EXHIBIT 3.8
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ARCO CHEMICAL TECHNOLOGY, L.P.
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AGREEMENT OF LIMITED PARTNERSHIP
PREAMBLE
This Agreement of Limited Partnership, which is made and dated as of
the lst day of December, 1991, is by and between ARCO Chemical Technology
Management, Inc., as the general partner, and ARCO Chemical Technology, Inc., as
the limited partner. In consideration of the rights conferred and the
obligations assumed herein, and intending to be legally bound, the parties
hereto hereby agree as follows.
ARTICLE I. FORMATION OF LIMITED PARTNERSHIP
Section 1.1 Formation. The parties hereto hereby form a limited
partnership pursuant to Del. Code Ann. tit. 6, (S)(S) 17-101, et seq., known as
the Delaware Revised Uniform Limited Partnership Act.
Section 1.2 Certificate and Filings. The parties hereto shall
forthwith execute an appropriate certificate of limited partnership and such
other documents as may be required in connection with the formation of a
Delaware limited partnership, which the General Partner shall cause to be
appropriately filed as required by law.
ARTICLE II. DEFINITIONS
Section 2.1 Defined Terms. The following terms shall have the meanings
indicated below wherever they appear in this Agreement and such meanings shall
be equally applicable to both the singular and plural forms of the terms herein
defined. References to an agreement, instrument or document shall, unless
otherwise expressly provided, include such agreement, instrument or document as
the same may be amended, modified or supplemented from time to time in
accordance with its terms, and shall include all schedules, appendices, annexes
and exhibits thereto, as the same may be so amended, modified, or supplemented
from time to time.
"Accountants" shall mean such firm or firms of internationally
recognized certified public accountants as may be appointed by the General
Partner.
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act,
as it may be amended from time to time, and any successor thereto.
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"ACTI" shall mean ARCO Chemical Technology, Inc., a Delaware
corporation.
"ACTM" shall mean ARCO Chemical Technology Management, Inc., a
Delaware corporation.
"Affiliate" shall mean, with respect to two Persons, that (i) one,
directly or indirectly, is wholly owned by the other or (ii) both are directly
or indirectly wholly owned by the same Person.
"Agreement" shall mean this Agreement of Limited Partnership,
including all appendices and other exhibits or attachments hereto, as amended
from time to time.
"Assets" shall mean all property, real and personal, tangible and
intangible, of the Partnership.
"Available Cash" of the Partnership shall mean all funds of the
Partnership on hand from time to time after (i) payment of all expenses of the
Partnership as of such time and (ii) provision for a reserve reasonably
necessary for Partnership operations and additional investments and
reinvestments in the course of business of the Partnership.
"Capital Account" shall mean a capital account for each Partner
established on the books of the Partnership in accordance with Article V.
"Capital Contributions" in respect of any Partner shall mean the
amount of all cash or other consideration contributed or deemed contributed by
such Partner and any predecessor in interest of such Partner to the capital of
the Partnership pursuant to Article VI.
"Certificate of Limited Partnership" means the Partnership's
Certificate of Limited Partnership as filed with the Secretary of State of
Delaware, as it may be amended, supplemented or restated from time to time.
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"Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time, and any successor thereto.
"Fiscal Year" shall mean the calendar year, except that any tax year
of the Partnership for federal income tax purposes that does not commence on
January 1 and end on December 31 of a calendar year shall also be considered a
Fiscal Year.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, consistently applied for the periods involved.
"General Partner" shall mean ACTM in its capacity as a general partner
of the Partnership, or any successor or assign thereof.
"Limited Partner" shall mean ACTI and any Person who is or becomes a
party to this Agreement as a limited partner in the Partnership, in its capacity
as a limited partner in the Partnership, or any other Person admitted as an
additional or substitute limited partner in the Partnership pursuant to this
Agreement, in such Person's capacity as a limited partner in the Partnership.
"Partner" shall mean any Limited Partner or General Partner.
"Partnership" shall mean the limited partnership organized pursuant to
this Agreement and the Certificate of Limited Partnership.
"Partnership Interest" shall mean the interest of a Partner, or an
assignee of a Partner, in Partnership Assets and in Profits, Losses and
Partnership distributions.
"Partnership Return" shall mean the Partnership's United States
federal income tax return.
"Percentage Interest" shall mean the percentage specified in
Section 6.5.
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"Person" shall mean any individual, partnership, firm, trust,
association, corporation, joint venture, unincorporated organization, other
business entity or governmental authority or political subdivision, including
any agency, department or instrumentality thereof.
"Profits" and "Losses" shall mean, for each Fiscal Year or other
period, the profit or loss of the Partnership determined in accordance with
Section 4.1.
"Regulations" shall mean the income tax regulations promulgated by the
U.S. Treasury Department pursuant to the Code and reference to any section of
such regulations shall include any successor thereto.
"Tax Credit" shall mean any amount that may be used as a credit
against the tax imposed by the Code or by any state or municipal law.
"Tax Matters Partner" shall have the meaning specified in Section 13.2
of this Agreement.
ARTICLE III. NAME, PURPOSE, TERM, AND PLACE OF BUSINESS
Section 3.1 Name. The business of the Partnership shall be conducted
under the Partnership name "ARCO Chemical Technology, L.P.", or such name as may
from time to time be designated by the General Partner upon notice to the
Limited Partner. The abbreviation "L.P." shall be included in the Partnership's
name where necessary for the purposes of complying with the laws of any
jurisdiction that so requires.
Section 3.2 Purpose. The purpose of the Partnership shall be to own,
purchase, develop and license technology.
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Section 3.3 Term. The Partnership shall continue in existence until
11:59 p.m., local time in Wilmington, Delaware on December 31, 2021, or until
earlier terminated according to Article XII.
Section 3.4 Place of Business. The principal place of business and
commercial domicile of the Partnership shall be in the State of Delaware, or
such other place as the General Partner, upon notice to the Limited Partner, may
from time to time designate.
Section 3.5 Principal Office; Registered Office. The principal office
of the Partnership shall be at 201 North Walnut Street, 3 Christina Center,
Suite 902, Wilmington, Delaware 19801, or such other place as may from time to
time be designated by the General Partner upon notice to the Limited Partner.
The address of the registered office of the Partnership in the State of Delaware
shall be 1209 Orange Street, Wilmington, Delaware 19801, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office shall be CT Corporation System, or such other agent or address
as may from time to time be designated by the General Partner upon notice to the
Limited Partner.
ARTICLE IV. BOOKS OF ACCOUNT AND BUDGETS
Section 4.1 Accounting. The General Partner shall cause to be
maintained, at the Partnership's principal office, on behalf of the Partnership,
proper books and records with respect to the Partnership's business. The books
of the Partnership shall be maintained to reflect commencement and formation of
the Partnership for accounting purposes as of the date of this Agreement. The
books of the Partnership shall be maintained on the accrual basis. For purposes
of computing the amount of any item of income, gain, loss, deduction or credit
to be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item
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shall be the same as its determination, recognition and classification for
federal income tax purposes, provided that:
(a) Any deductions for depreciation, cost recovery or amortization
attributable to property contributed by a Partner to the Partnership shall be
determined as if the adjusted basis of such property on the date it was
contributed was equal to the fair market value of the property; and
(b) Any income, gain or loss attributable to the taxable disposition
of any property contributed by a Partner shall be determined as if the adjusted
basis of the property as of the date of disposition was equal to the fair market
value of the property at the time of contribution reduced by all depreciation,
cost recovery and amortization deductions charged to the Partners' Capital
Accounts with respect to such property pursuant to Section 5.2.
Section 4.2 Banking. All funds of the Partnership shall be deposited
in the name of the Partnership in an account or accounts with one or more banks
or similar depository institutions as shall be determined by the General
Partner.
Section 4.3 Financial Reporting. The General Partner shall inform the
Limited Partner of the adjustments necessary to reflect the net profit and loss
in accordance with GAAP.
Section 4.4 Reserves. Each Fiscal Year, the General Partner shall
determine, after consultation with the Limited Partner, the amount of the
reserve, if any, that may be reasonably necessary for Partnership operations and
additional investments and reinvestments in the course of business of the
Partnership.
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ARTICLE V. CAPITAL ACCOUNTS
Section 5.1 Establishment of Capital Accounts. A separate Capital
Account shall be established and maintained in respect of each Partner.
Section 5.2 Maintenance of Capital Accounts. Each Partner's Capital
Account shall be credited with (i) the amount of cash and the fair market value
of other property (net of liabilities that the Partnership is considered to
assume or take subject to, under Section 752 of the Code) contributed by such
Partner to the capital of the Partnership and (ii) allocations to it pursuant to
Section 7.1 of income (or items thereof) including tax-exempt income and gain. A
Partner's Capital Account shall be debited with (i) the cash and fair market
value of property distributed to such Partner (net of liabilities that such
Partner is considered to assume or take subject to, under Section 752 of the
Code), (ii) allocations to it of expenditures of the Partnership described in
Section 705(a)(2)(b) of the Code, and (iii) allocations to it pursuant to
Sections 7.1 and 7.2 of deduction or loss (or items thereof). If any property
other than cash is distributed to a Partner, the Capital Accounts of the
Partners shall be adjusted as if the property had instead been sold by the
Partnership for a price equal to its fair market value, with the resulting gain
or loss allocated among the Partners pursuant to Sections 7.1 and 7.2, and the
proceeds thereof distributed. The Partners shall maintain their Capital Accounts
in accordance with the Code and the Regulations.
Section 5.3 Transferred Capital Accounts. In the event that any
Partnership Interest or portion thereof is transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor Partner to the extent such Capital Account relates to the
transferred Partnership Interest or portion thereof.
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Section 5.4 Compliance with Regulations. The provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Section 1.704-1(b) of the Regulations and shall be interpreted and applied
in a manner consistent with such Regulations. In the event that the General
Partner shall determine, after consultation with the Limited Partner, that it is
prudent to modify the manner in which the Capital Accounts are computed in order
to comply with changes in such Regulations or for other reasons, the General
Partner may in its sole discretion make such modification.
ARTICLE VI. CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
Section 6.1 General Partner Capital. The General Partner, in its
capacity as General Partner, shall contribute cash or cash equivalents to the
Partnership's capital at such times as Capital Contributions are made by the
Limited Partner in an amount equal to 1.01% of the amount contributed by the
Limited Partner, as determined pursuant to Sections 6.2, 6.3 and 6.4. It is
intended that the General Partner's Capital Contributions shall result in a 1%
Percentage Interest for the General Partner.
Section 6.2 Limited Partner Capital Contributions. The Limited Partner
shall contribute as a Capital Contribution the property described in an
assignment and assumption agreement dated as of the date hereof (the "Assignment
and Assumption Agreement"), the form of which is attached as Appendix A hereto.
Such Capital Contribution shall be a net contribution comprising certain assets
which will be assigned to the Partnership by the Limited Partner net of certain
liabilities which will be assumed by the Partnership, all pursuant to the
Assignment and Assumption or Agreement. It is intended that the Limited
Partner's Capital Contribution shall result in a 99% Percentage Interest for the
Limited Partner.
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Section 6.3 Contributions of Property. The Partners agree that the fair
market value of the property contributed pursuant to Section 6.2 shall be as set
forth in Appendix B hereto.
Section 6.4 Estimated Fair Market Value. If the Partners are unable, at
the time of execution of this Agreement, to establish the fair market value of
all or any part of any property contributed by the Limited Partner pursuant to
Section 6.2, the Partners may initially set forth an estimated value for such
property pending final determination of the fair market value thereof. In such
event, the General Partner's contribution pursuant to Section 6.1 shall
initially be calculated using the estimated value of such property. Adjustments
(either additional contributions from the General Partner or refund of excess
contributions to the General Partner, as the case may be) shall be effected upon
the final determination by the Partners of the fair market value of such
property.
Section 6.5 Percentage Interests. The Partners' respective Percentage
Interests shall be the percentage determined by dividing the amount of each
Partner's Capital Account by the total of the aggregate Capital Accounts of all
Partners. It is intended that the General Partner's Percentage Interest shall be
1% and that the Limited Partner's Percentage Interest shall be 99%. In the event
that any Partnership Interest or portion thereof is transferred in accordance
with this Agreement, the transferee shall succeed to the Percentage Interest of
the transferor Partner to the extent that such Percentage Interest relates to
the transferred Partnership Interest or portion thereof.
Section 6.6 Additional Capital Contributions. The Partners may, but
shall not be required to, make additional Capital Contributions.
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Section 6.7 Loans to the Partnership. Loans by Partners to the
Partnership shall not be considered Capital Contributions, nor shall Capital
Contributions by the Partners be deemed loans. If any Partner advances funds to
the Partnership in excess of the amounts required hereunder or in any separate
agreement with the General Partner to be contributed by it to the capital of the
Partnership, the making of any such advance shall not result in any increase in
the amount of the Capital Account or Partnership Interest of such Partner. 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 and conditions upon which such advance is made.
Section 6.8 Limitations. No Partner, without the prior written consent
of the General Partner, which consent may be withheld for any reason or for no
reason, may (i) withdraw or reduce its Capital Contribution to the Partnership,
(ii) bring an action for partition against the Partnership, (iii) except as
provided in Section 6.2, contribute or receive property other than cash as or
for its Capital Contributions, (iv) have priority over any other Partner as to
the return of its Capital Contribution or as to the Partnership's Profits,
Losses or distributions or (v) pledge, mortgage or otherwise encumber all or
part of its Partnership Interest.
ARTICLE VII. ALLOCATIONS
Section 7.1 Allocation of Profits and Losses. The Profits and Losses of
the Partnership shall be allocated among the Partners by allocating each item of
income, gain, loss, deduction and credit of the Partnership, determined in
accordance with Article IV, for each Fiscal Year as follows:
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(a) Except as otherwise provided in this Agreement, all items of income,
gain, loss, deduction and credit of the Partnership shall be allocated among the
Partners in accordance with their respective Percentage Interests.
(b) Deductions for expenses incurred pursuant to Section 8.2 that are
the sole responsibility of the General Partner shall be allocated to the General
Partner. Deductions for expenses incurred pursuant to Section 8.2 for which all
of the Partners are responsible shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(c) Notwithstanding the foregoing provisions of this Article VII, if any
Partner unexpectedly receives an adjustment, allocation or distribution
described in paragraphs (5) or (6) of Section 1.704-1(b)(2)(ii)(d) of the
Regulations, which creates a deficit balance in its Capital Account that exceeds
such Partner's share of minimum gain, plus such Partner's obligation to restore
such deficit, such Partner shall be allocated items of income and gain in an
amount sufficient to eliminate any such deficit balance as quickly as possible
in accordance with the rules of Section 1.704-1(b)(2)(ii)(d) of the Regulations.
Section 7.2 Gain or Loss from the Sale; Involuntary Conversion or Other
Disposition of Partnership Property. The General Partner shall allocate any
gains or losses from the sale, exchange, involuntary conversion or other
disposition of all or any part of the Partnership Assets between the Partners in
accordance with their respective Percentage Interests.
Section 7.3 Allocations for Tax Purposes.
(a) Except as otherwise provided in this Agreement, for Federal income
tax purposes, any item of Partnership income, gain, loss, deduction and credit
(and the character and
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source of such items) shall be allocated among the Partners in the same manner
as the corresponding item of income, gain, loss, deduction or credit is
allocated to Capital Accounts pursuant to this Article, and the Partnership
shall maintain such books, records, and accounts as are necessary to make such
allocations.
(b) If, as a result of contributions of property by a Partner to the
Partnership, Section 704(c) of the Code requires allocations of income, gain,
loss and deduction of the Partnership in a manner different from that set forth
in this Section, the provisions of Section 704(c) of the Code and the
Regulations thereunder shall control, solely for federal income tax purposes,
with regard to allocations of items of Partnership income, gain, loss and
deduction.
(c) If a Partner sells or exchanges a part of its interest in the
Partnership, or if the interest of a Partner is reduced, the Partner's
distributive share of items allocated pursuant to Section 7.3(a) shall be
determined as if the Partnership's books of account were closed on the date on
which such sale, exchange or reduction of interest occurred.
ARTICLE VIII. FEES AND EXPENSES OF GENERAL PARTNER
Section 8.1 General Partner Management Fee. The General Partner shall
receive no management fee or other compensation for its services to the
Partnership.
Section 8.2 General Partner Expenses. The General Partner shall be
responsible for all normal expenses incurred in fulfilling its obligations with
respect to the administration of the Partnership. Expenses, such as the costs of
litigation in behalf of the Partnership and tax audits, that are not incurred by
a general partner in the normal course of carrying out such responsibilities
shall be reimbursed to the General Partner by the other Partners
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in proportion to their Percentage Interests in the Partnership, except insofar
as such expenses are due to the willful or negligent act or omission of the
General Partner or anyone acting on its behalf.
ARTICLE IX. DISTRIBUTIONS
Section 9.1 Distributions of Income.
(a) The General Partner shall cause the Partnership to distribute income
to the Partners at such times as the General Partner determines. Distributions
of income shall be allocated among the Partners in accordance with their
respective Percentage Interests.
(b) Any cash realized by the Partnership from the sale of Partnership
Assets shall be distributed at such times and in such amounts as the General
Partner determines. Such distributions shall be allocated among the Partners in
accordance with their respective Percentage Interests.
(c) Not withstanding anything else in Section 9.1, to the extent that
Section 7.1(c) overrides the allocation of income under the preceding provisions
of Section 7.1, an adjustment to distributions under this Section 9.1 shall be
made in accordance with the principles of Section 7.1(c).
Section 9.2 Distributions in Liquidation. Notwithstanding anything to
the contrary contained in this Agreement, distributions upon termination of the
Partnership and upon liquidation of a Partner's interest in the Partnership
shall be made in accordance with Article XII.
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Section 9.3 Amounts Withheld. Any charges, duties, fees or other amounts
withheld by the General Partner pursuant to the Code or any provision of any
federal, state or local tax law with respect to any payment or distribution to
the Partners shall be treated as amounts distributed to the Partners pursuant to
this Article for all purposes of this Agreement.
Section 9.4 Tax Liabilities. Any asset used by the Partnership to
satisfy the income tax liabilities of a Partner or Partners and any withholding
tax paid by the Partnership (including interest and penalties, if any) with
respect to such Partner's share of the income of the Partnership shall be
treated as a distribution of cash by the Partnership to such Partner or
Partners, as the case may be.
Section 9.5 Transferred Interest. If a portion of a Partnership Interest
is transferred in accordance with the terms of this Agreement, any Available
Cash with respect to such transferred Partnership Interest for the period up to
the date on which the Partnership Interest was transferred shall be distributed
to the Person who owned such interest or partial interest immediately prior to
such transfer.
ARTICLE X. RIGHTS, POWERS AND OBLIGATIONS OF THE GENERAL PARTNER
Section 10.1 Powers.
(a) The General Partner shall have all the rights and powers of a
general partner as provided in the Act, under any other applicable law, or in
this Agreement, except to the extent that such powers may be expressly limited
by the Act, such other laws, or this Agreement. Except as so limited, the
General Partner shall have the exclusive right and power to manage the
Partnership and its assets and business, and shall be authorized to do on behalf
of the
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Partnership all things that, in its sole discretion (unless otherwise provided
herein), are necessary or appropriate to carry out the Partnership's purpose as
set forth in Section 3.2 including without limitation the following:
(1) Enter into, execute, acknowledge, deliver, cancel and terminate any
and all contracts, agreements and other instruments to carry on the
business of the Partnership as set forth herein;
(2) Cause to be paid all amounts due and payable by the Partnership to
any person and collect all amounts due to the Partnership;
(3) Delegate any or all of its duties and powers under this Agreement,
and engage agents, employees, managers, accountants, attorneys, consultants
and other persons to carry out the business and affairs of the Partnership,
whether or not any such Persons so employed are affiliated with or related
to any Partner, and to pay such fees, expenses, salaries, wages and other
compensation to such persons as the General Partner shall in its discretion
determine;
(4) Pay, extend, renew, modify, adjust, submit to arbitration,
prosecute, defend or compromise, upon such terms as the General Partner may
determine and upon such evidence as it may deem sufficient, any obligation,
suit, liability, cause of action, right or claim, either in favor of or
against the Partnership;
(5) Pay any fee or expense incurred in connection with the Partnership's
organization, the management of the Partnership's business or affairs, or
the carrying out of the General Partner's obligations and responsibilities
under this Agreement or the Act;
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(6) Prosecute and defend or cause to be prosecuted and defended, all
proprietary rights, including all licenses and permits and all applications
with respect thereto, that may be held by the Partnership, and prosecute
and defend all rights of the Partnership in connection therewith;
(7) Cause to be paid any and all taxes, charges and assessments that may
be levied, assessed or imposed upon any of the assets of the Partnership,
unless the same are contested by the General Partner in good faith;
(8) Establish, operate and close one or more accounts for the
Partnership in such financial institutions as the General Partner may from
time to time determine;
(9) Make distributions periodically according to the provisions of this
Agreement;
(10) Keep, or cause to be kept, the Partnership books and records;
(11) Secure the necessary goods and services required in performing the
General Partner's duties for the Partnership;
(12) Collect and disburse the Partnership's funds and invest any excess
funds of the Partnership in such investments as the General Partner shall
determine;
(13) Subject to the consent of the other Partners, which consent shall
not unreasonably be withheld, mortgage, pledge or otherwise encumber the
Partnership's assets;
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(14) Cause the Partnership to use excess Partnership cash to make equity
investments in, and advance loans to, corporations, and to exercise the
Partnership's rights as a stockholder of, or a lender to, such
corporations, as the case may be;
(15) Take any and all action that is permitted under the Act and that is
customary or reasonably related to the business of the Partnership; and
(16) Execute any and all documents that, in its sole discretion, are
needed to carry out the purposes of the above powers.
(b) With respect to each of its rights, powers and obligations under
this Agreement, and subject to the restrictions herein, the General Partner
shall be authorized to execute and deliver, for and on behalf of the
Partnership, such documents, promissory notes and other evidences of
indebtedness, contracts, assignments, deeds, leases, loan agreements and other
agreements as it deems necessary or appropriate, all on such terms and
conditions as it deems proper.
(c) The General Partner may cause the Partnership to adopt by-laws
governing the Partnership's internal organization and affairs. Without limiting
the generality of the foregoing, the by-laws so adopted may: (i) create titles
for management employees; (ii) establish the power and authority associated with
such titles (up to and including power and authority coextensive with that of
the General Partner) to represent the Partnership in dealings with third
parties; and (iii) provide for the appointment and removal of management
employees to and from the positions so created.
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Section 10.2 Qualifications and Filings. The General Partner shall cause
to be filed such certificates or documents as are necessary or appropriate for
the continuation, qualification or operation of the Partnership as a limited
partnership in the State of Delaware and any other jurisdiction in which the
Partnership may elect to do business. Subject to applicable law, the General
Partner may omit from any and all filings in and reports to any state, and from
all amendments thereto, the names and addresses of the Partners, information
relating to the Partners' Capital Contributions and shares of Profits and
Losses, and information relating to compensation of the Partners, or may state
such information in the aggregate rather than with respect to any individual
Partner.
Section 10.3 Reliance of Third Parties. Any person dealing with the
Partnership shall be entitled to deal with the General Partner as if it were the
sole party in interest in the Partnership's assets and business, both legally
and beneficially. Every agreement, instrument and document executed by the
General Partner with respect to any business or property of the Partnership
shall be conclusive evidence in favor of any person relying thereon or claiming
thereunder that (i) at the time of the execution or delivery thereof, this
Agreement was in full force and effect, (ii) such agreement, instrument or
document was duly executed in accordance with this Agreement and is binding upon
the Partnership, and (iii) the General Partner was duly authorized and empowered
to execute and deliver such agreement, instrument or document for and on behalf
of the Partnership.
Section 10.4 Duties. The General Partner shall manage and control the
Partnership and its business and affairs. The General Partner shall devote
itself to the business of the Partnership to the extent it determines necessary
for the efficient conduct thereof. The
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General Partner shall notify the other Partners of all non-routine actions
regarding the Partnership.
Section 10.5 Admission of New Partners. The General Partner may admit
other Limited Partners on such terms and conditions as it may, in its sole
discretion, deem appropriate, provided that the rights of the existing Limited
Partners are not impaired thereby. The General Partner shall not admit any new
General Partner without the consent of all of the Limited Partners, which
consent shall not unreasonably be withheld.
Section 10.6 General Partner Power to Amend. Provided that the other
Partners are notified within thirty days thereafter, the General Partner may
amend this Agreement to (i) add (subject to the consent of the other Partners
and to the other provisions of this Agreement) to the General Partner's duties
or obligations, (ii) correct any error or resolve any ambiguity in or
inconsistency among the provisions of this Agreement, (iii) delete or add any
provision required to be deleted or added by any state securities commission or
similar governmental authority for the benefit or protection of the other
Partners, (iv) add to or change the name or principal place of business of the
Partnership or add Limited Partners, subject to Section 10.6 above, or (v) make
any change that in the General Partner's sole opinion is necessary or prudent to
satisfy any requirement, condition or guideline contained in any opinion,
directive, order or ruling of any U.S., state, regional, or local agency or
judicial authority, or contained in any U.S., state, or local statute, code or
regulation. However, such amendments shall not without the consent of each
affected Partner: (i) reduce any Partner's Percentage Interest, (ii) change the
liabilities of any Partner, (iii) convert any Limited Partner to a General
Partner, (iv) allow any Limited Partner to exercise control of the Partnership's
business or (v) otherwise adversely affect any other Partner.
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The General Partner may execute, swear to, acknowledge, deliver, file and record
any document that may be required in connection with any such amendment.
Section 10.7 Limitations on General Partner's Authority. Except with the
consent of all other Partners, nothing in this Agreement shall authorize the
General Partner to:
(a) Manage the affairs or business of the Partnership in a manner
contrary to this Agreement;
(b) Sell, trade, give or otherwise alienate the Partnership's Assets
except in the ordinary course of business or in a liquidation;
(c) Negligently do any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction or that would cause the
Partnership to be classified as other than a partnership for federal income tax
purposes; and
(d) Except in the ordinary course of business, cause the Partnership to
borrow money without the consent of the other Partners, which consent shall not
be unreasonably withheld.
ARTICLE XI. TRANSFER BY THE PARTNERS OF PARTNERSHIP INTERESTS
Section 11.1 General.
(a) No Limited Partner may mortgage, pledge, hypothecate or otherwise
encumber all or any part of its Partnership Interest.
(b) No Limited Partner may sell, trade, give, transfer, abandon or
otherwise alienate (together hereafter in this Article XI referred to as
"transfer") its Partnership Interest
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except in accordance with this Article XI, and any transfer or purported
transfer not in accordance with this Article XI shall be null and void and shall
not bind or be recognized by the Partnership.
(c) No Limited Partner may transfer part but not all of its Partnership
Interest.
Section 11.2 Transfer to Affiliates. Subject to Section 11.5 below, a
Limited Partner may transfer its Partnership Interest to an Affiliate.
Section 11.3 Consent of General Partner. No Partner may transfer its
Partnership Interest without the written consent of the General Partner, which
consent shall not be unreasonably withheld. In determining whether to give or
withhold its consent to such transfer, the General Partner may consider, among
other things:
(a) Whether the transfer may violate any agreement or any law or other
governmental requirement or prohibition;
(b) Whether the transfer may affect the Partnership's existence or
qualification as a limited partnership under the Act or result in a termination
of the Partnership under Section 708 of the Code; and
(c) Whether the transfer may cause the Partnership to be classified
other than as a partnership for federal or state tax purposes.
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Section 11.4 Requirements on Transfer. For any transfer of a Partner's
Partnership Interest, the General Partner may require any or all of the
following:
(a) That the transferee, at the General Partner's option, either take
the transferor's place in the Partnership and become a party to this Agreement
and any other applicable agreement between the transferor and the General
Partner, or undertake obligations to the General Partner equivalent to those of
the transferor;
(b) That the transferee be, or be guaranteed by, an entity that, in the
General Partner's reasonable opinion, is financially and otherwise ready,
willing and able to perform its obligations under 11.4(a) above;
(c) That the transferor and the transferee execute and deliver documents
pertaining to the transfer that are satisfactory to the General Partner; and
(d) That the transferor and/or the transferee pay the Partnership's
expenses, including legal expenses and legal fees, incident to the transfer.
Section 11.5 Release from Liability. Upon completion of a transfer in
compliance with this Article XI:
(a) The transferring Partner shall (i) be deemed to have withdrawn from
the Partnership and (ii) be released from all liability under this Agreement
except as to undischarged obligations accruing, or based on events occurring,
prior thereto;
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(b) The other Partners and the Partnership shall be released from all
liability under this Agreement to the transferring Partner except as to
undischarged obligations accruing, or based on events occurring, prior thereto;
and
(c) This Agreement shall otherwise be deemed terminated as to such
transferring Partner.
Section 11.6 Transfers of General Partner's Interest. The General
Partner may transfer its Partnership Interest to any Person without the consent
of any other Partner.
ARTICLE XII. DISSOLUTION AND WINDING UP OF PARTNERSHIP
Section 12.1 Dissolution. The Partnership shall be dissolved upon the
first to occur of any of the following:
(a) The expiration of the term of the Partnership as provided in
Section 2.3;
(b) In the event of the acquisition by the General Partner of the
Partnership Interests of all of the Partners, the completion of the last such
acquisition;
(c) The withdrawal of the sole remaining General Partner unless a
successor General Partner is admitted to continue the Partnership's business;
and
(d) Any event of dissolution under the Act.
Section 12.2 Election to Continue Partnership. Within ninety days
following the occurrence of any event referred to in Section 12.1, all remaining
Partners, if any, may agree in writing to continue the Partnership's business.
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Section 12.3 Winding Up. Unless the Partnership is to be continued
pursuant to Section 12.2 above, upon dissolution of the Partnership the General
Partner shall take full account of the Partnership's assets and liabilities, and
shall liquidate those assets not agreed by the Partners to be distributed in
kind in such manner as it shall determine to be in the best interests of the
Partnership.
Section 12.4 Distribution Upon Termination. Upon termination of the
Partnership, as provided herein, the following shall occur:
(a) First, any item of income, gain, loss, deduction and credit that has
not heretofore been allocated pursuant to Articles VI and VII shall be so
allocated;
(b) Second, liabilities owed to creditors of the Partnership, other than
creditors who are Partners, shall be satisfied, whether by payment or the making
of reasonable provisions for payment thereof (including provision for contingent
liabilities determined by the General Partner to be appropriate for such
purposes);
(c) Third, if any loans made to the Partnership by any Partner are then
outstanding, such loans (including any accrued interest) shall be repaid in full
or, if such loans cannot be repaid in full, cash shall be applied to the pro
rata repayment of any such loans; and
(d) The remaining cash or non-cash assets shall be distributed to the
Partners in accordance with their Capital Accounts; and thereafter in accordance
with the Partners' respective Percentage Interests.
Section 12.5 General Partner Deficit Makeup. If the General Partner has
a deficit balance in its Capital Account following the liquidation of its
Partnership Interest, as
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determined after taking into account all Capital Account adjustments for the
taxable year during which such liquidation occurs (other than those made
pursuant to this Section 12.5), it shall contribute an amount equal to such
deficit to the Partnership by the end of such taxable year, or, if later, within
ninety days following the date of such liquidation. Any amount contributed to
the Partnership pursuant to this Section 12.5 shall be distributed according to
Section 12.4.
ARTICLE XIII. TAX MATTERS
Section 13.1 Tax Returns. The General Partner shall file on behalf of
the Partnership such Partnership Returns as are required by law. The Partners
agree to file their separate federal income tax returns in accordance with
applicable federal income tax law and in a manner consistent with the
Partnership Returns and the provisions of this Agreement.
Section 13.2 Tax Matters Partner. The General Partner is hereby
designated as the Partnership's tax matters partner (the "Tax Matters Partner")
as defined in Section 6231(a)(7) of the Code and shall have all the powers and
obligations set forth in this Article XIII or of a tax matters partner pursuant
to the Code. The Tax Matters Partner shall incur no liability to the other
Partners for actions taken in its capacity as Tax Matters Partner, including,
but not limited to, liability for any additional taxes, interest or penalties
owed by the other Partners due to adjustments of Partnership items of income,
gain, loss or deduction at the Partnership level.
Section 13.3 Duties of the Tax Matters Partner. The Tax Matters Partner
shall cooperate with the other Partners and, for other than routine
correspondence, shall keep the other Partners reasonably informed of discussions
with the Internal Revenue Service. The Tax Matters Partner shall, in its sole
discretion, determine what is reasonable with regard to communication of such
matters. The Tax Matters Partner shall have the power, in its sole discretion,
to extend
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the period of limitations for assessments, file a petition or complaint in any
court, file a request for an administrative adjustment of Partnership items
after any return has been filed, or enter into any settlement agreement with the
Internal Revenue Service or Department of the Treasury with respect to
Partnership items of income, gain, loss or deduction. The Tax Matters Partner
may request extension to file any tax return or statement without the consent
of, but shall so inform, the other Partners. The provisions of this Agreement
regarding the Partnership's tax returns shall survive the termination of the
Partnership and the transfer of any Partner's Partnership Interest and shall
remain in effect for the period of time necessary to resolve any and all matters
regarding the federal income taxation of the Partnership and items of
Partnership income, gain, loss and deduction.
Section 13.4 Tax Policy. The General Partner shall make any and all tax
accounting and reporting elections and adopt such procedures as are necessary
relating to income, gain, expense, loss, deduction and credit in order to
minimize taxable income and gain and maximize taxable loss, deductions and
credits allocable to the Partners. For all property with respect to which
deductions for depreciation may be claimed, the Partnership shall, except as
otherwise decided upon by the Partners, utilize the depreciation or amortization
method that will provide the depreciation to the Partnership at the earliest
possible time.
Section 13.5 Partnership Tax Status. No Partner shall take any action
that would result in the Partnership being treated other than as a partnership
for federal income tax purposes.
Section 13.6 Section 708 Termination. Notwithstanding any other
provision of this Article XIII in the event that the Partnership is liquidated
within the meaning of Section
26
1.704-1(b)(2)(ii)(g) of the Regulations but no liquidating event has occurred,
the Assets shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
ARTICLE XIV. POWER OF ATTORNEY; FURTHER ASSURANCES
Section 14.1 Grant of Power. Coincident with its execution of this
Agreement, the Limited Partner shall give to the General Partner a Power of
Attorney regarding the Partnership in the form set forth in Appendix C hereto.
Section 14.2 Further Assurances. Promptly upon the General Partner's
request, the Limited Partner shall (i) execute, acknowledge, deliver, file
and/or record such further certificates, amendments, instruments and documents
and (ii) do all other acts and things, as may be required by law or deemed by
the General Partner necessary or prudent to implement the purpose or intent of
this Agreement or conduct the business of the Partnership.
ARTICLE XV. PARTNER REPRESENTATIONS AND WARRANTIES
Section 15.1 Partner Representations and Warranties.
(a) Each Partner represents and warrants:
(1) That it has the full legal right, power and authority to enter
into this Agreement and perform its obligations hereunder;
(2) That it intends to enter the Partnership as an investment and
not for sale or distribution;
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(3) That it is aware (i) that interests in the Partnership have not
been registered under the United States Securities Act of 1933, or any
comparable state law, and that such interests cannot be sold or otherwise
disposed of unless they are registered thereunder or unless such sale or
disposition is exempt from such registration, (ii) that the Partnership has
no present intention of so registering such interests under the Securities
Act of 1933, or any comparable state law, and (iii) that accordingly such
Partner is able and is prepared to suffer a complete loss of its
investment; and
(4) That its knowledge and experience in financial and business
matters are such that it is capable of evaluating the risks of investing in
the Partnership.
(b) The General Partner explicitly disclaims any representation or
warranty with respect to (i) the success or profitability of the Partnership's
business or (ii) the tax treatment or consequences of any Partner's investment
in the Partnership.
ARTICLE XVI. LIABILITY AND INDEMNIFICATION OF GENERAL PARTNER AND OTHERS
Section 16.1 Exoneration. The General Partner shall not be liable to the
Partnership or any Partner for any act or omission involving its conduct of the
business or affairs of the Partnership if the General Partner has conducted such
business and affairs in good faith with respect to such matter and has not acted
with gross negligence or in willful misconduct with respect thereto.
Section 16.2 Repayment of Capital and Loans. Except to the extent
available from the portion of the Partnership Assets corresponding to a
Partner's Partnership Interest, and
28
subject to the other provisions of this Agreement, the General Partner shall not
be liable to any Partner for repayment of principal or interest on contributions
to the Partnership or for repayment of principal or interest an any loan or
advance from such Partner to the Partnership.
Section 16.3 Indemnification by Partnership.
(a) For the purposes of this Section 16.3, "Claim" shall mean any claim,
action, demand, loss, cost or expense, and shall be deemed to include, without
limitation, any Claim due to governmental requirements or related to the
environment.
(b) Should the General Partner, because of its status as a general
partner in the Partnership and due to any Claim against, or related to, the
Partnership or the Partnership's assets, business or activities, become liable,
or be subject to any Claim, in excess of its Partnership Interest, the other
Partners, each in proportion to its Percentage Interest, shall indemnify and
hold harmless the General Partner against such excess and against the General
Partner's reasonable costs and expenses of defending itself or the Partnership
against such liability or Claim, provided that the General Partner shall be
responsible for such portion of such excess, costs and expenses as is
proportional to its own Percentage Interest.
Section 16.4 Survival. The rights and obligations of this Article XVI
shall survive (i) any expiration or termination of this Agreement as to the
indemnifying Partner, and (ii) any withdrawal of the indemnifying Partner from
the Partnership, but in either case shall apply only to the extent that the
Claim accrues, or is based on events occurring, prior to such expiration,
termination or withdrawal.
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ARTICLE XVII. WITHDRAWAL AND REMOVAL OF GENERAL PARTNER
Section 17.1 Withdrawal of General Partner.
(a) The General Partner shall not withdraw as the Partnership's general
partner except upon the transfer of all of its Partnership Interest.
(b) The General Partner may withdraw pursuant to Section 17.1(a) above
by delivering a notice of withdrawal to the other Partners. Such notice shall
state the effective date of the General Partner's withdrawal, which date shall
be not less than thirty days subsequent to the date such notice is mailed.
(c) Upon withdrawal of the General Partner, the successor to its
Partnership Interest shall succeed to all of the General Partner's rights and
obligations under this Agreement.
Section 17.2 Removal of General Partner. The Limited Partner shall not
have any right to remove the General Partner as the Partnership's general
partner.
ARTICLE XVIII. MISCELLANEOUS
Section 18.1 Notices. Any notice, offer, consent or other communication
required or permitted to be given or made hereunder shall be in writing and
shall be deemed to have been sufficiently given or made when delivered
personally to the Party (or an officer of the Party) to whom the same is
directed, or (except in the event of a mail strike) five business days after
being mailed by first-class mail, certified and postage prepaid, or when
received if transmitted by facsimile or sent by overnight express, if to the
Partnership, to the principal office described in Section 3.5 or, if to a
Partner, to the address set forth in the execution pages hereof.
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Any Partner may change its address for receiving notice by giving notice of such
change to the Partnership and the other Partners, such change to become
effective on the tenth day after such notice is given.
Section 18.2 Captions. Article and Section captions contained in this
Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
Section 18.3 Severability. Each provision of this Agreement is intended
to be severable. If any provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity of the
remainder of this Agreement.
Section 18.4 Litigation. The General Partner shall prosecute and defend
such actions at law or in equity as may be necessary to enforce or protect the
interests of the Partnership. The Partnership and the General Partner shall
respond to any final decree, judgment or decision of any court, board or
authority having jurisdiction. Subject to Article XVI, the General Partner shall
satisfy any such judgment, decree or decision first out of any insurance
proceeds available therefor, next out of the Assets of the Partnership available
therefor, and finally out of the assets of the General Partner.
Section 18.5 Right to Rely Upon Authority of General Partner. No person
dealing with the General Partner shall be required to determine the General
Partner's authority to make any commitment or undertaking on behalf of the
Partnership, nor to determine any fact or circumstances bearing upon the
existence of such authority. In addition, no purchaser of any asset owned by the
Partnership shall be required to determine the sole and exclusive authority of
the General Partner to sign and deliver on behalf of the Partnership any such
instrument of
31
transfer, or to see to the application or distribution of revenues or proceeds
paid or credited in connection therewith, unless such purchaser shall have
received written notice from the Partnership affecting the same.
Section 18.6 Administration. The Partnership shall be administered in
accordance with this Agreement entirely by the General Partner, and shall have
no other administrative or policy making body or periodic Partnership meetings.
However, any Partner may at any time upon ten days' notice call a Partnership
meeting to discuss Partnership business, which meeting shall be held at the
Partnership's principal office during normal business hours.
Section 18.7 No Agency. Except as explicitly authorized in advance in
writing by the General Partner, no other Partner shall act, or represent itself,
in any matter as an agent or representative of the Partnership or the General
Partner.
Section 18.8 Ownership of 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 separate ownership interest in such
Partnership Assets or any portion thereof. Legal title to any or all Partnership
Assets shall be held in the name of the Partnership, or, with the consent of the
other Partners, in the name of the General Partner or one or more nominees in
behalf of the Partnership, 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 or any nominee shall be held in
trust by the General Partner or such nominee for the use and benefit of the
Partnership in accordance with this Agreement. 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.
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Section 18.9 Governing Law. This Agreement shall be governed by the laws
of the State of Delaware (without giving effect to Delaware's rules on the
conflict of law) as such laws are applied by Delaware courts to agreements
entered into and to be performed in Delaware by and between residents of
Delaware.
Section 18.10 Successors. This Agreement shall, subject to the
restrictions on transferability set forth herein, bind and inure to the benefit
of the heirs, executors, personal representatives, successors and assigns of the
Parties.
Section 18.11 Entire Agreement; Amendment. Except for other written
agreements in which it is specifically referred to, this Agreement constitutes
the entire agreement of the parties hereto on its subject. It supersedes all
prior agreements and understandings between or among them, oral or written, all
of which are hereby nullified. Except as otherwise provided in Section 10.6,
this Agreement may not be modified or amended other than by a writing signed by
all parties hereto.
Section 18.12 No Waiver. The failure of any party hereto to seek redress
for violation, or to insist on strict performance, of any obligation of this
Agreement shall not constitute a waiver of its rights in the future to do so
regarding that or any other obligation hereof.
Section 18.13 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
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Section 18.14 Other Business Ventures. Any Partner, or any shareholder,
director, employee, Affiliate or Person holding a legal or beneficial interest
in any entity that is a Partner, may engage in or possess interests in other
business ventures of every nature and description, independently or with others,
whether such ventures are competitive with the Partnership or otherwise. Neither
the Partnership nor any Partner shall have any right by virtue of this Agreement
in or to such independent ventures or to the income or profits derived
therefrom.
Section 18.15 Creditors. Except as required by any applicable bankruptcy
or receivership law or as explicitly provided for herein, no provision of this
Agreement shall be for the benefit of or enforceable by any non-party, including
any creditor of the Partnership or any Partner.
Section 18.16 Remedies. The rights and remedies of the parties hereto
shall not be exclusive, and the exercise of any right to which a party hereto is
entitled shall not preclude the exercise of any other right that such party may
have.
Section 18.17 Authority. Each individual executing this Agreement on
behalf of a partnership, corporation or other entity warrants that he or she is
authorized to do so and that this Agreement will constitute the legally binding
obligation of the entity that he or she represents.
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IN WITNESS WHEREOF, the parties hereto, through their authorized
representatives, have executed and delivered this Agreement as of the date first
written above.
GENERAL PARTNER:
ARCO CHEMICAL TECHNOLOGY MANAGEMENT, INC.
By:
------------------------------------------
(Signature)
------------------------------------------
(Printed Name)
------------------------------------------
(Title)
LIMITED PARTNER:
ARCO CHEMICAL TECHNOLOGY, INC.
By:
------------------------------------------
(Signature)
------------------------------------------
(Printed Name)
------------------------------------------
(Title)
35