EXHIBIT 3.14
AGREEMENT
OF
LIMITED PARTNERSHIP
OF
RUSSELL-STANLEY, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
OF
RUSSELL-STANLEY, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP made as of the 1st day
of November, 1998, by and between RUSSELL-STANLEY MIDWEST, INC., an Illinois
corporation having an address at 685 Route 202/206, Bridgewater, New Jersey
08807 (hereinafter referred to as the "General Partner"), and RSLPCO, INC., a
Delaware corporation having an address at 685 Route 202/206, Bridgewater, New
Jersey 08807 (hereinafter referred to as the "Limited Partner").
W I T N E S S E T H:
WHEREAS, the parties desire to form a limited partnership
under the Revised Limited Partnership Act of the State of Texas and to enter
into a limited partnership agreement to govern their respective rights and
obligations; and
WHEREAS, the parties hereto desire to assure the continuity of
the management and the policies of the Partnership (as herein defined).
NOW, THEREFORE, in consideration of the covenants contained in
this Agreement and other good and valuable consideration, the parties agree as
follows:
ARTICLE 1.
DEFINITIONS
For purposes of this Agreement, the terms defined in this
Article 1. shall have the following meanings, unless the context clearly
requires a different interpretation:
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1.1 ACT. The Texas Revised Limited Partnership Act, Tex. Rev.
Civ. Stat. Art. 6132a-1, as amended from time to time.
1.2 AFFILIATE. Any Person controlling or controlled by or
under common control with the Partnership, including, without limitation (a) any
Person who has a familial relationship, by blood, marriage or otherwise with any
director, officer or employee of the Partnership, its parent, or any Affiliate
thereof and (b) any Person which receives compensation for administrative, legal
or accounting services from the Partnership, its parent or any Affiliate. For
purposes of this definition, "control" when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
1.3 AGREEMENT. This Agreement of Limited Partnership, as it
may be amended from time to time.
1.4 APPROVAL OF THE LIMITED PARTNERS. An affirmative vote by
the Limited Partners. The Limited Partners shall vote by Percentage Interest and
not per capita.
1.5 CAPITAL ACCOUNT. An account maintained for each Partner
throughout the term of the Partnership in accordance with the rules of Treasury
Regulation Section 1.704-(b)(2)(iv) as in effect from time to time, and, to the
extent not inconsistent therewith, shall reflect the Capital Contribution of
each of the Partners to the capital of the Partnership, from time to time (a)
increased from time to time by such Partner's distributive share of Partnership
income and gains, and (b) decreased from time to time by distributions to such
Partner by the Partnership (other than distributions in repayment of loans by a
Partner or for services rendered by any Partner) and by such Partner's
distributive share of Partnership losses. The Capital Account of
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each Partner shall otherwise appropriately reflect transactions of the
Partnership and the Partners in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv).
1.6 CAPITAL CONTRIBUTION. The amount of cash and real and
personal properties contributed in exchange for the Partnership Interests held
by the Partners, as reflected on the books of the Partnership, as same may
change from time to time. The references in this Agreement to the Capital
Contribution of a then Partner shall include the Capital Contribution previously
made by any predecessor Partner of a then Partner.
1.7 CASH FLOW. All cash receipts of the Partnership during
such period from any source (including, without limitation, sales of portions of
the assets of the Partnership, borrowings, condemnation awards, interest earned
on Partnership funds, proceeds of insurance, if any, and Capital Contributions),
plus the cash available from reduction in the amount of any reserve or escrow of
the Partnership, less (a) an amount equal to the Partnership's expenses,
interest, fees, and principal payments on any loans, and (b) such amounts as the
General Partner determines, subject to Section 6.2 hereof, should be retained by
the Partnership for use in its business 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
Cash Flow for any period by the General Partner, absent manifest error and
subject to the limitations of Section 6.2 hereof, shall be binding and
conclusive.
1.8 CODE. The Internal Revenue Code of 1986, as amended from
time to time, and any successor statute thereto, including all regulations and
rules promulgated thereunder.
1.9 FISCAL YEAR. The calendar year ending December 31.
1.10 GENERAL PARTNER. Russell-Stanley Midwest, Inc. and any
successor general partner pursuant to the terms hereof.
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1.11 LIMITED PARTNER. RSLPCO, Inc. and any Person who may
acquire a Partnership Interest from the Limited Partner pursuant to the terms
hereof.
1.12 MINIMUM GAIN. The total gain which the Partnership would
realize if it sold, in a taxable disposition, each of its assets which were
subject to nonrecourse liabilities in full satisfaction of the liabilities. In
computing said gain, only the portion of the assets' bases allocated to
nonrecourse liabilities of the Partnership shall be taken into account.
1.13 NET LOSSES. The net losses of the Partnership as reported
on its information returns for Federal income tax purposes.
1.14 NET OPERATING CASH FLOW. With respect to each Fiscal Year
of the Partnership, the gross revenues of the Partnership, less (a) the actual
cash expenditures (other than organization expenses, syndication costs, property
acquisition costs, nonrecurring or extraordinary business expenses) for such
period, and (b) such reasonable and necessary reserves for working capital,
capital investments, potential liabilities and other contingencies as shall be
determined in the sole discretion of the General Partner. Gross revenues shall
not include (x) the proceeds of any contributions or loans to the Partnership,
and (y) security deposits, until the Partnership is entitled unconditionally to
retain the same for its own use and benefit. The Partnership's accountants shall
conclusively determine the nature and amount of any other adjustments in
determining Net Operating Cash Flow.
1.15 NET PROFITS. The net income of the Partnership as
reported on its information returns for Federal income tax purposes.
1.16 PARTNERS. The Limited Partner and the General Partner,
collectively.
1.17 PARTNERSHIP. The limited partnership between the General
Partner and the Limited Partner formed pursuant to the terms of this Agreement.
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1.18 PARTNERSHIP INTEREST. A Partner's interest in the
Partnership, which shall include, without limitation, its Capital Account,
Percentage Interest, distributive share of Partnership income, gain, loss,
deduction and credits, its interest in Net Operating Cash Flow and other
distributions, as provided for in this Agreement, and all other rights, duties,
and obligations under this Agreement.
1.19 PERCENTAGE INTEREST. The percentage interest of a Partner
in the Partnership: for the Limited Partner, ninety-nine (99%) percent and for
the General Partner, one (1%) percent.
1.20 PERSON. Any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization, or government
or any agency or political subdivision thereof.
1.21 SECURITIES ACT. The Securities Act of 1933, as amended
from time to time, and all regulations and rules promulgated thereunder.
1.22 TAX CREDITS. The tax credits of the Partnership as
reported on its information returns for Federal income tax purposes.
ARTICLE 2.
GENERAL
2.1 FORMATION OF PARTNERSHIP. The Partnership is hereby formed
as a Texas limited partnership pursuant to the terms of this Agreement.
2.2 NAME. The name of the Partnership shall be
Russell-Stanley, L.P., but it may do business under such other names as the
General Partner hereby designates in writing to the
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Limited Partners, provided that the General Partner shall file all certificates
required by law to be filed with respect to any name used by the Partnership.
2.3 INSTRUMENTS TO BE FILED. Prior to the execution and
delivery of the Agreement, the General Partner filed on behalf of the
Partnership a Certificate of Limited Partnership in accordance with the Act. The
General Partner shall execute such other documents and instruments and shall
take all such other actions deemed by the General Partner to be necessary or
appropriate to effectuate and permit the formation of the Partnership under the
laws of the State of Texas and as a limited partnership qualified to do business
as a foreign limited partnership in such states as the General Partner may
consider necessary or appropriate from time to time as a result of the business
being conducted by the Partnership. The General Partner shall, from time to
time, take appropriate action, including the preparation and filing of such
amendments to the Certificate of Limited Partnership, as may be required by the
Act. The Limited Partner shall execute such documents and instruments and take
such other action as may be necessary to enable the General Partner to fulfill
its responsibilities under this Section. The Power of Attorney granted under
Article 11 by the Limited Partner hereby may be exercised by the General Partner
to accomplish the foregoing.
2.4 PRINCIPAL PLACE OF BUSINESS. The principal office of the
Partnership shall be at 685 Route 202/206, Bridgewater, New Jersey 08807. The
General Partner shall notify the Limited Partner of any change in the principal
place of business of the Partnership. The Partnership may maintain other offices
at other locations inside or outside New Jersey as the General Partner deems
advisable from time to time.
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2.5 REGISTERED AGENT AND REGISTERED OFFICE. The registered
agent for the Partnership shall be CT Corporation System (the "Registered
Agent"), 350 N. St. Paul Street, Dallas, Texas 75201, or at such other location
in Texas, as determined by the Registered Agent.
2.6 BUSINESS OF THE PARTNERSHIP. The business of the
Partnership shall be to:
(a) own, hold, sell, assign, transfer, operate, lease,
mortgage, pledge and otherwise deal with real and personal properties inside and
outside the States of Texas and Georgia in connection with the manufacture and
sale of steel and plastic containers.
(b) exercise all powers enumerated in the Act necessary or
convenient to the conduct, promotion or attainment of the business or purposes
otherwise set forth herein; and
(c) enter into any and all documents in connection with the
business of the Partnership as determined by the General Partner.
(d) to have and exercise all of the powers related or
incidental thereto and to engage in any lawful business related or incidental
thereto
2.7 RESTRICTIONS ON PARTNERS. The relationship among the
Partners created by this Agreement shall be limited to the performance of this
Agreement and shall not affect any other business or activity of any Partner or
Affiliate. Nothing in this Agreement shall be deemed to restrict in any way the
freedom of any Partner or Affiliate of a Partner to conduct any business
activity of whatever nature including, without limitation, the manufacture and
sale of steel and plastic containers, without any accountability to the
Partnership or any other Partner, even if such business or activity directly
competes with the business of the Partnership.
2.8 Term. The term of the Partnership shall commence upon the
filing of a Certificate of Limited Partnership consistent with the terms of this
Agreement in the Office of the Secretary of State of Texas and shall continue
indefinitely until:
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(a) sixty (60) days following the date upon which the
Partnership no longer owns any assets; or
(b) the termination of the Partnership pursuant to the terms
of this Agreement, by Approval of the Limited Partners and the approval of the
General Partner, operation of law, or judicial decree.
ARTICLE 3.
BANK ACCOUNTS, BOOKS, FISCAL YEAR,
ACCOUNTING AND REPORTS
3.1 BANK ACCOUNTS. The funds of the Partnership shall be
deposited in the name of the Partnership in one or more bank accounts as
designated by the General Partner, and shall not be commingled nor shall the
funds be used except for the business of the Partnership. Withdrawals therefrom
shall be made only from such account or accounts in such manner and in such form
as the General Partner may from time to time determine.
3.2 BOOKS OF ACCOUNT. The General Partner shall keep, or cause
to be kept, complete and accurate books of account, in which shall be entered,
fully and accurately, each and every transaction of the Partnership. The books
of the Partnership shall be kept on the accrual basis, unless the General
Partner shall determine otherwise, in accordance with generally accepted
accounting principles consistently applied from year to year, and shall be
maintained at all times at the principal office of the Partnership.
3.3 TAX ELECTIONS.
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(a) The General Partner, in its sole discretion, may cause the
Partnership to make or revoke the election referred to in Section 754 of the
Code, or any similar provision enacted in lieu thereof, as well as any other
elections permitted by the Code.
(b) Organization expenses shall be amortized over the first
sixty (60) months of the Partnership's business, as permitted under Code Section
709.
(c) The General Partner shall, for each fiscal year, file on
behalf of the Partnership United States tax returns of income within the time
prescribed by law for such filing. The General Partner shall also file on behalf
of the Partnership such other tax returns and other documents from time to time
as may be required by the United States of America or by any state. The
determination of the General Partner with respect to the treatment of any item
or its allocation for federal, state or local tax purposes shall be binding upon
all of the Partners so long as such determination will not be inconsistent with
any express term hereof or applicable law.
ARTICLE 4.
RIGHTS, POWERS AND OBLIGATIONS OF
GENERAL PARTNER AND LIMITATIONS, THEREON
4.1 EXERCISE OF MANAGEMENT. The General Partner shall manage
the day to day affairs of the Partnership subject to the terms and provisions of
this Agreement. The General Partner shall have complete and exclusive control
over the management of the Partnership's business and affairs in accordance with
the business of the Partnership set forth in Section 2.6 hereof, and, except as
otherwise specifically provided in this Agreement, the General Partner shall
have the right, power and authority on behalf of the Partnership and in its
name, to exercise all of the rights, powers and authority of a partner of a
partnership without limited partners. In
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addition, the General Partner shall formulate all substantial policy decisions
with respect to the Partnership. Except as otherwise specifically provided in
this Agreement, no Limited Partner, as such, shall take part in the management
or control of the business of the Partnership or have authority to bind the
Partnership.
4.2 SPECIFIC POWER AND AUTHORITY OF GENERAL PARTNER. Except as
otherwise specifically provided in this Agreement, the General Partner shall
have the power and authority to take any action of any type and to do all of the
following:
(a) hold, improve, manage, sell, lease or otherwise dispose of
real and personal property owned by the. Partnership, interests therein or
appurtenances thereto;
(b) borrow money and incur indebtedness, and to secure the
repayment of such borrowings and incurring of indebtedness, by executing
mortgages or deeds of trust, pledging or otherwise encumbering or subjecting to
security interests, all or any part of the assets of the Partnership;
(c) operate, manage and develop the assets of the Partnership
and to enter into agreements with others with respect to such operation,
management and development including without limitation the manufacture and sale
of steel and plastic containers;
(d) purchase from others, at the expense of the Partnership,
contracts of liability, casualty and other insurance which the General Partner
deems advisable, appropriate or convenient for the protection of thue assets or
affairs to the Partnership or for any purpose convenient or beneficial to the
Partnership;
(e) employ persons or entities, other than the General Partner
and its Affiliates except as provided herein, at the expense of the Partnership,
and on its behalf in the operation and management of the Partnership's property,
including, but not limited to, supervisory
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managing agents, building management agents, architects, engineers, accountants,
attorneys, bookkeepers, insurance brokers and property appraisers;
(f) make capital expenditures and improvements with respect to
the real and personal property of the Partnership and to take all appropriate
action in connection with the maintenance, operation and management thereof; and
(g) Subject to the terms of this Agreement, the General
Partner is Rather hereby fully authorized to take any action of any type and to
do anything and everything which a general partner of a Texas limited
partnership may be authorized to take or do hereunder.
4.3 DUTIES OF GENERAL PARTNER. The General Partner, through
its agents and employees, shall devote such time to the Partnership as may be
necessary for the operation of the Partnership with the assistance of such
agents and professionals as the General Partner shall cause the Partnership to
retain.
4.4 NO DUTY OF THIRD PARTY TO INQUIRE AS TO AUTHORITY OF THE
GENERAL PARTNER. No Person dealing with the Partnership shall be required to
inquire into the authority of the General Partner to take any action or to make
any decision hereunder.
4.5 LIMITATION ON OBLIGATIONS OF GENERAL PARTNER.
Notwithstanding any provision of this Agreement or any law to the contrary and
except as may otherwise specifically be provided in any other agreement to which
the General Partner is a party, the General Partner shall not be obligated to
advance funds to prevent a default by the Partnership on any note, lease or
other agreement to which the Partnership is a party or by which it is bound and
the General Partner shall not be obligated to make any contribution, loan or
other advance to or for the benefit of the Partnership for any purpose
whatsoever.
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4.6 LIMITATION OF THE GENERAL PARTNER'S LIABILITY TO OTHER
PARTNERS AND INDEMNIFICATION TO GENERAL PARTNER.
(a) Except with respect to any material misrepresentation or
breach of this Agreement by the General Partner, or acts attributable to fraud
or gross negligence by the General Partner, the General Partner shall not be
liable to any other Partner or the Partnership for any claim, loss, expense,
liability, action, cause of action, suit or damage resulting from any act or
omission of the General Partner in the management of the affairs of the
Partnership other than for the General Partner's gross mismanagement. The
General Partner shall not be personally liable for the return of any
contribution made to the Partnership by a Limited Partner. By way of example,
and not by way of limitation, the General Partner shall not be liable in any
respect whatsoever to the Limited Partners by reason of (i) any disallowance or
adjustment of any deductions or credits claimed on the Limited Partner's income
tax returns or the Partnership's information returns, (ii) the filing of Federal
information returns on behalf of the Partnership which do not reflect the
reporting positions that the Partnership presently expects to adopt, or (iii)
any penalties or interest which are imposed on any taxpayer as a direct or
indirect result of the reporting positions which are adopted by the Partnership
on any of its returns.
(b) The Partnership shall indemnify, save harmless and pay all
judgments arising against any Partner and its shareholders, partners, directors,
employees and agents, from any cost, expense, claim, liability or damage
incurred by reason of such Person's relationship to the Partnership or any act
performed or omitted to be performed by them in connection with the business of
the Partnership, including attorney fees and costs incurred by them in
connection with the defense of any action based on any such act or omission,
which attorney fees and costs may be paid as incurred, including all such
liabilities under any Federal or state securities act
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(including the Securities Act of 1933, as amended) as permitted by law, except
that the Partnership shall have no indemnification obligation hereunder with
respect to any act or omission of any Person that constitutes willful misconduct
or gross negligence or was outside the scope of such Person's authority under
this Agreement. In the event of any action against any Partner by any other
Partner, including a Partnership derivative suit, the Partnership shall
indemnify, save harmless and pay all expenses of the defendant Partner,
including attorney fees and costs incurred in the defense of said action, if the
defendant Partner is successful in said action. Notwithstanding the foregoing,
no Partner shall be indemnified against any liability to the other Partners
imposed by this Agreement or by law, including liability for fraud, bad faith,
willful misconduct or gross negligence. Any such indemnification shall be
recovered only from the assets of the Partnership and not from the assets of the
Limited Partners. The General Partner may require in any Partnership contract
and any other agreements for which the Limited Partner(s) agrees to be
personally liable, that it and its shareholders will not be personally liable
thereon and that the remedy for a breach of such contract shall be satisfied
solely from the assets of the Partnership. The indemnified Partner also shall be
entitled to recover its attorney fees and costs of enforcing this indemnity from
the Partnership's assets, if the Partner is successful in said action.
4.7 NO LIABILITY OF THE GENERAL PARTNER FOR COMPUTATION OR
DETERMINATION. With respect to all matters (including disputes with respect
thereto) relating to computations and determinations required to be made under
this Agreement, the General Partner may rely upon, and shall have no liability
to the Limited Partner(s) or the Partnership if it relies upon, the opinion of
the accountants or attorneys for the Partnership.
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4.8 SUCCESSOR GENERAL PARTNER. In the event that the General
Partner shall withdraw as a partner as provided under the Act, with the Approval
of the Limited Partners a replacement General Partner shall be elected. The
Successor General Partner shall signify his, her or its acceptance of such
appointment by executing a copy of this Agreement within 20 days after receiving
notice of said appointment and, by doing so, shall be deemed to have agreed to
be bound by all of the terms and conditions of this Agreement, as such Agreement
may be amended, as though he, she or it were an original signatory thereto.
ARTICLE 5.
CAPITAL ACCOUNTS AND CONTRIBUTIONS
5.1 ESTABLISHMENT OF CAPITAL ACCOUNTS. An individual Capital
Account shall be established and maintained for each Partner, including any
permitted additional or substituted Partner. Upon the admission, substitution or
withdrawal of any Partner, the books and records of the appropriate Partners
shall be adjusted to reflect such admission, withdrawal or substitution. The
initial Capital Account of each Partner as of the date of this Agreement is the
amount of such Partner's Capital Contribution.
5.2 CREDITS AND CHARGES TO CAPITAL ACCOUNTS. All credits and
charges to the Capital Account of each Partner shall be made in accordance with
the provisions of Section 1.5 above.
5.3 NO PRIORITY AMONG PARTNERS, NO WITHDRAWAL OF CAPITAL.
Except as specifically provided in Article 6 hereof, no Partner shall have
priority over any other Partner either as to the return of such Partner's
Capital Contribution to the Partnership or as to allocation of Net Profits or
Net Losses or distributions of cash or property made by the Partnership, and all
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such returns, allocations and distributions to the Partners shall be divided
among the Partners pro rata in accordance with their respective Percentage
Interests. No Partner shall have the right to demand or receive any funds or
property of the Partnership or to bring any action of or partition against the
Partnership. No Partner shall have the right or power to withdraw any part of
such Partner's Capital Contribution from the Partnership, except as specifically
provided herein.
5.4 NO INTEREST ON CAPITAL CONTRIBUTIONS. Except as
specifically provided in Article 6 hereof, no Partner shall receive any interest
whatsoever on such Partner's Capital Account or Capital Contribution made to the
Partnership.
ARTICLE 6.
ALLOCATION OF NET PROFITS, NET LOSSES
AND NET OPERATING CASH FLOW
6.1 ALLOCATION OF NET PROFITS, NET LOSSES AND TAX CREDITS.
(a) Net Losses and Tax Credits. The Net Losses and Tax Credits
of the Partnership shall be allocated in accordance with the Partners' then
Percentage Interests.
(b) Net Profits. Net Profits in an amount not exceeding the
amount of Cash Flow distributed to the Partners pursuant to Section 6.2 during
the Partnership's tax year shall be allocated among the Partners in the same
manner as the Cash Flow was distributed pursuant to Section 6.2. Net Profits in
excess of the amount of Cash Flow distributed during the Partnership's tax year
pursuant to Section 6.2 shall be allocated in accordance with the Partners' then
Percentage Interests.
6.2 DISTRIBUTION OF CASH FLOW. Cash Flow shall be distributed
in accordance with the Partners' then Percentage Interests.
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6.3 SPECIAL ALLOCATIONS. Notwithstanding any other provision
of this Agreement, the following allocations shall be made prior to any other
allocations under this Agreement:
(a) QUALIFIED INCOME OFFSET. No Partner shall be allocated any
item of loss or deduction to the extent said allocation will cause or increase
any deficit in said Partner's Capital Account (in excess of any amount that such
Partner is obligated or deemed obligated to restore) as of the end of the
Partnership's tax year to which such allocation relates. In determining the
above, a Partner's Capital Account shall be reduced for the items described in
Treasury Regulation Sections l.704-l(b)(2)(ii)(d)(4), (5), and (6). If any
Partner with a deficit in such Partner's Capital Account unexpectedly receives
any adjustment, allocation or distribution described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then Partnership items of income
and gain shall be specifically allocated to such Partner in an amount and manner
sufficient to eliminate the deficit in said Partner's Capital Account created by
such adjustment, allocation, or distribution as quickly as possible.
(b) SPECIAL INCOME ALLOCATION. In the event any Partner has a
deficit in such Partner's Capital Account at the end of any Partnership tax year
(or other period of the Partnership) that is in excess of the sum of (i) the
amount such Partner is obligated to restore and (ii) the amount such Partner is
deemed to be obligated to restore pursuant to the penultimate sentence of
Regulation Section 1.704-2(g)(1), each such Partner shall be specially allocated
items of Partnership income and gain in the amount of such excess as quickly as
possible.
(c) MINIMUM GAIN CHARGEBACK. The following provisions shall be
applicable in the first taxable year in which the Partnership has nonrecourse
deductions as defined in Treasury Regulation Section 1.704-2(b):
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(i) If there is a net decrease in Minimum Gain for a
tax year, then each Partner must be allocated items of income and gain
for such year equal to that Partner's share of the net decrease in
Minimum Gain, in accordance with the minimum gain chargeback
requirements pursuant to Treasury Regulation Section 1.704-2(f). A
Partner's share of the net decrease in Minimum Gain is the amount of
the total net decrease in Minimum Gain multiplied by the Partner's
percentage share of the Minimum Gain at the end of the immediately
preceding tax year. Treasury Regulation Section 1.704-2(g)(2).
(ii) In allocating the income and gain pursuant to
subsection (i) above, gains recognized from the disposition of
Partnership assets subject to nonrecourse liabilities of the
Partnership shall be allocated first to the extent of the decrease in
Minimum Gain attributable to the disposition of the said asset.
Thereafter, any income and gain to be allocated shall consist of a pro
rata amount of other Partnership income and gain for that year.
(iii) Any allocation under subsection (i) above shall
be made no later than the end of the tax year in which such Minimum
Gain deficiency arises; provided, however, that in no event shall there
be a reallocation of any item of income, gain, loss or deduction
previously allocated among the Partners pursuant to this Agreement.
(iv) This subsection (c) is intended to comply with
the minimum gain chargeback requirements under Treasury Regulation
Section 1.704-2(f) and shall be interpreted and applied consistently
therewith.
(d) CODE SECTION 704(c) ALLOCATIONS. In accordance with Code
Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction
(including depreciation) with respect to any property contributed to the capital
of the Partnership by a Partner shall, solely for
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tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
Federal income tax purposes and its fair market value at the time it was
contributed to the Partnership.
(e) RECAPTURE. To the extent that any allocation of income or
gain made pursuant to this Agreement includes the allocation of an item of
income or gain that is recaptured as ordinary income under Code Sections 1245 or
1250, such ordinary income shall be allocated to the Partners who received the
allocation of the depreciation or cost recovery deductions that generated the
ordinary income recapture in proportion to their shares of such deductions,
provided that such allocation of ordinary income shall be limited to the amount
of income or gain allocated to such Partner for the period to which such
allocation relates.
(f) Code Section 754 Adjustment. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704.1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as the result of a
distribution to a Partner in complete liquidation of such Partner's Partnership
Interest, the amount of such adjustment to the Capital Accounts shall be treated
as an item of gain (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases such basis) and such gain or loss shall be
specially allocated to the Partners in accordance with their Percentage
Interests in the event Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Partners to whom such distribution was made in the event
Treasury Regulation Section 1.704-1(b)(2)(iv)(m)(4) applies.
6.4 ALLOCATIONS IN THE EVENT OF TRANSFER OF A PARTNERSHIP
INTEREST. If a Partnership Interest is transferred in accordance with the terms
of this Agreement, there shall be
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allocated to each Partner who held the transferred Partnership Interest during
the fiscal year of transfer the product of (a) the Partnership's Net Profit or
Net Losses allocable to such transferred Partnership Interest for such fiscal
year, and (b) a fraction, the numerator of which is the number of days such
Partner held the transferred Partnership Interests during such fiscal year and
the denominator of which is the total number of days in such fiscal year,
provided, however, that the Partners may allocate such Net Profit or Net Losses
by closing the Partnership's books immediately after the transfer of any
Partnership Interest. Either allocation shall be made without regard to the
date, amount or recipient of any distributions which may have been made with
respect to such transferred Partnership Into-est. No Partnership Interest may be
transferred without the approval in writing of the General Partner.
ARTICLE 7.
ADMISSION OF NEW PARTNERS
The issuance of additional Partnership Interests and thus the
admission of any Person to the Partnership as a new partner (the "Admittee")
shall be subject to the following:
7.1 The unanimous consent of the Partners, which consent may
be withheld for any cause or for no cause, regardless of the reasonableness
thereof;
7.2 The Admittee's execution of an instrument satisfactory to
counsel to the Partnership, by which the Admittee agrees to be bound by and
comply with all of the terms and provisions of this Agreement; and
7.3 Execution of any other instruments required under the Act
to effect such admittance.
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ARTICLE 8.
RESTRICTIONS ON TRANSFER
8.1 GENERAL RULE. No Partner may Transfer all or any part of
its Partnership Interest or grant or create any participation in such Partner's
right to receive distributions or returns of capital without the prior written
consent of the General Partner. "Transfer" shall mean any disposition including,
but not limited to, gifts, bequests, sales, assignments, pledges, encumbrances,
whether voluntary or involuntary, or pursuant to this Agreement, court order or
operation of law.
8.2 OTHER TRANSFERS. Any Transfer by a Partner of its
Partnership Interest in a manner not permitted under Article 8 shall be null,
void and of no effect against the Partnership or the other Partners. In addition
to, and not in limitation of, the foregoing, in the event that any Person
acquires any Partnership Interest in contravention of this Agreement, such
Person shall have no voting rights as a Partner.
8.3 NEED FOR RESTRICTIONS. The parties hereto recognize and
acknowledge that the provisions set forth in this Agreement respecting the
restrictions on Transfer of their Partnership Interests are fair and reasonable
in consideration of their absolute necessity for the proper conduct of the
business of the Partnership.
ARTICLE 9.
DISSOLUTION
9.1 GENERAL. The Partnership shall dissolve upon, but not
before, the termination of the Partnership in accordance with Section 2.8
hereof.
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9.2 LIQUIDATION OF ASSETS. Upon the dissolution of the
Partnership, the General Partner shall proceed to liquidate the assets thereof
The proceeds of such liquidation and dissolution shall be distributed as
follows:
FIRST: To creditors whose debt is secured by mortgages or
security interests granted in the assets of the Partnership, if the Partnership
is winding up or if required by the terms of the instruments evidencing or
securing such indebtedness;
SECOND: To third party creditors of the Partnership in payment
of the unpaid operating expenses of the Partnership to the extent required under
agreements with said creditors;
THIRD: To the payment of all other creditors of the
Partnership to the extent due and payable; and
FOURTH: To the Limited Partner(s), until they have received,
pursuant to Section 6.2 and this Section 9.2, an amount equal to a 100% return
of its Capital Contribution; and
FIFTH: To the General Partner, until it has received, pursuant
to Section 6.2 and this Section 9.2, an amount equal to its Capital
Contribution; and
SIXTH: To the Partners, pro rata to their Percentage
Interests.
ARTICLE 10.
RIGHTS AND LIABILITIES OF LIMITED PARTNERS
10.1 ACTIVITIES OF LIMITED PARTNERS. The Limited Partner(s)
shall not participate in, or have any part in the management, conduct or control
of, the Partnership business, except as otherwise specifically set forth in this
Agreement. The Limited Partner(s) shall have no authority whatsoever to act on
behalf of or bind the Partnership.
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10.2 LIMITATION ON LIABILITY OF LIMITED PARTNERS.
(a) Except as otherwise provided herein, the liability of each
Limited Partner in the Partnership shall be limited to the amount of such
Limited Partner's aggregate Capital Contribution. No Limited Partner shall have
any further personal liability to contribute money or other property to, or in
respect of, the liabilities or obligations of the Partnership.
(b) Notwithstanding anything to the contrary herein, if a
Limited Partner has received a return of all or any portion of such Limited
Partner's Capital Contribution to the Partnership, such Limited Partner will be
liable to the Partnership for any sum, not in excess of such amount returned,
which is necessary to discharge the Partnership's liabilities to any creditor
which extended credit to the Partnership or whose claims arose before the return
of said amount to the Limited Partner.
ARTICLE 11.
POWER OF ATTORNEY
11.1 POWER OF ATTORNEY GIVEN BY LIMITED PARTNER. The Limited
Partner hereby constitutes and appoints the General Partner as its true and
lawful attorney-in-fact with power to act in its name and on its behalf, to
consent to, adopt, make, execute and deliver, swear to, acknowledge, file and
record:
(a) copies of this Agreement and any and all amendments hereto
and, upon termination of the Partnership, a certificate or agreement of
dissolution, if required by the laws of the State of Texas;
(b) the Certificate of Limited Partnership, as well as
amendments thereto, under the laws of the State of Texas or any other
jurisdiction;
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(c) any Certificate of Fictitious Name, if required by law;
and
(d) such other ministerial certificates or instruments as may
be required under the laws of the State of Texas, or any other jurisdiction, or
by any other regulatory agency, as the General Partner may deem necessary or
advisable; provided, however, that none of the foregoing acts shall increase the
liability of the Limited Partner or decrease the liability of the General
Partner beyond the liability expressly set forth in this Agreement.
The power of attorney granted herein is a special power of
attorney coupled with an interest, is irrevocable, and shall survive the
dissolution, bankruptcy or insolvency of the Limited Partner, and may be
exercised by the General Partner, and shall survive the transfer of a Limited
Partner's interest in the Partnership.
ARTICLE 12.
MISCELLANEOUS
12.1 INTEGRATION. This Agreement contains the entire agreement
between the parties pertaining to the subject matter hereof, supersedes any
prior agreements between the parties hereto and may not be amended except as
provided in Section 12.9 herein.
12.2 Notices. Except as otherwise expressly provided in this
Agreement, all notices, demands and other communications hereunder shall be in
writing and shall be deemed to have been given (a) if delivered personally, (b)
three (3) days after being mailed, registered or certified mail, first class
postage prepaid, return receipt requested, or (c) the business day next
following the day delivered to a reputable overnight courier providing proof of
delivery, to the applicable party at the address herein set forth or at such
other address of which a Partner has
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given notice to the General Partner in accordance herewith. The substance of any
such notice shall be deemed to have been fully acknowledged in the event of any
refusal of acceptance by the party to whom the notice is addressed.
12.3 FURTHER ASSURANCES. The Partners will execute and deliver
such further assurances and do such further acts and things as may be required
to carry out the intent and purpose of this Agreement.
12.4 CAPTIONS. All captions and headings of articles,
sections, paragraphs, subparagraphs and subdivisions of this Agreement are
solely for convenience and are not part of this Agreement, and shall not be used
for the interpretation or determination of the validity of this Agreement or any
provision thereof.
12.5 GENDER. The masculine gender shall include the feminine
and neuter genders, as appropriate in the context of this Agreement.
12.6 SINGULAR OR PLURAL. Whenever the singular number is used
in this Agreement, the same shall include the plural when required by context.
12.7 THIRD PARTY BENEFICIARIES. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any creditors of the
Partnership.
12.8 SEVERABILITY. In case any one or more of the provisions
of this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or enforceability shall not affect other
provisions hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision never had been contained herein.
12.9 AMENDMENT. This Agreement may be modified or amended only
with the unanimous written consent of the General Partner and the Limited
Partner.
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12.10 GOVERNING LAW. This Agreement shall be construed in
accordance with the laws and other legal authority of the State of Texas,
including the Act, but excluding the conflicts of laws provisions of the State
of Texas.
12.11 PARTNERS INDEPENDENTLY BOUND.Partner shall become bound
by this Agreement immediately upon its execution hereof.
12.12 COMPUTATION OF TIME. In computing any period of time
pursuant to this Agreement, the day of the act or event of default from which
the designated period of time begins to run shall be included, unless it is a
Saturday, Sunday or legal holiday, in which event the period shall begin to run
on the next day which is not a Saturday, Sunday or legal holiday, and such
period shall end with the last day of the designated period of time unless it is
a Saturday, Sunday or legal holiday, in which event such period shall end with
the end of the next day thereafter which is not a Saturday, Sunday or legal
holiday.
12.13 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.14 TAX MATTERS PARTNER. The General Partner is hereby
designated as the "Tax Matters Partner" of the Partnership, as defined in
Section 6231(a)(7) of the Code.
IN WITNESS WHEREOF, each of the Partners hereby execute this
Agreement the day and year first above written.
GENERAL PARTNER:
RUSSELL-STANLEY MIDWEST, INC.
By: /s/ DANIEL W. MILLER
-----------------------------------
Daniel W. Miller
Executive Vice President
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LIMITED PARTNER:
RSLPCO, INC.
By: /s/ DANIEL W. MILLER
-----------------------------------
Daniel W. Miller
Executive Vice President