, a
corporation, trust or any other type of legal entity (a "New Entity"), in the
manner determined by the General Partner in its sole discretion, in a
transaction in which (I) each outstanding Limited Partnership Interest of the
same class or series is treated in the same manner, and (II) if the Limited
Partnership Interests and General Partnership Interest are converted into
equity securities of the New Entity, the relative fair market values of the
equity securities into which Limited Partnership Interests and the General
Partnership Interest are converted are in proportion to the amounts each of
the Limited Partners and the General Partner would have been entitled to
receive upon a liquidation of the Partnership pursuant to Section 15.02, and
(III) if all or substantially all of the assets of the Partnership are
transferred to a New Entity, the Partnership may retain all of the equity
interests in the New Entity until such time, if any, as the General Partner,
in its sole discretion and without the approval of any other Partners, elects
to dissolve the Partnership, in which case the Limited Partners and General
Partner will receive the equity interests in the New Entity in proportion to
the amounts each of the Limited Partners and the General Partner would have
been entitled to receive upon a liquidation of the Partnership pursuant to
Section 15.02, except that an action described in this clause (y) may not be
taken solely on the basis of a proposed regulation described in clause (ii)
unless the proposed regulation would by its terms, upon becoming final, apply
to periods before the date it became final. Notwithstanding anything herein to
the contrary, the General Partner may without Majority Approval effect a
transaction described in clause (y) of the preceding sentence if the New
Entity is a corporation. In connection with any transaction described in
clause (y) of the first sentence of this Section, the General Partner may
issue to itself a sufficient number of Limited Partnership Interests or other
securities or otherwise restructure or reorganize the Partnership so that the
General Partner and its Corporate Affiliates will own a sufficient percentage
(but no more) of the Limited Partnership Interests or other
16
securities so as to allow the Partnership or the New Entity to be included for
federal tax purposes in the affiliated group of which the General Partner is a
member; Limited Partnership Interests or securities may be acquired by the
General Partner pursuant to this sentence only for the fair market value
thereof as determined by an Appraiser. In connection with any transaction
described in clause (y) of the first sentence of this Section, the business of
the Partnership may be continued by the New Entity or otherwise and if the
Partnership has been restructured or reorganized as a New Entity and the
Limited Partnership Interests and General Partnership Interest are converted
into equity securities of the New Entity, the Partnership Interests shall be
converted into equity of the New Entity in the manner determined by the
General Partner in its sole discretion and without the approval of the Limited
Partners, subject to clause (y) above. Notwithstanding the foregoing, no such
modification, restructuring or reorganization shall take place unless the
Partnership shall have received an Opinion of Outside Counsel to the effect
that the liability of the holders of the Limited Partnership Interests or the
equity interests in the New Entity into which the Limited Partnership
Interests are converted pursuant to the law of the jurisdiction of the New
Entity or Entities for the debts and obligations of the New Entity or Entities
shall not, unless such Limited Partners or holders of such equity interests
take part in the control of the business of the New Entity or Entities, exceed
that which otherwise had been applicable to the Limited Partners of the
Partnership.
ARTICLE 3
PURPOSE
SECTION 3.01. Purpose. The purpose and nature of the business to be
conducted and promoted by the Partnership shall be (a) to engage in the
investment management and advisory business and (b) to engage in any other
lawful activities for which limited partnerships may be organized under the
Delaware Act.
SECTION 3.02. Powers. The Partnership shall be empowered to do any
and all acts and things necessary, appropriate, proper, advisable or
convenient for or incidental to the furtherance and accomplishment of the
purposes and businesses described herein and for the protection and benefit of
the Partnership, including, but not limited to, the following:
(a) To borrow money and issue evidences of indebtedness, to refinance
such indebtedness, to secure the same by mortgages, deeds of trust, security
interest, pledges or other liens on all or any part of the Partnership Assets,
to enter into contracts of guaranty or suretyship, and to confess and
authorize confession of judgment in connection with the foregoing or
otherwise;
(b) To secure, maintain and pay for insurance against liability or
other loss with respect to the activities and assets of the Partnership
(including, but not limited to, insurance against liabilities under Section
6.09);
17
(c) To employ or retain such Persons as may be necessary or appropriate
for the conduct of the Partnership's business, including permanent, temporary
or part-time employees and attorneys, accountants, agents, consultants and
contractors, and to have employees and agents who may be designated as
officers with titles including, but not limited to, "chairman," "vice
chairman," "president," "executive vice president," "senior vice president,"
"vice president," "assistant vice president," "treasurer," "controller,"
"secretary," "assistant secretary," and "assistant treasurer" and who in such
capacity may act for and on behalf of the Partnership, as and to the extent
authorized by the General Partner, including, but not limited to, the
following:
(i) represent the Partnership in its dealings with third
parties, and execute any kind of document or contract on behalf of the
Partnership;
(ii) approve the sale, exchange, lease, sublease, mortgage,
assignment or other transfer or acquisition of, or granting or
acquiring of a security interest in, any asset or assets of the
Partnership; or
(iii) propose, approve or disapprove of, and take, action for
and on behalf of the Partnership with respect to the operations of
the Partnership;
(d) To acquire, own, hold a leasehold interest in, maintain, use,
lease, sublease, manage, operate, sell, exchange, transfer or otherwise deal
in assets and property as may be necessary, convenient or beneficial for the
Partnership;
(e) To incur expenses and to enter into, guarantee, perform and carry
out contracts or commitments of any kind, to assume obligations, and to
execute, deliver, acknowledge and file documents in furtherance of the
purposes and business of the Partnership;
(f) To pay, collect, compromise, arbitrate, litigate or otherwise
adjust, contest or settle any and all claims or demands of or against the
Partnership;
(g) To invest in interest-bearing and non-interest-bearing accounts and
short-term investments of any kind and nature whatsoever, including, but not
limited to, obligations of federal, state and local governments and their
agencies, mutual funds (including money market funds), mortgage-backed
securities, commercial paper, repurchase agreements, time deposits,
certificates of deposit of commercial banks, savings banks or savings and loan
associations and equity or debt securities of any type;
(h) To transfer assets to joint ventures, other partnerships,
corporations or other business entities in which the Partnership is or thereby
becomes a participant upon such terms, and subject to such conditions
consistent with applicable law, as the General Partner deems appropriate; and
18
(i) To engage in any kind of activity and to enter into and perform
obligations of any kind with the General Partner or Affiliates of the General
Partner or otherwise, necessary to or in connection with, or incidental to,
the accomplishment of the purposes and business of the Partnership, so long as
said activities and obligations may be lawfully engaged in or performed by a
limited partnership under the Delaware Act.
ARTICLE 4
CAPITAL CONTRIBUTIONS
SECTION 4.01. General Partner, Limited Partners. (a) In accordance
with the terms of the Original Agreement of Limited Partnership, ACMC was
admitted as the General Partner of the Partnership and Alliance Holding was
admitted as the initial Limited Partner of the Partnership. At such time, each
of ACMC and Alliance Holding made a contribution to the capital of the
Partnership of $50 in exchange for an economic interest having a value equal
to $50 in the Partnership.
(b) At the Effective Time, pursuant to the Reorganization Agreement and
the terms hereof, (i) Alliance Holding shall contribute all of its assets
(other than the Holdback Interests) to the Partnership in exchange for the
issuance by the Partnership of all of the Limited Partnership Interests and
the General Partnership Interest to Alliance Holding, and Alliance Holding
shall be deemed admitted as a Limited Partner with respect to all Limited
Partnership Interests issued to it, (ii) the Partnership shall assume all or
substantially all of the liabilities of Alliance Holding and (iii) the
unitholders of Alliance Holding who exchange their Alliance Holding LP Units
for Limited Partnership Interests pursuant to the Exchange shall be deemed
admitted as Limited Partners in respect thereof. Alliance Holding shall be
deemed to have contributed to the Partnership, in exchange for the
above-referenced Limited Partnership Interests and the General Partnership
Interest, an amount equal to the fair market value of the assets so
transferred.
(c) Immediately after the Effective Time, pursuant to the
Reorganization Agreement and the terms hereof, (i) ELAS and its Affiliates who
hold Alliance Holding LP Units shall exchange an aggregate of 95,069,125
Alliance Holding LP Units for an equal number of Limited Partnership Interests
and shall be deemed admitted as Limited Partners in respect of such Limited
Partnership Interests and (ii) ACMC shall exchange its general partner
interest in Alliance Holding for the General Partnership Interest and shall be
deemed to hold the General Partnership Interest in its capacity as General
Partner of the Partnership.
(d) The General Partner will make, or cause one or more of its
Corporate Affiliates to make, payments to the Partnership in an amount equal
to the Reorganization Costs (as such term is defined in the Indemnification
and Reimbursement Agreement), without duplication with respect to any amounts
paid pursuant to the Alliance Holding Partnership Agreement, in accordance
with the Indemnification and Reimbursement Agreement. The
19
General Partner shall not be entitled to receive any additional Partnership
Interests in exchange for such payments.
(e) Alliance Holding may, following the Effective Time, make from time
to time Contributions to the Partnership consisting of any assets or property
(other than cash and cash equivalents required for working capital purposes of
Alliance Holding) acquired by it in accordance with the Alliance Holding
Partnership Agreement in exchange for the issuance by the Partnership of
additional Limited Partnership Interests; provided that:
(i) if the Contribution is cash equal to the net proceeds
obtained from the sale or issuance of Alliance Holding LP Units or
Alliance Holding limited partnership interests, (x) Alliance Holding
shall receive a number of Limited Partnership Interests equal to the
number of Alliance Holding LP Units or Alliance Holding limited
partnership interests so sold or issued and (y) Alliance Holding
shall make such Contribution as soon as practicable after the receipt
of such net proceeds;
(ii) if the Contribution consists of assets obtained in
exchange for the sale or issuance of Alliance Holding LP Units or
Alliance Holding limited partnership interests, (x) Alliance Holding
shall receive a number of Limited Partnership Interests equal to the
number of Alliance Holding LP Units or Alliance Holding limited
partnership interests so sold or issued and (y) Alliance Holding
shall make such Contribution as soon as practicable after the receipt
of such assets; and
(iii) if the Contribution is other than pursuant to clauses (i)
or (ii) of this proviso or if any event occurs which the General
Partner in its sole discretion determines would render inappropriate
the use of the one-for-one exchange ratio of Alliance Holding LP
Units or Alliance Holding limited partnership interests for Limited
Partnership Interests and vice versa, the number of Limited
Partnership Interests to be received by Alliance Holding in exchange
for such Contribution for purposes of this Section 4.01(e) shall be
determined by the General Partner in its sole discretion.
SECTION 4.02. Additional Issuances of Securities. (a) The General
Partner, in order to raise additional capital, to acquire assets, to redeem or
retire Partnership debt, or for any other Partnership purpose as it may
determine in good faith is in the best interests of the Partnership, is
authorized to cause the Partnership to issue Limited Partnership Interests, or
classes or series thereof (in addition to the Limited Partnership Interests
issued prior to the date of this Agreement as referenced in Sections 4.01(b)
and 4.01(c)), from time to time to Partners or to other Persons. The foregoing
action may be taken, and Persons to whom Limited Partnership Interests are
issued may be admitted as, or become, Additional Limited Partners as the
General Partner may determine without the necessity of obtaining approval of
Partners. The General Partner is also
20
authorized to cause the issuance of other types of securities of the
Partnership from time to time to Partners or other Persons on terms and
conditions established in the sole discretion of the General Partner, without
the necessity of obtaining approval of Partners. Such securities may include,
but shall not be limited to, unsecured and secured debt obligations of the
Partnership, debt obligations of the Partnership convertible into any class or
series of Limited Partnership Interests that may be issued by the Partnership,
options, rights or warrants to purchase any such class or series of Limited
Partnership Interests or any combination of any of the foregoing. There shall
be no limit on the number of Limited Partnership Interests or other securities
that may be so issued, and the General Partner shall have sole discretion in
determining the consideration and terms and conditions with respect to any
future issuance of Limited Partnership Interests or other securities. The
General Partner shall do all things necessary to comply with the Delaware Act
and is authorized and directed to do all things it deems to be necessary or
advisable in connection with any such future issuance, including, but not
limited to, compliance with any statute, rule, regulation or guideline of any
federal, state or other governmental agency. The Partnership may assume
liabilities and hypothecate its property in connection with any such issuance.
(b) Limited Partnership Interests to be issued by the Partnership
pursuant to Section 4.02(a) shall be issuable from time to time in one or more
classes or series, at such price, and with such designations, preferences and
relative participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to existing classes or series of
Limited Partnership Interests, all as shall be fixed by the General Partner in
the exercise of its sole discretion, including, but not limited to: (i) the
allocation, for federal income and other tax purposes, to such class or series
of Limited Partnership Interests of items of Partnership income, gain, loss,
deduction and credit; (ii) the rights of such class or series of Limited
Partnership Interests to share in Partnership distributions; (iii) the rights
of such class or series of Limited Partnership Interests upon dissolution and
liquidation of the Partnership; (iv) whether such class or series of Limited
Partnership Interests is redeemable by the Partnership and, if so, the price
at which, and the terms and conditions on which, such class or series of
Limited Partnership Interests may be redeemed by the Partnership; (v) whether
such class or series of Limited Partnership Interests is issued with the
privilege of conversion and, if so, the rate at and the terms and conditions
upon which such class or series of Limited Partnership Interests may be
converted into any other class or series of Limited Partnership Interests;
(vi) the terms and conditions of the issuance of such class or series Limited
Partnership Interests, and all other matters relating to the assignment
thereof; and (vii) the rights of such class or series of Limited Partnership
Interests to vote on matters relating to the Partnership and this Agreement.
(c) Notwithstanding the other provisions of this Section 4.02, except
as provided in Section 2.05, the Partnership will not issue any Limited
Partnership Interests or classes or series thereof or any other type of
security unless:
(i) the Partnership receives an Assignment Determination,
Limited Liability Determination and a Tax Determination with respect to
such issuance; or
21
(ii) such issuance occurs pursuant to the employee benefit
plans sponsored by the General Partner, the Partnership, Alliance
Holding or any Persons controlled by the Partnership or Alliance
Holding in accordance with Section 6.15 and the corresponding
issuance by Alliance Holding is in accordance with Section
4.02(c)(ii) of the Alliance Holding Partnership Agreement.
(d) Upon the issuance pursuant to this Section 4.02 of any class or
series of Limited Partnership Interests, or any other securities, the General
Partner (pursuant to the General Partner's powers of attorney from the Limited
Partners), without the approval at the time of any Partner (each Person
accepting Limited Partnership Interests being deemed to approve of such
amendment), may amend any provision of this Agreement, and execute, swear to,
acknowledge, deliver, file and record, if required, an amended Certificate of
Limited Partnership and whatever other documents may be required in connection
therewith, as shall be necessary or desirable to reflect the authorization and
issuance of such class or series of Limited Partnership Interests or other
securities and the relative rights and preferences of such class or series of
Limited Partnership Interests or other securities.
(e) The General Partner or any Affiliate of the General Partner may,
but shall not be obligated to, make Contributions to the Partnership in
exchange for Limited Partnership Interests, provided that the number of
Limited Partnership Interests issued in exchange for any such Contribution
shall not exceed the Net Value of the Contribution divided by the LP Interest
Price of such class and series. The General Partner shall hold such Limited
Partnership Interest in its capacity as a Limited Partner of the Partnership.
SECTION 4.03. Record of Contributions. The books and records of the
Partnership shall include true and full information regarding the amount of
cash and cash equivalents and a designation and statement of the Net Value of
any other property or other consideration contributed by each Partner to the
Partnership.
SECTION 4.04. Splits and Combinations. (a) The General Partner may
cause the Partnership to make a distribution in Limited Partnership Interests
to all Limited Partners of any class or series or may effect a subdivision or
combination of Limited Partnership Interests, but in each case only on a pro
rata basis so that, after such distribution, subdivision or combination, each
Limited Partner shall have the same proportionate economic interest in the
Partnership as before such distribution, subdivision or combination, subject
to Section 4.06, and provided, however, that no such distribution, subdivision
or combination may be made unless a distribution, subdivision or combination
at the same proportionate rate is simultaneously made by Alliance Holding with
respect to Alliance Holding LP Units and Alliance Holding GP Units.
(b) Whenever such a distribution, subdivision or combination is
declared, the General Partner shall select a Record Date (which shall not be
prior to the date of the declaration) as of which the distribution,
subdivision or combination shall be effective and shall notify each Limited
Partner of the distribution, subdivision or combination.
22
(c) Promptly following such distribution, subdivision or combination,
the General Partner may cause the Partnership to issue to the Limited Partners
as of such Record Date new LP Certificates representing the new number of
Limited Partnership Interests, or adopt such other procedures as it may deem
appropriate to reflect such distribution, subdivision or combination;
provided, however, that in the case of any such distribution, subdivision or
combination resulting in a smaller total number of Limited Partnership
Interests outstanding, the General Partner may require, as a condition to the
delivery of such new LP Certificate, the surrender of any LP Certificate
representing the Limited Partnership Interests prior to such declaration.
(d) The General Partner shall give notice to Partners of any
distribution, subdivision or combination pursuant to this Section 4.04 at
least 10 days prior to the effective date thereof.
SECTION 4.05. No Preemptive Rights. No Person shall be granted or
have any preemptive, preferential or other similar right with respect to (i)
additional Contributions, (ii) the issuance or sale of new, unissued or
treasury Limited Partnership Interests, (iii) the issuance or sale of any
obligations, evidences of indebtedness or other securities of the Partnership,
whether or not convertible into or exchangeable for, or carrying or
accompanied by any rights to receive, purchase or subscribe to, any such new,
unissued or treasury Limited Partnership Interests, (iv) the issuance of any
subscription right to or right to receive, or any warrant or option for the
purchase of, any of the foregoing Limited Partnership Interests or securities,
or (v) the issuance or sale of any other Limited Partnership Interests or
securities that may be issued or sold by the Partnership.
SECTION 4.06. No Fractional Interests. No fractional Limited
Partnership Interests shall be issued by the Partnership; instead, in the sole
discretion of the General Partner, each fractional Limited Partnership
Interest shall be rounded to the nearest whole Limited Partnership Interest
(the next higher whole Limited Partnership Interest if the fraction is
precisely 1/2) or an amount equal to the product of the LP Interest Price and
such fraction shall be paid in cash by the Partnership.
SECTION 4.07. No Withdrawal. No Person shall be entitled to withdraw
any part of his Contribution or the amount of his Capital Account, or to
receive any distribution from the Partnership, except as otherwise provided in
this Agreement.
SECTION 4.08. Loans from Partners; No Interest on Capital Account
Balances. If any Partner shall advance funds to the Partnership in excess of
the amounts required hereunder to be contributed by it to the capital of the
Partnership, such advance shall not be considered a Contribution and the
making of such advance shall neither result in any increase in the amount of
the Capital Account of such Partner nor entitle such Partner to any increase
in its Percentage Interest. The amount of any such advance shall be a debt of
the Partnership to such Partner and shall be payable or collectible only out
of the Partnership Assets in accordance with the terms
23
and conditions upon which such advance is made. No interest shall be paid by
the Partnership on Contributions or on the amount of any Capital Account.
SECTION 4.09. Capital Accounts. The Partnership shall maintain for
each Partner (which terms for purposes of this Section 4.09, Section 4.10 and
Article 5 shall refer to the beneficial owner of an interest held by a nominee
in any case in which the nominee has furnished the identity of such owner to
the Partnership pursuant to Section 6031(c) of the Code) a separate Capital
Account in accordance with Section 704 of the Code. The initial Capital
Account of any Person who becomes a Partner by making a Contribution to the
Partnership shall be equal to the cash amount or Net Value of all
Contributions made by such Person to the Partnership. Each Capital Account
shall be increased by (A) the cash amount or Net Value of all Contributions
made by such Person to the Partnership pursuant to this Agreement and (B) all
items of Partnership income and gain computed in accordance with Section
4.10(a) and allocated to such Person pursuant to Section 5.04 and Section
5.05, and decreased by (A) the cash amount or Net Value of all Distributions
made to such Person pursuant to this Agreement and (B) all items of
Partnership deduction and loss computed in accordance with Section 4.10(a) and
allocated to such Person pursuant to Section 5.04 and Section 5.05, and shall
otherwise be maintained in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv). Provisions of this Section 4.09 shall, to the extent not
inconsistent with the terms thereof, be construed in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv). Each Person who holds one or more
Partnership Interests shall have one Capital Account reflecting all
Partnership Interests owned by such Person.
SECTION 4.10. Capital Account Calculations and Adjustments. (a) For
purposes of computing the amount of any item of income, gain, deduction or
loss to be reflected in the Capital Accounts, the determination, recognition
and classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes (including any
method of depreciation, cost recovery or amortization used for this purpose),
provided that:
(i) In accordance with the requirements of Section 704(b) and
Section 704(c) of the Code and Treasury Regulation Section
1.704-1(b)(2)(iv)(d), any deductions for depreciation, cost recovery
or amortization attributable to Contributed Property shall be
determined as if the adjusted basis of such property on the date it
was acquired or deemed to be acquired by the Partnership was equal to
the Net Value of such property. Upon an adjustment pursuant to
Section 4.10(c) to the Carrying Value of any Partnership Asset
subject to depreciation, cost recovery or amortization, any further
deductions for such depreciation, cost recovery or amortization
attributable to such Partnership Asset shall be determined as if the
adjusted basis of such Partnership Asset was equal to the Carrying
Value of such property immediately following such adjustment.
24
(ii) Any income, gain or loss attributable to the taxable
disposition of any property shall be determined by the Partnership as
if the adjusted basis of such property as of such date of disposition
was equal in amount to the Partnership's Carrying Value with respect
to such property as of such date.
(iii) The amounts of any adjustments to the basis (or Carrying
Values) of Partnership Assets made pursuant to Section 743 of the
Code shall not be reflected in Capital Accounts, but the amounts of
any adjustments to the basis (or Carrying Values) of Partnership
Assets made pursuant to Section 734 of the Code as a result of the
Distribution of property by the Partnership to a Partner shall (i) be
reflected in the Capital Account of the Person receiving such
Distribution in the case of a Distribution in liquidation of such
Person's interest in the Partnership and (ii) otherwise be reflected
in Capital Accounts in the manner in which the unrealized income and
gain that is displaced by such adjustments would have been shared had
the property been sold at its Carrying Value immediately prior to
such adjustments.
(iv) The computation of all items of income, gain, loss and
deduction shall be made, as to those items described in Section
705(a)(1)(B) or Section 705(a)(2)(B) of the Code, without regard to
the fact that such items are not includible in gross income or are
neither currently deductible nor capitalizable for federal income tax
purposes. For this purpose, amounts paid or incurred to organize the
Partnership or to promote the sale of interests in the Partnership
that are neither deductible nor amortizable under Section 709 of the
Code, and deductions for any losses incurred in connection with the
sale or exchange of Partnership Assets disallowed pursuant to Section
267(a)(1) or Section 707(b) of the Code, shall be treated as
expenditures described in Section 705(a)(2)(B) of the Code.
(b) In the case of the transfer of a Limited Partnership Interest or
the General Partnership Interest, the transferee of such Limited Partnership
Interest or the General Partnership Interest shall succeed to a Capital
Account relating to the Limited Partnership Interest or the General
Partnership Interest transferred and the Capital Account of the transferor
shall be adjusted to reflect the Capital Account of the transferee.
(c) To the extent that the General Partner in its sole discretion deems
it appropriate (A) immediately prior to an issuance of additional Limited
Partnership Interests for Contributions pursuant to Section 4.02, or (B) to
reflect the sale, exchange or other disposition of all or substantially all of
the Partnership Assets during any fiscal year in which such a sale, exchange
or other disposition occurs, the Capital Accounts of all Partners and the
Carrying Values of all Partnership Assets may be adjusted in accordance with
Treasury Regulation Section 1.704-1(b)(2)(iv)(f) (consistent with the
provisions hereof) upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to each Partnership Asset as if such Unrealized
25
Gain or Unrealized Loss had been recognized upon an actual sale of each such
Partnership Asset at such time and had been allocated to the Partners pursuant
to Sections 5.04 and 5.05. Such Unrealized Gain or Unrealized Loss shall be
determined by the General Partner using such reasonable methods of valuation
as it in its sole discretion deems appropriate.
(d) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(e), immediately prior to the Distribution of any Partnership
Asset in kind, the Capital Accounts of all Partners and the Carrying Values of
all such Partnership Assets shall be adjusted (consistent with the provisions
hereof) upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to each such Partnership Asset as if such Unrealized Gain or
Unrealized Loss had been recognized upon an actual sale of each such
Partnership Asset immediately prior to such distribution and had been
allocated to the Partners, at such time, pursuant to Sections 5.04 and 5.05.
Such Unrealized Gain or Unrealized Loss shall be determined by the General
Partner in its sole discretion and such determination shall be binding and
conclusive upon the Partnership and Partners.
ARTICLE 5
DISTRIBUTIONS AND ALLOCATIONS
SECTION 5.01. Pass-Through Cash Distributions. Within 75 days after
the last day of each calendar quarter of the Partnership, the General Partner
shall distribute in cash the Partnership's Available Cash Flow. Such
distributions shall be made 1% to the General Partner and 99% among the
Limited Partners who were Record Holders on such Record Date as shall be
selected by the General Partner in its sole discretion, pro rata in accordance
with their Percentage Interests.
SECTION 5.02. Special Distributions. Any Distributions (other than a
Distribution made (x) from Available Cash Flow, or (y) in connection with the
dissolution of the Partnership) may be made by the General Partner in such
amounts and at such times as the General Partner, in its sole discretion, may
determine, 1% to the General Partner and 99% among all Limited Partners, pro
rata in accordance with their Percentage Interests.
SECTION 5.03. General Rules with Respect to Distributions. (a) The
General Partner is authorized to distribute property in kind only in
connection with the dissolution of the Partnership pursuant to Article 15.
(b) The General Partner shall specify a Record Date for any
Distribution, and any cash or property distributed shall be distributed to the
Partners who were Record Holders on the books of the Partnership as of the
Record Date, in accordance with this Article 5. The Record Date for any
Distribution to be made pursuant to Section 5.02 shall be (i) in the case of a
Distribution that is attributable to the proceeds from the sale or other
disposition by the
26
Partnership of Partnership Assets other than in the ordinary course of its
business, the date of such sale or other disposition and (ii) in the case of
any other Distribution, such Record Date as selected by the General Partner in
its sole discretion.
(c) Any amount of taxes withheld pursuant to Section 9.04, and any
amount of taxes, interest or penalties paid by the Partnership to any
governmental entity, with respect to amounts allocated or distributable to a
Person shall be deemed to be a Distribution or payment to such Person and
shall reduce the amount otherwise distributable to such Person pursuant to
this Article 5.
(d) Any amount otherwise distributable to a Person that is retained
by the Partnership pursuant to Section 6.14(b) shall be deemed to be
distributed to such Person and to be contributed to the Partnership by such
Person immediately thereafter.
(e) No Distribution (other than a Distribution pursuant to Article
15) with respect to all or any portion of a calendar year shall be made to a
Person (other than the General Partner) if, after giving effect to expected
allocations of Net Income, Net Loss or Depreciation for such calendar year,
the Distribution would create or increase a deficit in such Person's Capital
Account in excess of such Person's share of the Partnership's "Minimum Gain"
as defined in Treasury Regulation Section 1.704-2(b)(2).
(f) The requirement of the General Partner or the Partnership to make
any and all Distributions provided for in this Agreement shall be subject to
the limitations contained in the Delaware Act and no Distribution shall be
made in violation of the provisions thereof or hereof.
SECTION 5.04. Allocations of Net Income, Net Loss and Depreciation.
For Capital Account purposes, except as otherwise provided in Section 5.05,
Net Income, Net Loss and Depreciation of the Partnership shall be determined
and allocated as set forth in this Section 5.04, and allocations of Net Income
and Net Loss shall be deemed to be allocations of proportionate shares of the
items of income, gain, loss and deduction from which Net Income and Net Loss
are computed. Net Income, Net Loss and Depreciation of the Partnership with
respect to a fiscal year of the Partnership shall be allocated to each month
in such fiscal year on a pro rata basis.
(a) Net Income of the Partnership shall be allocated 1% to the
General Partner and 99% among the Limited Partners, pro rata in accordance
with their Percentage Interests.
(b) Depreciation of the Partnership for each month shall be allocated
as follows:
(i) First, to the General Partner and any Corporate Affiliates
(other than Alliance Holding) in accordance with their Percentage
Interests, an amount of Depreciation with respect to the customer
lists associated with the investment
27
management agreements originally contributed by ACMC or its
Affiliates to Alliance Holding and contributed by Alliance Holding to
the Partnership equal to the amount of Depreciation allocated to the
General Partner and such Corporate Affiliates for federal income tax
purposes pursuant to Section 5.06(b) with respect to such month;
(ii) Next, Depreciation with respect to Partnership
Assets for which deductions for Depreciation may be claimed
for federal income tax purposes (other than the customer
lists referred to in Section 5.04(b)(i)) to the General
Partner and Limited Partners, pro rata in accordance with
their Percentage Interests;
provided, however, that Depreciation shall not be allocated to a Limited
Partner to the extent such allocation would create or increase a negative
balance in such Limited Partner's Capital Account, and any such Depreciation
not so allocated to such Limited Partner shall be allocated to the General
Partner. For purposes of this Section 5.04(b), the determination of Capital
Account balances shall be made (i) after giving effect to (A) all
Distributions made with respect to the calendar quarters before the month in
question pursuant to Article 5 and (B) the allocation of Net Income for the
month in question, and (ii) before giving effect to the allocation of Net Loss
for the month in question.
(c) Net Loss of the Partnership shall be allocated first, to the
General Partner and Limited Partners having positive Capital Account balances
so as to cause their respective Capital Account balances to be in (or, if not
possible, closer to) the same proportion to each other as their respective
Percentage Interests and then in accordance with their respective Percentage
Interests until all such positive balances have been eliminated; and the
balance, if any, to the General Partner in respect of its General Partnership
Interest. Section 5.04(a) notwithstanding, to the extent subsequent Net Income
of the Partnership does not exceed Net Loss allocated pursuant to this Section
5.04(c), such Net Income shall be allocated (A) first, to the General Partner
in respect of its General Partnership Interest until such allocated Net Income
equals Net Loss allocated to the General Partner pursuant to this Section
5.04(c); and (B) the balance, if any, to the General Partner and Limited
Partners in the same proportions and amounts as Net Loss was allocated
pursuant to this Section 5.04(c). For purposes of this Section 5.04(c), the
determination of Capital Account balances shall be made after giving effect to
all Distributions made with respect to calendar quarters before the month in
question pursuant to Article 5.
(d) All items of income, gain, loss and deduction resulting from any
transaction the proceeds of which are distributed to the Partners pursuant to
Section 5.02 shall be allocated among the General Partner and the Limited
Partners, pro rata in accordance with their Percentage Interests.
28
SECTION 5.05. Special Provisions Governing Capital Account Allocations.
The following special provisions shall apply whether or not inconsistent with
the provisions of Section 5.04:
(a) If there is a net decrease in "partnership minimum gain" (within
the meaning of Treasury Regulation Section 1.704-2(b)(2)) during a fiscal
year, all Persons with a deficit balance in their Capital Accounts at the end
of such year shall be allocated, before any other allocations of Partnership
items for such fiscal year, items of income and gain for such year (and if
necessary, subsequent years), in the amount and in the proportions necessary
to eliminate such deficits as quickly as possible. This Section 5.05(a) is
intended to comply with the requirements of Treasury Regulation Section
1.704-2(f), and is to be interpreted to comply with the requirements of such
regulation.
(b) If any Person unexpectedly receives any adjustments, allocations or
Distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), 1.704- 1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6),
items of income and gain (consisting of a pro rata portion of each item of
Partnership income, including gross income, and gain) shall be specially
allocated to such Person in an amount and manner sufficient to eliminate a
deficit in its Capital Account created by such adjustments, allocations or
Distributions as quickly as possible. This Section 5.05(b) is intended to
constitute a "qualified income offset" within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(3). Any special allocations of items
of income or gain pursuant to this Section 5.05(b) shall be taken into account
in computing subsequent allocations of Net Income or Net Loss so that the net
amounts of any items so allocated shall, to the extent possible, be equal to
the net amounts that would have been allocated to each such Person if such
unexpected adjustments, allocations or Distributions had not occurred.
(c) Section 5.04(a) notwithstanding, in the event of a sale or transfer
of a Limited Partnership Interest by the General Partner or any of its
Corporate Affiliates (other than to the General Partner or a Corporate
Affiliate of the General Partner or in a transaction in which the General
Partner and its Corporate Affiliates transfer their entire interest in the
Partnership) the General Partner may, in its sole discretion, allocate gross
income to the General Partner or such Corporate Affiliate, as the case may be,
to the extent required to make the Capital Account of the General Partner or
such Corporate Affiliate immediately prior to such sale or transfer equal to
the product of (I) the aggregate Percentage Interest of the General Partner or
such Corporate Affiliate, (II) the quotient obtained by dividing the aggregate
amount of Limited Partnership Interests outstanding by 0.99 and (III) an
amount equal to the Capital Account of a Limited Partnership Interest.
(d) Any net gains realized by the Partnership upon the dissolution of
the Partnership shall be credited to the Capital Accounts of the Partners
(after crediting or charging thereto the appropriate portion of Net Income,
Net Loss and Depreciation and after giving effect to all amounts distributed
or to be distributed to such Partners with respect to all calendar
29
quarters of the Partnership prior to the quarter in which the dissolution of
the Partnership occurs) in the following priority:
(i) First, to those Partners whose Capital Accounts have
negative balances, in proportion to such negative balances, until
such negative balances have been eliminated;
(ii) Next, to the Partners in a manner so as to cause such
Partners' respective Capital Account balances to be in the same
proportion to each other as their respective Percentage Interests;
and
(iii) The balance, if any, 1% to the General Partner and 99%
among the Limited Partners, pro rata in accordance with their
Percentage Interests.
(e) In the event any net gains realized by the Partnership upon the
dissolution of the Partnership are insufficient to cause the Partners'
respective Capital Account balances to be in the ratios of their respective
Percentage Interests, then, Section 5.04(a) notwithstanding, gross income
shall be allocated to those Partners whose Capital Accounts have balances
(after giving effect to the allocations provided in Section 5.05(d)), that are
less than the amount required to make all Partners' Capital Account balances
be in the ratio of their respective Percentage Interests until all Partners'
Capital Account balances are in such ratios; provided, however, that an
allocation shall not be made pursuant to this Section 5.05(e) to the extent
such allocation would cause or increase a negative balance in any other
Partner's Capital Account.
(f) If any Partner makes a payment to the Partnership to pay an expense
or cover a loss of the Partnership, or pays an expense of the Partnership,
including, without limitation, any organizational expenses incurred in
connection with the Reorganization and any costs incurred under the
Indemnification and Reimbursement Agreement, and the result is that the
Partnership is required to recognize income or is entitled to a loss or
deduction with respect to such amount so contributed or paid, then such
income, loss or deduction shall be specially allocated to such Partner.
(g) In the event that the Internal Revenue Service is successful in
asserting an adjustment to the taxable income of a Partner and, as a result of
any such adjustment, the Partnership is entitled to a deduction for federal
income tax purposes with respect to any portion of such adjustment, such
deduction shall be allocated to such Partner.
(h) The General Partner may, in its sole discretion and without the
approval of any other Partner, make special allocations of Net Income, Net
Loss or Depreciation or items thereof (including, but not limited to, gross
income) to the extent necessary to make the Capital Account balances of the
Partners be in the ratios of their Percentage Interests. In addition to the
other special allocations that the General Partner may make under this Section
5.05(h), the General Partner may, in its sole discretion and without the
approval of any other Partner, make
30
special allocations of Net Income, Net Loss or Depreciation (or items thereof)
and adopt such other methods and procedures in order to preserve or achieve
uniformity of the Partnership Interests, but only if such allocations and
methods and procedures would not have a material adverse effect on the
Partners holding the Partnership Interests and if they are consistent with the
principles of Section 704 of the Code.
(i) In the event that the Internal Revenue Service is successful in
asserting an adjustment to the allocations of Net Income, Net Loss or
Depreciation provided for in Sections 5.04 and 5.05 for federal income tax
purposes, such adjustment shall not have any effect on Capital Accounts or on
the Distributions made or to be made pursuant to the provisions of this
Agreement, unless the General Partner determines that giving effect to such
adjustment would make the Partners' Capital Account balances be in the
proportion of the Percentage Interests.
SECTION 5.06. Allocations for Tax Purposes. (a) For federal income
tax purposes, except as otherwise provided in this Section 5.06, each item of
income, gain, loss and deduction of the Partnership shall be allocated, for
each month, among the Partners in the same proportions as items comprising Net
Income, Net Loss or Depreciation, as the case may be, are allocated among the
Partners. Credits shall be allocated as provided in Treasury Regulation
Section 1.704- 1(b)(4)(ii).
(b) Depreciation of the Partnership for federal income tax purposes for
each month, with respect to the customer lists associated with the investment
management agreements contributed by ACMC or its Affiliates to Alliance
Holding and by Alliance Holding to the Partnership (but not including any
Depreciation attributable to an adjustment on the books of the Partnership
pursuant to Section 734(b) of the Code), shall be allocated to the General
Partner and any of its Corporate Affiliates which hold Limited Partnership
Interests, pro rata in accordance with their respective Percentage Interests.
(c) In the case of Contributed Property, items of income, gain, loss or
deduction attributable to such Contributed Property shall be allocated among
the Partners in a manner that takes into account the variation between the
adjusted basis to the Partnership of such Contributed Property and the Net
Value of such Contributed Property at the time of contribution, as required by
Section 704(c) of the Code, to the extent such allocation reduces Book-Tax
Disparities. The General Partner shall have the sole discretion to make
additional allocations of income, gain, loss or deduction in order to
eliminate such Book-Tax Disparities as quickly as possible, provided such
allocations are consistent with the principles of Section 704(c) of the Code.
The General Partner shall have the sole discretion to choose any method of
allocations permissible under Treasury Regulation Section 1.704-3 to reduce or
eliminate Book-Tax Disparities.
(d) In the case of Adjusted Property, items of income, gain, loss or
deduction attributable thereto shall (A) first, be allocated among the
Partners in a manner consistent with the principles of Section 704(c) of the
Code to take into account the Unrealized Gain or
31
Unrealized Loss attributable to such property and the allocation thereof
pursuant to Section 4.10(c) to the extent such allocation reduces Book-Tax
Disparities, and (B) second, in the event such property was originally
Contributed Property, be allocated among the Partners in a manner consistent
with Section 5.06(b) above. The General Partner shall have the sole discretion
to make additional allocations of income, gain, loss or deduction in order to
eliminate such Book- Tax Disparities as quickly as possible, provided such
allocations are consistent with the principles of Section 704(c) of the Code.
The General Partner shall have the sole discretion to choose any method of
allocations permissible under Treasury Regulation Section 1.704-3 to reduce or
eliminate Book-Tax Disparities.
(e) To the extent of any Recapture Income resulting from the sale or
other taxable disposition of a Partnership Asset, the amount of any gain from
such disposition allocated to (or recognized by) a Partner for federal income
tax purposes pursuant to the above provisions shall be deemed to be Recapture
Income to the extent such Partner has been allocated or has claimed any
deduction directly or indirectly giving rise to the treatment of such gain as
Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by
the Partnership for federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any adjustment made pursuant to Section 743 of the Code; provided, however,
that such allocations, once made, shall be adjusted as necessary or
appropriate to take into account those adjustments permitted by Section 743 of
the Code and any adjustments made pursuant to Section 743 of the Code shall be
allocated to the extent permitted under and in accordance with the rule of
Treasury Regulation Section 1.704- 1(b)(2)(iv)(m).
(g) The General Partner may, in its sole discretion and without the
approval of any other Partner, make special allocations of Net Income, Net
Loss or Depreciation or items thereof (including, but not limited to, gross
income) (i) to the extent necessary to make the Capital Account balances of
the Partners be in the ratios of their Percentage Interests or (ii) that are
consistent with the principles of Section 704 of the Code and Section 5.04 and
to amend the provisions of this Agreement as appropriate to reflect the
proposal or promulgation of Treasury Regulations under Subchapter K of the
Code. The General Partner may adopt and employ such methods and procedures for
(A) the maintenance of book and tax capital accounts, (B) the determination
and allocation of adjustments under Sections 704(c), 734 and 743 of the Code,
(C) the determination and allocation of Net Income, Net Loss, Depreciation,
taxable income, taxable loss and items thereof under this Agreement and
pursuant to the Code, (D) the determination of the identities and tax
classification of Partners, (E) the provision of tax information and reports
to Partners, (F) the adoption of reasonable conventions and methods for the
valuation of assets and the determination of tax basis, (G) the allocation of
asset values and tax basis, (H) conventions for the determination of cost
recovery, depreciation and amortization deductions and the maintenance of
inventories, (I) the recognition of the transfer of Limited Partnership
Interests, and (J) compliance with other tax-related requirements, including,
but not limited to, the use of
32
computer software and filing and reporting procedures similar to those
employed by other publicly-traded partnerships, as it determines in its sole
discretion are necessary and appropriate to execute the provisions of this
Agreement, comply with federal and state tax laws, and to achieve uniformity
of Limited Partnership Interests. The General Partner shall be indemnified and
held harmless by the Partnership for any expenses, penalties or other
liabilities arising as a result of decisions made in good faith on any of the
matters referred to in the preceding sentence. If the General Partner
determines, based upon advice of counsel, that no reasonable allowable
convention or other method is available to preserve the uniformity of Limited
Partnership Interests or the General Partner in its discretion so elects,
Limited Partnership Interests may be separately identified as distinct classes
to reflect differences in tax consequences.
SECTION 5.07. Assignments. (a) Each item of income, gain, loss,
deduction or credit derived by the Partnership during a fiscal year shall be
determined and allocated on a monthly basis in accordance with the provisions
of this Article 5.
(b) Subject to applicable Treasury Regulations, the Partnership shall
treat Partners of record at the opening of business on the first day of a
calendar month as being the only Partners during such month. If the General
Partnership Interest or any Limited Partnership Interest is transferred during
any month, such items attributable, under the convention set forth in the
second sentence of Section 5.04, to such Partnership Interest for such month
shall be allocated to the holder of such Partnership Interest on the first day
of such month, provided, however, that (i) any income, gain, loss, or
deduction on a sale or other disposition of all or substantially all of the
Partnership Assets shall be allocated to the Partners on the date of such sale
or other disposition and (ii) any income, gain, loss or deduction resulting
from any transaction the proceeds of which are distributed to the Partners
pursuant to Section 5.02 shall be allocated to the Partners on the date of
such transaction. Distributions shall be made to the Partners as of the
applicable Record Date as provided in Section 5.03(b).
(c) The General Partner may revise, alter or otherwise modify such
methods of allocation (i) to the extent that it in its sole discretion
determines that the application of such methods would result in a substantial
mismatching of the allocation of Net Income, Net Loss or Depreciation
attributable to a period and the distribution of cash attributable to the same
period as between the transferor and transferee of the Partnership Interest
transferred that could be minimized by the application of an alternative tax
allocation method, or (ii) to the extent necessary to conform the
Partnership's tax allocations to the requirements of any Treasury Regulations
or rulings of the Internal Revenue Service.
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ARTICLE 6
MANAGEMENT AND OPERATION OF BUSINESS
SECTION 6.01. Management. (a) Except as otherwise expressly provided
in this Agreement, all decisions respecting any matter set forth herein or
otherwise affecting or arising out of the conduct of the business of the
Partnership shall be made by the General Partner, and the General Partner
shall have the exclusive right and full authority and responsibility to
manage, conduct, control and operate the Partnership's business and effect the
purposes and provisions of this Agreement. The General Partner shall have full
authority to do all things on behalf of the Partnership deemed necessary or
desirable by it in the conduct of the business of the Partnership, including,
but not limited to, exercising all of the powers contained in Section 3.02 and
to effectuate the purposes specified in Section 3.01. The power and authority
of the General Partner pursuant to this Agreement shall be liberally construed
to encompass the General Partner's undertaking, on behalf of the Partnership,
all acts and activities in which a limited partnership may engage under the
Delaware Act. The power and authority of the General Partner shall include,
but shall not be limited to, the power and authority on behalf of the
Partnership and at the expense of the Partnership:
(i) To cause the Partnership to execute, deliver and perform
the Reorganization Agreement, the Indemnification and Reimbursement
Agreement and all other agreements, documents and instruments as the
General Partner may deem necessary or appropriate to consummate the
transactions contemplated thereby;
(ii) To cause the Partnership to take all such actions as may
be necessary or appropriate to effect the Reorganization, including
the Alliance Holding Contribution;
(iii) To make all operating decisions concerning the business of
the Partnership;
(iv) To cause the Partnership to acquire, dispose of, mortgage,
pledge, encumber, hypothecate, assign in trust for creditors, or
exchange any or all assets or properties (including the Partnership
Assets), including, but not limited to, its goodwill;
(v) To use the assets or properties of the Partnership
(including, but not limited to, cash on hand) for any purpose, and on
any terms, including, but not limited to, the financing of
Partnership operations, the lending of funds to other Persons,
including Alliance Holding, the repayment of obligations of the
Partnership, the conduct of additional Partnership operations and the
purchase or acquisition of interests in properties or other assets,
including, but not limited to,
34
such interests in real property as may be acquired in connection with
arrangements for the use of facilities in connection with the
Partnership's operations or the acquisition of any other assets or
interests in property;
(vi) To negotiate, execute, amend and terminate, and to cause
the Partnership to perform, any contracts, conveyances or other
instruments that it considers useful or necessary to the conduct of
Partnership operations or the implementation of its powers under this
Agreement;
(vii) To select and dismiss employees and outside attorneys,
accountants, consultants and contractors and to determine
compensation and other terms of employment or hiring;
(viii) To form any further limited or general partnerships, joint
ventures, corporations or other entities or relationships that it
deems desirable, and contribute to such partnerships, ventures,
corporations or other entities any or all of the assets and
properties of the Partnership, and if the General Partner is a
partner or participant in any such entity or relationship to accord
the General Partner a share in the income of such entity or
relationship;
(ix) To issue additional securities or additional Limited
Partnership Interests or additional classes or series of Limited
Partnership Interests pursuant to the provisions of Section 4.02, and
on behalf of the Partnership (but subject to the other provisions of
this Agreement);
(x) To purchase, sell or otherwise acquire or dispose of
Limited Partnership Interests, at such times and on such terms as it
deems to be in the best interests of the Partnership;
(xi) To maintain or cause to be maintained records of all
rights and interests acquired or disposed of by the Partnership, all
correspondence relating to the business of the Partnership and the
original records (or copies on such media as the General Partner may
deem appropriate) of all statements, bills and other instruments
furnished the Partnership in connection with its business;
(xii) To maintain records and accounts of all operations and
expenditures, make all filings and reports required under applicable
rules and regulations of any governmental department, bureau, or
agency, any securities exchange, any automated quotation system of a
registered securities association, and any self-regulatory body, and
furnish the Partners with all necessary United States federal, state
or local income tax reporting information or such information with
respect to any other jurisdiction;
35
(xiii) To purchase and maintain, at the expense of the
Partnership, liability, indemnity, and any other insurance
(including, but not limited to, errors and omissions insurance and
insurance to cover the obligations of the Partnership under Section
6.09), sufficient to protect the Partnership, the General Partner,
their respective officers, directors, employees, agents, partners and
Affiliates, or any other Person, from those liabilities and hazards
which may be insured against in the conduct of the business and in
the management of the business and affairs of the Partnership;
(xiv) To make, execute, assign, acknowledge and file on behalf
of the Partnership all documents or instruments of any kind which the
General Partner may deem necessary or appropriate in carrying out the
purposes and business of the Partnership, including but not limited
to, powers of attorney, agreements of indemnification, contracts,
deeds, options, loan obligations, mortgages, notes, documents, or
instruments of any kind or character, and amendments thereto, any of
which may contain confessions of judgment against the Partnership. No
Person dealing with the General Partner shall be required to
determine or inquire into the authority or power of the General
Partner to bind the Partnership or to execute, acknowledge or deliver
any and all documents in connection therewith;
(xv) To borrow money and to obtain credit in such amounts, on
such terms and conditions, and at such rates of interest and upon
such other terms and conditions as the General Partner deems
appropriate, from banks, other lending institutions, or any other
Person, the Partners or any of their Affiliates, for any purpose of
the Partnership, and to pledge, assign, or otherwise encumber or
alienate all or any portion of the Partnership Assets, including any
income therefrom, to secure or provide for the repayment thereof. As
between any lender and the Partnership, it shall be conclusively
presumed that the proceeds of such loans are to be and will be used
for the purposes authorized herein and that the General Partner has
the full power and authority to borrow such money and to obtain such
credit;
(xvi) To assume obligations, enter into contracts, including
contracts of guaranty or suretyship, incur liabilities, lend money
and otherwise use the credit of the Partnership, to secure any of the
obligations, contracts or liabilities of the Partnership by mortgage,
pledge or other encumbrance of all or any part of the property and
income of the Partnership;
(xvii) To invest funds of the Partnership in interest-bearing and
non-interest-bearing accounts and short-term investments including,
but not limited to, obligations of federal, state and local
governments and their agencies, money market and mutual funds
(including, but not limited to, those managed by the
36
Partnership) and any type of debt or equity securities (including
repurchase agreements and without regard to restrictions on
maturities);
(xviii) To make any election on behalf of the Partnership as is or
may be permitted under the Code or under the taxing statutes or rules
of any state, local, foreign or other jurisdiction, and to supervise
the preparation and filing of all tax and information returns which
the Partnership may be required to file;
(xix) To employ and engage suitable agents, employees, advisers,
consultants and counsel (including any custodian, investment adviser,
accountant, attorney, corporate fiduciary, bank or other reputable
financial institution, or any other agents, employees or Persons who
may serve in such capacity for the General Partner or any Affiliate
of the General Partner) to carry out any activities which the General
Partner is authorized or required to carry out or conduct under this
Agreement, including, but not limited to, a Person who may be engaged
to undertake some or all of the general management, property
management, financial accounting and recordkeeping or other duties of
the General Partner, to indemnify such Persons on behalf of the
Partnership against liabilities incurred by them in acting in such
capacities and to rely on the advice given by such Persons, it being
agreed and understood that the General Partner shall not be
responsible for any acts or omissions of any such Persons and shall
assume no obligations in connection therewith other than the
obligation to use due care in the selection thereof;
(xx) To pay, extend, renew, modify, adjust, submit to
arbitration, prosecute, defend, confess or compromise, upon such
terms as it may determine and upon such evidence as it may deem
sufficient, any obligation, suit, liability, cause of action, or
claim, including taxes, either in favor of or against the
Partnership;
(xxi) To qualify the Partnership to do business in any state,
territory, dependency or foreign country;
(xxii) To distribute cash or Partnership Assets to Partners in
accordance with Article 5;
(xxiii) In accordance with Section 2.05, to restrict trading in
Limited Partnership Interests or to reconstitute and convert the
Partnership into such entity as shall be determined in accordance
therewith;
(xxiv) To take such other action with respect to the manner in
which the Limited Partnership Interests are being or may be
transferred or traded as the General Partner deems necessary or
appropriate;
37
(xxv) To take all such actions as may be necessary or
appropriate to maintain or alter the one-for-one exchange ratio of
Limited Partnership Interests for Alliance Holding LP Units or
Alliance Holding limited partnership interests, and vice versa, in
the event that any circumstance exists or is reasonably expected to
exist which the General Partner determines in its sole discretion
would render inappropriate the use of such exchange ratio;
(xxvi) To possess and exercise any additional rights and powers
of a general partner under the partnership laws of Delaware
(including, but not limited to, the Delaware Act) and any other
applicable laws, to the extent not inconsistent with this Agreement;
and
(xxvii) In general, to exercise in full all of the powers of the
Partnership as set forth in Section 3.02 and to do any and all acts
and conduct all proceedings and execute all rights and privileges,
contracts and agreements of any kind whatsoever, although not
specifically mentioned in this Agreement, that the General Partner
may deem necessary or appropriate to the conduct of the business and
affairs of the Partnership or to carry out the purposes of the
Partnership. The specific expression of any power of authority of the
General Partner in this Agreement shall not in any way limit or
exclude any other power or authority which is not specifically or
expressly set forth in this Agreement.
(b) Each of the Partners hereby approves, ratifies and confirms the
execution, delivery and performance of the Reorganization Agreement, the
Indemnification and Reimbursement Agreement and each other agreement, document
and instrument as the General Partner may deem necessary or appropriate to
consummate the transactions contemplated thereby, and agrees that the General
Partner is authorized to execute, deliver and perform the Reorganization
Agreement, the Indemnification and Reimbursement Agreement and such other
agreements, documents and instruments and the transactions contemplated
thereby without any further act, approval or vote of Partners, notwithstanding
any other provision of this Agreement, the Delaware Act or any other
applicable law, rule or regulation.
(c) The General Partner shall use all reasonable efforts to cause to be
filed any certificates or filings as may be determined in its sole discretion
by the General Partner to be reasonable and necessary or appropriate for the
formation and continuation and operation of a limited partnership (or a
partnership in which the Limited Partners have limited liability) in the State
of Delaware or any other state in which the Partnership elects to do business.
To the extent that the General Partner in its sole discretion determines such
action to be reasonable and necessary or appropriate, the General Partner
thereafter (i) shall file any necessary amendments to the Certificate of
Limited Partnership, including, but not limited to, amendments to reflect
successor or additional general partners admitted pursuant to Section 13.02
and (ii) shall otherwise do all things (including the appointment of
registered agents of the Partnership and management of registered offices of
the Partnership) requisite to the maintenance of the
38
Partnership as a limited partnership under the laws of the State of Delaware
or any other state in which the Partnership may elect to do business. If
permitted by applicable law, the General Partner may omit from the Certificate
of Limited Partnership and from any other certificates or documents filed in
any state in order to qualify the Partnership to do business therein, and from
all amendments thereto, the names and addresses of the Partners (other than
the General Partner) and information relating to the Contributions and shares
of profits and compensation of the Partners (other than the General Partner)
or state such information in the aggregate rather than with respect to each
individual Partner. Except as provided in Section 7.05(a), the General Partner
shall not be required, before or after filing, to deliver or mail a copy of
the Certificate of Limited Partnership or any amendment thereto to any Limited
Partner.
SECTION 6.02. Reliance by Third Parties. Notwithstanding any other
provisions of this Agreement to the contrary, no lender, purchaser or other
Person dealing with the Partnership shall be required to look to the
application of proceeds hereunder or to verify any representation by the
General Partner as to the extent of the interest in Partnership Assets that
the General Partner is entitled to encumber, sell or otherwise use, and any
such lender, purchaser or other Person shall be entitled to rely exclusively
on the representations of the General Partner as to its authority to enter
into such financing or sale arrangements and shall be entitled to deal with
the General Partner, without the joinder of any other Person, as if the
General Partner were the sole party in interest therein, both legally and
beneficially. To the fullest extent permitted by law, each Partner (other than
the General Partner) hereby waives any and all defenses or other remedies that
may be available against such lender, purchaser or other Person to contest,
negate or disaffirm any action of the General Partner in connection with any
sale or financing. In no event shall any person dealing with the General
Partner or the General Partner's representative with respect to any business
or property of the Partnership be obligated to ascertain that the terms of
this Agreement have been complied with, or be obligated to inquire into the
necessity or expedience of any act or action of the General Partner or the
General Partner's representative; and every contract, agreement, deed,
mortgage, security agreement, promissory note or other instrument or document
executed by the General Partner or the General Partner's representative with
respect to any business or property of the Partnership shall be conclusive
evidence in favor of any and every Person relying thereon or claiming
thereunder that (i) at the time of the execution and delivery thereof this
Agreement was in full force and effect, (ii) such instrument or document was
duly executed in accordance with the terms and provisions of this Agreement
and is binding upon the Partnership, and (iii) the General Partner or the
General Partner's representative was duly authorized and empowered to execute
and deliver any and every such instrument or document for and on behalf of the
Partnership.
SECTION 6.03. Purchase or Sale of Limited Partnership Interests. The
General Partner may cause the Partnership to purchase or otherwise acquire (or
may purchase or otherwise acquire on behalf of the Partnership) Limited
Partnership Interests. The General Partner or any of its Affiliates may also
purchase or otherwise acquire Limited Partnership Interests for its own
account and may, subject to the provisions of Article 12, sell or otherwise
dispose of such Limited Partnership Interests. Any Limited Partnership
Interests purchased for or on behalf of or
39
otherwise held by the Partnership shall not be deemed outstanding for any
purposes under this Agreement; provided that Limited Partnership Interests
purchased for or on behalf of or otherwise held by a Person in the "control"
of the Partnership, as that term is defined in the definition of an Affiliate
in Article 1, for a business purpose approved by the General Partner shall not
be considered to have been purchased for or on behalf of or otherwise held by
the Partnership.
SECTION 6.04. Compensation and Reimbursement of the General Partner.
(a) The General Partner shall be reimbursed on a monthly or such other basis
as the General Partner shall determine (i) for all direct expenses it incurs
or makes on behalf of the Partnership (including amounts paid to any Person to
perform services for the Partnership) and (ii) for the General Partner's
legal, accounting, investor communications, utilities, telephone, secretarial,
travel, entertainment, bookkeeping, reporting, data processing, office rent
and other office expenses, salaries and other compensation and employee
benefits expenses, other administrative or overhead expenses and all other
expenses necessary to or appropriate for the conduct of the Partnership's
business which are incurred by the General Partner in operating the
Partnership's business (including, but not limited to, expenses allocated to
the General Partner by its Affiliates), and which are allocated to the
Partnership in addition to any reimbursement as a result of indemnification
pursuant to Section 6.09. The General Partner shall determine the fees and
expenses that are allocated to the Partnership by the General Partner in good
faith.
(b) The General Partner shall not receive any compensation from the
Partnership for services provided to the Partnership as General Partner.
SECTION 6.05. Outside Activities. (a) The General Partner shall not
acquire any assets or enter into or conduct any business or activity except in
connection with or incidental to (i) the management or operations of the
Partnership and Alliance Holding, (ii) the performance of its obligations
required or authorized by this Agreement and the Alliance Holding Partnership
Agreement, (iii) the acquisition, ownership or disposition of Limited
Partnership Interests, Alliance Holding GP Units, Alliance Holding LP Units or
Alliance Holding limited partnership interests, (iv) its corporate governance
and existence and (v) acquiring, investing in, holding, disposing of or
otherwise dealing with passive investments.
(b) Any Indemnitee, except the General Partner, may compete, directly
or indirectly, with the Partnership and may engage in any business or other
activity, whether or not for profit and whether or not competitive with or
similar to any current or anticipated business activity of the Partnership,
including, but not limited to, providing investment management and advisory
services, and no such business or activity shall in any way be restricted by,
or considered to be in conflict with, this Agreement, the partnership
relationship established hereby or any principle of law or equity relating
thereto. None of the Partnership or any Partner shall have any rights in or
with respect to any such business or activity so engaged in by an Indemnitee,
and no Indemnitee shall have any obligation to offer any interest in any such
business or activity, or any opportunity relating thereto or to the business
of the Partnership, to
40
the Partnership, any Partner or any other Persons who may have or acquire any
interest in the Limited Partnership Interests or the Partnership. No decision
or action taken by any such Indemnitee (or, to the extent such decision or
action was not taken with the specific intent of providing an improper benefit
to an Indemnitee to the detriment of the Partnership, by the General Partner)
with respect to any such business or activity or any business or activity of
the Partnership shall be subject to review or challenge in any way or in any
forum on the basis that it improperly benefitted any such Indemnitee to the
detriment of the Partnership or otherwise involved any conflict of interest or
breach of a duty of loyalty or similar fiduciary obligation. No such
Indemnitee shall be subject to any liability or other obligation with respect
to the matters described in this Section 6.05(b). The Partnership shall not,
and each Partner by its acquisition of a Limited Partnership Interest hereby
agrees that it will not, assert in any manner or in any forum any claim with
respect to the matters described in this Section 6.05(b). The Partnership
shall actively resist any effort to assert any such claim on its behalf. This
Section 6.05(b) is not intended to affect any rights the Partnership may have
under any contract or agreement with any of its employees.
SECTION 6.06. Partnership Funds. The funds of the Partnership shall
be deposited in such account or accounts as are designated by the General
Partner. The Partnership shall at all times maintain books of account which
indicate the amount of funds of the Partnership on deposit in each such
account. All withdrawals from or charges against such accounts shall be made
by the General Partner by its officers or agents, or by employees or agents of
the Partnership. Funds of the Partnership may be invested as determined by the
General Partner, except in connection with acts otherwise prohibited by this
Agreement.
SECTION 6.07. Loans by the Partnership; Transactions and Contracts
with Affiliates. (a) The Partnership may (but shall have no obligation to)
lend Alliance Holding funds needed by Alliance Holding for working capital
purposes for such periods of time as the General Partner may determine at an
interest rate equal to the cost to the Partnership of obtaining such funds
from an unaffiliated third party.
(b) The Partnership will not lend any funds to the General Partner or
any of its Affiliates. Except as provided by this Agreement and the
Reorganization Agreement, the Partnership will not make any investments in the
General Partner or any Affiliates thereof except on terms approved by the
General Partner as being comparable to (or more favorable to the Partnership
than) those that would prevail in a transaction with an unaffiliated party.
(c) The assumption of liabilities and related obligations by the
Partnership pursuant to the Reorganization Agreement and each other agreement,
document and instrument as the General Partner may deem necessary or
appropriate to consummate the transactions contemplated thereby is hereby
ratified, confirmed and approved by all Partners.
(d) The General Partner may enter into an agreement with an
Affiliate of the General Partner to render services to the Partnership on
terms approved by the General Partner in
41
good faith as being comparable to (or more favorable to the Partnership than)
those that would prevail in a transaction with an unaffiliated party.
(e) Neither the General Partner nor any of its Affiliates shall sell,
transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except on terms approved by the General
Partner in good faith as being comparable to (or more favorable to the
Partnership than) those that would prevail in a transaction with an
unaffiliated party; provided, however, that the requirements of this Section
6.07(e) shall be deemed to be satisfied as to any sale, transfer or conveyance
consummated by the General Partner in accordance with clause (y) of the first
sentence of Section 2.05.
(f) Neither the General Partner nor any of its Affiliates shall use or
lease any property (including, but not limited to, office equipment,
computers, vehicles, aircraft and office space) of the Partnership except on
terms approved by the General Partner in good faith as being comparable to (or
more favorable to the Partnership than) those that would prevail in a
transaction with an unaffiliated party.
(g) Without limitation of Sections 6.07(a) through 6.07(f) above, and
notwithstanding anything to the contrary in this Agreement, any transactions
or arrangements with one or more Indemnitees described or disclosed in the
Reorganization Agreement and the Registration Statement are hereby ratified,
confirmed and approved by all Partners.
(h) Whenever a particular transaction or arrangement is required under
this Agreement to be "on terms approved by the General Partner as being
comparable to (or more favorable to the Partnership than) those that would
prevail in a transaction with an unaffiliated party", that requirement shall
be conclusively presumed to be satisfied as to any transaction or arrangement
that (x) is, in the reasonable and good faith judgment of the General Partner,
on terms substantially comparable to (or more favorable to the Partnership
than) those that would prevail in a transaction with an unaffiliated party or
(y) has been approved by a majority of those directors of the General Partner
who are not also directors, officers or employees of an Affiliate of the
General Partner.
(i) The General Partner or any Affiliate thereof may (but shall have no
obligation to) conduct, through such representatives as it may designate,
audits and other investigations of the Partnership and Persons controlled by
it as the General Partner may determine in its sole discretion. Except as the
General Partner or such Affiliate may expressly agree in writing with the
Partnership in a document that refers to this Section 6.07(i) and is approved
in the manner set forth in clause (y) of Section 6.07(h), (x) such audit or
investigation shall be without charge to the Partnership and Persons
controlled by it, (y) such audit or investigation shall be deemed to have been
undertaken solely for the benefit of the General Partner or such Affiliate and
neither of them shall have any obligation to divulge the results thereof to
the Partnership or any Partner or to take any action based thereon and (z) no
Indemnitee or other Person conducting or otherwise involved in such audit or
investigation shall
42
have any obligation or liability to the Partnership or the Partners by reason
of such audit or investigation or the manner in or care (or lack thereof) with
which it is conducted.
SECTION 6.08. Liability of the General Partner and Other Indemnities.
(a) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "sole discretion" or "discretion" or
under a grant of similar authority or latitude, the General Partner or such
Affiliate shall be entitled to consider only such interests and factors as it
desires and shall have no duty or obligation to give any consideration to any
interest of or other factors affecting the Partnership or any Partner, or (ii)
in its "good faith" or under another express standard, the General Partner or
such Affiliate shall act under such express standard and shall not be subject
to any other or different standards imposed by this Agreement, any other
agreement contemplated hereby or applicable law or in equity or otherwise.
(b) Neither the General Partner nor any other Indemnitee shall be
liable for monetary damages to the Partnership or Partners for errors in
judgment or for breach of fiduciary duty (including breach of any duty of care
or any duty of loyalty) unless it is established (the Person asserting such
liability having the burden of proof) that the General Partner's or such other
Indemnitee's action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Partnership, constituted actual
fraud by the General Partner or such Indemnitee, or was undertaken with
reckless disregard for the best interests of the Partnership or actual bad
faith on the part of the General Partner or such Indemnitee. No Indemnitee
shall have any liability to the Partnership or Partners for any action
permitted by Section 6.05.
(c) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to any Partner, any such Indemnified Person, including the
General Partner, acting under this Agreement shall not be liable to the
Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement. The provisions of this Agreement shall be given effect as
permitted in the Delaware Act.
SECTION 6.09. Indemnification. (a) To the fullest extent permitted by
law but without duplication as to losses, claims, damages, liabilities and
expenses covered by the Indemnification and Reimbursement Agreement, with
respect to which the Partnership shall not be responsible pursuant to this
Section 6.09, each Indemnified Person (which for the purposes of this Section
6.09 shall mean (i) the General Partner, (ii) any Departing Partner, (iii)
each Affiliate of the General Partner or any Departing Partner, (iv) each
director of the General Partner in his capacity as such, (v) Alliance Holding,
(vi) each Affiliate of Alliance Holding and (vii) each other Indemnitee that
is designated as an Indemnified Person in an agreement or policy of the
General Partner) shall be indemnified and held harmless by the Partnership
from and against any and all losses, claims, damages, liabilities, whether
joint or several, expenses (including reasonable legal fees and expenses),
judgments, fines, settlements and other amounts arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, in
43
which any Indemnified Person may be involved, or threatened to be involved, as
a party or otherwise, by reason of (A) its present or former status as (x) the
General Partner or a Departing Partner, or an Affiliate thereof, (y) an
officer, director, employee, partner, agent or trustee of the Partnership, the
General Partner or a Departing Partner, or an Affiliate thereof, or (z) a
Person serving at the request of the Partnership in another entity in a
similar capacity, or (B) any action taken or omitted in any such capacity, if
with respect to the matter at issue the Indemnified Person acted in good faith
and in a manner it reasonably believed to be in, or not opposed to, the best
interests of the Partnership and, with respect to any criminal proceeding, had
no reasonable cause to believe its conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere, or its equivalent, shall not, of itself,
create a presumption that the Indemnified Person acted in a manner contrary to
that specified above. Any designation of an Indemnitee as an Indemnified
Person pursuant to clause (v) of the first sentence of this Section 6.09(a)
may (i) be made with respect to an individual Indemnitee or a group of
Indemnitees, (ii) be revoked or modified by the General Partner in its
discretion except to the extent, if any, otherwise specified in the agreement
or policy effecting such designation, and (iii) be subject to such limitations
and conditions as may be specified in the agreement or policy effecting such
designation.
(b) To the fullest extent permitted by law, expenses (including
reasonable legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding subject to this Section 6.09 shall,
from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Partnership of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that such Person is not entitled
to be indemnified as authorized in Section 6.09(a).
(c) The advancement of expenses and indemnification provided by this
Section 6.09 shall be in addition to any other rights to which an Indemnified
Person may be entitled under any agreement, pursuant to any vote of the
Limited Partners, as a matter of law or otherwise, as to an action in the
Indemnified Person's capacity as (i) the General Partner, a Departing Partner
or an Affiliate thereof, (ii) an officer, director, employee, partner, agent
or trustee of the General Partner, any Departing Partner or an Affiliate
thereof, or (iii) a Person serving at the request of the Partnership in
another entity in a similar capacity, shall continue as to an Indemnified
Person who has ceased to serve in such capacity and shall inure to the benefit
of the heirs, successors, assigns, executors and administrators of such
Indemnified Person.
(d) The Partnership may purchase and maintain insurance on behalf of
the General Partner and such other Indemnified Persons as the General Partner
shall determine against any liability that may be asserted against or expense
that may be incurred by such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
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(e) For purposes of this Section 6.09, the Partnership shall be deemed
to have requested an Indemnified Person to serve as fiduciary of an employee
benefit plan whenever the performance by such Indemnified Person of its duties
to the Partnership also imposes duties on it or otherwise involves services by
it to such Plan or participants or beneficiaries of such Plan; excise taxes
assessed on an Indemnified Person with respect to an employee benefit plan
pursuant to applicable law shall be deemed to be "fines" within the meaning of
Section 6.09(a); and action taken or omitted by an Indemnified Person with
respect to an employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants
and beneficiaries of such plan shall be deemed to be for a purpose which is
in, or not opposed to, the best interests of the Partnership.
(f) Any indemnification hereunder shall be satisfied solely out of any
insurance obtained pursuant to Section 6.09(d) or the assets of the
Partnership. In no event may an Indemnified Person subject the Partners or
Affiliates or any of them to personal liability by reason of indemnification
hereunder.
(g) An Indemnified Person shall not be denied indemnification in whole
or in part under this Section 6.09 because the Indemnified Person had an
interest in the transaction with respect to which the indemnification applied
if the transaction was otherwise permitted by the terms of this Agreement.
(h) The indemnification provided in this Section 6.09 is for the
benefit of the Indemnified Persons and their respective heirs, successors,
assigns, executors and administrators and shall not be deemed to create any
right to indemnification for the benefit of any other Persons.
(i) The provisions of this Section 6.09 are not intended to be
exclusive and the General Partner may cause the Partnership to enter into an
indemnification agreement with any Indemnified Person, or to adopt policies
covering any group of Indemnified Persons on such terms as the General Partner
may determine in its sole discretion.
SECTION 6.10. Other Matters Concerning the General Partner. (a) The
General Partner may rely upon and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The General Partner may consult with legal counsel (including, but
not limited to, counsel who may be regular counsel to, or an employee of, the
Partnership, the General Partner or any Affiliate thereof), accountants,
appraisers, management consultants, investment bankers and other consultants
and advisers selected by it and any opinion of any such Person as to matters
that the General Partner reasonably believes to be within such Person's
professional or expert competence shall be full and complete authorization and
protection in
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respect to any action taken or suffered or omitted by the General Partner
hereunder in good faith and in accordance with such opinion.
(c) The General Partner shall not provide any Limited Partner, in
connection with such Limited Partner's Limited Partnership Interest, with any
mandatory or discretionary right to purchase any type of security issued by
the General Partner or its Affiliates.
(d) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney- or attorneys-in-fact. Each such
attorney shall, to the extent provided by the General Partner in the power of
attorney, have full power and authority to do and perform all and every act
and duty which is permitted or required to be done by the General Partner
hereunder.
SECTION 6.11. Title to Partnership Assets. All Partnership Assets
shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in such
Partnership Assets or any portion thereof. Title to any or all of the
Partnership Assets may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may determine. The
General Partner hereby declares and warrants that any Partnership Assets for
which legal title is held in the name of the General Partner shall be held in
trust by the General Partner for the use and benefit of the Partnership in
accordance with the terms and provisions of this Agreement, and any applicable
deed or similar title document shall so indicate. All Partnership Assets shall
be recorded as the property of the Partnership on its books and records,
irrespective of the name in which legal title to such Partnership Assets is
held.
SECTION 6.12. Sale of the Partnership's Assets. Notwithstanding any
other provision of this Agreement, the General Partner shall not cause the
Partnership to sell, transfer, pledge assign, convey or otherwise dispose of,
in a single transaction or series of related transactions, all or
substantially all of the Partnership Assets (other than pursuant to Section
2.05) unless (a) (i) such sale, transfer, pledge, assignment, conveyance or
other disposition has received Majority Approval (Majority Outside Approval if
the General Partner or any of its Corporate Affiliates have any direct or
indirect equity interest in any Person acquiring Partnership Assets in such
transaction) and (ii) the Partnership shall have received a Tax Determination
and Limited Liability Determination or (b) such sale, transfer, pledge,
assignment, conveyance or other disposition is in connection with a
liquidation of the Partnership pursuant to Article 15.
SECTION 6.13. No New Business. The Partnership shall not acquire all
or substantially all of the outstanding capital stock or assets of, or enter
into any partnership or joint venture with, any Person, other than Alliance
Holding, unless (i) such acquisition, partnership or joint venture is in
accordance with Sections 3.01 and 3.02 and (ii) it receives a Tax
Determination with respect thereto. Neither the General Partner nor the
Partnership shall become the general partner of any other partnership, other
than Alliance Holding, or joint venture unless such action is permitted by
46
Sections 6.01(a)(viii) and 6.05(a) (in the case of the General Partner) and
the Partnership receives a Tax Determination with respect thereto.
SECTION 6.14. Reimbursement of Expenses of Alliance Holding. (a) The
Partnership will pay on behalf of Alliance Holding, or reimburse Alliance
Holding as promptly as practicable for, all costs and expenses of any kind
whatsoever incurred by Alliance Holding, including, without limitation, all
costs and expenses associated with maintaining Alliance Holding as a public
partnership, all costs and expenses of any financial, legal, accounting or
other advisors, and all costs and expenses of any litigation or other
proceeding involving Alliance Holding (in each case, without duplication for
any such costs and expenses in connection with the Holdback Interests paid or
reimbursed pursuant to arrangements referred to in Section 2.01 (d) of the
Reorganization Agreement); provided that (i) the Partnership shall not pay or
reimburse (A) any tax imposed on Alliance Holding's share of the Partnership's
income, (B) any tax for which ELAS is required to indemnify Alliance Holding
pursuant to Section 3(a)(ii)(B) of the Indemnification and Reimbursement
Agreement, (C) any tax (other than an income tax) payable by Alliance Holding
to the extent that such tax is attributable to Alliance Holding's partnership
interest in the Partnership, (D) any interest, penalties or additions to tax,
and any liabilities, costs, expenses (including, without limitation,
reasonable expenses of investigation and attorneys' fees and expenses),
losses, damages, assessments, settlements or judgments, arising out of or
incident to the imposition, assessment or assertion of any tax described in
(A), (B) or (C), or (E) any Reorganization Costs or any Losses incurred in
connection with a Specified Proceeding (each capitalized term in this clause
(E) having the meaning set forth in the Indemnification and Reimbursement
Agreement); (ii) the Partnership shall not pay or reimburse costs and expenses
of Alliance Holding to the extent incurred in connection with business
activities other than the holding of its partnership interest in the
Partnership and activities related thereto (it being understood that making
passive investments of funds relating to the holding of its partnership
interest in the Partnership constitute such related activities; provided that
the Partnership shall not pay or reimburse any tax attributable to such
passive investments of funds, or any interest, penalties or additions to tax,
or any liabilities, costs, expenses (including, without limitation, reasonable
expenses of investigation and attorneys' fees and expenses), losses, damages,
assessments, settlements or judgments arising out of or incident to the
imposition, assessment or assertion of any such tax); and (iii) the
Partnership shall not pay or reimburse costs and expenses of Alliance Holding
incurred in connection with the Holdback Interests to the extent Alliance
Holding realizes an economic benefit from the Holdback Interests.
(b) If ELAS or any of its Corporate Affiliates has made a payment to,
or indemnified, Alliance Holding pursuant to the Indemnification and
Reimbursement Agreement in respect of any tax for which Alliance Holding would
otherwise be entitled to reimbursement or payment under Section 6.14(a), then
the amount the Partnership is obligated to pay on behalf of, or reimburse to,
Alliance Holding on account of such tax shall be reduced by the amount paid or
indemnified by ELAS and its Corporate Affiliates.
47
(c) In the event that the Partnership is required to make a payment on
behalf of Alliance Holding, or to reimburse Alliance Holding, pursuant to
Section 6.14(a), for (i) any taxes and (ii) any interest, penalties or
additions to tax, and any liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments, arising out
of or incident to the imposition, assessment or assertion of any taxes (the
sum of (i) and (ii) being referred to herein as a "Tax Payment"), then the
Partnership shall withhold from Distributions to be made to Partners (other
than Alliance Holding), in proportion to their respective Percentage
Interests, such amounts as may be required to enable the Partnership to make
such payment on behalf of, or reimbursement to, Alliance Holding. If the
Partnership is unable to withhold sufficient funds to make any such payment or
reimbursement, then the Partners (other than Alliance Holding) shall make
payments to the Partnership, in proportion to their respective Percentage
Interests, of an aggregate amount equal to such shortfall. The Partnership
shall not issue any Partnership Interests in respect of payments made pursuant
to this Section 6.14(b). Notwithstanding any other provision of this
Agreement, to the extent that a Partner has failed to make a payment required
by this Section 6.14(b), the Partnership is authorized to retain amounts that
would otherwise be distributed to such Person pursuant to Article 5.
To the extent that the amount of any Tax Payment that the Partnership
would otherwise have been required to make is reduced pursuant to Section
6.14(b), there shall be a reduction of (x) the amount that the Partnership may
withhold pursuant to this Section 6.14(c) from Distributions to be made to
ELAS and (y) the payment that ELAS is required to make to the Partnership
pursuant to this Section 6.14(c). Notwithstanding anything herein to the
contrary, no Partner shall be liable (through withholding from Distributions,
payments or otherwise) to make payments or reimbursements on account of any
tax for which the Partnership is required to make a payment pursuant to
Section 6.14(a) for an aggregate amount which exceeds such Partner's
Percentage Interest of the aggregate obligation of the Partnership under
Section 6.14(a). For these purposes, payments or reimbursements by a Partner
shall include all amounts withheld from Distributions to such Partner and all
amounts paid to the Partnership or to Alliance Holding by such Partner,
whether under the terms of this Agreement, the Indemnification and
Reimbursement Agreement or otherwise. Income, deductions or losses with
respect to Tax Payments shall be specially allocated to Partners other than
Alliance Holding pursuant to Section 5.05(f). Tax Payments shall have no
effect upon Alliance Holding's Capital Account or the amount distributable to
Alliance Holding pursuant to Article 5.
SECTION 6.15. Issuances of Alliance Holding LP Units Pursuant to
Employee Benefit Plans. Upon the exercise of any awards to purchase or
otherwise acquire Alliance Holding LP Units or other securities of Alliance
Holding pursuant to any employee benefit plan sponsored by the General
Partner, the Partnership, Alliance Holding or any Person controlled by the
Partnership or Alliance Holding and/or the entitlement of any plan participant
to receive Alliance Holding LP Units thereunder in accordance with the terms
of such plan, at the request of the Partnership: (i) Alliance Holding shall
issue to the plan participant Alliance Holding LP Units necessary to satisfy
such award in exchange for the exercise price or other consideration (if any)
48
to be paid by the plan participant in respect of such award; and (ii) Alliance
Holding shall contribute any such exercise price or other consideration to the
Partnership in exchange for a number of Limited Partnership Interests equal to
the number of Alliance Holding LP Units issued in satisfaction of such award.
Such issuances and payments shall be deemed to occur on the date on which the
plan participant is entitled to receive Alliance Holding LP Units thereunder
without further payment. If any Alliance Holding LP Units are issued by
Alliance Holding pursuant to any such employee benefit plan and such Alliance
Holding LP Units are forfeited or are otherwise returned to Alliance Holding,
then Alliance Holding will return to the Partnership the corresponding Limited
Partnership Interests and the Partnership will pay to Alliance Holding the
amounts, if any, which Alliance Holding may be required to pay to the plan
participant whose Alliance Holding LP Units are forfeited or returned to
Alliance Holding.
SECTION 6.16. Repurchase of Alliance Holding LP Units. Subject to
Section 17-607 of the Delaware Act, the Partnership may from time to time make
a cash distribution to Alliance Holding for the purpose of repurchasing
outstanding Alliance Holding LP Units or Alliance Holding limited partnership
interests; provided that in no event shall the aggregate number of Alliance
Holding LP Units and Alliance Holding limited partnership interests so
repurchased be greater than the number of Limited Partnership Interests then
held by Alliance Holding. Upon such repurchase, the aggregate number of
Limited Partnership Interests held by Alliance Holding shall be reduced by a
number equal to the aggregate number of Alliance Holding LP Units and Alliance
Holding limited partnership interests so repurchased. The funds provided by
the Partnership pursuant to this Section 6.16 shall be used by Alliance
Holding solely for the repurchase of Alliance Holding LP Units or Alliance
Holding limited partnership interests (together with any expenses incurred in
connection with such repurchases) and, to the extent that any excess funds
remain following such repurchases, such funds shall be returned to the
Partnership.
ARTICLE 7
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
SECTION 7.01. Limitation of Liability. The Limited Partners shall
have no liability under this Agreement except as provided in this Agreement or
by applicable law.
SECTION 7.02. Management of Business. No Limited Partner in its
capacity as such shall take part in the operation, management or control of
the Partnership's business, transact any business in the Partnership's name or
have the power to sign documents for or otherwise act on behalf of or bind the
Partnership. The transaction of any such business by any such Partner or
employee or agent of the Partnership shall not affect, impair or eliminate the
limitations on the liability of any such Limited Partner under this Agreement.
49
SECTION 7.03. Outside Activities. Each Partner (other than the
General Partner) shall have the right to engage in the business of providing
investment advisory and management services and to engage in and possess an
interest in other business ventures of any and every type and description,
independently or with others, including business interests and activities in
direct competition with the Partnership. Neither the Partnership, any of the
Partners nor any other Person shall have any rights by virtue of this
Agreement, or the Partnership relationship created hereby in any such business
ventures, and no Partner shall have any obligation as a result thereof to
offer any interest in any such business ventures to the Partnership, any
Partner, or any other Person. This Section 7.03 is not intended to affect any
rights the Partnership may have under any contract or agreement with any of
its employees.
SECTION 7.04. Return of Capital; Additional Capital. (a) No Partner
shall be entitled to the withdrawal or return of his Contribution (if any) or
any amount of his Capital Account, except to the extent, if any, that
Distributions made pursuant to this Agreement or upon termination of the
Partnership or purchases of Limited Partnership Interests by the Partnership
may be considered as such by law, and then only to the extent provided for in
this Agreement.
(b) Subject to the further provisions of this Section 7.04(b), no
Limited Partner shall have any personal liability whatsoever in his capacity
as a Limited Partner, whether to the Partnership, to any of the Partners or to
the creditors of the Partnership, for the debts, liabilities, contracts or
other obligations of the Partnership or for any losses of the Partnership.
Each Limited Partnership Interest, upon the issuance thereof, shall be fully
paid and not subject to assessment for additional Contributions. No Limited
Partner shall be required to lend any funds to the Partnership or, after his
Contribution has been paid, to make any further contribution to the capital of
the Partnership. Under Sections 17-607 and 17-804 of the Delaware Act, a
limited partner of a limited partnership may, under certain circumstances, be
required to return to the partnership, amounts previously distributed to such
limited partner (i) if, at the time of, and after giving effect to, such
Distribution, the liabilities of the partnership, other than liabilities to
partners on account of their partnership interests, exceeded the fair value of
its assets or, (ii) in connection with a liquidating distribution after
dissolution of the partnership, such limited partner receives a Distribution
prior to the partnership paying, or making reasonable provision to pay, claims
of creditors. It is the intention and agreement of the Partners that if any
Limited Partner has received a Distribution from the Partnership that is
required to be returned to, or for the account of, the Partnership or
Partnership creditors, such obligation shall be the obligation of the Limited
Partner who receives such Distribution, and not the obligation of any General
Partner; provided, however, that nothing contained in this Agreement shall be
deemed to impose upon the transferee of a Limited Partnership Interest under
Section 12.06 any obligation to return to the Partnership or any Partnership
creditor any Distribution made to a prior holder of such Limited Partnership
Interest.
SECTION 7.05. Rights of Limited Partners and Alliance Holding
Unitholders and Limited Partners Relating to the Partnership. In addition to
other rights provided by this Agreement or
50
by applicable law, the Limited Partners and the holders of Alliance Holding LP
Units and limited partnership interests shall have the following rights
relating to the Partnership:
(a) Each Limited Partner and each holder of Alliance Holding LP Units
and limited partnership interests, and each of their duly authorized
representatives, shall have the right upon reasonable notice and at reasonable
times and at such Person's own expense, but only upon written request and for
a purpose reasonably related to such Person's interest as a Limited Partner or
holder of Alliance Holding LP Units or limited partnership interests, as the
case may be, (i) to have reasonable information regarding the status of the
business and financial condition of the Partnership, (ii) to inspect and copy
the books of the Partnership and other reasonably available records and
information concerning the operation of the Partnership, including the
Partnership's federal, state and local income tax returns for each year, (iii)
to have on demand a current list of the full name and last known business,
residence or mailing address of each Limited Partner, (iv) to have reasonable
information regarding the Net Value of any Contribution made by any Partner
and the date on which each such Person became a Partner, (v) to have a copy of
this Agreement and the Certificate of Limited Partnership and all amendments
thereto, and (vi) to have any other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Anything in Section 7.05(a) to the contrary notwithstanding, the
General Partner may keep confidential from the Limited Partners and the
holders of Alliance Holding LP Units and limited partnership interests, and
each of their duly authorized representatives, for such period of time as the
General Partner deems reasonable, any information that the General Partner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in
the best interests of the Partnership or could damage the Partnership or its
business or which the Partnership is required by law or by agreements with
third parties to keep confidential.
SECTION 7.06. Agreement to be Bound by Terms of Partnership
Agreement. By accepting an LP Certificate, and as a condition to entitlement
to any rights in or benefits with respect to the Limited Partnership Interests
evidenced thereby, each Limited Partner will be deemed to have agreed to
comply with, and be bound by, all of the terms, conditions, rights and
obligations set forth in this Agreement, including, but not limited to, the
grant of the power of attorney set forth in Section 10.01.
ARTICLE 8
BOOKS, RECORDS, ACCOUNTING AND REPORTS
SECTION 8.01. Records and Accounting. The General Partner shall keep
or cause to be kept complete and accurate books and records with respect to
the Partnership's business, assets, liabilities, operations and financial
condition, which books and records shall at all times be kept
51
at the principal office of the Partnership. Any records maintained by the
Partnership in the regular course of its business, including the names and
addresses of Partners, books of account and records of Partnership
proceedings, may be kept on or be in the form of punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided
that the records so kept are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial reporting purposes, on the accrual basis in
accordance with generally accepted accounting principles.
SECTION 8.02. Fiscal Year. The fiscal year of the Partnership shall
be the same as its taxable year for federal income tax purposes, which shall
be the calendar year or such other year that is permitted under the Code as
the General Partner in its sole discretion shall determine.
SECTION 8.03. Reports. (a) The General Partner shall use its best
efforts to cause to be mailed not later than 90 days after the close of each
fiscal year to each Limited Partner, as of the last day of that fiscal year,
reports containing financial statements of the Partnership for the fiscal
year, including a balance sheet and statements of operations, partners' equity
and cash flow, all of which shall be prepared in accordance with generally
accepted accounting principles and shall be audited by the Partnership's
Accountants.
(b) The General Partner shall use its best efforts to cause to be
mailed not later than 45 days after the close of each fiscal quarter, except
the last fiscal quarter of each fiscal year, to each Limited Partner as of the
last day of such fiscal quarter, a quarterly report for the fiscal quarter
containing such financial and other information (which need not be audited) as
the General Partner deems appropriate.
The General Partner's obligations set forth in this Section 8.03 may be
satisfied by delivering to each Limited Partner a copy of the Form 10-K or
10-Q, as the case may be, or such other periodic reports containing comparable
financial information as may be filed by the Partnership pursuant to the
Securities Exchange Act or, if the Partnership is no longer subject to
on-going reporting requirements under the Securities Exchange Act, a copy of
the Form 10-K or 10-Q (containing separate financial statements of the
Partnership), as the case may be, or such other periodic reports containing
comparable financial information as may be filed by Alliance Holding pursuant
to the Securities Exchange Act.
SECTION 8.04. Other Information. The General Partner may release such
information concerning the operations of the Partnership to such sources as is
customary in the industry or required by law or regulation of any regulatory
body. In addition, the Partnership shall promptly provide to Alliance Holding
such financial and other information regarding the Partnership and any
Affiliates which it controls as may be reasonably requested by Alliance
Holding in connection with the preparation and filing of any reports required
to be filed by Alliance Holding under the Securities Exchange Act, the NYSE or
any comparable national securities market on which the Alliance Holding LP
Units are listed or quoted, or otherwise.
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ARTICLE 9
TAX MATTERS
SECTION 9.01. Preparation of Tax Returns. The General Partner shall
arrange for the preparation and timely filing of all returns relating to
Partnership income, gains, losses, deductions and credits, as necessary for
federal, state and local income tax purposes, and shall use its best efforts
to cause to be mailed to the Limited Partners within 90 days after the close
of the taxable year the tax information reasonably required for federal, state
and local income tax reporting purposes.
SECTION 9.02. Tax Elections. (a) The General Partner may, in its sole
discretion, make the election under Section 754 of the Code in accordance with
applicable regulations thereunder. In the event the General Partner makes such
election, the General Partner reserves the right to seek to revoke such
election upon its determination that such revocation is in the best interests
of the Limited Partners.
(b) To the extent permissible under Section 709 of the Code, the
Partnership shall elect to deduct expenses incurred in the Reorganization
ratably over a 60-month period as provided in Section 709 of the Code.
(c) Except as otherwise provided herein, the General Partner shall
determine in its sole discretion whether to make any other elections available
under the Code or under any state or local tax laws on behalf of the
Partnership.
SECTION 9.03. Tax Controversies. Subject to the provisions hereof,
the General Partner is designated as the Tax Matters Partner (as defined in
Section 6231 of the Code) and is authorized and required to represent the
Partnership (at the Partnership's expense) in connection with all examinations
of the Partnership's affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Partnership funds for
professional services and costs associated therewith. Each Limited Partner
agrees to cooperate with the General Partner and to do or so refrain from
doing any or all things reasonably required by the General Partner to conduct
such proceedings.
SECTION 9.04. Withholding. Notwithstanding any other provision of
this Agreement, the General Partner is authorized to take any action that it
determines to be necessary or appropriate to cause the Partnership to comply
with any withholding and reporting obligations imposed by law, including
pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.
SECTION 9.05. Entity-level Deficiency Collections. In the event the
Partnership is required by applicable law to pay any federal, state or local
income tax on behalf of any Partner or any former Partner, the General Partner
shall have the authority, in its sole discretion, and without the approval of
any Partner, to amend this Agreement as the General Partner determines
53
to be necessary or appropriate: (i) to provide for the payment of such taxes
and otherwise to enable the Partnership to comply with such law; (ii) to
withhold an appropriate amount from any Distributions to be made in the future
to Partners on whose behalf such taxes were paid, and to treat such amounts as
having been distributed to such Partners out of Available Cash Flow; (iii) to
authorize the General Partner, on behalf of the Partnership to take all
necessary or appropriate action to collect all or any portion of such taxes
from the Partners (whether current or former Partners); (iv) to treat such
taxes as an expense of the Partnership in computing Available Cash Flow to the
extent appropriate to reflect any amounts which cannot be collected (or
withheld pursuant to clause (ii)) from current or former Partners and to treat
any collection thereof as an addition to Available Cash Flow; and (v) to
reflect such other changes as the General Partner determines are necessary or
appropriate to implement the foregoing. If the Partnership is required to pay
any such taxes on behalf of the General Partner or any Corporate Affiliate,
the General Partner will either pay directly to the appropriate taxing
authority or make funds available to the Partnership to pay the General
Partner's share of such taxes and will take all necessary or appropriate
action to collect from its Corporate Affiliates, or cause such Corporate
Affiliate to pay directly to the appropriate taxing authority, such Corporate
Affiliate's share of such taxes.
ARTICLE 10
POWER OF ATTORNEY
SECTION 10.01. Power of Attorney. Each Limited Partner constitutes
and appoints each of the General Partner and the Liquidating Trustee severally
(and any successor to either thereof by merger, transfer, election or
otherwise), and each of the General Partner's and the Liquidating Trustee's
authorized officers and attorneys-in-fact, with full power of substitution, as
his true and lawful agents and attorneys-in-fact, with full power and
authority in his name, place and ▇▇▇▇▇ to:
(a) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (i) all certificates and other instruments
including, at the option of the General Partner or Liquidating Trustee, as the
case may be, this Agreement and the Certificate of Limited Partnership and all
amendments and restatements thereof, that the General Partner or Liquidating
Trustee, as the case may be, deems appropriate or necessary to carry out the
purposes of this Agreement and to form, qualify, or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the Limited Partners have limited liability) in the State of Delaware
and under the Delaware Act and in all jurisdictions in which the Partnership
may or may wish to conduct business or own property; (ii) all instruments that
the General Partner or Liquidating Trustee, as the case may be, deems
appropriate or necessary to reflect any amendment, change or modification of
this Agreement in accordance with its terms; (iii) all conveyances and other
instruments or documents that the General Partner or Liquidating Trustee, as
the case may be, deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement
(including a certificate of cancellation);
54
and (iv) all instruments (including, if required by law, this Agreement and
the Certificate of Limited Partnership and amendments and restatements
thereof) relating to the admission, withdrawal or substitution of any Partner,
the initial or increased Contribution of any Partner or the determination of
the rights, preferences and privileges of any class of Limited Partnership
Interests issued pursuant to Section 4.02; and
(b) sign, execute, swear to and acknowledge all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole discretion of the General Partner or the Liquidating
Trustee, as the case may be, to make, evidence, give, confirm or ratify any
vote, consent, approval, agreement or other action that is made or given by
the Partners hereunder or is consistent with the terms of this Agreement or
appropriate or necessary, in the sole discretion of the General Partner or the
Liquidating Trustee, as the case may be, to effectuate the terms or intent of
this Agreement; provided, however, that when required by any provision of this
Agreement which establishes a percentage of the Limited Partners or Limited
Partners of any class or series required to take any action, the General
Partner or Liquidating Trustee may exercise the power of attorney made in this
Section 10.01(b) only after the necessary vote, consent or approval by the
Limited Partners or Limited Partners of such class or series.
Nothing herein contained shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article 17
or as may be otherwise expressly provided for in this Agreement. Nothing
herein contained shall be construed as authorizing any Person acting pursuant
to this Article 10 to take any action to increase in any way the legal
liability of the Limited Partners beyond the liability expressly set forth in
this Agreement.
The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive, and shall not be
affected by, the subsequent death, incompetence, dissolution, disability,
incapacity, bankruptcy or termination of any grantor and the transfer of all
or any portion of his Partnership Interest and shall extend to such Person's
heirs, successors and assigns. Each Person who accepts Limited Partnership
Interests is deemed to consent to be bound by any representations made by the
General Partner or the Liquidating Trustee, acting in good faith pursuant to
such power of attorney. Each Person who accepts Limited Partnership Interests
is deemed to consent to and waive any and all defenses that may be available
to contest, negate or disaffirm any action of the General Partner or the
Liquidating Trustee, taken in good faith under such power of attorney. Each
Limited Partner shall execute and deliver to the General Partner or the
Liquidating Trustee, within 15 days after receipt of the General Partner's or
the Liquidating Trustee's request therefor, such further designations, powers
of attorney and other instruments as the General Partner or the Liquidating
Trustee deems necessary to effectuate this Agreement and the purposes of the
Partnership.
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ARTICLE 11
ISSUANCE OF CERTIFICATES
SECTION 11.01. Issuance of Certificates. Upon the issuance of Limited
Partnership Interests to Limited Partners, the General Partner shall cause the
Partnership to issue one or more LP Certificates in the names of such Limited
Partners. Each such LP Certificate shall be denominated in terms of the number
and type of Limited Partnership Interests evidenced by such LP Certificate.
Upon the transfer of a Limited Partnership Interest in accordance with the
terms of this Agreement, the General Partner shall cause the Partnership to
issue replacement LP Certificates in accordance with such procedures as the
General Partner, in its sole discretion, may establish. The General Partner
may also cause the Partnership to issue certificates evidencing the General
Partnership Interest, in such form as the General Partner may approve in its
sole discretion.
SECTION 11.02. Lost, Stolen, Mutilated or Destroyed Certificates. (a)
The Partnership shall issue a new LP Certificate in place of any LP Certificate
previously issued if the registered owner of the LP Certificate:
(i) makes proof by affidavit, in form and substance
satisfactory to the General Partner, that a previously issued LP
Certificate has been lost, destroyed or stolen;
(ii) requests the issuance of a new LP Certificate before
the Partnership has notice that the LP Certificate has been acquired
by a purchaser for value in good faith and without notice of an
adverse claim;
(iii) if requested by the General Partner, delivers to the
Partnership a bond, in form and substance satisfactory to the General
Partner, with such surety or sureties and with fixed or open penalty,
as the General Partner may direct, to indemnify the Partnership
against any claim that may be made on account of the alleged loss,
destruction or theft of the LP Certificate; and
(iv) satisfies any other reasonable requirements imposed by
the General Partner.
When an LP Certificate has been lost, destroyed or stolen, and the
owner fails to notify the Partnership within a reasonable time after he has
notice of it, and a transfer of the Limited Partnership Interests represented
by the LP Certificate is registered before the Partnership receives such
notification, the owner shall be precluded from making any claim against the
Partnership for such transfer or for a new LP Certificate.
(b) If any mutilated LP Certificate is surrendered to the General
Partner, the General Partner on behalf of the Partnership shall execute and
deliver in exchange therefor a new
56
LP Certificate evidencing the same number of Limited Partnership Interests as
did the LP Certificate so surrendered.
(c) As a condition to the issuance of any new LP Certificate under this
Section 11.02, the General Partner may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses connected therewith.
SECTION 11.03. Record Holder. The Partnership shall be entitled to
treat each Record Holder as the Limited Partner in fact of any Limited
Partnership Interests and, accordingly, shall not be required to recognize any
equitable or other claim or interest in or with respect to such Limited
Partnership Interests on the part of any other Person, regardless of whether
it shall have actual or other notice thereof, except as otherwise required by
law.
ARTICLE 12
TRANSFER OF PARTNERSHIP INTERESTS
SECTION 12.01. Transfer. (a) The term "transfer," when used in this
Article with respect to a Partnership Interest, shall be deemed to refer to a
transaction by which the holder of a Partnership Interest assigns such
Partnership Interest evidenced thereby to another Person, and includes a sale,
assignment, gift, pledge, hypothecation, mortgage, exchange or any other
disposition, whether by merger, consolidation or otherwise.
(b) Except as provided in Section 2.05, no Partnership Interest shall
be transferred in whole or in part, except in accordance with the terms and
conditions set forth in this Article 12. Any transfer or purported transfer of
any Partnership Interest not made in accordance with this Article 12 or
Section 2.05 shall not be recognized by the General Partner, which may refuse
to recognize the transferee as a Partner and may refuse to recognize any
rights of such transferee.
SECTION 12.02. Avoidance of Publicly Traded Partnership Status. It is
the intent of the Partners that the Partnership not be classified as a
publicly traded partnership under Section 7704 of the Code and not be required
to register any class of its securities with the Commission under the
Securities Exchange Act. The General Partner shall take such steps as it
believes, in its sole discretion, are necessary or desirable to prevent a risk
of such classification or registration requirement, including refusing to
consent to any transfer in its discretion. In particular, the General Partner
shall not permit transfers of Limited Partnership Interests that, in the
opinion of the General Partner, do not comply with the regulatory safe harbors
described in Treasury Regulations Section 1.7704-1, or any successor provision
thereof, or would obligate the Partnership to register any class of its
securities under the Securities Exchange Act. In addition, the General Partner
may in its sole discretion adopt such conventions or policies or amend this
57
Article 12 as it deems appropriate or necessary to comply with Code Section
7704 and the regulations promulgated thereunder.
SECTION 12.03. Permitted Transfers of Limited Partnership Interests.
(a) No transfer of any Limited Partnership Interests may be made without the
prior written consent of the General Partner, which may be withheld in the
sole discretion of the General Partner. The General Partner shall not consent
to any transfer of a Limited Partnership Interest unless the Limited Partner
requesting the transfer certifies in writing to the General Partner that such
Limited Partner received his entire Limited Partnership Interest either in the
Exchange or in a transfer that was approved by the General Partner pursuant to
this Section 12.03. The Partnership shall not recognize for any purpose any
purported transfer of any Limited Partnership Interest, and no transferee
shall become a Substitute Limited Partner, unless:
(i) the provisions of this Article 12 relating to the transfer
of Limited Partnership Interests have been complied with;
(ii) there shall have been filed with the Partnership and
recorded on the Partnership's books a duly executed and acknowledged
counterpart of the instrument making such transfer, and such
instrument sets forth the intention of the transferor that the
transferee succeed to all or a portion of the transferor's Limited
Partnership Interest as a Substituted Limited Partner in its place,
evidences the written acceptance by the transferee of all the terms
and provisions of this Agreement, including the grant of the powers
of attorney provided for in this Agreement as set forth herein,
represents that such transfer was made in accordance with all
applicable laws and regulations and in all other respects is
satisfactory in form and substance to the General Partner;
(iii) the transferee shall have paid all reasonable legal fees
and filing costs incurred by the Partnership in connection with the
transfer; and
(iv) the books and records of the Partnership shall have been
changed to reflect the admission of the transferee Limited Partner.
(b) Any Limited Partner who shall transfer all his Limited Partnership
Interests shall cease to be a Limited Partner of the Partnership.
(c) Notwithstanding anything in this Agreement to the contrary, for
purposes of this Article 12, no transfer will be considered approved by the
General Partner or recognized by the Partnership unless such transfer is also
approved by ELAS, which approval may be withheld in the sole discretion of
ELAS. Subject to the approval of ELAS as provided in the preceding sentence,
the General Partner shall consent to and permit transfers by Limited Partners
which are corporations or other business entities which are private transfers
pursuant to Treasury Regulation Section 1.7704-1(e)(vi) (relating to block
transfers), or pursuant to comparable
58
provisions of any amendment to such regulation, provided that the Partnership
receives an Opinion of Outside Counsel that the Partnership will not be
classified as a publicly traded partnership under Section 7704 of the Code as
a result of such transfers.
SECTION 12.04. Transfer of General Partnership Interests of the
General Partner. (a) Subject to the provisions of Section 12.02, the General
Partner may sell or otherwise transfer its General Partnership Interest to any
Person that is or in connection with the sale or transfer becomes a General
Partner, without any approval of the Partners and without obtaining an
Assignment Determination. Any Person acquiring a General Partnership Interest
as permitted by this Section 12.04 shall be entitled to be admitted as a
general partner. Subject to the provisions of Section 12.02, the General
Partner may effect sales or transfers as provided by this Section without
regard to the consequences thereof to the Partnership, other Partners or any
other Persons. The General Partner may not sell or otherwise transfer its
General Partnership Interest except as provided in this Section 12.04.
(b) No provision of this Agreement shall be construed to prevent (and
all Limited Partners hereby expressly consent to) any sale, transfer, exchange
or other disposition of any or all of the General Partnership Interest in
connection with the withdrawal of the General Partner pursuant to Article 14.
(c) Subject to the provisions of Section 12.02, the General Partner may
at any time transfer (in addition to the transfers permitted by Section
12.04(a)) one-tenth of its General Partnership Interest to any Corporate
Affiliate of the General Partner that in connection with the transfer becomes
a General Partner (the "Other General Partner"), if the Partnership receives
an Assignment Determination and a Tax Determination with respect thereto. In
connection with any such transfer, (i) the Other General Partner shall be
admitted as a General Partner, (ii) the transferor General Partner shall
remain a General Partner and shall not be relieved of any of its obligations
under this Agreement, (iii) the transferor General Partner shall be the sole
managing General Partner, with the exclusive power to manage the business and
affairs of the Partnership and the Other General Partner shall not participate
in, and shall have no responsibility for, the management of the business and
affairs of the Partnership and shall not be entitled to exercise any of the
powers with respect thereto granted to the General Partner, (iv) the Other
General Partner shall assume, jointly and severally with the transferor
General Partner, all of the obligations of the General Partner under this
Agreement (including, but not limited to, Section 12.04(a)), subject to clause
(ii) of this sentence and (v) the transferor General Partner shall be entitled
to make such amendments to this agreement as may be necessary to reflect or in
connection with the foregoing and to provide for the allocation of a portion
of the transferor General Partner's capital account to the Other General
Partner.
SECTION 12.05. Restrictions on Transfer. Subject to Section 12.03, no
transfer of any Limited Partnership Interest shall be made if such transfer
(a) would jeopardize the status of the Partnership as a partnership for United
States federal income tax purposes; (b) would violate the then applicable
federal and state securities laws or rules and regulations of the Commission,
any
59
state securities commission or any other governmental authorities with
jurisdiction over such transfer; (c) would affect the Partnership's existence
or qualification as a limited partnership under the Delaware Act; or (d) would
violate any then applicable administrative procedures and requirements as the
General Partner may adopt.
SECTION 12.06. Withdrawal of a Limited Partner. A Limited Partner may
not withdraw from the Partnership prior to its dissolution unless it sells or
otherwise transfers its Limited Partnership Interests to any Person that is,
or in connection with the sale or transfer becomes, a Limited Partner in
accordance with the provisions of Article 12. If an individual Limited Partner
dies, his executor, administrator or trustee, or, if he is adjudicated
incompetent, his committee, guardian or conservator, or, if he becomes
bankrupt, his trustee or the receiver of his estate, shall have all the rights
of a Limited Partner for purposes of settling or managing his estate and such
power as the decedent, incompetent or bankrupt possessed to assign all or any
part of his Limited Partnership Interests and to join with the assignee
thereof in satisfying the conditions precedent to such assignee's becoming a
Substituted Limited Partner. The withdrawal, death, dissolution, adjudication
of incompetence or bankruptcy of a Limited Partner shall not dissolve the
Partnership.
ARTICLE 13
ADMISSION OF GENERAL PARTNERS
SECTION 13.01. Admission of Additional and Successor General Partner.
An additional or successor general partner approved pursuant to Section 12.04,
14.01 or 15.01(b) shall be admitted to the Partnership as a General Partner
(in the place of or in addition to, as the case may be, the General Partner),
effective as of the date that an amendment to the Certificate of Limited
Partnership, adding its name and other required information, is filed pursuant
to Section 6.01(c) (which, in the event the successor or transferee General
Partner is in the place in whole of the withdrawing, removed or transferor
General Partner, shall be contemporaneous with the withdrawal of such
withdrawing, removed or transferor General Partner without dissolution of the
Partnership), and upon receipt by the withdrawing, removed or transferor
General Partner of all of the following:
(a) acceptance in form and substance satisfactory to such General
Partner of all of the terms and provisions of this Agreement;
(b) written agreement of the proposed General Partner to continue the
business of the Partnership; and
(c) such other documents or instruments as may be required in order to
effect its admission as a General Partner under this Agreement and applicable
law. Each Limited Partner is deemed to approve of the admission of a successor
General Partner selected pursuant
60
to the terms of this Agreement and no further approval of Partners shall be
required to effect such admission. Any such successor or additional General
Partner shall carry on the business of the Partnership. No Person shall be
admitted as a general partner of the Partnership except as contemplated by
Section 12.04, 14.01 or 15.01(b) or as otherwise expressly authorized by this
Agreement.
ARTICLE 14
WITHDRAWAL OR REMOVAL OF PARTNERS
SECTION 14.01. Withdrawal or Removal of the General Partner. (a) The
General Partner covenants and agrees that except in connection with a transfer
of its General Partnership Interest in accordance with Section 12.04, it will
not voluntarily withdraw as the General Partner unless (i) the Partnership
receives a Limited Liability Determination, a Tax Determination and an
Assignment Determination; (ii) such withdrawal receives Majority Outside
Approval; and (iii) the General Partner or one of its Affiliates is not the
general partner of Alliance Holding or simultaneously withdraws as the general
partner of Alliance Holding in accordance with the terms of the Alliance
Holding Partnership Agreement. If the General Partner gives a notice of its
intent to withdraw, it shall call and conduct a meeting of the Limited
Partners to obtain the requisite Majority Outside Approval and to consider and
approve a successor General Partner. If the proposed withdrawal of the General
Partner will result in the dissolution of the Partnership, such meeting shall
be held no sooner than 180 days after the date of notice and any Limited
Partner may, by notice to the General Partner at least 120 days prior to the
date of the meeting, propose a successor general partner. Such proposed
successor general partner shall only be included on the ballot if it has
complied with all legal requirements necessary for such inclusion. If the
requisite Majority Outside Approval is obtained, but no successor general
partner is approved on the first ballot of such meeting, a second ballot shall
be held as soon as practicable thereafter in order to consider the approval of
the candidate that received the most votes on the first ballot. If such
candidate is not approved on the second ballot, the Partnership shall be
dissolved and liquidated pursuant to Article 15 and the General Partner shall
serve as Liquidating Trustee. If a successor general partner is elected, it
shall be admitted immediately prior to the withdrawal of the General Partner
and shall continue the business and operations of the Partnership without
dissolution.
(b) Except as provided below, the General Partner may be removed upon
the affirmative vote of (i) Limited Partners holding 80% or more of the issued
and outstanding Limited Partnership Interests if such removal is not for
cause, or (ii) Limited Partners holding 50% or more of the issued and
outstanding Limited Partnership Interests if such removal is for cause. The
limited partners and unitholders of Alliance Holding shall be entitled to vote
upon such removal (through instructions to Alliance Holding, in its capacity
as a Limited Partner of the Partnership, directing the actions of Alliance
Holding with respect to voting the Limited Partnership Interest held by
Alliance Holding) in accordance with Section 17.04(b) of the
61
Alliance Holding Partnership Agreement. As used in this Article 14, "cause"
means that a court of competent jurisdiction has entered a final,
non-appealable judgment in an action in which the General Partner is a party,
finding that any action or failure to act on the part of the General Partner
involved an act or omission undertaken with deliberate intent to cause injury
to the Partnership, constituted actual fraud or actual bad faith on the part
of the General Partner or was undertaken with reckless disregard for the best
interests of the Partnership. The right to remove the General Partner shall
not exist or be exercised unless (i) the General Partner or one of its
Affiliates is not the general partner of Alliance Holding or is simultaneously
removed as the general partner of Alliance Holding in accordance with the
terms of the Alliance Holding Partnership Agreement; (ii) such action for
removal also provides for the election of a new general partner and (iii) the
Partnership receives a Limited Liability Determination, a Tax Determination
and an Assignment Determination; any Opinions of Outside Counsel delivered in
connection with such determinations shall be opinions of counsel selected by
the successor general partner. Such removal shall be effective immediately
subsequent to the admission of the successor General Partner pursuant to
Article 13.
SECTION 14.02. Interest of Departing Partner and Successor. (a) Upon
the withdrawal or removal of the General Partner, the Departing Partner may,
at its option exercisable prior to the effective date of the departure of such
Departing Partner, transfer and sell to its successor as General Partner all
of the General Partnership Interest held or owned by the Departing Partner,
and the successor General Partner shall purchase such General Partnership
Interest for an amount in cash equal to the fair market value of such General
Partnership Interest, the amount to be determined and payable as of the
effective date of its departure. For purposes of this Section 14.02, the fair
market value of the Departing Partner's General Partnership Interest shall be
determined by agreement between the Departing Partner and its successor or,
failing agreement within 30 days after the effective date of such Departing
Partner's departure, by an independent investment banking firm or other
independent expert selected by the Departing Partner and its successor, which,
in turn, may rely on other experts and the determination of which shall be
binding and conclusive as to such matter. If such parties cannot agree upon
one independent investment banking firm or other independent expert within 45
days after the effective date of such departure, then each of the Departing
Partner and its successor shall designate an independent investment banking
firm or other independent expert and the independent investment banking firm
or other independent expert selected by each of the Departing Partner and its
successor shall in turn designate a single independent investment banking firm
or other independent expert; each such firm or expert shall determine the fair
market value of the Departing Partner's General Partnership Interest and the
determination of the firm or expert that is neither the highest nor the lowest
shall control. In making its determination, the independent investment banking
firm or other independent expert shall consider the LP Interest Price, the
value of the Partnership Assets, the rights and obligations of the General
Partner and other factors it may deem relevant.
(b) If the Departing Partner's General Partnership Interest is not
acquired pursuant to Section 14.02(a), the Departing Partner shall become a
Limited Partner, and its General
62
Partnership Interest shall be converted into Limited Partnership Interests
pursuant to a valuation made by the investment banking firm or other
independent expert selected pursuant to Section 14.02(a) without any reduction
in such Partnership Interest (subject to proportionate dilution by reason of
the admission of its successor).
This Agreement shall be amended to reflect any event described in
this Article 14, and any successor General Partner covenants so to amend this
Agreement and the Certificate.
(c) If the Departing Partner's General Partnership Interest is not
acquired pursuant to Section 14.02(a), the successor to such Departing Partner
shall at the effective date of its admission to the Partnership contribute to
the capital of the Partnership cash in an amount such that its Capital
Account, after giving effect to such contribution, shall be equal to that
percentage of the Capital Accounts of all Partners that is equal to its
Percentage Interest as a General Partner, which shall be 1%. In such event
such successor shall be entitled to such Percentage Interest, as the case may
be, of all Partnership allocations and Distributions.
(d) If the Partnership is indebted to the Departing Partner at the
effective date of its departure for funds advanced, properties sold or
services rendered to the Partnership by the Departing Partner, the Partnership
shall, within 60 days after the effective date of such departure, pay to the
Departing Partner the full amount of such indebtedness. The successor to the
Departing Partner shall assume all obligations theretofore incurred by the
Departing Partner as the General Partner of the Partnership, and the
Partnership and such successor shall take all such action as shall be
necessary to terminate any guarantees of the Departing Partner and any of its
Affiliates of any obligations of the Partnership. If for whatever reason the
creditors of the Partnership will not consent to such termination of
guarantees, the successor to the Departing Partner shall be required to
indemnify the Departing Partner for any liabilities and expenses incurred by
the Departing Partner on account of such guarantees pursuant to an agreement
reasonably satisfactory in form and substance to the Departing Partner.
SECTION 14.03. Withdrawal of Limited Partners. No Limited Partner
shall have any right to withdraw from the Partnership; provided, however, that
upon a transfer of a transferor Limited Partner's Limited Partnership
Interests in accordance with Article 12 and the transferee's becoming a
Limited Partner, the transferor Limited Partner shall cease to be a Limited
Partner with respect to the Limited Partnership Interests so transferred, but
until such transferee becomes a Limited Partner, the transferor shall continue
to be a Limited Partner. No Limited Partner shall be entitled to any
Distribution from the Partnership for any reason or upon any event except as
expressly set forth in Articles 5 and 15.
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ARTICLE 15
DISSOLUTION AND LIQUIDATION
SECTION 15.01. Dissolution. (a) The Partnership shall not be
dissolved by the admission of Substituted Limited Partners or Additional
Limited Partners, or by the admission of substituted or additional general
partners in accordance with the terms of this Agreement. Except as provided in
Section 15.01(b), the Partnership shall be dissolved and its affairs shall be
wound up upon:
(i) the withdrawal or removal of the General Partner or the
occurrence of any other event that results in its ceasing to be the
General Partner (other than by reason of a transfer pursuant to
Section 12.04 or a withdrawal or removal occurring upon or after
approval by the Limited Partners of a successor pursuant to Section
14.01);
(ii) the filing of a certificate of dissolution or the
revocation of the certificate of incorporation of the General
Partner;
(iii) a written determination by the General Partner (which
the General Partner shall have no obligation or duty to make) that
projected future revenues over the next five years of the Partnership
are insufficient to enable payment of the projected Partnership costs
and expenses for such period;
(iv) an election to dissolve the Partnership by the General
Partner which receives Majority Outside Approval;
(v) the bankruptcy of the General Partner;
(vi) upon the written election of the General Partner to
dissolve the Partnership pursuant to an election of the General
Partner under clause (y) of the first sentence of Section 2.05;
(vii) the sale of all or substantially all of the
Partnership Assets approved in accordance with Section 6.12(a)(i); or
(viii) any other event requiring dissolution under the
Delaware Act.
For purposes of this Section 15.01, bankruptcy of the General Partner shall be
deemed to have occurred when (A) it commences a voluntary proceeding, or files
an answer in any involuntary proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) it is adjudged a bankrupt or insolvent, or has
entered against it a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect, (C) it
executes and delivers a general assignment for the
64
benefit of its creditors, (D) it files an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against it
in any proceeding of the nature described in clause (A) above, (E) it seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for it or for all or any substantial part of its properties, or (F)
(1) any proceeding of the nature described in clause (A) above has not been
dismissed 120 days after the commencement thereof, (2) the appointment without
its consent or acquiescence of a trustee, receiver or liquidator appointed
pursuant to clause (E) above has not been vacated or stayed within 90 days of
such appointment, or (3) such appointment is not vacated within 90 days after
the expiration of any such stay.
(b) Upon an event described in Section 15.01(a)(i), 15.01(a)(ii), or
15.01(a)(v), the Partnership shall not be dissolved if, within 90 days after
the event described in any of such Sections, a majority in interest of the
remaining Partners agree to continue the business of the Partnership and to
the selection, effective as of the date of such event, of a successor General
Partner. In such event, the Partnership shall continue until dissolved in
accordance with this Article 15, and the General Partnership Interest of the
former General Partner shall be subject to disposition in the manner provided
in Section 14.02(a).
SECTION 15.02. Liquidation. Upon dissolution of the Partnership, the
General Partner, or, in the event the General Partner has been dissolved or
removed or has withdrawn from the Partnership, or the Partnership has been
dissolved pursuant to Section 15.01(a)(i), 15.01(a)(ii) or 15.01(a)(v), a
liquidator or liquidating committee approved by a Majority Approval shall be
the Liquidating Trustee. The Liquidating Trustee (if other than the General
Partner) shall be entitled to receive such compensation for its services as
may be approved by a Majority Approval. The Liquidating Trustee shall agree
not to resign at any time without 30 days' prior written notice and (if other
than the General Partner) may be removed at any time, with or without cause,
by notice of removal approved by a Majority Approval. Upon dissolution,
removal or resignation of the Liquidating Trustee, a successor and substitute
Liquidating Trustee (who shall have and succeed to all rights, powers and
duties of the original Liquidating Trustee) shall within 60 days thereafter be
approved by a Majority Approval. If a Liquidating Trustee is not selected and
qualified within the time periods set forth in this Section 15.02, any Limited
Partner may apply to any court of competent jurisdiction for the winding up of
the Partnership and, if appropriate, the appointment of a Liquidating Trustee.
The right to appoint a successor or substitute Liquidating Trustee in the
manner provided herein shall be recurring and continuing for so long as the
functions and services of the Liquidating Trustee are authorized to continue
under the provisions thereof, and every reference herein to the Liquidating
Trustee shall be deemed to refer also to any such successor or substitute
liquidator appointed in the manner herein provided. Except as expressly
provided in this Article 15, the Liquidating Trustee appointed in the manner
provided herein shall have and may exercise, without further authorization or
approval of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers), regardless of whether the Liquidating Trustee is the General Partner,
to the extent necessary or desirable in the good faith judgment of the
Liquidating Trustee to
65
complete the winding up and liquidation of the Partnership as provided for
herein. The Liquidating Trustee shall liquidate the assets of the Partnership,
and apply and distribute the proceeds of such liquidation in the following
order of priority, unless otherwise required by mandatory provisions of
applicable law:
(a) the payment to creditors of the Partnership, including
Partners, in order of priority provided by law, and the creation of a
reserve of cash or other assets of the Partnership for contingent
liabilities in an amount, if any, determined by the Liquidating
Trustee in its sole judgment to be appropriate for such purposes;
(b) to the Partners with positive balances in their Capital
Accounts (after crediting or charging thereto the appropriate portion
of Net Income, Net Loss and Depreciation in accordance with Article 5
and after giving effect to all amounts distributed or to be
distributed to such Partners with respect to all calendar quarters of
the Partnership prior to the quarter in which the liquidation of the
Partnership occurs) an amount equal to the sum of all such positive
balances, such Distribution to be made in proportion to the positive
amounts in such Capital Accounts; and
(c) to the Partners in accordance with their Percentage
Interests.
SECTION 15.03. Distribution in Kind. (a) Notwithstanding the
provisions of Section 15.02 which require the liquidation of the Partnership
Assets, but subject to the order of priorities set forth therein, if on
dissolution of the Partnership the Liquidating Trustee determines that an
immediate sale of part or all of the Partnership Assets would be impractical
or would cause undue loss to the Partners or is otherwise undesirable, the
Liquidating Trustee may, in its absolute discretion, defer for a reasonable
time the liquidation of any Partnership Assets except those necessary to
satisfy liabilities of the Partnership and may, in its absolute discretion,
distribute to the Partners, in lieu of cash, as tenants in common, undivided
interests in such Partnership Assets as the Liquidating Trustee deems not
suitable for liquidation. Any distributions in kind shall be subject to such
conditions relating to the disposition and management thereof as the
Liquidating Trustee deems reasonable and equitable and to any agreements
governing the operation of such Partnership Assets at such time. In lieu of
distributing any Partnership Asset (other than cash) in kind among the
Partners the Liquidating Trustee, in its sole discretion, may determine to
distribute Partnership Assets (other than cash) to certain Partners and solely
cash to other Partners. The Liquidating Trustee shall determine the fair
market value of any Partnership Assets distributed in kind using such
reasonable method of valuation as it may adopt; if the General Partner is the
Liquidating Trustee, such fair market value shall be determined by an
Appraiser.
(b) Notwithstanding the provisions of Section 15.02 or Section
15.03(a), but subject to the order of priorities set forth in Section 15.02,
if equity interests are to be distributed to Partners in connection with a
dissolution of the Partnership pursuant to an election of the General Partner
under clause (y) of Section 2.05, then distributions in kind of the equity
interests shall be
66
made pursuant to such election and the provisions of Section 2.05 (and,
without limitation, the requirements of Section 15.03(a) relating to
distributions of undivided interests to Partners as tenants in common shall
not be applicable to any such distributions).
SECTION 15.04. Cancellation of Certificate of Limited Partnership.
Upon the completion of the distribution of Partnership Assets as provided in
Sections 15.02 and 15.03, the Partnership shall be terminated, and the
Liquidating Trustee (or the General Partner or Limited Partners) shall cause
the cancellation of the Certificate of Limited Partnership and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware and shall take such other
actions as may be necessary to terminate the Partnership.
SECTION 15.05. Reasonable Time for Winding Up. A reasonable time
shall be allowed for the orderly winding up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Sections 15.02 and
15.03 in order to minimize any losses otherwise attendant upon such winding
up.
SECTION 15.06. Return of Contributions. The General Partner shall not
be liable for the return of any Contributions of the Limited Partners, or any
portion thereof, it being expressly understood that any such return shall be
made solely from Partnership Assets.
SECTION 15.07. No Obligation to Restore Deficit. None of the Partners
shall be obligated to contribute cash to the Partnership in order to eliminate
the negative balance, if any, in its Capital Account.
SECTION 15.08. Waiver of Partition. Each Partner, by requesting and
being granted admission to the Partnership, is deemed to waive until
termination of the Partnership any and all rights that he may have to maintain
an action for partition of the Partnership's Assets.
ARTICLE 16
RIGHT TO PURCHASE LIMITED PARTNERSHIP INTERESTS
SECTION 16.01. Right to Purchase Limited Partnership Interests. (a)
Notwithstanding any other provision of this Agreement, if at any time less
than 10% of the issued and outstanding Limited Partnership Interests are held,
directly or indirectly, by Persons other than the General Partner, its
Affiliates and officers and employees of the General Partner, the Partnership
or Alliance Holding or Persons controlled by the Partnership or Alliance
Holding (hereinafter referred to as "Affiliated Holders") (including, for
purposes of determining the Limited Partnership Interests held by Persons
other than Affiliated Holders, the number of Limited Partnership Interests
held by Alliance Holding multiplied by a fraction, the numerator of which is
the number of issued and outstanding Alliance Holding LP Units held by Persons
other than Affiliated Holders and the denominator of which is the number of
issued and outstanding
67
Alliance Holding LP Units), the General Partner shall then have the right,
which right it may assign and transfer to the Partnership, Alliance Holding or
any of the General Partner's Affiliates, exercisable in its sole discretion at
any time, to purchase all, but not less than all, of any such Limited
Partnership Interests that remain outstanding and held by Persons other than
the General Partner and its Affiliates, at a price per Limited Partnership
Interest equal to the Purchase Price. The right to purchase Limited
Partnership Interests pursuant to this Section 16.01 shall not be exercisable
unless the General Partner, the Partnership, Alliance Holding or any of the
General Partner's Affiliates simultaneously purchases all, but not less than
all, of the Alliance Holding LP Units that remain outstanding and held by
Persons other than the General Partner and its Affiliates, at a price per
Alliance Holding LP Unit equal to the Purchase Price. For purposes of this
Section 16.01, a Limited Partnership Interest held for the benefit of an
employee, or by or for the benefit of a member of the family of an employee,
shall be treated as if owned by that employee.
(b) In the event the General Partner, any Affiliate of the General
Partner, the Partnership or Alliance Holding elects to exercise such right to
purchase Limited Partnership Interests pursuant to this Article 16, the
General Partner, its Affiliate, the Partnership or Alliance Holding, as the
case may be, shall deliver to the General Partner written notice of such
election to purchase (hereinafter in this Article 16 called the "Notice of
Election to Purchase") and shall mail a copy of such Notice of Election to
Purchase to the Limited Partners holding such Limited Partnership Interests at
least 10, but not more than 60, days prior to the Purchase Date. Such Notice
of Election to Purchase shall also be published at least twice in at least one
daily newspaper of general circulation printed in the English language and
published in the Borough of Manhattan, New York. The Notice of Election to
Purchase shall specify the Limited Partnership Interests to be purchased, the
Purchase Date and the Purchase Price, and state that the General Partner, its
Affiliate, the Partnership or Alliance Holding, as the case may be, elects to
purchase such Limited Partnership Interests, upon surrender thereof in
exchange for payment, at such office or offices of the General Partner as the
General Partner may specify. Any such Notice of Election to Purchase mailed to
a Limited Partner of such Limited Partnership Interests at his address as
reflected in the records of the Partnership shall be conclusively presumed to
have been given regardless of whether the owner receives such notice. On or
prior to the Purchase Date, the General Partner, its Affiliate, the
Partnership or Alliance Holding, as the case may be, shall deposit with the
Partnership cash in an amount equal to the Purchase Funds. If the Notice of
Election to Purchase shall have been duly given as aforesaid at least 10 days
prior to the Purchase Date, and if on or prior to the Purchase Date the
Purchase Funds shall have been deposited with the Partnership in trust for the
benefit of the owners of Limited Partnership Interests subject to purchase as
provided in this Article 16, then from and after the Purchase Date,
notwithstanding that any LP Certificates shall not have been surrendered for
purchase, all rights of the owners of such Limited Partnership Interests
(including, but not limited to, any rights pursuant to Articles 4, 5 and 15)
shall thereupon cease, except the right to receive the Purchase Price
therefor, without interest, upon surrender to the General Partner of the LP
Certificates, and such Limited Partnership Interests shall thereupon be deemed
to have been transferred to the General Partner, its Affiliate, the
Partnership or Alliance Holding, as the case
68
may be, on the record books of the Partnership, and the General Partner or any
Affiliate of the General Partner, the Partnership or Alliance Holding, as the
case may be, shall be deemed to be the owner of all such Limited Partnership
Interests from and after the Purchase Date and shall have all rights as the
owner of such Limited Partnership Interests (including, but not limited to,
all rights as owner of such Limited Partnership Interests pursuant to Articles
4, 5 and 15).
(c) At any time during one year after the Purchase Date, a holder of
an issued and outstanding Limited Partnership Interests subject to purchase as
provided in this Article 16 may surrender his LP Certificate to the General
Partner in exchange for payment of the Purchase Price therefor, without
interest thereon. If such holder does not surrender such LP Certificate within
such one year period, the Purchase Funds deposited with the Partnership in
trust for such holder shall revert to, and shall be returned to, the General
Partner, its Affiliate, the Partnership or Alliance Holding, as the case may
be, and thereafter such holder may look only to the Person to which such funds
were returned for payment.
ARTICLE 17
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
SECTION 17.01. Amendments to be Adopted Solely by the General
Partner. The General Partner (pursuant to the General Partner's power of
attorney) without the approval at the time of any Partner or other Person
(each Person who accepts Limited Partnership Interests being deemed to approve
of any such amendment) may amend any provision of this Agreement or the
Certificate of Limited Partnership, and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect:
(a) a change in the name of the Partnership or the location of the
principal place of business of the Partnership;
(b) the admission, substitution or withdrawal of Partners in accordance
with this Agreement;
(c) a change that the General Partner in its sole discretion
determines is necessary or advisable to qualify the Partnership as a limited
partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state;
(d) a change that the General Partner in its sole discretion
determines (i) does not adversely affect the Limited Partners in any material
respect, (ii) is necessary or desirable to satisfy any requirements,
conditions or guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or contained in any federal or state
statute or (iii) is required to effect the intent of the provisions of this
Agreement or otherwise contemplated by this Agreement;
69
(e) an amendment that the General Partner in its sole discretion
determines is necessary or desirable in connection with the issuance of any
class or series of Partnership Interests or other securities, and the
establishment of the rights and preferences of such class or series of
Partnership Interests or other securities, pursuant to Section 4.02,
including, but not limited to, Section 4.02(e);
(f) an amendment that the General Partner in its sole discretion
determines is necessary or desirable in connection with any action taken
pursuant to Section 2.05;
(g) an amendment that the General Partner in its sole discretion
determines is necessary or desirable to conform the provisions of this
Agreement to the provisions of the Alliance Holding Partnership Agreement;
(h) an amendment that the General Partner in its sole discretion
determines is necessary or desirable to cure any ambiguity in this Agreement
or to correct or supplement any provision of this Agreement that may be
defective or inconsistent with any other provision of this Agreement;
(i) an amendment pursuant to Section 9.05.
SECTION 17.02. Amendment Procedures. No amendment may be made to this
Agreement unless it has been proposed by the General Partner. Except as
provided in Sections 17.01 and 17.03, all amendments to this Agreement shall
be made in accordance with the following requirements:
(a) Any amendment to this Agreement may be proposed by the General
Partner by submitting the text of the amendment to all Limited Partners in
writing.
(b) If an amendment is proposed pursuant to subsection 17.02(a)
above, the General Partner shall call a meeting of the Limited Partners to
consider and vote on the proposed amendment unless, in the Opinion of Counsel,
such proposed amendment would be illegal under Delaware law if approved.
Subject to Section 17.03, a proposed amendment shall be effective upon
approval by the General Partner and Majority Approval unless otherwise
required by law. The General Partner shall notify all Limited Partners upon
final approval or disapproval of any proposed amendment.
SECTION 17.03. Special Amendment Requirements. Notwithstanding the
provisions of Sections 17.01 and 17.02,
(a) If any amendment to this Agreement would by its terms adversely
alter the rights and preferences of any class or series with respect to
distributions or otherwise materially and adversely alter the rights and
preferences of any class or series, other than as contemplated by Section
2.05, 4.02 or 9.05, such amendment shall become effective only upon (i)
Majority
70
Outside Approval (in addition to approval of the General Partner), if such
class consists of the Limited Partnership Interests as constituted on the date
of this Agreement (or Limited Partnership Interests subsequently issued with
identical rights and preferences), or (ii) in the case of any other class or
series, approval of the holders of a majority of the outstanding interests of
such class or series. No amendment to this Agreement with respect to which the
Partnership does not receive an Assignment Determination, Liability
Determination and Tax Determination shall become effective without Majority
Outside Approval (in addition to approval of the General Partner), unless such
amendment is pursuant to Section 17.01(f) or is in connection with the
transfer of the General Partnership Interest or the admission, substitution or
withdrawal of a general partner in accordance with this Agreement.
(b) No provision of this Agreement which establishes a percentage of
the Partners (or a class or series thereof) required to take any action shall
be amended, altered, changed, repealed or rescinded in any respect that would
have the effect of changing such percentage, unless such amendment is approved
by a written approval or an affirmative vote of Partners (or a class or series
thereof) constituting not less than the number required by the voting
requirement sought to be reduced (in addition to approval of the General
Partner).
(c) No amendment of Sections 6.14, 14.01 or 17.04 or this Section
17.03(c) shall become effective without Majority Outside Approval (in addition
to approval of the General Partner).
SECTION 17.04. Meetings. (a) Meetings of the Limited Partners for any
purpose with respect to which the Limited Partners are entitled to vote may be
called by the General Partner at any time (there being no obligation to hold
annual or other periodic meetings of the Limited Partners) and shall be called
by the General Partner within ten days after receipt of a written request for
such a meeting signed by Limited Partners which hold 25% or more in interest
of the Limited Partnership Interests or a written request submitted by
Alliance Holding in accordance with Section 17.04(e) of the Alliance Holding
Partnership Agreement. Any such request shall state the purpose of the
proposed meeting and the matters to be acted upon thereat. Meetings shall be
held at the principal office of the Partnership or at such other place as may
be designated by the General Partner or, if the meeting is called upon the
request of Limited Partners, as designated by such Limited Partners. In
addition, the General Partner may, but shall not be obligated to, submit any
matter upon which the Limited Partners are entitled to act to the Limited
Partners for a vote by written consent without a meeting pursuant to Section
17.12. Holders of Alliance Holding LP Units and Alliance Holding limited
partnership interests shall be entitled to attend all meetings of the Limited
Partners.
(b) A Limited Partner shall be entitled to cast one vote for each
Limited Partnership Interest which he owns: (i) at a meeting in person, by
written proxy or by a signed writing directing the manner in which he desires
that his vote be cast, which writing must be received by the General Partner
prior to such meeting or (ii) without a meeting, by a signed writing directing
the manner in which he desires that his vote be cast, which writing must be
received by the
71
General Partner prior to the date upon which the votes of Limited Partners are
to be counted. Every proxy shall be revocable at the pleasure of the Limited
Partner executing it. Alliance Holding (in its capacity as a Limited Partner
of the Partnership) shall vote (whether by proxy, ballot, consent or
otherwise) so many of the Limited Partnership Interests held by it in favor
of, in opposition to, or shall abstain with respect to any matter upon which
the Limited Partners are to vote in accordance with the written instructions
or proxies received by it from the partners and unitholders of Alliance
Holding as provided in Section 17.04(b) of the Alliance Holding Partnership
Agreement as of the applicable record date. Other than their rights as herein
provided to give written instructions to Alliance Holding, the Alliance
Holding unitholders and partners shall have no other voting or consent rights
with respect to the Partnership. The laws of the State of Delaware pertaining
to the validity and use of corporate proxies shall govern the validity and use
of proxies given by Limited Partners. Subject to the provisions of Section
4.02 and the rights of the holders of any securities issued pursuant thereto,
the Limited Partners shall vote as a single class with respect to all matters
voted upon by the Limited Partners.
(c) With respect to any matter upon which the Limited Partners are
requested to vote or to give their consent, for which the required vote for
approval is not otherwise specified in this Agreement, such matter shall be
considered approved upon Majority Approval.
SECTION 17.05. Notice of Meeting. Notice of a meeting called pursuant
to Section 17.04 shall be given in writing by hand delivery, by courier
service or by mail addressed to each Limited Partner at the address of the
Limited Partner appearing on the books of the Partnership. An affidavit or
certificate of delivery or of mailing of any notice or report in accordance
with the provisions of this Article 17 executed by the General Partner,
delivery or courier service or mailing organization shall constitute
conclusive (but not exclusive) evidence of the giving of notice. If any notice
addressed to a Limited Partner at the address of such Limited Partner
appearing on the books of the Partnership is returned to the Partnership by
the United States Postal Service marked to indicate that the United States
Postal Service is unable to deliver such notice, the notice and any subsequent
notices or reports shall be deemed to have been duly given without further
mailing if they are available for the Limited Partner at the principal office
of the Partnership for a period of one year from the date of the giving of the
notice to all other Limited Partners.
SECTION 17.06. Record Date. For purposes of determining the Limited
Partners entitled to notice or to vote at a meeting of the Limited Partners or
to give consents without a meeting as provided in Section 17.12, the General
Partner or the Liquidating Trustee, if any, may set a Record Date, which
Record Date shall not be less than ten (10) days nor more than 60 days prior
to the date of such meeting or consent.
SECTION 17.07. Adjournment. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting and a new
Record Date need not be fixed if the time and place of such adjourned meeting
are announced at the meeting at which such adjournment is taken, unless such
adjournment shall be for more than 30 days. At the adjourned
72
meeting, the Partnership may transact any business that would have been
permitted to be transacted at the original meeting. If the adjournment is for
more than 30 days, or if a new Record Date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given in accordance with this
Article 17.
SECTION 17.08. Waiver of Notice; Consent to Meeting; Approval of
Minutes. The transactions of any meeting of Limited Partners however called
and noticed, and wherever held, are as valid as though they had been approved
at a meeting duly held after regular call and notice if a quorum is present
either in person or by proxy, and if, either before or after the meeting, each
of the Limited Partners entitled to vote, not present in person or by proxy,
signs a waiver of notice, or a consent to the holding of the meeting, or an
approval of the minutes thereof. All such waivers, consents and approvals
shall be filed with the Partnership records or made a part of the minutes of
such meeting. Attendance of a Limited Partner at a meeting shall constitute a
waiver of notice of the meeting; provided, however, that no such waiver shall
occur when the Limited Partner objects, at the beginning of the meeting, to
the transaction of any business at such meeting because the meeting is not
lawfully called or convened; and provided further, that attendance at a
meeting is not a waiver of any right to object to the consideration of any
matters required to be included in the notice of the meeting, but not so
included, if the objection is expressly made at the meeting.
SECTION 17.09. Quorum. Limited Partners of record who are Limited
Partners with respect to more than 50% of the total number of all outstanding
Limited Partnership Interests of the class or series entitled to vote with
respect to the matter held by all Limited Partners of record, whether
represented in person or by proxy, shall constitute a quorum at a meeting of
Limited Partners. As to the Limited Partnership Interests then held by
Alliance Holding (in its capacity as a Limited Partner of the Partnership),
only Limited Partnership Interests with respect to which Alliance Holding has
received written instructions or proxies as provided in Section 17.04(b) of
the Alliance Holding Partnership Agreement shall be deemed represented for
purposes of determining whether a quorum is present. The Limited Partners
present at a duly called or held meeting at which a quorum is present may
continue to transact business until adjournment of such meeting
notwithstanding the withdrawal of enough Limited Partners to leave less than a
quorum, if any action taken (other than adjournment) is approved by the
requisite vote of Limited Partners specified in this Agreement. In the absence
of a quorum, any meeting of Limited Partners may be adjourned from time to
time by the affirmative vote of a majority of the Limited Partnership
Interests represented either in person or by proxy at such meeting, but no
other business may be transacted.
SECTION 17.10. Conduct of Meeting. The General Partner or the
Liquidating Trustee, as the case may be, shall be solely responsible for
convening, conducting and adjourning any meeting of Limited Partners,
including without limitation the determination of Persons entitled to vote at
such meeting, the existence of a quorum for such meeting, the satisfaction of
the requirements of Section 17.04 with respect to such meeting, the conduct of
voting at such meeting, the validity and effect of all instructions or proxies
to Alliance Holding, in its capacity
73
as a Limited Partner of the Partnership, as to the voting of Limited
Partnership Interests held by it, the validity and effect of all proxies
represented at such meeting and the determination of any controversies, votes
or challenges arising in connection with or during such meeting or voting. The
General Partner or the Liquidating Trustee, as the case may be, shall
designate a Person to serve as chairman of any meeting and further shall
designate a Person to take the minutes of any meeting, which Person, in either
case, may be, without limitation, a Partner or any officer, employee or agent
of the General Partner. The General Partner or the Liquidating Trustee, as the
case may be, may make all such other regulations, consistent with applicable
law and this Agreement, as it may deem advisable concerning the conduct of any
meeting of the Limited Partners, including regulations in regard to the
appointment of proxies and other evidence of the right to vote.
SECTION 17.11. Instructions by Nominees. With respect to Limited
Partnership Interests that are held for a Person's account by another Person
(such as a broker, dealer, bank, trust company or clearing corporation, or any
agent of any of the foregoing), in whose name the LP Certificates evidencing
such Limited Partnership Interests are registered, such broker, dealer or
other agent shall vote such Limited Partnership Interests at the direction of
the Person on whose behalf such broker, dealer or other agent is holding such
Limited Partnership Interests, and the Partnership shall be entitled to assume
it is so acting without further inquiry. With respect to Alliance Holding LP
Units that are held for a Person's account by another Person (such as a
broker, dealer, bank, trust company or clearing corporation, or any agent of
any of the foregoing), in whose name the certificates evidencing such Alliance
Holding LP Units are registered, such broker, dealer or other agent shall, in
exercising any right to give written instructions or proxies to Alliance
Holding (in its capacity as a Limited Partner of the Partnership) as provided
in Section 17.04(b) of the Alliance Holding Partnership Agreement, give such
instructions or proxies at the direction of the Person on whose behalf such
broker, dealer or other agent is holding such Alliance Holding LP Units, and
the Partnership and Alliance Holding shall be entitled to assume it is so
acting without further inquiry.
SECTION 17.12. Action Without a Meeting. Any action that may be taken
at a meeting of the Limited Partners may be taken without a meeting if the
General Partner so agrees in writing, in its sole discretion, and a consent in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum number of Limited Partnership Interests that would
be necessary to authorize or take such action at a meeting at which all of the
Limited Partners were present and voted. Alliance Holding (in its capacity as
a Limited Partner of the Partnership) shall sign such consent only on behalf
of those unitholders of Alliance Holding with respect to whom it has received
written instructions or proxies with respect thereto as provided in Section
17.04(b) of the Alliance Holding Partnership Agreement. Prompt notice of the
taking of action without a meeting shall be given to the Limited Partners who
have not consented thereto in writing. Written consents to the taking of any
action by the Limited Partners shall have no force and effect unless and until
(i) they are deposited with the Partnership in care of the General Partner and
(ii) consents sufficient to take the action proposed are dated as of a date
not more
74
than one hundred eighty (180) days prior to the date sufficient consents are
deposited with the Partnership.
ARTICLE 18
GENERAL PROVISIONS
SECTION 18.01. Addresses and Notices. The address of each Partner for
all purposes shall be the address set forth on the books and records of the
Partnership. Any notice, demand, request or report required or permitted to be
given or made to a Partner (other than the General Partner and its Corporate
Affiliates) under this Agreement shall be in writing and shall be deemed given
or made when delivered in person or when sent to such Partner at such address
by first class mail or by other means of written communication.
SECTION 18.02. Consent of Limited Partners. By acceptance of a LP
Certificate, each Limited Partner expressly approves and agrees that, whenever
in this Agreement it is specified that an action may be taken upon the
affirmative vote of less than all of the Limited Partners, such action may be
so taken upon the concurrence of less than all of the Limited Partners and
each present and future Limited Partner shall be bound by the results of such
action.
SECTION 18.03. Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the
scope or intent of any provisions hereof.
SECTION 18.04. Pronouns and Plurals. Whenever the context may
require, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa.
SECTION 18.05. Further Action. Each Partner shall execute and deliver
all documents, provide all information and take or refrain from taking all
actions as may be necessary or appropriate to achieve the purpose of this
Agreement.
SECTION 18.06. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Partners and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
SECTION 18.07. Integration. This Agreement constitutes the entire
agreement among the Partners pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
75
SECTION 18.08. Benefits of this Agreement. Except for the provisions
of Section 6.02, none of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership or by
any other Person not expressly granted rights herein.
SECTION 18.09. Waiver. No failure by any party hereto to insist upon
the strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or any other covenant, duty,
agreement or condition.
SECTION 18.10. Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto, independently of the signature
of any other party.
SECTION 18.11. Applicable Law. Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties hereto
expressly agree that all of the terms and provisions hereof shall be construed
under and governed by the substantive laws of the State of Delaware, without
regard to the principles of conflict of laws.
SECTION 18.12. Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
76
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of the 29th day of October, 1999.
ALLIANCE CAPITAL MANAGEMENT
CORPORATION, General Parnter
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President and
General Counsel
ALLIANCE CAPITAL MANAGEMENT
HOLDING L.P.
By; ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President and
General Counsel
77
Exhibit A
CERTIFICATE
FOR
LIMITED PARTNERSHIP INTERESTS
IN
ALLIANCE CAPITAL MANAGEMENT L.P.
No. ______ ______________ Limited Partnership
Interests
ALLIANCE CAPITAL MANAGEMENT L.P. (the "Partnership"), a Delaware
limited partnership, hereby certifies that is the registered owner of units of
limited partner interest in the Partnership ("Limited Partnership Interests").
The rights, preferences, and limitations of the Limited Partnership Interests
are set forth in the Amended and Restated Agreement of Limited Partnership of
the Partnership, as it may be amended, supplemented or restated from time to
time (the "Partnership Agreement"), copies of which are on file at the General
Partner's principal office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
THIS CERTIFICATE, AND THE LIMITED PARTNERSHIP INTERESTS REPRESENTED
HEREBY, ARE NOT TRANSFERABLE EXCEPT UPON DEATH, BY OPERATION OF LAW, OR WITH
THE WRITTEN CONSENT OF THE GENERAL PARTNER, WHICH CONSENT MAY BE GRANTED OR
WITHHELD IN THE GENERAL PARTNER'S SOLE DISCRETION. ANY TRANSFER OR PURPORTED
TRANSFER OF THIS CERTIFICATE OR THE LIMITED PARTNERSHIP INTERESTS REPRESENTED
HEREBY NOT MADE IN ACCORDANCE WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT
SHALL BE NULL AND VOID. THE LIMITED PARTNERSHIP INTERESTS REPRESENTED HEREBY
ARE ALSO SUBJECT TO REDEMPTION UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
PARTNERSHIP AGREEMENT.
A-1
WITNESS, the facsimile signature of the duly authorized officer of
Alliance Capital Management Corporation, the General Partner of the
Partnership.
Dated:
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation, General Partner
By
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Title:
BY ACCEPTANCE OF THIS CERTIFICATE FOR LIMITED PARTNERSHIP INTERESTS, AND AS A
CONDITION TO ENTITLEMENT TO ANY RIGHTS IN OR BENEFITS WITH RESPECT TO THE
LIMITED PARTNERSHIP INTERESTS EVIDENCED HEREBY, A HOLDER HEREOF (INCLUDING ANY
ASSIGNEE OR TRANSFEREE HEREOF) IS DEEMED TO HAVE AGREED TO COMPLY WITH AND BE
BOUND BY ALL TERMS AND CONDITIONS OF THE PARTNERSHIP AGREEMENT.
A-2