Exhibit 3.15
LIMITED PARTNERSHIP AGREEMENT
THIS LIMITED PARTNERSHIP AGREEMENT made as of January 18, 2002
BETWEEN:
IPSCO STEEL (ALABAMA) INC.,
a corporation incorporated under the laws of the State of Alabama,
as General Partner (the "General Partner")
-and-
IPSCO CONSTRUCTION INC.,
a corporation incorporated under the laws of the State of Alabama,
as the Original Limited Partner (the "Original Limited Partner")
-and-
Each person who from time to time becomes a Limited Partner in
accordance with the terms of this Agreement
RECITALS:
A. The General Partner and the Original Limited Partner wish to form a limited
partnership in order to acquire the steel mill assets owned and operated by
the General Partner and to thereafter carry on the steel manufacturing
business previously carried on by the General Partner; and
B. The General Partner and the Original Limited Partner have entered into this
Agreement for the purpose of constituting the Partnership and recording the
arrangements to which they have agreed by which the Partnership will be
capitalized, managed and operated and its income distributed.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
-----------
(1) In this Agreement, except as otherwise expressly provided, the following
words or expressions shall have the following meanings:
(a) "Adjusted Capital Account" means, with respect to a Partner, that
Partner's Capital Account after (i) crediting to the Partner's Capital
Account any amount which the Partner is deemed to be obligated to
restore pursuant to Treasury Regulations Sections
1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and 1.704-2(i)(5); (ii) crediting
to the Partner's Capital Account any amount that Partner is
unconditionally obligated to contribute to the Partnership under
applicable law; and (iii) debiting from the Capital Account the items
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),(5),
and (6). This
definition of Adjusted Capital Account is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii) and
1.704-2, and will be interpreted consistently with those provisions.
(b) "Agreement" means this Agreement among the General Partner and the
Original Limited Partner, as may be amended or restated from time to
time.
(c) "Business" means the steel manufacturing business to be operated by
the Partnership resulting from the acquisition of the steel mill
assets and certain related assets from the General Partner.
(d) "Business Day" means any day other than a Saturday, Sunday or
statutory or civic holiday in Mobile, Alabama.
(e) "Capital Account" of a Partner means the account established pursuant
to Section 4.1.
(f) "Capital Contribution" means with respect to any Partner, the amount
paid in cash and the fair market value of other property net of any
liability assumed by the Partnership in respect of such property
contributed by the Partner to the Partnership in connection with the
subscription for its Units or any other amount of cash and the fair
market value of other property net of any assumed liabilities, as the
case may be, contributed to the capital of the Partnership by the
Partner. Any reference in this Agreement to the Capital Contribution
of a Partner who acquired its Unit(s) by way of acquisition from a
prior Partner will include any Capital Contribution made by any prior
Partner with respect to the acquired Unit(s).
(g) "Certificate" means the Certificate of Limited Partnership filed under
the Partnership Act in respect of the Partnership, as amended, renewed
or replaced from time to time.
(h) "Distributable Cash" of the Partnership, at any time, means amounts
determined by the General Partner, form time to time, as being
available out of cash flow of the Partnership for distribution to the
Partners, after payment of all current debts and liabilities of the
Partnership as the same become due from time to time and after
deducting all amounts which the General Partner determines shall be
reinvested in the Partnership.
(i) "Fiscal Year" means, unless otherwise provided in accordance with
Section 2.8, a period of twelve consecutive calendar months
terminating on the 31st day of December in each year except that the
first Fiscal Year shall be the period commencing on the filing of the
Certificate and ending on the following December 31, and the last
Fiscal Year shall commence on January 1 most immediately preceding the
date of termination of the Partnership and shall terminate on the date
of termination of the Partnership pursuant to the terms of this
Agreement or the Partnership Act.
(j) "General Partner" means IPSCO Steel (Alabama) Inc., a body corporate
incorporated under the laws of the State of Alabama and its
successors in interest pursuant to the terms of this Agreement.
(k) "Internal Revenue Code" means the Internal Revenue Code of 1996, as
amended or replaced from time to time.
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(l) "Limited Partners" means the Original Limited Partner and any other
Person admitted to the Partnership (excluding the General Partner) as
a limited partner and their respective successors in interest pursuant
to the terms of this Agreement, and "Limited Partner" means any one of
them.
(m) "Oridinary Resolution" means:
(i) a resolution passed with the support of over 50% of the votes
cast by Partners who, being entitled to do so, vote in person or
by proxy at a duly constituted meeting of the Partners, or an
adjournment thereof, or
(ii) a resolution consented to in writing by every Partner who would
have been entitled to vote in person or by proxy at a meeting of
Partners, and a resolution so consented to will be deemed to be
an Ordinary Resolution passed at a meeting of the Partners.
(n) "Original Limited Partner" means IPSCO Construction Inc., a body
corporate incorporated into the laws of the State of Alabama and its
successors in interest pursuant to the terms of this Agreement.
(o) "Partnership" means IPSCO Alabama Ltd., a limited partnership formed
under the laws of the State of Alabama in accordance with this
Agreement by the filing and recording of the Certificate.
(p) "Partnership Act" means The Alabama Limited Partnership Act of 1997
(Section 10-9B of the Alabama Code), as amended or replaced from time
to time.
(q) "Partnership Assets" means at any time all of the property, assets,
rights, business and goodwill of the Partnership.
(r) "Partners" means the General Partner and the Limited Partners and
"Partner" means any one of the General Partner or the Limited
Partners.
(s) "Person" means an individual, corporation, body corporate,
partnership, syndicate, joint venture, association, trust or
unincorporated organization or any trustee, executor, administrator or
other legal representative.
(t) "Profits" and "Losses" means for each Fiscal Year or other period (a)
for tax purposes, an amount equal to the Partnership's taxable income
or loss for such year or period, determined in accordance with
Internal Revenue Code Section 703(a) (for this purpose all items of
income, gain, loss or deduction required to be stated separately
pursuant to Internal Revenue Code Section 703(a)(1), and any
guaranteed payments paid to a General Partner, shall be included in
taxable income or loss), and (b) for book purposes, an amount equal to
the Partnership's net income or net loss for such year or period,
determined in accordance with U.S. generally accepted accounting
principles.
(u) "Record" means the record of the Partners required to be maintained by
the General Partner Pursuant to Section 10.6(1)(a).
(v) "Register of Transfers" means the Register of Transfers of Units
required to be maintained by the General Partner pursuant to Section
10.6(1)(b).
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(w) "Treasury Regulations" means the Treasury Regulations promulgated
under the Internal Revenue Code.
(x) "Section" means a section of this Agreement.
(y) "Sharing Ratio" means with respect to any Partner, the percentage
interest allocated to such Partner, which percentage interest will be
determined by using a fraction in which the number of Units owned by
the Partner is the numerator and the aggregate number of Units of the
Partnership that are then outstanding is the denominator.
(z) "Special Resolution" means:
(i) a resolution passed with the support of at least 66 2/3% of the
votes cast by those Partners who, being entitled to do so, vote
in person or by proxy at a duly constituted meeting of the
Partners, or an adjournment thereof, or
(ii) a resolution consented to in writing by every Partner who would
have been entitled to vote in person or by proxy at a meeting of
Partners, and a resolution so consented to will be deemed to be a
Special Resolution passed at a meeting of the Partners.
(aa) "Unit" or "Units" has the meaning assigned to that term in Section
4.1.
1.2 INTERPRETATION
--------------
For all purposes of this Agreement, except as otherwise expressly provided, or
unless the context otherwise requires:
(a) The headings are for convenience of reference and do not form a part
of this Agreement nor are they intended to interpret, define or limit
the scope, extent or intent of this Agreement or any of its
provisions.
(b) All accounting terms not otherwise defined have the meanings
ordinarily assigned to them at the date hereof pursuant to U.S.
generally accepted accounting principles and all computations made
pursuant to this Agreement must be made in accordance with U.S.
generally accepted accounting principles applicable from time to time,
unless otherwise expressly provided in this Agreement.
(c) Any reference to a currency is a reference to U.S. currency.
(d) Except where otherwise specified, any reference to a statute includes
a reference to such statute and to its regulations, with all
amendments in force from time to time, and to any statute or
regulation that may be passed which has the effect of supplementing or
superseding the statute or regulation.
(e) Any reference to a Person includes a reference to any Person that is a
successor to that Person.
(f) Words importing the masculine gender include the feminine or neuter
gender and words importing the feminine gender include the masculine
or neuter gender and words in the
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singular include the plural, and words importing the neuter gender
include the masculine or feminine gender and words in the plural
include the singular.
ARTICLE 2
THE PARTNERSHIP
2.1 FORMATION OF LIMITED PARTNERSHIP
--------------------------------
The Partners hereby agree to form the Partnership as a limited partnership in
accordance with the terms of this Agreement and the provisions of the
Partnership Act. The General Partner shall cause the first Certificate to be
filed in accordance with the requirements of the Partnership Act.
2.2 NAME
----
The Partnership shall carry on business under the name IPSCO Alabama Ltd. or
such other name as the General Partner may determine from time to time.
2.3 TERM
----
The term of the Partnership is for an indefinite period commencing on the filing
of the initial Certificate and continuing until the date on which the
Partnership is dissolved in accordance with the terms of this Agreement or the
Partnership Act.
2.4 BUSINESS OF PARTNERSHIP
-----------------------
The Partnership has been constituted by the Partners for purposes of acquiring
the steel mill and certain related assets from the General Partner and assuming
certain liabilities in respect thereof and thereafter carrying on the Business
in accordance with the provisions of this Agreement. The Partners therefore
agree that the Partnership shall:
(a) negotiate, execute and deliver a formal acquisition agreement for the
purchase and sale of the above-noted assets and assumption of
liabilities; and
(b) upon completion of the purchase and sale transactions contemplated
above, operate or supervise the operation of the Business, and engage
in such other businesses or activities, as the General Partner may
from time to time determine.
2.5 EXCLUDED ASSETS
---------------
For greater certainty, the Partnership shall not acquire certain contract rights
relating to the construction of the General Partner's steel mill located near
Axis, Alabama or any claims or legal proceedings relating to such contract
rights, all of which are to be retained and prosecuted by the General Partner in
its personal capacity and for its own benefit, all of which is to be more
particularly described in the formal acquisition agreement between the General
Partner and the Partnership referred to in Section 2.4.
2.6 PLACE OF BUSINESS
-----------------
The principal place of business of the Partnership shall be located at Axis,
Alabama or such other place of business determined by the General Partner from
time to time. The Partnership may have such additional places of business as may
from time to time be determined by the General Partner.
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2.7 OFFICE OF THE PARTNERSHIP: REGISTERED AGENT
-------------------------------------------
The office at which the prescribed Partnership records will be maintained
pursuant to Section 104 of the Partnership Act, will be located at:
Burr & Forman LLP
Southtrust Tower
420 North Twentieth Street
Suite 3100
Birmingham, Alabama 35203
The name and street address of the agent for service of process on the
Partnership as required by Section 104 of the Partnership Act, is as follows:
The Corporation Company
2000 Interstate Park Drive, Suite 204
Montgomery, Alabama, 36109
The General Partner may change the office or agent for service noted above from
time to time in which case, the General Partner shall promptly give notice in
writing to the Limited Partners of any such change.
2.8 FISCAL YEAR
-----------
The Partnership's Fiscal Year shall end on December 31/st/ in each year, or on
such other date as the General Partner may determine from time to time.
2.9 QUALIFICATION TO DO BUSINESS
----------------------------
The General Partner shall execute such forms as are required to register the
Partnership, and to maintain in good standing such registration, so that it is
duly qualified to carry on its business in all jurisdictions in which it does
so, and to register the Partnership under the Partnership Act and comparable
legislation in all other jurisdictions where such registration is necessary or
advisable to maintain the limited liability of the Limited Partners in such
jurisdictions. Upon the General Partner's request, each Limited Partner shall
execute such other documents as reasonably required for the General Partner to
comply with all requirements for the formation, continuation and operation of
the Partnership and the maintenance of the limited liability of the Limited
Partners in any other jurisdictions where the Partnership carries on business or
the General Partner considers it appropriate.
ARTICLE 3
UNITS AND INITIAL CONTRIBUTIONS
3.1 UNITS
-----
The interest of the Partners in the Partnership shall be divided into and
represented by one class of an unlimited number of units (individually, a "Unit"
and collectively, the "Units").
3.2 NATURE OF UNITS
---------------
Each issued and outstanding Unit shall be equal to each other Unit with respect
to all matters, including:
(a) the right to receive notice of and attend all meetings of Partners;
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(b) the right to vote;
(c) the right to receive allocations of Profits and Losses; and
(d) the right to share in Distributable Cash or any other distributions
(including distributions on dissolution of the Partnership) to
Partners.
No Unit shall have any preference or right of priority in any circumstances over
any other Unit.
3.3 NO FRACTIONAL UNITS
-------------------
A Unit may not be divided or split into fractions, and the Partnership will not
accept any subscription for, record any assignment of, or otherwise recognize
any interest in, less than a whole Unit.
3.4 ISSUE AND TRANSFER
------------------
The Units shall only be issued as fully paid and non-assessable Units. No
Partner shall assign or transfer any of its Units except in accordance with the
terms of this Agreement.
3.5 ADMISSION TO PARTNERSHIP
-----------------------
A Person subscribing for Units will become a Partner upon:
(a) acceptance by the General Partner of a subscription from such Person;
(b) payment of the agreed upon subscription price or contribution of other
property; and
(c) the General Partner causing the subscriber to be entered on the
Record.
Upon satisfaction of the foregoing, all Partners will be deemed to consent to
the admission of such Person as a Partner. The General Partner may accept or
reject, in its absolute discretion, a subscription for a Unit.
3.6 UNIT CERTIFICATE
----------------
The General Partner shall not be required to issue certificates on behalf on the
Partnership to evidence ownership of Units, but may do so at its option.
3.7 INITIAL CONTRIBUTION OF PARTNERS
--------------------------------
The General Partner and Original Limited Partner shall each initially
contribute $100.00 to the capital of the Partnership and subscribe for, and be
allotted Units in the Partnership, as follows:
IPSCO Steel (Alabama) Inc. - 1 Unit
IPSCO Construction Inc. - 1 Unit
3.8 ISSUANCE OF ADDITIONAL UNITS
----------------------------
The Partnership may from time to time issue further Units additional to those
specifically provided for in Section 3.7 at such subscription price as may be
established by the General Partner from time to time, without approval of the
Partners.
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ARTICLE 4
CAPITAL ACCOUNTS
4.1 ESTABLISHMENT OF CAPITAL ACCOUNTS
---------------------------------
A "Capital Account" shall be established for each Partner and shall be
maintained at all times throughout the existence of the Partnership in a manner
so as to correspond with the rules set forth in the Treasury Regulations. A
Partner's Capital Account shall be increased by:
(a) the amount of the Partner's Capital Contribution to the Partnership;
(b) allocation of Profits to the Partner for Partnership "book" purposes
pursuant to Article 5; and shall be reduced by:
(c) the amount of Distributable Cash distributed to the Partner by the
Partnership pursuant to Article 6;
(d) the fair market value of any property distributed to the Partner by
the Partnership; and
(e) allocations of Losses to the Partner for Partnership "book" purposes
by the Partnership pursuant to Article 5.
4.2 TRANSFER OF UNITS - CAPITAL ACCOUNTS
------------------------------------
Except as otherwise required by the Treasury Regulations, in the event that any
Unit(s) are transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account of the transferor to the extent
it relates to the transferred Unit(s).
4.3 NO WITHDRAWAL OF CAPITAL
------------------------
No Partner has the right to withdraw any Capital Contribution or other amount or
receive any cash or other distribution from the Partnership, except as expressly
provided for in this Agreement and as permitted by law.
4.4 NO INTEREST ON ACCOUNTS
-----------------------
No Partner will have the right to receive interest on any credit balance in such
Partner's Capital Account. Except as otherwise provided by the Partnership Act,
no Partner will be liable to pay interest to the Partnership on any Capital
Contribution distributed to such Partner or on any negative balance in such
Partner's Capital Account.
4.5 NEGATIVE BALANCE IN ACCOUNTS
----------------------------
The interest of a Partner in the Partnership will not terminate by reason of a
negative balance in such Partner's Capital Account.
4.6 ADJUSTMENTS
-----------
If the General Partner determines that any Partner has received a distribution
which exceeds its entitlement, then that Partner shall immediately repay to the
Partnership such excess amount, and in the
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absence of such repayment, the General Partner shall be entitled to deduct such
excess amount from any subsequent distribution from the Partnership to such
Partner.
4.7 RETURN OF CAPITAL CONTRIBUTIONS
-------------------------------
All Partners will look solely to the assets of the Partnership for the return of
their respective Capital Contributions or any other distributions. If the assets
remaining after payment or discharge, or provision for discharge, of the debts
and liabilities of the Partnership are insufficient to return the Capital
Contributions or to make any other distribution to the Partners, no Partner
shall have any recourse against the personal assets of any other Partner for
that purpose, except in respect of the obligations of the General Partner
pursuant to Section 9.2.
ARTICLE 5
ALLOCATIONS
5.1 GENERAL
-------
Except as otherwise provided in this Article 5, for federal income tax purposes,
each item of income, gain, loss and deduction will be allocated among the
Partners in the same manner as its correlative item of "book" income, gain, loss
or deduction is allocated pursuant to this Article 5.
5.2 PROFITS AND LOSSES
------------------
Profits and Losses shall be allocated in the following manner.
(a) First, Losses shall be allocated to the Partners in accordance with
and in proportion to each Partner's Sharing Ratio but only to the
extent of the Partner's Adjusted Capital Account.
(b) Second, to the extent any Losses are not allocable under subsection
(a) above, such Losses shall be allocated to the General Partner.
(c) Third, Profits shall be allocated to the General Partner in a
cumulative amount equal to the cumulative Losses allocated to the
General Partner under subsection (b) above.
(d) Fourth, Profits shall be allocated to the Partners in accordance with
each Partner's Sharing Ratio.
(e) Notwithstanding the preceding allocations, and to the extent the
General Partner deems it necessary to insure that the Agreement and
the allocations hereunder meet the requirements of Section 704 of the
Internal Revenue Code and the applicable Treasury Regulations,
allocations of the following type will be made to the appropriate
Partners in the necessary and required amounts as set forth in the
applicable Treasury Regulations before any other allocations under
this Section 5.2:
(i) Partner nonrecourse debt minimum gain chargeback under Treasury
Regulations Section 1.704-2(i);
(ii) Partnership minimum gain chargeback under Treasury Regulations
Section 1.704-2(f)(provided that the General Partner may seek a
waiver of such
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chargeback in appropriate circumstances under Treasury
Regulations Section 1.704-2(f)(4) in its sole discretion);
(iii) In the event any Partners unexpectedly receive any adjustments,
allocations, or distributions described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of
Partnership income and gain to such Partners in an amount and
manner sufficient to eliminate the deficit balances in their
Capital Accounts (excluding from such deficit balance amounts
Partners are obligated to restore under this Agreement or are
treated as obligated to restore pursuant to Treasury Regulations
Sections 1.704-1(b)(2)(ii)(c), 1.704-1(b)(2)(ii)(h), 1.704-2(g),
or 1.704-2(i)(5)) created by such adjustments, allocations, or
distributions as quickly as possible and in a manner which
complies with Treasury Regulations Section 1.704-1(b)(2)(ii)(d);
(iv) Partner nonrecourse deductions under Treasury Regulations
Section 1.704-2(i) which will in all cases be allocated to the
Partner who bears economic risk of loss for the indebtedness to
which such deductions are attributable; and
(v) To the extent an adjustment to the adjusted tax basis of any
property under Internal Revenue Code Sections 734(b) or 743(b)
is required to be taken into account in determining Capital
Accounts under Treasury Regulations Section 1,704(b)(2)(iv)(m),
the amount of the adjustment to the Capital Accounts will be
treated as an item of gain (if the adjustment increases the
basis of the property) or loss (if the adjustment decreases the
basis), and the gain or loss will be specially allocated to the
Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted under Treasury
Regulations Section 1.704-1(b)(2)(iv)(m).
The allocations set forth in this Section 5.2(e) (the "Regulatory Allocations")
are intended to comply with certain requirements of Treasury Regulations
Sections 1.704-1(b) and 1.704-2. The Regulatory Allocations may effect results
which would not be consistent with the manner in which the Partners intend to
divide Partnership distributions. Accordingly, the General Partner is authorized
to divide other allocations of Profits, Losses, and other items among the
Partners so as to prevent the Regulatory Allocations from distorting the manner
in which distributions would be divided among the Partners under Article 6 if
such distributions were made in accordance with the Sharing Ratios of the
Partners but for application of the Regulatory Allocations. In general, the
reallocation will be accomplished by specially allocating other Profits, Losses
and items of income, gain, loss and deductions, to the extent they exist, among
the Partners so that the net amount of the Regulatory Allocations and the
special allocations to each Partner is zero. The General Partner will have
discretion to accomplish this result in any reasonable manner that is consistent
with Internal Revenue Code Section 704 and the related Treasury Regulations.
Pursuant to Treasury Regulations Section 1.752-3(a)(3), solely for purposes of
determining each Partner's proportionate share of the "excess nonrecourse
liabilities" of the Partnership (as defined in Treasury Regulations Section
1.752-3(a)(3)), the Partners' respective interests in Profits will be equal to
their Sharing Ratio.
5.3 TRANSFER OF UNITS-ALLOCATIONS: SECTION 754 ELECTION
---------------------------------------------------
Income, gain, loss or deduction attributable to any Unit in the Partnership
which has been transferred shall be allocated between the transferor and the
transferee under any method allowed under Internal Revenue Code Section 706 as
agreed by the transferor and transferee. The General Partner, at its discretion,
may
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make the election provided under Internal Revenue Code Section 754 and any
corresponding provision of applicable state law.
5.4 DETERMINATION OF PROFITS OF LOSSES
----------------------------------
For accounting purposes, Profits or Losses of the Partnership will be determined
in accordance with U.S. generally accepted accounting principles consistently
applied. For the purposes of determining the taxable income or taxable loss of
the Partnership under the Internal Revenue Code in respect of a particular
Fiscal Year, the Partnership will claim discretionary deductions or allowances,
including tax depreciation, in such amounts as the General Partner may, in its
discretion, determine. Notwithstanding the foregoing, the General Partner will
also provide each Partner with such financial and tax information as the Partner
may reasonably require based on the generally accepted accounting principles and
tax laws applicable in the country of residence of such Partner.
5.5 TAX MATTERS PARTNER AND TAX ELECTIONS
-------------------------------------
The General Partner shall be the "Tax Matters Partner" for federal income tax
purposes. Any successor Tax Matters Partner shall be a General Partner. The
Partnership shall make such elections and adopt such accounting methods and
procedures for federal and state income tax purposes as the Tax Matters Partner
deems to be in the best interest of the Partnership.
ARTICLE 6
DISTRIBUTIONS
6.1 GENERAL
-------
Distributable Cash shall be distributed among the Partners, pro rata, in
accordance with their Sharing Ratios.
6.2 NO INTEREST
-----------
If any Partner does not withdraw the whole or any part of its Distributable Cash
distribution made pursuant to Section 6.1, the Partner shall not be entitled to
receive any interest thereon without the consent of the General Partner.
6.3 TRANSFER OF UNITS-DISTRIBUTIONS
-------------------------------
Unless otherwise agreed in writing by a transferor and transferee, Distributable
Cash allocable to the transferred Unit which may have been transferred during
any year shall be distributed to the holder of such Unit who was recognized as
the owner of record on the date of such distribution.
6.4 AUTHORIZATION TO WITHHOLD
-------------------------
The General Partner is authorized to withhold and to pay to all government
authorities having jurisdiction, any taxes required by any applicable law to be
withheld by the General Partner from any amount payable to any Partner.
6.5 PARTNER LOANS
-------------
If any Partner advances any funds or makes any other payment to or on behalf of
the Partnership, not required in this Agreement, to cover operating or capital
expenses of the Partnership which cannot be paid
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out of the Partnership's operating revenues, any advance or payment shall be
deemed a loan to the Partnership by that Partner, bearing interest from the date
the advance or payment was made until the loan is repaid at the interest rate
set forth in Section 7.12. Notwithstanding Sections 6.1 and 6.2, all
distributions of Distributable Cash shall first be distributed to the Partners
making the loans until the loans have been repaid, together with interest.
Thereafter, the balance of the distributions, if any, shall be made in
accordance with the terms of Sections 6.1 and 6.2. If distributions are
insufficient to repay all loans as provided above, the funds available shall
first be applied to repay the oldest loan and, if any funds remain available,
the funds shall be applied in a similar manner to remaining loans in accordance
with the order of the dates on which they were made; provided, however, as to
loans made on the same date, each loan shall be repaid pro rata in the
proportion that the loan bears to the total loans made on that date.
ARTICLE 7
GENERAL PARTNER
7.1 STATUS AND CAPACITY
-------------------
The General Partner represents and warrants to each Limited Partner that the
General Partner:
(a) is and will continue to be a valid and subsisting corporation under
the laws of the State of Alabama or such other jurisdiction under
which the General Partner may be continued or under which a successor
to the General Partner may be incorporated or continued; and
(b) has and will continue to have the capacity and qualifications to act
as the General Partner and to perform its obligations under this
Agreement without conflicting with its constating documents or being
in default under any agreement by which it is bound.
7.2 MANAGEMENT OF PARTNERSHIP
-------------------------
The General Partner shall have exclusive authority to direct, manage, control,
administer and operate the Business and affairs of the Partnership and to
represent and enter into transactions binding the Partnership. In connection
with the foregoing, the General Partner shall have the power and authority to
do, or cause to be done, for and on behalf of the Partnership, any and all acts
deemed by the General Partner to be necessary, appropriate or incidental
thereto, subject only to those limitations expressly set forth in this
Agreement. Without limiting the generality of the foregoing, the General Partner
shall have full and exclusive power and authority to:
(a) make, execute, sign, acknowledge and file on behalf of the Partnership
and/or each Limited Partner, any and all documents or instruments of
any kind which the General Partner may deem appropriate in complying
with the Partnership Act, including, without limitation, the
Certificate and any amendments thereto or replacements thereof;
(b) make all operating decisions concerning the Business, including all
decisions concerning the business and activities to be carried on by
the Partnership and the manner of operation of all business and
activities;
(c) enter into agreements and transactions on behalf of and which bind
the Partnership in order to carry on the Business and affairs of the
Partnership upon such terms as it considers appropriate including,
without limitation, licensing agreements, sales contracts, marketing
agreements, service contracts, subcontracts, leases, financing
agreements, and other documents or instruments of any kind or
character;
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(d) borrow money and obtain loans or commitments therefor for the purposes
of the Partnership and to mortgage, charge, hypothecate, pledge or
deposit any or all of the present and future Partnership Assets to
secure or provide for the repayment of such loan and to draw, make,
execute and issue bonds, debentures, promissory notes and other
instruments and evidences of indebtedness;
(e) acquire and dispose of property, both real and personal, tangible and
intangible, as may be necessary or desirable in the ordinary course of
carrying on the Business;
(f) enter into, modify, renew, surrender and terminate any lease or
license of any property on such terms as the General Partner considers
appropriate and to exercise all rights, powers, privileges and other
incidents of ownership and possession with respect to the Partnership
Assets;
(g) take in and account for revenues of the Partnership and pay expenses,
capital expenditures and other outlays of the Partnership;
(h) invest funds not immediately required for the operations of the
Partnership;
(i) admit new Partners and assigns of Units to the Partnership from time
to time;
(j) enter into any agreement or agreements with other Persons including,
without limitation, its affiliates, for performance of acts in
furtherance of the purposes of the Partnership, but this shall in no
way relieve the General Partner of its obligations and duties to the
Partnership and to the other Partners;
(k) appoint officers or agents for a definite or indefinite term and to
authorize the same to act on behalf of the Partnership subject to such
limitations as the General Partner, in its absolute discretion,
determines as appropriate, subject always to the limitations imposed
on the General Partner by this Agreement or by law;
(l) employ, retain and dismiss the persons as may be necessary or
appropriate for the conduct of the Business, including permanent,
temporary or part-time employees, agents, consultants and contractors;
(m) retain such legal counsel, accountants, experts, advisors and
consultants as the General Partner considers appropriate and to rely
upon the advice of any such Person so retained;
(n) open, operate and close accounts for the deposit of funds with
financial institutions and to designate and change the signatories for
such accounts;
(o) commence, prosecute, defend, compromise and settle any action or
proceeding in connection with the Partnership or its affairs, Business
or Partnership Assets;
(p) submit the Partnership to binding arbitration with respect to any
issue arising in or concerning its affairs, Business or Partnership
Assets;
(q) file returns required by any governmental or like authority on behalf
of the Partnership;
(r) determine the Profits and Losses for any period in accordance with
U.S. generally accepted accounting principles and the Internal Revenue
Code and furthermore, calculate
-13-
the comparable information for each Partner determined in accordance
with the generally accepted accounting principles and in accordance
with the laws applicable in the country of residence of each Partner;
(s) obtain, maintain, modify and cancel such insurance coverage as the
General Partner considers advantageous to the Partnership or the
Partners in connection with the affairs or Business of the Partnership
or the Partnership Assets; and
(t) do anything else that is in furtherance of or incidental to the
Business or affairs of the Partnership or the Partnership Assets.
7.3 CONDUCT OF OPERATIONS AND TITLE TO ASSETS
-----------------------------------------
(1) Notwithstanding the generality of Section 7.2 or any other provision of
this Agreement, the General Partner may exercise all of its powers and
authority for and on behalf of the Partnership, in the name of the
Partnership or in its own name, as the General Partner may determine from
time to time. Notwithstanding that such power and authority may be
exercised in the name of the General Partner without reference to the
Partnership, all rights, interests, obligations and liabilities derived
therefrom shall accrue to and be for the benefit of the Partnership.
(2) Legal title to the Partnership Assets (whether real, personal, tangible or
intangible, including regulatory permits relating to the Business), or the
interest of the Partnership therein, may, to the extent permitted by law,
be held either in the name of the Partnership or held in the name of the
General Partner, which will hold the same as trustee for and on behalf of
the Partnership on and subject to the terms of this Agreement. The General
Partner hereby declares and warrants that any of the Partnership Assets for
which legal title is held in the name of the General Partner, shall be held
in trust by the General Partner for the use and benefit of the Partnership
in accordance with the terms and provisions of this Agreement. 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 the
Partnership Assets is held.
(3) Despite the fact that the General Partner may hold the title to or interest
in the Partnership Assets in its own name, the General Partner shall have
no beneficial interest in the Partnership Assets or Business and the true
and beneficial ownership thereof shall, for all purposes, be vested in the
Partnership.
(4) In confirmation of Section 7.3(2) and (3), the General Partner may execute
and deliver such trust agreements in favor of the Partnership in respect of
such Partnership Assets or the interest of the Partnership therein, as the
General Partner may determine in appropriate from time to time.
7.4 DISCHARGE OF DUTIES
-----------------
The General Partner shall exercise its powers and authority and discharge its
duties under this Agreement honestly, in good faith and in the best interests of
the Partnership and in connection therewith shall exercise the degree of care,
diligence and skill that a reasonably prudent person having the requisite
experience to perform the duties of the General Partner hereunder would exercise
in comparable circumstances and shall devote as much time to the conduct of the
Business as reasonably required for the prudent management of the Business and
affairs of the Partnership.
-14-
7.5 OSTENSIBLE AUTHORITY
--------------------
No person dealing with the Partnership or the General Partner will be required
to inquire into the authority of the General Partner to do any act, take any
proceeding, make any decision or execute and deliver any instrument, deed,
agreement or document for and on behalf of the Partnership, regardless of
whether such matter is undertaken or performed by the General Partner in its own
name or in the name of the Partnership.
7.6 DELEGATION
----------
The General Partner may contract with any Person (including any affiliate of the
General Partner) to carry out any of the duties of the General Partner hereunder
and may delegate to such Person any power or authority of the General Partner
hereunder, but no such contract or delegation will relieve the General Partner
of any of its obligations hereunder.
7.7 GOODWILL AND OWNERSHIP OF THE BUSINESS
--------------------------------------
Notwithstanding that the General Partner may conduct the Business in its own
name from time to time, the business and the goodwill associated with the
Business will be the property of the Partnership.
7.8 BUSINESS IN OTHER JURISDICTIONS
-------------------------------
The General Partner shall not carry on the Business in any jurisdiction unless
the Partnership and the General Partner are registered, if required by law, to
carry on business in such jurisdiction.
7.9 MAINTENANCE OF LIMITED LIABILITY
--------------------------------
The General Partner will conduct the business and affairs of the Partnership in
such a manner that the liability of a Limited Partner will be limited to the
extent set forth in Section 9.1.
7.10 EXPENSES OF THE PARTNERSHIP
---------------------------
The General Partner shall on behalf of the Partnership (whether in its own name
or in the name of the Partnership) pay all the costs and expenses incurred or
owed by the Partnership in connection with the Business and affairs of the
Partnership including, without limitation, the following:
(a) all operating expenses of the Partnership including, without
limitation, all salaries, compensation and other amounts payable to
officers, employees and other support personnel of the Partnership or
the General Partner and consultants and other persons engaged to
perform services for the Partnership or the General Partner;
(b) taxes and assessments applicable to the Partnership or its assets,
advertising and promotional expenses, insurance premiums, rental
expenses and legal fees and expenses;
(c) costs and expenses of a general and administrative nature and overhead
costs of expenses incurred by the Partnership or by the General
Partner for the benefit of the Partnership;
(d) interest and other charges payable in connection with borrowings for
the benefit of the Partnership;
-15-
(e) accounting, audit, professional and reporting expenses including,
without limitation, costs of preparation and documentation of
Partnership financial statements and accounts, costs of preparation
and documentation of tax returns;
(f) costs and expenses payable in connection with the organization and
capitalization of the Partnership;
(g) costs incurred in connection with any litigation or arbitration in
which the Partnership (or the General Partner with respect to the
Partnership) is involved or for which it is responsible, as well as
any examination, investigation or other proceeding conducted by any
regulatory agency, including related legal and accounting fees;
(h) all amounts due under contractual or other commitments of the
Partnership; and
(i) consultant, receivership, insolvency and any other fees and expenses
related to the purchase, holding, sale or liquidation of, or any other
transactions in connection with, or protection of security for, the
Partnership Assets.
7.11 REIMBURSEMENT OF THE GENERAL PARTNER
------------------------------------
(1) The Partnership shall reimburse the General Partner, as and when reasonably
requested by the General Partner, for all costs and expenses reasonably and
properly incurred by the General Partner in conducting the Business and
affairs of the Partnership.
(2) If and to the extent that any costs and expenses are incurred not only in
connection with the Business, but any other business of the General
Partner, the General Partner will reasonably and equitably allocate such
costs and expenses between the Partnership and such other business.
(3) Any costs or expenses incurred by the General Partner relating to the
Excluded Assets referred to in Section 2.5 and any receipts obtained by the
General Partner from the prosecution or settlement of the claims referred
to in Section 2.5 shall be the responsibility and property, as the case may
be, of the General Partner in its personal capacity.
(4) The Partnership shall pay an annual management fee to the General Partner
for the performance of its services under this Agreement in the amount of
$200,000 per year, payable quarterly in arrears. Subject to the approval of
the Limited Partners given by Special Resolution, the General Partner and
Partnership may agree to amend the management fee from time to time.
7.12 INTEREST ON UNPAID AMOUNTS
--------------------------
If the Partnership fails to pay the General Partner an expense, fee or other
amount due to be paid to the General Partner pursuant to this Agreement (other
than a distribution to the General Partner on account of any Units held in its
capacity as a Limited Partner) within 30 days after the due date therefor, the
Partnership shall also pay the General Partner interest on the unpaid amount at
the rate of 12% per annum, compounded annually, for the period from the due date
therefor up to the date of payment, except for the part of that period, if any,
that the Partnership has insufficient cash available to make the payment having
regard to its then current liabilities.
-16-
7.13 UNLIMITED LIABILITY OF GENERAL PARTNER
--------------------------------------
The General Partner in its capacity as the general partner of the Partnership
shall be responsible and liable for the debts, obligations and all other
liabilities of the Partnership in the manner and to the extent required by the
Partnership Act and as set forth in this Agreement.
7.14 LIABILITY TO PARTNERSHIP
------------------------
Neither the General Partner nor its officers, directors, partners, agents or
employees shall be liable, responsible or accountable in damages or otherwise to
the Partnership or the Limited Partners for any action taken or failure to act
on behalf of the Partnership within the scope of the authority conferred on the
General Partner by this Agreement or by law, if such persons have acted
honestly, in good faith and in a manner consistent with the best interests of
the Partnership and such action or omission does not constitute fraud, bad
faith, gross negligence, willful misconduct or breach of fiduciary duty.
7.15 INDEMNIFICATION BY PARTNERSHIP
------------------------------
The Partnership shall indemnify and hold harmless the General Partner, its
officers, directors, partners, agents and employees from and against any and all
losses (other than loss of profits), expenses, claims or liability suffered or
incurred by any of them arising out of any claims based upon any acts performed
or omitted to be performed by them in connection with the business of the
Partnership, including costs, expenses and solicitor's fees expended in the
settlement or defense of any such claims, provided that such persons have acted
honestly, in good faith and in a manner consistent with the best interests of
the Partnership and such acts or omissions do not constitute fraud, bad faith,
gross negligence or willful misconduct by or breach of fiduciary duty of such
person or entity and, provided further that any such indemnification shall be
recoverable only from the assets of the Partnership and not from the Limited
Partners.
ARTICLE 8
CHANGE OF GENERAL PARTNER
8.1 ASSIGNMENT OF INTEREST
----------------------
The General Partner may not sell, assign, transfer or otherwise dispose of its
interest, rights or obligations as General Partner in the Partnership or its
Unit(s), except with the prior approval of the Limited Partners given by Special
Resolution, unless such sale, assignment, transfer or other disposition is in
connection with and ancillary to a merger or amalgamation of the General Partner
resulting in a surviving or continuing corporation or body corporate which will
thereupon act as General Partner in accordance with this Agreement. Nothing
contained in this Section shall preclude a sale or transfer of shares of the
General Partner or a change in the control of the General Partner.
8.2 WITHDRAWAL
----------
So long as its withdrawal as General Partner or dissolution would not result in
the dissolution of the Partnership, the General Partner may resign as General
Partner or dissolve on not less than 180 days written notice to all Limited
Partners. Such withdrawal shall be effective and the General Partner shall cease
to be General Partner upon the earlier of:
(a) the date specified in the notice; and
-17-
(b) the admission of a new General Partner with approval of the Partners
given by Ordinary Resolution.
8.3 BANKRUPTCY OR DISSOLUTION
-------------------------
The General Partner shall cease to be qualified to act as General Partner upon:
(a) making an assignment for the benefit of creditors;
(b) filing a voluntary petition in bankruptcy;
(c) being adjudicated a bankrupt or insolvent;
(d) filing a petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law, or regulation;
(e) filing an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding
of the nature referred to in Section 8.3(d) above;
(f) seeking, consenting to, or acquiescing in the appointment of a
trustee, receiver or liquidator of the General Partner or of all or
any substantial part of its properties;
(g) failure to dismiss any proceeding commenced against the General
Partner to attach or charge its partnership interest or seeking a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation
within 120 days after its commencement; or
(h) failure to vacate or stay a court order attaching or charging the
General Partner's partnership interest or the appointment without the
General Partner's consent or acquiescence of a trustee, receiver or
liquidator of the General Partner or of all or any substantial part of
its properties, within 90 days after such order or appointment.
Upon the General Partner ceasing to be qualified to act as such as set forth
above or as otherwise provided under the Partnership Act, the General Partner
shall be removed as General Partner effective upon the appointment of a new
General Partner by the Partners made by Ordinary Resolution, which appointment
shall be made within 90 days following the occurrence of the event giving rise
to the disqualification of the General Partner. The General Partner agrees to
provide notice to the Limited Partners of the occurrence of any of the foregoing
events forthwith after the occurrence of the event.
8.4 REMOVAL
-------
The General Partner may only be removed as the General Partner of the
Partnership if it should breach or fail to perform any of its duties or
obligations under this Agreement and such breach or failure (other than a
failure to act honestly and in good faith) shall continue unremedied for a
period of 120 days after notice of such breach or failure is given to the
General Partner by any Limited Partner, or if the breach or failure is incapable
of being remedied within the said 120 day period, then if the General Partner
has not commenced within such period of time to remedy the breach or failure and
diligently thereafter continue to so remedy the breach or failure. Such a
removal of the General Partner shall be made by a Special
-18-
Resolution of the Partners that appoints a new General Partner to the
Partnership in replacement of the General Partner being removed.
8.5 TRANSFER OF MANAGEMENT
----------------------
On the admission of a new General Partner to the Partnership on the withdrawal
or removal of the General Partner, the resigning or retiring General Partner
will do all things and take all steps to transfer title to the Partnership
Assets and to transfer administration, management, control and operation of the
business of the Partnership and the books, records and accounts of the
Partnership to the new General Partner and will execute and deliver all deeds,
certificates, declarations and other documents necessary or desirable to effect
such transfer.
8.6 RELEASE AND INDEMNIFICATION
---------------------------
In the event of a change of the General Partner, the Partnership and the Limited
Partners shall release and the Partnership shall indemnify and hold harmless the
former General Partner from all actions, claims, costs, demands, losses, damages
and expenses with respect to events which arise in relation to the Partnership
after the effective date of removal or withdrawal of the former General Partner.
The indemnification herein shall be made from the assets of the Partnership and
no Limited Partner shall be personally liable to the former General Partner.
8.7 NEW GENERAL PARTNER
-------------------
A new General Partner appointed hereunder shall sign a counterpart hereof and
thereupon shall be bound by all of the provisions hereof and shall have the
power and authority and shall assume the obligations, duties and liabilities of
the General Partner hereunder as and from the date the new General Partner
becomes a party to this Agreement.
ARTICLE 9
LIMITED PARTNERS
9.1 LIMITED LIABILITY
-----------------
Subject to provisions of the Partnership Act, and other applicable legislation,
the liability of a Limited Partner for the debts, liabilities and obligations of
the Partnership shall be limited to its Capital Contribution and its pro rata
share of any undistributed Distributable Cash. No Limited Partner shall be
required to make any additional contributions to the capital of the Partnership.
No Limited Partner owes to any other Limited Partner or to the General Partner
any fiduciary or other duty of good faith which might otherwise be imposed upon
him as a Partner by the common law pertaining to partnerships or by any statute
relating thereto.
9.2 INDEMNITY
---------
The General Partner shall indemnify and hold harmless each Limited Partner for
any costs, damages, liabilities, expenses or losses suffered or incurred by a
Limited Partner if its liability is not limited in the manner provided for in
Section 9.1, unless the liability arises out of any act or omission of such
Limited Partner.
-19-
9.3 RECOGNITION
-----------
A Person shall become a Limited Partner upon the entry of its name as such on
the Record. The General Partner shall thereafter give all notices as may be
required by the Partnership Act and other applicable legislation to such Limited
Partner. Such Person shall cease to be a Limited Partner upon the removal of its
name as such on the Record.
9.4 REPRESENTATIONS
---------------
Each Limited Partner hereby represents and warrants that it has the legal
capacity to enter into this Agreement. Each Limited Partner shall, at the
request of the General Partner, provide such evidence of its status and
residence as the General Partner may reasonably require.
9.5 RESTRICTIONS
------------
No Limited partner, in its capacity as a Limited Partner, shall:
(a) participate in the management or control of the Business;
(b) transact any business on behalf of the Partnership or any Partner;
(c) have the right to sign for or bind the Partnership or any Partner;
(d) hold itself out as an agent of the Partnership or any other Partner;
or
(e) have any authority to undertake any obligation or responsibility on
behalf of the Partnership or any other Partner.
9.6 ENCUMBERING PARTNERSHIP INTEREST
--------------------------------
No Limited Partner shall hypothecate, mortgage, charge, pledge or otherwise
encumber its Units.
9.7 COMPENSATION
------------
Except as otherwise expressly provided in this Agreement, no Partner shall
receive any salary, fee or draw for services rendered to or on behalf of
the Partnership, nor shall any Partner be reimbursed for any expenses incurred
by such Partner on behalf of the Partnership.
9.8 POWER OF ATTORNEY
-----------------
Each Limited Partner hereby irrevocably nominates, constitutes and appoints the
General Partner to act as its true and lawful attorney on its behalf with full
power and authority in its name and stead, under seal or otherwise, to execute,
register, record and file as and where required:
(a) the Certificate, any amendments to or replacements of the Certificate,
any instrument required to continue and keep in good standing the
Partnership as a limited partnership in any jurisdiction in which the
Partnership carries on business, is required to be registered or is
registered to carry on business and any other instrument required by
law;
(b) any instrument to amend this Agreement in accordance with the terms
hereof;
-20-
(c) any instrument required pursuant to the Partnership Act or similar
legislation of any other jurisdiction in connection with the
operation, dissolution, winding-up, liquidation or termination of the
Partnership;
(d) any instrument required in connection with any election that may be
made under the Internal Revenue Code or corresponding legislation of a
jurisdiction that applies to the Partnership or any of the Partnership
Assets; and
(f) such documents on behalf and in the name of the Partnership as may be
necessary to carry on the Business in any jurisdiction or to give
effect to any of the provisions of this Agreement.
Such appointment and power of attorney is a power coupled with an interest and
will extend to the legal representatives, successors and assigns of the Limited
Partner. To evidence the authority conferred on the General Partner pursuant to
this Section, each Limited Partner will, if requested by the General Partner,
execute a power of attorney in accordance with the terms of this Section.
9.9 TRANSFER OF UNITS
-----------------
Notwithstanding the provisions of the Partnership Act, a Limited Partner is not
entitled to sell, assign, transfer or otherwise dispose of any of its units
(whether to an affiliate or otherwise) except with the written consent of the
General Partner.
9.10 ADMISSION OF NEW PARTNER
------------------------
The Partners agree to the admission of and hereby admit as a Limited Partner any
Person who acquires Units from a Partner with the consent of the General Partner
and any other Person to whom the General Partner issues Units, provided that
such Person executes and delivers to the General Partner a counterpart of this
Agreement as then amended.
ARTICLE 10
ACCOUNTING AND REPORTING
10.1 BOOKS OF ACCOUNT
----------------
The General Partner will keep and maintain, or cause to be kept and maintained,
full, complete, separate and accurate books of account and records of the
Business including the Capital Accounts of the Partners, and will enter and
record therein fully and accurately all transactions and other matters related
to the Business. The books of account of the Partnership shall be established
and maintained in accordance with U.S. generally accepted accounting principles.
10.2 APPOINTMENT OF AUDITOR
----------------------
The General Partner shall, on behalf of the Partnership, retain an auditor to
carry out a review and report to the Partners on the financial statements of the
Partnership for, and as at the end of, each Fiscal Year of the Partnership. The
auditor may be changed from time to time by the General Partner without the
approval of the Limited Partners. If requested by the Partners and approved by
Special Resolution, the auditor shall conduct an audit of such financial
statements.
-21-
10.3 ANNUAL STATEMENTS
-----------------
Following each Fiscal Year, the General Partner shall forward in a timely
manner, financial statements of the Partnership for the previous Fiscal Year to
each Partner of record as of the last day of the Fiscal Year in question. The
financial statements shall include a statement of all Distributable Cash
(expressed as a dollar amount per Unit) distributed to the Partners during such
Fiscal Year
10.4 INCOME TAX INFORMATION
----------------------
Following each Fiscal Year, the General Partner shall forward in a timely manner
prior to any filing requirements, to each Partner of record as of the last day
of the Fiscal Year, information concerning the Partnership's Profits or Losses
and each class of income, gain, loss or deduction that is relevant to reporting
Partnership income under the Internal Revenue Code and under the tax laws of any
other relevant jurisdiction. The information will show each Partner's share of
each class of income, gain, loss, deduction or other tax attribute. The General
Partner shall file, on behalf of the Partners, any information returns required
to be filed in respect of the activities of the Partnership under the Internal
Revenue Code, or tax laws of any other jurisdiction in which it carries on
business.
10.5 INTERIM REPORTS
---------------
If required by any applicable law or regulation, or any order of a regulatory
body or agency having jurisdiction, or if requested by the Partners and approved
by Special Resolution, and as otherwise determined by the General Partner, the
Partnership shall prepare monthly, quarterly or semi-annual financial
statements, as the case may be, which shall consist of such information as may
be required under any such laws, regulations or orders. A copy of such financial
statements or other information shall be delivered to each Partner in a timely
fashion after the end of the relevant period to which it relates.
10.6 REGISTERS AND RECORDS
---------------------
(1) The General Partner shall maintain at a place permitted by the
Partnership Act:
(a) the "Record" in which it records in alphabetical order the names and
last known addresses of the Partners and the Units held by such
Partners;
(b) the "Register of Transfers" in which is listed in respect of each
permitted transfer of Units, the names of each transferor and
transferee of the Units, the number of Units transferred and the date
of transfer;
(c) a copy of the Certificate and each amendment made to it and a copy of
this Agreement and each amendment made to it; and
(d) such other records as may be required by law.
(2) The records of the Partnership referred to in Section 10.6(1), and any
other books and records of the Partnership, wherever situated, are subject
to inspection and copying by a Partner and its agents at the reasonable
request and upon reasonable notice of any Partner during ordinary business
hours, at the expense of such Partner.
-22-
10.7 SUCCESSORS IN INTEREST OF PARTNERS
----------------------------------
Subject to the terms of this Agreement, the General Partner shall cause to be
recorded in the Record the name of any Person becoming entitled to any Units in
consequence of dissolution or winding-up of a Partner or by reason of the
insolvency of any Partner, or otherwise by operation of law, as the holder of
such Units upon production of the proper evidence of such entitlement and such
other evidence as may be required by law, in each case as reasonably
satisfactory to the General Partner.
ARTICLE 11
PARTNERSHIP MEETINGS
11.1 MEETINGS OF PARTNERS
--------------------
The General Partner may at any time call a meeting of Partners and must call
such a meeting on receipt of a written request from Limited Partners if such
request:
(a) is made by a Limited Partner or Limited Partners holding in the
aggregate 20% or more of all Units then outstanding; and
(b) contains sufficient detail of the purpose for which the meeting is to
be held to permit the distribution of a notice in compliance with
Section 11.3.
11.2 REQUISITIONED MEETINGS
----------------------
If the General Partner fails to call a meeting of Partners within 30 days after
receipt of a request, any Limited Partner who was a party to the request may, by
giving notice in accordance with Section 11.3, call such a meeting for the
purpose so stated. If more than one Limited Partner purports to call the
meeting, the notice given in accordance with this Agreement which calls the
meeting for the earliest time will govern and the other notices will be
considered invalid.
11.3 NOTICE
------
Any notice of any meeting of Partners will be mailed to each of the Partners
shown as such on the Record, each director of the General Partner and the
auditors of the Partnership not less than 21 nor more than 60 days prior to the
date of the meeting. Such notice shall include:
(a) the time of meeting;
(b) the place of meeting; and
(c) sufficient information to enable each Limited Partner to make a
reasoned judgment on each matter to be considered at the meeting.
Accidental failure to give notice to any partner shall not invalidate a meeting
any or proceedings thereat.
11.4 PLACE AND TIME OF MEETINGS
--------------------------
All meetings will be held at the location and at such reasonable time as is
selected by the person convening the meeting.
-23-
11.5 QUORUM
------
Subject to Section 11.6, one or more Limited Partners present in person or
represented by proxy representing at least 20% of the Units then outstanding
shall constitute a quorum for the transaction of business at any meeting.
11.6 ADJOURNED MEETINGS
------------------
If a quorum is not present within 30 minutes from the time fixed for holding any
meeting, the meeting shall be adjourned by the chairperson of the meeting to a
time and place on a date not more than 21 days later as determined by the
chairperson. Upon an adjournment, at least seven days notice of the adjourned
meeting shall be given, except that no notice need be given in respect of any
meeting adjourned for less than 10 days. It shall not be necessary for any
notice of an adjourned meeting to specify the nature of business to be
transacted. At the adjourned meeting the Partners present in person or
represented by proxy shall form a quorum and may transact the business for which
the meeting was originally convened notwithstanding that the number of Units
held or represented by them may not represent, in the aggregate, 20% of the
Units then outstanding and entitled to vote on the matters to be presented to
the meeting.
11.7 ATTENDANCE
----------
Notwithstanding anything herein contained, only Partners shall have the right to
attend in person or by proxy and to vote on all matters submitted to the
meeting. All Partners, proxies, officers and directors of the General Partner,
representatives of the auditors of the Partnership, any of their counsel and any
other Person authorized by the General Partner may attend and speak at any
meeting of the Partners.
11.8 CHAIRPERSON
-----------
The President of the General Partner, or in his or her absence, any other
officer of the General Partner, shall be the chairperson of meetings of
Partners, unless those Limited Partners present in person or represented by
proxy at the meeting shall choose, by Ordinary Resolution, some other person
present to be chairperson. If the President of the General Partner, or in his or
her absence, any other officer of the General Partner, is not present at any
such meeting, those Limited Partners present in person or represented by proxy
shall appoint a chairperson of the meeting by Ordinary Resolution. The
chairperson of the meeting shall not have a casting vote.
11.9 VOTING RIGHTS
-------------
On any question submitted to a meeting each Partner shall be entitled to one
vote for each Unit held. Except as otherwise specified in this Agreement, all
questions shall be decided by a special Resolution.
11.10 SHOW OF HANDS
-------------
Every question submitted to a meeting of Partners will be decided on a show of
hands, unless a poll is demanded by a Partner or the chairperson before the
question is put or after the result of a show of hands has been announced and
before the meeting proceeds to the next item of business, in which case a poll
will be taken.
11.11 APPOINTMENT OF PROXY AND VOTING
-------------------------------
A Partner may attend any meeting of the Partners personally or may be
represented by proxy. Votes at meetings of the Partners may be cast personally
or by proxy. The instrument appointing a proxy shall be
-24-
signed by the appointor or his or her attorney duly authorized in writing, or if
the appointor is a corporation under its seal or by an officer or attorney
thereof duly authorized and shall cease to be valid one year from its date. Any
person may be appointed a proxy, whether or not he or she is a Partner.
11.12 VALIDITY OF PROXY
-----------------
No proxy shall be voted at any meeting unless it shall either have been placed
on file with the General Partner or delivered to the chairperson of the meeting
prior to the time at which such meeting shall commence. The determination of the
chairperson of the meeting of the validity of any proxy shall be final. When any
Unit is held jointly by several persons, any one of them may vote at any meeting
in person or by proxy in respect of such Unit, but if more than one of them
shall be present at such meeting in person or by proxy, and the joint owners or
their proxies disagree as to any vote to be cast, a vote shall not be received
in respect of such Unit. A proxy purporting to be executed by or on behalf of a
Partner shall be presumed valid unless challenged at or prior to its exercise,
and the burden of proving invalidity shall rest upon the challenger.
11.13 REVOCATION OF PROXY
-------------------
A vote cast in accordance with the terms of an instrument of proxy shall be
valid notwithstanding the previous death, incapacity, insolvency, bankruptcy or
insanity of a Partner giving the proxy or the revocation of the proxy, provided
that no written notice of such death, incapacity, insolvency, bankruptcy,
insanity or revocation shall have been received at the place of meeting prior to
the time fixed for holding of the meeting.
11.14 FORM OF PROXY
-------------
In addition to the requirements, where applicable, of Section 11.13, every
instrument of proxy, whether for a specified meeting or otherwise, shall be in
substantially the following form:
"I, DiamondFill of DiamondFill in the State/Province of DiamondFill
being a Partner of IPSCO Alabama Ltd., hereby appoint of DiamondFill in the
State/Province of DiamondFill as my proxy to attend and vote for me and on
my behalf at the meeting of Partners to be held on the day of DiamondFill,
and every adjournment thereof and every poll that may take place in
consequence thereof.
As witness my hand this DiamondFill day of DiamondFill."
11.15 CONDUCT OF MEETINGS
-------------------
To the extent that the rules and procedures for the conduct of a meeting of
Partners are not prescribed in this Agreement, such rules and procedures shall
be determined by the chairperson.
11.16 EFFECT OF RESOLUTIONS
---------------------
A Special Resolution or an Ordinary Resolution as required by this Agreement and
passed at a meeting of the Partners or in accordance with Section 11.18 shall be
binding on all the Partners and their respective heirs, executors,
administrators, successors and assigns.
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11.17 MINUTE BOOK
-----------
All proceedings at all meetings of Partners shall be recorded by the General
Partner in a minute book, which shall be available for inspection by the
partners at all reasonable times during normal business hours at the principal
place of business of the Partnership.
11.18 WRITTEN RESOLUTIONS
-------------------
At the General Partner's discretion, any matter which can be decided at a
Partnership meeting may be decided instead by written resolution signed in one
or more counterparts by all of the Partners entitled to vote on the matter
without a formal meeting. A copy of the proposed resolution shall be sent to
each Partner entitled to vote at its address shown on the Record together with a
notice from the General Partner instructing the Partner on the procedure for
signing and returning the resolution. If there is joint or common ownership of a
Unit, the signature of the first person listed on the Record shall be required
and shall bind all other joint or common owners of the Unit. If within 10 days
of mailing the resolution to the Partners there is a Partner's request for a
Partnership meeting to consider the matters dealt with in the resolution, then
the General Partner shall convene a meeting and the resolution will not be
effective unless passed by the required majority for such resolution at a
Partnership meeting.
11.19 CONSENT REQUIRED
----------------
The General Partner shall, in accordance with Section 7.2, generally manage the
Business and affairs of the Partnership provided that, in addition to any
matters which by law or the other terms of this Agreement they must approve, the
following matters shall require the approval of the Partners by Special
Resolution:
(a) redemptions of Units; or
(b) the sale, disposition, exchange, lease, mortgage, hypothecation,
deposit, assignment by way of security, charge, assignment, pledge or
other transfer of, or granting of a security interest in, all or
substantially all of the Partnership Assets unless such sale,
disposition, exchange, lease mortgage, hypothecation, deposit,
assignment by way of security, charge, assignment, pledge or other
transfer of, or granting of a security interest in, is in the ordinary
course of business.
ARTICLE 12
AMENDMENT OF LIMITED PARTNERSHIP AGREEMENT
12.1 AMENDMENTS GENERALLY
--------------------
Subject to the provisions of Section 12.2, this Agreement may only be amended
with the written approval of the General Partner and the consent of the Partners
given by a Special Resolution.
12.2 AMENDMENT BY GENERAL PARTNER
----------------------------
This Agreement may be amended by the General Partner without prior notice to or
consent from any Limited Partner:
(a) for the purpose of adding to or deleting from the Agreement any
covenants, restrictions, or provisions which additions or deletions,
in the written opinion of counsel to the Partnership, are for the
protection of the Limited Partners;
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(b) to cure any ambiguity or to correct or supplement or make consistent
any provisions contained herein which, in the written opinion of
counsel to the Partnership, are defective or inconsistent with any
other provision contained herein or the provisions of any applicable
law or regulation, provided that, in the written opinion of such
counsel, the cure, correction or supplemental provision does not and
will not adversely affect the interests of any Partner;
(c) to make such other changes, corrections or additions in regard to
matters or questions which may arise under this Agreement which
counsel for the Partnership advises are necessary or desirable for any
other purpose not inconsistent with the terms of this Agreement,
provided that in the opinion of counsel to the Partnership the rights
of the Partners are in no way prejudiced thereby; or
(d) to reflect the addition of a new Partner as provided for in this
Agreement.
ARTICLE 13
DISSOLUTION AND TERMINATION OF PARTNERSHIP
13.1 AGREEMENT TO DISSOLVE
---------------------
The Partners may by Special Resolution resolve to dissolve the Partnership.
13.2 CONTINUITY
----------
The Partnership shall not be dissolved or terminated by the amendment of this
Agreement, the amendment of the Certificate, the admission of any new General
Partner or Limited Partner, or the Withdrawal, removal, death, incompetency,
bankruptcy, insolvency, dissolution, liquidation, winding up or receivership of
the General Partner or any Limited Partner or the assignment, transfer or
transmission of any Unit.
13.3 RECEIVER
--------
The General Partner shall serve as the receiver of Partnership, provided that if
the General Partner is unable or unwilling to act in such capacity, the Partners
shall appoint an appropriate person to act as the receiver of the Partnership by
Ordinary Resolution.
13.4 LIQUIDATION OF ASSETS
---------------------
As soon as practicable after the authorization of the dissolution of the
Partnership, the receiver of the Partnership shall prepare or cause to be
prepared a statement of the financial position of the Partnership which shall be
forwarded to each Partner. The receiver of the Partnership shall proceed
diligently to wind up the affairs of the partnership, and all assets of the
Partnership shall be liquidated as promptly as is reasonably possible. During
the course of such liquidation, the receiver of the Partnership shall act
honestly, in good faith and in the manner of a prudent receiver and shall
operate the properties and undertaking of the Partnership and in so doing shall
be vested with all the powers and authorities of the General Partner in relation
to the business and affairs of the Partnership under the terms of this
Agreement. The receiver of the Partnership shall be paid its reasonable fees and
disbursements incurred in carrying out its duties.
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13.5 DISTRIBUTION OF NET PROCEEDS
----------------------------
The net proceeds from the liquidation of the assets of the Partnership shall be
distributed by the receiver in the following order of priority:
(a) to pay the expenses of liquidation and the debts and liabilities of
the Partnership to its creditors, including Partners who are creditors
to the extent permitted by the Partnership Act;
(b) to provide for such reserves as the receiver of the Partnership may
deem reasonably necessary for any contingent or unforeseen liabilities
or obligations of the Partnership; provided, however, that any such
reserves shall be paid over by the receiver of the Partnership to an
escrow agent to be held by such escrow agent for the purpose of the
payment of liabilities or obligations of the Partnership and any
balance remaining shall be distributed, at the direction of the
receiver of the Partnership, as specified in paragraphs (c) and (d);
(c) to the Partners in payment of the balance, if any, in each Partner's
Capital Account; and
(d) the balance, if any, to the Partners based on their respective Sharing
Ratios.
13.6 PARTITION OF ASSETS
-------------------
In no event and under no circumstances shall a Partner be entitled, whether
during the existence of the Partnership or after the commencement of the
dissolution of the Partnership, to compel a partition, judicial or otherwise, of
any of the assets of the Partnership or of its assets distributed to the
Partners, either in kind or otherwise.
13.7 RETURN OF CAPITAL
-----------------
Except as provided in this Agreement, no Partner shall have the right to demand
or receive a return of its Capital Contribution in a form other than cash,
provided, however, that nothing herein is to be construed to prohibit such a
return of capital in a form other than cash.
13.8 TERMINATION OF PARTNERSHIP
--------------------------
The Partnership shall terminate when all of its assets have been disposed of and
the net proceeds therefrom (after payment of, or due provision for the payment
of, all debts, liabilities and obligations of the Partnership to creditors) have
been distributed as provided in this Article. The General Partner, or such other
person as may be acting as receiver of the Partnership, shall have authority to
execute and register an amendment to the Certificate as well as any other
documents required to give effect to the dissolution and termination of the
Partnership. Upon termination of the Partnership, the rights and obligations of
the Partners set out in this Agreement shall terminate, except for the rights
and obligations which by their nature survive such expiration or termination.
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ARTICLE 14
NOTICES AND CONFIDENTIALITY
14.1 NOTICE
------
Any notice, communication, payment or demand required or permitted to be given
or made hereunder will be sufficiently given or made for all purposes if
delivered personally to the party or to an officer of the party to whom it is
directed or if sent by courier or ordinary first class mail, postage prepaid,
addressed as follows:
(a) if to the General Partner,
IPSCO Steel (Alabama) Inc.
12400 Highway 43 North
P.O. Box 359
Axis, AL 36505
Attention: Executive Vice President
(b) if to a Limited Partner, to the address of the Limited Partner as it
appears on the Record.
14.2 DEEMED RECEIPT
--------------
Except as provided in Section 14.3, a document sent by mail will be deemed to be
received on the third day after mailing.
14.3 MAIL DISRUPTION
---------------
In the event of any disruption, strike or interruption in the postal service
after mailing and before receipt or deemed receipt of a document, that document
will be deemed to have been received on the seventh day following full
resumption of the postal service.
14.4 CHANGE OF ADDRESS
-----------------
A Limited Partner may change its address by giving written notice of such change
to the General Partner, and the General Partner may change its address by giving
written notice thereof to each Limited Partner.
14.5 CONFIDENTIALITY
---------------
(1) The Partners agree to treat this Agreement and information, data, reports
and other records relating to the partnership or the business of any of the
Partners (except information, data, reports and records that are available
to the public from sources other than the Partners) as confidential and
they shall not disclose any such information to Persons other than the
"Permitted Disclosures" hereof, without the prior written consent of all of
the other Partners. "Permitted Disclosures" are as follows:
(a) any Partner may make a disclosure that would otherwise be prohibited
by this Section 14.5 if such disclosure is required or advisable for
any Partner to comply with any law, regulation or parliamentary or
legislative custom or practice to which it or its activities are
subject, or is made to legal advisors, auditors, or in court or
arbitration proceedings;
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(b) any Partner may make a disclosure that would otherwise be prohibited
by this Section 14.5 if such disclosure is necessary for the
management of the Business and affairs of the Partnership, provided
such Partner within a reasonable period of time prior to such
disclosure, if the disclosure could reasonably be considered material
to any of the other Partners, notifies the other Partners that such
disclosure will be made; and
(c) any Partner may make a disclosure that would otherwise be prohibited
by this Section 14.5 if such disclosure is made to an affiliate of
such Partner, a consultant, a lender, a financial adviser or to any
Person, corporation or other entity with whom such Partner is
negotiating in good faith for the sale of its Units, provided the
intended recipient of such information shall be required by such
Partner to give a written confidentiality undertaking, in a form
provided by the General Partner, directed to each of the Partners.
(2) Notwithstanding anything contained in this Agreement, the obligations
contained in this Section 14.5 shall survive any expiration or termination
of this Agreement or any assignment, transfer, conveyance, other
disposition or forfeiture of rights hereunder and shall blind each Partner
while it shall be a Partner hereto and for a period of six years thereafter
or for such longer period as may be stated in a confidentiality undertaking
granted to the Partnership.
ARTICLE 15
GENERAL
15.1 GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with the laws of
the State of Alabama and applicable federal law and will be treated in all
respects as an Alabama contract.
15.2 SEVERABILITY
------------
Each provision of this Agreement is intended to be severable and if any
provision is uneforceable or invalid, such unenforceability or invalidity shall
not affect the enforceability or validity of this Agreement or the remaining
provisions.
15.3 ENTIRE AGREEMENT
----------------
This Agreement constitutes the entire agreement between the parties with respect
to all of the matters herein and its execution has not been induced by, nor do
any parties rely upon or regard as material, any representations or writing not
incorporated herein and made a part hereof.
15.4 FURTHER ASSURANCES
------------------
As and so often as any Partner may reasonably require, the Partners agree to
execute and deliver further and other documents, assurances and conveyances as
may be necessary to properly carry out the intention of this Agreement.
15.5 WAIVERS
-------
No provision of this Agreement may be waived except by a written instrument and
any waiver of a provision, is valid only in respect specific instance to which
it relates and is not a continuing waiver and is not to be construed as a waiver
of any other provision.
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15.6 SUCCESSORS
----------
This Agreement enures to the benefit of and will be binding upon the Partners
and their respective successors and, to the extent permitted by this Agreement,
permitted assigns.
15.7 COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts with the same
effect as if all parties hereto had signed and delivered the same document. All
counterparts shall be construed together and shall constitute one and the same
agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year set forth above.
IPSCO STEEL (ALABAMA) INC.,
as General Partner
Per:
------------------------------------
Per:
------------------------------------
IPSCO CONSTRUCTION INC.,
as Limited Partner
Per:
------------------------------------
Per:
------------------------------------
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